l o u r n d aJLlbrrrnnon Sud8er. Vol. 2. No. 4, pp. I l l - 1%.

a Pcrsamon Prerr Lld. 1918. Printed in Crcat Britain.



Deparlmenr o/ Economics, George Mason University

It is taken for granted by most economists and not always be as important as how he was later
political philosophers that John Locke was in interpreted, we must discover the former in
some sense a precursor of the labor theories of order to accurately understand and appreciate
value of the nineteenth century British Classical the latter. Hence, in the following pages I will
School and of Karl Marx, yet there is a wide attempt to supply the missing detailed analysis
divergence of opinion on how Locke's work an- of John Locke's "labor theory of value".
ticipated and influenced the work of later It is not surprising that there should be such a
political economists. In large part this dif- variety of interpretations on the subject of
ference of opinion stems from a disagreement Locke and the labor theory of value. On the
among historians of economic thought over one hand, Locke himself was ambiguous about
how to interpret Locke himself on the subject what he meant by both value and labor in the
of labor and economic value. The only point of Second Treatise (as we shall see below), and on
agreement is that, in his major political essay, the other, there is no uniform agreement among
the Second Treatise of Government,[" Locke economists as t o what constitutes a labor theory
developed a theory of property which showed of value and who, if anyone, ever espoused
some relationship between labor and economic such a theory.[31It seems appropriate, then, to
value. Historians of economic thought cannot define how the term labor theory of value will
agree on the significance of this relationship or be used in this paper.
on how Locke's ideas on labor and value are There are three possible meanings of a labor
related to his supply and demand theory of theory of value that are relevant to Locke's
market price in his economic writings. It has writings: a labor theory of value may identify
been argued, for example, that Locke had the labor as the source of use-value or utility (the
beginnings of a theory of the exploitation of reason people desire a good in the first place), it
labor, that he provided a labor theory of value may attempt t o explain the determination of
in the long run to supplement his supply and de- relative prices (the exchange value of goods)
mand theory of price in the short run, that he based on some measure of labor inputs, or it
presented the "metaphysical justification" for may claim that labor provides the only
the nineteenth century labor theory of value, justifiable claim to receiving the exchange value
and that he had no labor theory of value at of the goods it produces. A labor theory of
all.'" value in the first sense states that the usefulness
What is characteristic of these and most of goods and services demanded and consumed
other evaluations of Locke's statements about by individuals is created either exclusively or
labor and economic value is that they are principally by the labor that goes into produc-
generally brief mentions of this aspect of ing them. Almost all economists would identify
Locke's thought in the context of larger works labor as a contributor to the use-value of com-
on much broader topics. There has been no modities, but the idea that labor is solely
detailed analysis to discover whether or not responsible for this use-value is unusual and
Locke can be said to have had a labor theory of probably only found in the writings of Karl
value in any sense of the term. While in the Marx.[" While explanations of the ultimate
history of ideas, what a man actually said may cause of value have concerned economists for

these ethical ques. it might instead attempt to define men had to appropriate some of these resources the just reward for the services of the labor that to feed. and (c) while he did hold a labor tionship between the relative value of one com. The structure of The third sense in which a labor theory of Locke's defense of private property is un- value is often understood is different from the doubtedly familiar to most readers.['] value to human beings. to explain how these appropriated the just price and the just wage are not unique resources became legitimate private property to labor theories of value. had given all men an equal right to use the tern of prices that deviates from this norm is earth's resources. it is this normative form that most non. some argue. ' ~Hence. Grotius and Pufendorf had and the labor theory of value in both the both argued that private property was establish- economics and political philosophy literature. value" ultimately refer to the theory of property change rate of a beaver and deer is equal to the he develops in Chapter V of the Second inverse of the labor time which has gone into Treatise. ' although it is society. that mative sense that the Ricardian socialist^^'^ and since property only existed at the consent of Karl Marx read L o ~ k e . this consent could be withdrawn or not strictly a question of economic theory. . clothe and shelter themselves.312 KAREN I . that two goods which earth and the fruits thereof which God had pro- take the same amount of labor to produce vided for their use. it is as a theory in the determination of price in either the long run the second sense. a labor theory of or the short run with the labor used t o produce value most often means a theory about the rela.'s1 Such theory of value at all. being normative rather than of nature before governments had come into positive. for example. men all had common access to the might hold. in order to survive. It is also possible to construct a famous justification for private ownership of labor theory of value