Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy — John Stuart Mill — John Shaqi
Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
Profits, however, may enter more largely into the conditions of production
of one commodity than of another, even though there be no difference in
the _rate_ of profit between the two employments. The one commodity may be
called upon to yield a profit during a longer period of time than the
other. The example by which this case is usually illustrated is that of
wine. Suppose a quantity of wine and a quantity of cloth, made by equal
amounts of labor, and that labor paid at the same rate. The cloth does not
improve by keeping; the wine does. Suppose that, to attain the desired
quality, the wine requires to be kept five years. The producer or dealer
will not keep it, unless at the end of five years he can sell it for as
much more than the cloth as amounts to five years’ profit, accumulated at
compound interest. The wine and the cloth were made by the same original
outlay. Here, then, is a case in which the natural values, relatively to
one another, of two commodities, do not conform to their cost of
production alone, but to their cost of production _plus_ something
else—unless, indeed, for the sake of generality in the expression, we
include the profit which the wine-merchant foregoes during the five years,
in the cost of production of the wine, looking upon it as a kind of
additional outlay, over and above his other advances, for which outlay he
must be indemnified at last.
Regarding cost of production as the amounts of labor and
abstinence required in production, and not as Mr. Mill regards it,
as the amounts of wages and profits, the above is simply a case
where, in the production of wine, there is a longer _duration of
the abstinence_ than in the production of cloth. If there is a
free movement of labor and capital between the two industries,
they will exchange for each other in proportion to the sacrifices
involved; so that the wine would exchange for more of cloth,
because there was more sacrifice undergone. The same explanation
also holds good in the following illustration: