his
definition of riches and value in the first chapter of his excellent
work: the following is the substance of his reasoning: riches, he
observes, consist only of things which have a value in themselves:
riches are great, when the sum of the values of which they are composed
is great. They are small when the sum of their values is small. Two
things having an equal value, are riches of equal amount. They are of
equal value, when by general consent they are freely exchanged for each
other. Now, if mankind attach value to a thing, it is on account of the
_uses_ to which it is applicable. This faculty, which certain things
have, of satisfying the various wants of mankind, I call utility. To
create objects that have a value of any kind is to create riches, since
the utility of things is the first foundation of their value, and it is
the value of things which constitutes riches. But we do not create
objects: all we can do is to reproduce matter under another form--we can
give it utility. Production then is a creation, not of matter but of
utility, and it is measured by the value arising from the utility of the
object produced. The utility of any object, according to general
estimation, is pointed out by the quantity of other commodities for
which it will exchange. This valuation, arising from the general
estimate formed by society, constitutes what Adam Smith calls value in
exchange; what Turgot calls appreciable value; and what we may more
briefly designate by the term _value_.

Thus far M. Say, but in his account of value and riches he has
confounded two things which ought always to be kept separate, and which
are called by Adam Smith, value in use and value in exchange. If by an
improved machine I can, with the same quantity of labour, make two pair
of stockings instead of one, I in no way impair the _utility_ of one
pair of stockings, though I diminish their value. If then I had
precisely the same quantity of coats, shoes, stockings, and all other
things, as before, I should have precisely the same quantity of useful
objects, and should therefore be equally rich, if utility were the
measure of riches; but I should have a less amount of value, for my
stockings would be of only half their former value. Utility then is not
the measure of exchangeable value.

If we ask M. Say in what riches consist, he tells us in the possession
of objects having value. If we then ask him what he means by value, he
tells us that things ar