that admits capital as a goods and land on the basis of the effort o r productive agent but still shows changes in labor which individuals expend to produce relative prices to be determined by changes in goods or to cause the land to produce goods of labor as. 3041 goes into producing a product. VAUGHN two thousand years. mankind who once shared in the original com- economists mean when they speak of a labor munistic ownership of these resources. did David Ricardo. a product. That is. avoid. which excluded other men from having any tions have been closely associated with Locke claim upon them. a conclusion which Locke sought to and value will be a major concern of this paper. While the ethical questions of general. where the just It was Locke's problem. individual unjust. ed in the state of nature by the cansent of all Indeed. Instead. theory of value in an ethical sense. the ex. A normative labor theory of value existence. and any pat. and it was in this nor.151 where in All discussions of Locke's "labor theory of the absence of scarce land and capital. However. In the state other two. produces. but by natural law. when most economists source of use-value. the modified by the society which sanctioned it ethical implications of Locke's ideas on labor originally. he argued that private property The following pages will attempt to show (a) was established in the state of nature not by the that Locke did identify labor as the primary consent of mankind. The most obvious (and perhaps only) example of a pure labor theory of exchange value is found in Adam Smith's beaver . his defini- modity to another and the quantity of labor tion of labor was such that the ethical conclu- which has gone into producing each of them.deer LOCKE'S LABOR THEORY OF PROPERTY example in the Wealth of Nations. although God should exchange for each other. and the problem of reward depends upon the price at which the seventeenth century political philosophers in product is sold. a theory of property implied. Or. [p. sions he arrived at were generally favorable to Such a theory tries to establish an exclusive capitalism as he knew it and to the private pro- relationship between the effort (or time) of the perty system upon which that capitalism was laborer and relative price of the commodity he based. It is there that Locke presents his hunting them. (b) that he did not connect discuss a labor theory of value. however.

3111 Thus. [p. although he does not claim itself provides very little that is of value to that land creates no value. for example. can labor theory of value usually support their in. Although there is labor being the unquestionable property of the laborer. ing fallow land "waste" to emphasize the pared to labor in the production of valuable smallness of its contribution to value in his goods. and speaks of value created by labor. against the desire men have for more than they quisition of unowned resources in the state of need. that ex. . For 'tis labor indeed that puts the differenceof value Locke's insistence on the overwhelming im- on every thing. 3141 survive. Land. sown with wheat or barley. This no body has any right to but whatever bread is more worth than acorns. yet every man has a property in his again and again. It k i n g by him the far greatest part of the value of things we removed from the common state nature placed it in. as when he says. that the im- man had a natural right to self ownership provement of labor makes the far greater paR of the which. so that. by itself. the value it does mankind unless it is combined with labor: create is minimal when compared to labor. he usually as good left in common for others. The labor of his body. he hath mixed h ~ labor s with. what the oortance of labor comoared to land in the oro- difference is between an acre of land planted with duction of valuable gdods might be somewhat . and cloth than plicated process of production which involves silk. hands. 305 -3061 means some kind of objective utility. and cloth or silk than leaves. 308-3091 Anytime "conveniences of life". when coupled with his right and duty to value. 3171 It is this kind any human effort. at least where there is enough. no man but he can have a right to what that some ambiguity in his usage. [pp. Locke terpretation by citing Locke's many statements pointedly refers to the Spanish practice of call- about the relative unimportance of land com. when Locke is once joyned to. and all inferior creatures k com- nature" providing very little that is valuable mon to all men. and access to God's earthly resources. and left it In. 3191 and rails labor was necessary to justify all types of ac. and hence labor creates "most of the value" of things we enjoy in this world. no matter how trivial. The question now arising is the nature of the cludes the common right of other men. and that each a n acre of the same land lying in common without any husbandry upon it. LABOR AS THE SOURCE OF VALUE the common pool of resources. satisfy few of man's needs.. are orooerlv his. "For own person. . . we mav sav. and thereby makes it his property. tively more valuable than acorns. to the launching of a com. [pp. 3121 He also refers to this kind of value as "labor"). it is defined as characterizes gold and silver as being "little labor. which depends only on that private property is justified through hard [something's] usefulness to the life of man". Indeed. and let anyone consider. of value Locke has in mind when he pended in purposeful action. [p. because they provide for more of the owning the land itself. [p. JOHN LOCKE AND THE LABOR THEORY OF VALUE 313 Natural law dictated that all men had common tobacco. and he concludes that "labor makes and joyned to it something that is his own. bread is objec- fallen to the ground. "labor" to include any act of appropriation of 3181 It is objective in the sense that there is im- natural resources. plied a common standard of usefulness for all ding over and picking up acorns which have people. an "in- Although the above passage seems to imply trinsick value. 