I. DEFINITIONS—UTILITY OF THE SUBJECT. 1. Social science comprises the statement and explanation of the natural laws which govern men in their mutual relations. Political economy is the application of that portion of those laws which pertain to the production and distribution of wealth. Now we are not to be discouraged by this term _wealth_, as though the subject were one which concerns only rich men, and in which a poor man could have no interest. The man who has a little property, worth only one or two hundred dollars, is just as really a possessor of wealth as one who has one or two millions; and to be able to acquire and rightly use these small fortunes is, in the aggregate, of more importance than the acquisition and management of the greater riches of the few. 2. But what is meant by _wealth_? For the present it is enough to say that _it comprises all things which have value_. A more complete definition will follow by and by. What, then, do we mean by _value_? This, too, has many forms of definition, but they for the most part have one element in common. The general notion concerning it is that it has reference to the amount of one commodity that may be equitably given in exchange for a designated amount of another; this is a correct notion. Thus a bushel of wheat may be exchanged for two bushels of oats, or a cord of wood for twenty yards of cloth. That is, the value of a bushel of wheat is that of two bushels of oats, and the value of twenty yards of cloth is the same as that of a cord of wood. It is thus seen to be a _relative_ term, and not indicative of any quality of any one thing considered by itself. But in all instances of relationship there must be some ground of the relation. Let us try to determine what it is in this case. A superficial thinker might decide that it is _money_, from the fact that value is generally estimated in money. But money is itself in the same relation to all other commodities in this respect as they are to one another, and its value rests upon the same basis. 3. The chief element in value, and that constitutes its original standard, is the _cost of production_; and by _cost_ is meant the amount of labor involved. _Labor is the voluntary effort put forth by man to secure some desired object._ But when we say this, a little caution is needed. We are not to infer that the present value of an article is estimated by the amount of labor required at the time of its production, especially if that was a long time ago. A hundred years since, it required the labor of a man for days to produce a yard of cotton cloth. A dozen yards of better cloth can now be produced by the same amount of labor; of course the present value of the latter is superior to the present value of the former, even if this were as good as new. It is the labor that would be required to _reproduce_ or replace an article which determines its value.