Henry Charles Carey (17931879),son of an American citizen who had emigrated from Ireland,represents a reactionagainst the dispiriting character which the Smithian doctrines had assumed in the hands of Malthus and Ricardo.His aimwas,whilst adhering to the individualistic economy,to place it on a higher and surer basis,and fortify it against the assaultsof socialism,to which some of the Ricardian tenets had exposed it.The most comprehensive as well as mature exposition ofhis views is contained in his Principles of Social Science (1859).Inspired with the optimistic sentiment natural to a youngand rising nation with abundant undeveloped resources and an unbounded outlook towards the future,he seeks to show thatthere exists,independently of human wills,a natural system of economic laws,which is essentially beneficent,and of whichthe increasing prosperity of the whole community,and especially of the working classes,is the spontaneous result,capableof being defeated only by the ignorance or perversity of man resisting or impeding its action.He rejects the Malthusiandoctrine of population,maintaining that numbers regulate them-selves sufficiently in every well-governed society,and thattheir pressure on subsistence characterises the lower,not the more advanced,stages of civilization.He rightly denies theuniversal truth,for all stages of cultivation,of the law of diminishing returns from land.His fundamental theoretic positionrelates to the antithesis of wealth and value.
Wealth had been by most economists confounded with the sum of exchange values;even Smith,though at firstdistinguishing them,afterwards allowed himself to fall into this error.Ricardo had,indeed,pointed out the difference,butonly towards the end of his treatise,in the body of which value alone is considered.The later English economists had tendedto regard their studies as conversant only with exchange;so far had this proceeded that Whately had proposed for thescience the name of Catallactics.When wealth is considered as what it really is,the sum of useful products,we see that ithas its origin in external nature as supplying both materials and physical forces,and in human labour as appropriating andadapting those natural materials and forces.Nature gives her assistance gratuitously;labour is the sole foundation of value.
The less we can appropriate and employ natural forces in any production the higher the value of the product,but the less theaddition to our wealth in proportion to the labour expended.Wealth,in its true sense of the sum of useful things,is themeasure of the power we have acquired over nature,whilst the value of an object expresses the resistance of nature whichlabour has to overcome in order to produce the object.Wealth steadily increases in the course of social progress;theexchange value of objects,on the other hand,decreases.Human intellect and faculty of social combination secure increasedcommand over natural powers,and use them more largely in production,whilst less labour is spent in achieving each result,and the value of the product accordingly falls.The value of the article is not fixed by its Cost of production in the past;whatreally determines it is the cost which is necessary for its reproduction under the present conditions of knowledge and skill.
The dependence of value on cost,so interpreted,Carey holds to be universally true;whilst Ricardo maintained it only withrespect to objects capable of indefinite multiplication,and in particular did not regard it as applicable to the case of land.