3121 Labor is primarily responsible nature. industry". [p. Locke's basic premise is that nature by eyes. this sense. [p. on the other Those who have interpreted Locke's labor hand. While this very general definition of useful to the life of man". or sugar. [p. For this value which labor creates. that is wholly owing to labor and then he removes out of the state that nature hath provided. . 3151 it hath by his labor something annexed to it. permitted him to create private proper- ty where none previously existed: Locke repeats this theme of "unassisted Though the Earth. and he will find. [p. Whatsoever skins or moss. it had important implications for for creating products which are more useful in Locke's view of economic value. from the simple act of ben. and the work of his wine than water. is ex. himself. work (this is the usual connotation of the word [p. enjoy in this world". contributes almost nothing to value when theory of property as implying some kind of compared to labor since land. Locke makes clear that he means the "real use and necessary support of life". .

private property rather than to enunciate a Ricardo. they need less of thecom- from the institution of private property. [p. century view of land and labor as co-equal although he claimed that the same principle of sources of value. yet for want o f improving it by labour. claimed that labor was theory of economic value. This is obvious when one considers and thus. than he could from the common was a result o f natural law have from an hundred left to nature. in this case. The puzzle evaporates. but in this case natural law is especially easy to comply with since it coincides with the LABOR AS A MEASURE O F VALUE self-interest of all mankind.e. Locke did have a labor theory of value. [p. [p. 3081 What makes ownership of ting to demonstrate conclusively to his readers the land itself palatable. 314. labor. for example. conveniency went together". have the application of labor. plants. and once labor is pur- not one hundreth part o f the conveniences we enjoy. ownership applies: "As much land as a man however. 2 n d can use which the discussion of land and labor takes the product of. apt to produce in abun. England. men would be living makes the earth more supportive of human life. and there is then more to support themselves. so much is his property. whom nature having furnished as responsible for a small part of the use value of liberally as any other people. He by place. lodges. when men choose to mix their to point out the beneficial effects that flow labor with the earth. while he land and has a greater plenty of the conve- argued that the right to own property apart niences of life from ten acres. may truly which did not depend upon the consent of be said to give ninety acres to mankind". [pp. Hence. Locke argues that "he that incloses more acceptable to his audience. as it were. Thus. common".'"' Smith. there is a dramatic in- feeds. and alone could not be enjoyed by humans without delight. his purpose is to exchange value (or price) although the two emphasize these utilitarian implications of ideas may be found in the work of one man. than several nations o f the Americans are o f Locke believed that labor was the primary this. then. he argued that while private property is the they merely lived off the products of inevitable moral consequence o f men laboring "unassisted nature". the activity by which men acquire the conscious application of labor to "worth. . and a king o f a large and fruitful territory there posefully applied to land. In fact. inclose it from the in the creation of value because he was attemp.3151 In this limited sense. he also took pains 3121"'' That is. In ef. mankind for its legitimacy. Locke minimized the role of land his labor does. and is clad worse than a day laborer in crease in the usefulness of the products created. source of use value. in- that: cluding those who d o not own land. who are rich in Land. the source of value in all commodities that While it is not difficult to accept that one could be increased in supply and then attemp- should "own" the water one draws from a ted to develop a theory of value in which the stream or the wheat one grows on otherwise quantity of labor necessary t o produce a com- fallow land. i. is also the activity which less" natural resources. property is beneficial to everyone. [p. however. when Identifying labor as the source of use value is Locke says that labor makes the greatest part of not the same thing as making it the measure of the value of things we enjoy. mon stock t o provide for their support than if fect.314 KAREN 1 VAUGHN puzzling in view of the common seventeenth difficult to justify owning the land itself. are the exter- how "the property of labor should be able to nal benefits accruing to mankind in general overbalance the community of land". as savages. the products of land dance. in an effort to make his theory of property In fact. private property. "right and common stock left over to support others. fruitful sail. improves. what might serve for food. and poor in all the cam. T o recapitulate so far: it is obvious that There cannot be a clearer demonstration o f any thing. 3201 Without Thus. with the materials o f plenty. While land by itself was forts o f life. Thus. when one considers the context in tills. 3141 even when land ownership is limited to a few. rayment. goods people consume. cultivates. natural law guarantees one's right to pro- perty. Locke perceived that it was more modity explained its exchange value.

