Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
Returning to our illustration of the alphabet, it is evident that
a certain amount of capital united with labor (constituting what
may be called a productive engine) lies behind the production of A
(such as the plow, for example), and to which its existence is
due. The same is true of Z. Suppose that 5,000 of Z is produced,
of which 4,000 is enough to reimburse the capital used up by labor
in the operation, and that the owner of commodity Z spends the
remaining 1,000 Z in exchange for 1,000 of commodity A. It is
evident (no money being used as yet) that this exchange of goods
is regulated entirely by the desires of the two parties to the
transaction. No more goods are created simply by the exchange; the
simple process of exchange does not keep the laborers engaged on A
occupied. And yet the owner of Z had a demand for commodity A; his
demand was worthless, except through the fact of his production,
which gave him actual wealth, or purchasing power, in the form of
Z. His demand for commodity A was not the thing which employed the
laborers engaged in producing A, although the demand (if known
beforehand) would cause them to produce A rather than some other
article—that is, the demand of one quantity of wealth for a
certain thing determines the _direction_ taken by the owner of
capital A. But, since the exchange is merely the form in which the
demand manifests itself, it is clear that the demand does not add
to production, and so of itself does not employ labor. Of course,
if there were no desires, there would be no demand, and so no
production and employment of labor. But we may conclude by
formulating the proposition, that wealth (Z) offered for
commodities (A) necessitates the use of other wealth (than Z) as
capital to support the operation by which those commodities (A)
are produced. It makes no difference to the existing employment of
labor what want is supplied by the producers of A, whether it is
velvet (intended for unproductive consumption) or plows (intended
for productive consumption). Even if Z is no longer offered in
exchange for A, and if then A is no longer to be made, the
laborers formerly occupied in producing A—if warning is given of
the coming change; if not, loss results—having the plant, can
produce something else wanted by the owner of Z.