Deducting the polemic chapters, there remain thirteen affirmative or doctrinal chapters; of which one (the twenty-seventh), on Currency, &c., ought always to be insulated from all other parts of Political Economy. And thus, out of the whole thirty-two chapters, twelve only are important to the student on his first examination; and to these I propose to limit our discussions. _Phæd_. Be it so, and now let us adjourn to more solemn duties. * * * * * DIALOGUE THE FIRST. ON THE ELEMENTARY PRINCIPLE OF POLITICAL ECONOMY. _Phæd_. To cut the matter short, X. Y. Z., and to begin as near as possible to the end--is there any one principle in Political Economy from which all the rest can be deduced? A principle, I mean, which all others presuppose; but which itself presupposes none. _X_. There is, Phædrus; such a principle exists in the doctrine of Value--truly explained. The question from which all Political Economy will be found to move--the question to which all its difficulties will be found reducible--is this: _What is the ground of exchangeable value_? My hat, for example, bears the same value as your umbrella; double the value of my shoes; four times the value of my gloves; one twentieth of the value of this watch. Of these several relations of value, what is the sufficient cause? If they were capricious, no such science as that of Political Economy could exist; not being capricious, they must have an assignable cause; this cause--what is it? _Phæd_. Ay, what is it? _X_. It is this, Phædrus; and the entire merit of the discovery belongs to Mr. Ricardo. It is this; and listen with your whole understanding: _the ground of the value of all things lies in the quantity_ (but mark well that word "quantity") _of labor which produces them_. Here is that great principle which is the corner- stone of all tenable Political Economy; which granted or denied, all Political Economy stands or falls. Grant me this one principle, with a few square feet of the sea-shore to draw my diagrams upon, and I will undertake to deduce every other truth in the science. _Phæd_. Take it and welcome. It would be impossible for most people to raise a cabbage out of the sea-shore, though the sand were manured by principles the noblest. You, therefore, my dear friend, that promise to raise from it, not a cabbage, but a system of Political Economy, are doubly entitled to your _modicum_ of sand, and to your principle beside; which last is, I dare say, a very worthy and respectable principle, and not at all the worse for being as old as my great-grandfather. _X_. Pardon me, Phædrus; the principle is no older than the first edition of Mr. Ricardo's book; and when you make me this concession so readily under the notion that you are conceding nothing more than has long been established, I fear that you will seek to retract it, as soon as you are aware of its real import and consequences.