the other provi. problem of comparing the value of goods pro. from this passage at least. "Some Con- noted. are. and cloth or silk than leaves. which. that is wholly owing to labor and industry. and from the other possibly not worth a its internal consistency. but how while labor creates the "greatest part of the much more valuable? In a world where creation value of things we enjoy in this world". also believe that labor its market value. and another in America. in a year. In the above passage. " . ."41 The im- much value labor creates. same husbandry. with the modities at all times and at all place^". 3121 This definition was also can compare the values of different com. but also the fact that it penny. If this interpreta- values? Bread and wine may be more useful (or tion is correct. skins or from an Indian's land in America were sold at moss. one would think it of vital im. and sold here. in accor- value. with the price.^"^ But further implication that the intrinsic value of did Locke. not 1/1000. Perhaps the most economic value he developed in his economic striking has to do with the way he contrasts the writings also informed his discussions of value "intrinsick" value of land with the "benefit in his political essay. but close examination of be made from this passage about Locke's ideas both works suggests that the theory of on labor and economic value. at least. [p. 3161 tent value theories in his political and his There are several interesting inferences that can economic writings. [p. earlier in the Second Treatise. as depending measure of the exchangeable value of all com. could in some way be used to measure and com. the intrin. . 3151 ductive while the Indian did little more than But how does one go about computing these gather the bounty of nature. how much labor makes the far greatest part of the value Englishman had labored to make his land pro- of things we enjoy in this world. Locke is saying that if all the output than water. without What makes this interpretation of Locke's doubt. would receive only 1/1000 of the income an sions which our industry and pains prepare for us. used in Locke's economic writings. ". of the same natural. mankind receives" from it. but the portance to Locke to be able to measure how market price at which it can be sold. But yet the benefit mankind receives from theone. JOHN LOCKE AND THE LABOR THEORY OF VALUE 315 in contrast. however. who identified labor as the primary something could (and often was) different from source of use-value. I may truly say. view of labor and value so appealing is not only is worth 51. Ap- For whatever bread is more woRh than acorns. It has been suggested by greatest part of the value upon land. did not identify labor as a source of sic value of goods had been defined. intrinsick value. but he did claim that labor was "the real dance with common usage. goods are not valuable simply because Evidence that Locke at least considered the labor has gone into producing them. Tis labor then which puts the his economic writings. he will then see. and "the only measure by which we m a n . siderations of the Consequences of Lowering . without which some writers that Locke presents two inconsis- it would scarcely be worth anything. . How then does Locke plication is clear: men labor to produce goods propose to compare the value of goods produc. there is no reason to duced with differing amounts of labor is found suspect that Locke believed there to be any in the following passage: causative connection between the amount of An acre of land that bears here twenty bushels of labor used to produce a good and its market wheat. For the when anyone hath computed. labor which goes into producing it. Therefore. [p. would do the like. . the Indian The one of these being the food and rayment which unassisted nature furnishes us with. only on their usefulness to the life of modities". wine parently. the intrinsic value of a thing seems to pare the exchange value of goods? The problem be only a potential it has to benefit mankind. is implied in a passage we have already quoted while the actual measure of that benefit is the in part: market price of the thing in question. Englishman would receive from the output of a which how much they exceed the other in value. current market prices in England. which men will value (and are willing to pay ed by labor? for). comparable piece of land in England. if all the profit an indian received from it is consistent with the value theory he presents in were to be valued. the of valuable goods also results in the creation of measure of that value is not the amount of ownership rights. As we have alreadq Locke's major economic essay. then what Locke believes is that desirable) than acorns and water.

The change of this marketable value of any they will be willing to pay a price for it: commodity in respect of another commodity or in respect of a standing common measure. to be reduced into any proportion to its consump- ling with a problem which had troubled tion. which depends upon their objective usefulness the price they will pay depends upon the quanti- in supporting human life. increases as its quantity is reduced and ween stating. the being or well-being of men. the usefulness of something does consists in its fitness to supply the necessities or serve help to determine its price. but only insofar as it the conveniences of human life. In addition. . . In order to support his t o ask is why not? Why doesn't a gallon of contention that interest is a price. and is economic thinkers at least from the time of sometimes sold dearer than wine. that water is more decreases as its quantity increases. economists would finally be able to result. yet the Bounty of Providence has made their usefulness and its exchange value? Locke grants production large. [pp. 461 but notice here that a thing's another. Hence it is. and therefore is nowhere of any price) comes anywhere What we see in this passage is Lockegrapp. and the mare affects the vent (or demand) for the product. and we find Locke Locke only approached the correct answer by stating very clearly what he believes to be the recognizing that the exchange values of goods relationship between intrinsic value and market depend not only on their usefulness in general. as convenience.l"l was published in 1692 to oppose a quantity of it constantly worth any assigned bill before Parliament to lower the legal rate of quantity of another". Locke if they are both useful and if their capability t o found it necessary to explain how prices were in support human life doesn't change? Two cen- fact determined in the marketplace. guarantees that people want a good. that Aristotle. on the supply and at which specific quantities of goods exchange. and yet these have generally no price at all. This orooortion in all commodities. demand for the good. as to make any assigned quantity of i t constantly worth any assigned quantity of mine". necessary i t i s to our being. usefulness only another. nor yield which the commodity bears to something else. i s the greater than their vent in most places of the world. . theory of value: quantities which are subject t o change. price.["' Fur- 1. as believe that this usefulness determines the price this is commonly interpreted.671 everywhere. furthermore. who first formulated the question: the best. i t begins presently to have a price. [pp. thermore. but the alteration of some proportion. Locke perceives that there is a difference bet. and that in water always exchange for two bushels of wheat general prices can not be dictated by law. any money: because their quantity i s immensely . . for example. subject stated in the title. proportion of their quantity to their vent. not that 4.316 KAREN l VAUGHN the Interest Rate and Raising the Value of tled value in anything. as to make any assigned Money". without restraint or inclosure. yet he does not ty of the good proportional to its vent. in a concise summary of his but also on the quantities which are available. than air and waler modity . when they will exchange one for suming the good. 63-611 (as he also did in the Second Treatise) that Given that the quantity of a good is sufficiently goods have an "intrinsick natural worth" limited that people will pay some price for it. but the Logical question interest from 6% to 4%. and most useful things are commonly the cheapest. He says. But as soon as ever water (for air still offers itself 66 . or opi- 2. That there i s no such intrinsick natural settled nion guided by fancy or fashion shall deter- value in anything. of wheat. his essay deals more with the subject of answer this question satisfactorily by market value and money than it does with the distinguishing total from marginal utility. . 5. necessity or usefulness. The price. usefulness is not invariable but is determined by 3. [p. or the more i t con- tributes to our well-being the greater i s its worth. the subjective evaluation of the individuals con- tities of two or more commodities are pro hic and nun?. or. i s not the What more useful or necessary things are there to altering o f any intrinsick value or quality in the com. and saying tempting to argue that Locke was saying that that one gallon of water is "worth" two bushels the greater the quantity of any good available. because. He says that there is no "natural set. the less important the use which the additional . The marketable value of any assigned quan. . . though their consumption be what is the relationship between a good's great.1"' It is useful than wheat in the abstract. That the intrinsick natural worth of anything. As a turies later. but "The vent of anything depends upon its yet. and suitable to it. equal.

these metals not spoil- airily dismissed. which may be hoarded tionship between labor and price cannot be up without injury to anyone.lml the more useful the goods produced."'] Thus. might have considered labor in some way to be Locke is arguing that the use of money allows related to the selling price of a product. He says: the goods it produces. or its value. One is not sure if he means to defined labor to be merely picking up acorns say that labor is in great part the measure of the from the ground or drawing water from a consent of men t o use gold and silver. Yet Locke has no means clear. The market operates according to supply his numerical examples was that the greater the and demand: why this is so was not a question amount of labor mixed with land. the overplus. by receiving in exchange for contexts of the statements. [p. and just asserted that this is in fact the It appears that all Locke intended to say with case. ing. In great part. being little useful to the life tual numerical relationship between the con. determined by supply and demand. they produce Locke refers to labor as the measure1"' (italics things which people value more highly than the his) of value. Chapter V where he is discussing the effect of modities. how the more likely explanation considering the a man may fairly possess more land than he himself can use the product o f . but imputing such a market price than goods which require little sophisticated understanding of diminishing labor? O n the other hand. Locke sidestepped the question of why ship between the quantity of labor (or land) re- the greater the quantity. he is saying no more than that the then implicitly saying that goods requiring degree to which men consent to value gold and . JOHN LOCKE A N D T H E LABORTHEORY O F VALUE 317 unit will serve and therefore the lower the price more labor to produce command a higher people will pay for it. 9 9 / 1 0 0 . or was he just resorting to uheteof ldbor )el makes. This instance is to be taken more duction of a good measures its long run seriously than the previous one. If the first reading without any labor being expended. product in mind. [p. labor does bear some relation- something. we still The second indication that Locke may have must question whether he also believed market believed that labor could be used as a measure price to be somehow influenced by the labor of value is in the penultimate paragraph of which goes into producing valuable com. rayment.has its value only from the consent of men. the more useful the resulting goods produced. same thing as asserting a predictable relation- Instead. The first is men have agreed among themselves to use several statements that labor is responsible for money. (Recall that one interpretation of the use of money on the distribution of proper- Locke is that he believed the labor used in pro. I I IS pldin i h d ~men haie agreed I" jhpruporuunatc hyperbole to emphasize the importance of labor and uncqudl p o w c w o n o f the earth. or 999/1000[20'of the value of this result. and voluntary consent found out a way.)t"' actually uses the term measure in connection There are only two indications that Locke with labor and value. the idea of a rela. 3061 This means that no consumed labor is in great part the measure of the value of goods can be the products of nature alone the gold and silver men use. Is he not is correct. gold and silver. 3191 he claims the value of things useful to the life of man is 99/100 due to labor. I k n m r o 5 u r r . the greater While it appears so far that Locke believed their vent (or demand) and the higher their that the "benefit" mankind received from price. Did Locke have some ac- But since gold and silver. or if stream. In this disputed passage. the lower the market quired to produce a good and its market price. the) h w n a bb to the creation of value? While the latter seems a tacit. he means that when This is the only place in his writings where men expend productive effort. It is undoubtedly true that when ing or decaying in the hands o f the possessor. this is not at all the marginal utility t o Locke would be misplaced. but since both are in the Second Treatise. and what he means by this is by things offered by nature alone. which Locke was directly interested in answer. there is nothing inherently immoral in 9/10. ty in society. price. for here Locke value. o f man in proportion t o food. and wealth to be unequally distributed. was measured by its ship to price but only by creating utility market price and that the market price was reflected in demand for the goods it creates. and car- tributions of labor and land and the price of the r i a ~ e . in general.

an ethical the fact of many laborers cooperating in the sense . however. but even if we presumably. to acquire property. by political philosophers and economists alike If this is true. is The former holds that the real value of to be counted into the bread we eat. it must also so. in fact. Yet in "Some Con. Does not Locke thought this relationship might be. in favor of others. who digged and wrought the iron and stones. The second possible somewhat eccentric interpretation. There this man have a right to everything he creates? is no way to know for certain what Locke The whole purpose of the Second Treatise. This is the argument that of gold and silver and not the measure of men's since labor creates the value of the output it consent to value the metals. The more common one is the second. the laborer is entitled to receive the siderations".[2s' Locke market price of commodities. He tells us: is fundamentally a theory of the "just" price For 'tis not barely the plough-man's pains.318 KAREN 1 silver is the degree to which they have labored viously is not what Locke believed. Locke has said that the value of full value of the output as his just reward. those who broke the oxen. and there is no way to determine what something new and uniquely his own. is to answer "yes" to this ques- assume that the second interpretation with all tion. it is not unreasonable goods it produces and not the other way to assume that he believed men would consent around. who felled and framed the forts to produce. requisite . The problem argues that the act of creating property is with this interpretation is that there is no cor. oven. yet once production moves beyond the of its tortuous reasoning is the correct one. which are vast number. it is simple form of one man subduing nature to his obvious that there is not enough evidence in this will. produces.'"' many people cooperate t o produce a valuable good. ethical implication of a labor theory of value. there are two kinds of ty of labor and the public benefits of property ethical arguments on labor and value: the first ownership. then he must have thought there for not perceiving fully the implications of his was some relationship between labor and the theory of property for wage labor. that he has frequently beencriticized measure the value of the things money can buy. since he uses We have identified a third way .lZalwhich leads us to believe that if labor amenable to this kind of argument. and the baker's sweat. reaper's and thresher's toil. meant by this strange passage. may very well be applicable to Locke held labor to be the measure of the value Locke's thought. and given his view that the value distributed property resulting from the use of of labor depends upon the market value of Phe gold and silver as money. Man roboration for it anywhere in the rest of his mixes hi body with God's resources to produce writings. In fact. the while the second is a theory of the "just" wage. any other utensils. or goods should equal these real costs. money depends upon the goods that it can Locke's theory of property is highly buy. This is a analytic or ethical sense. Since Locke believed that sistence on quantity and vent as the only deter- one of the main reasons for forming civil minants of market price (the only kind of price governments was to protect the unequally he discussed). We have already argued that there is to the valuing of these otherwise worthless no indication that Locke believed that prices metals in proportion to thedegree to which they should in any way reflect labor-time in either an had labored to acquire property. In a production process that involves more than one laborer. and therefore the prices of timber imployed about the plough. mill. given his in. So much measures the value of money. This ob. the labor o f something is what it costs in terms of human ef. The problem arises when even in the long run. that however. it has appeared to some Locke scholars one dependent clause to support the view that that he ignores the property rights of some men Locke had an analytic labor theory of value.in which a labor theory of value can be production of goods to illustrate the productivi- interpreted. responsible for creating economic value. who owns the final pro- A NORMATIVE INTERPRETATION duct and how is that ownership determined? It OF LOCKE'S LABOR THEORY OF is evident that Locke expects his theory of pro- VALUE perty to apply to such situations.

Locke is saying that the fact that a Locke's attitude toward the property rights laborer worked to produce a product does not of wage laborers would be more satisfying if he lead automatically to the establishment of that had addressed himself directly to the problem product as the property of the laborer. least sometimes. in exchange for wages he is to owns the product created? receive: and though this commonly puts him into the family o f his Master. and present and the effort of the one who directs the removing it out of the state nature leaves it in. must all be charged o n the account o f fect. able to negotiate with the employer for a wage He states precisely this when he describes how which represents his entire claim to the property men establish property in what was originally created by his work. Yet a n employer over the behavior of his employee in at least some of these stages. we can Obviously. porary power over him. [p. wage labor. Pascal Larkin. In ef- made bread. without which the common is o f labor of others: each receives part of the value n o use. In another context later in the Second sells his output for a price to the individual who Treatise he discusses the limits of the power of is engaged in the next stage of production. and at For a Free-man makes himself a servant t o another. then. becomes my property. the owner of the output produced contractual arrangement where the laborer is is the employer who directed the production. yet it is unfair to ceive of an organizing principle where at each say that he neglects the property rights of wage stage of production. the individual producer labor. with the wage earner receiving a depend o n the express consent o f all the Com. which begins lheproperly. my servonl has cul [italics mine] and the ore I have dug in any place where I have a right to them in com. of wage rate determination in his economic This passage has generated a good bit of writings. for example. level as a man's horse and implies that the Locke is still open to Larkin's criticism that employer can therefore extract as much work employers are entitled to pay employees as little . Needless to say. [p. Locke does put wage labor on the same functional level as a horse insofar as they are Yet. . In fact. it would be easier to claim that employer labor. Locke did not believe that wage earners were in has complained that in the above passage Locke danger of being "exploited" by employers. from being seed to be sown t o its being for as little pay as he can get away with. as in themselves. and n o greater than what is there are several indications that the problem contained in the contract between 'em.'"' This is only partly materials. JOHN LOCKE AND THE L ABOR THEORY O F VALUE 319 to this corn. more than one when he explains: person must work to produce the good. Although it is labor that part of the common stock by referring to the creates property. how does the labor theory of property a p p both factors of production (much the same as a ly in a society where production takes place modern economist would treat capital and through a division of labor? One might con. 3401 would not have troubled him. Locke gives wage labor no labor. a laborer (or servant) and his employer as a tion process. creates value and undertakes t o do. which remain s o by compact. Ihe turfs portion of the market value of the product. labor as substitutable inputs). does not he creates. . this in no way implies consis- mon with others. And the taking o f this or that part. . yet it gives the master but a tem- rights under the division of labor specifically. in- medieval commons: cluding the effort of those who in the past pro- We see in Commons. labor refers to all effort. 3071 tent exploitation of wage labor at the hands of In so far as servants can be taken to represent employers. and under the ordinary While Locke does not discuss ownership discipline thereof. duced the capital goods used by laborers in the that 'tis taking any part o f what is common. In has put a human being on the same functional the absence of a theory of wage determination. there would be an employer by selling him far a certam time. [p. If it could be shown that Locke believ- comment in the literature on Locke's political ed that wages depended upon something other philosophy as being evidence of Locke's view than a two party contract between employer that wage labor was somehow inferior to and employee. guaranteed wage rather than an unspecified moners. Thus the grass my horse has bit. Larkin argues. and received as an effect o f that: nature and the Earth furnished only the almost worthless property rights at all. Who. 3161'''' true. the service he and an employee. Locke sees the relationship between infer that he would argue that in any produc.

they as correctly be argued that Locke's theory of are both constrained by a market wage. the occasions Locke asserts that laborers live relevant question was not whether employers "from hand to mouth" or that they generally are fair in their dealings with employees. but earn little more than a subsistence income. The in times of scarce labor could negotiate for right to own private property was unlimited so ruinously high wages. which differed from that determined by sympathies so generally run toward the wage the market. Thus. either wage. There is some evidence that earners by malevolent wage payers. yet Locke himself did not make any consistent exploitation of poor wage this assumption."" rather why the employer . For Marx. however. equal to other wanted to create his own pr~perty. but on three separate equal property ownership. To Marx. the fact that wage belongs to labor.'~']The first European countries to avoid suffering an condition guaranteed that the second would ob- emigration of English laborers. the he gives no analytic reason why this should be fact that such relationship exists implies so."" earner that this argument seems never to have occurred to anyone. he just accepts this typically mer. however. since ship emerges in the first place.employee relation- This is no "iron law of wages". then. a group whose usefulness Locke did with common. For some reason. And while it is still technically true to one's sense of justice only if one believes that both employer and employee are able employees to be weak and inefficient legitimately to negotiate for as much of thepro- bargainers relative to employers. while tain in the early stages of the state of nature. or what the consequences to the employer. unowned resources to create not recognize. exploitation There is no direct treatment of wages in was inherent in the system which permitted un- "Some Considerations". is that Locke described a wage as they can get away with. Even under these conditions of equal oppor- tion of a market wage rate. Karl Marx Locke actually believed wage contracts were nevertheless saw in Locke the beginnings of a constrained by a market rate which sometimes theory of surplus value. earners earn little is not presented as the fault of According to Marx. rent.320 KAREN I. And to him. in Locke's essay tion in Locke's system is the unequal distribu- are usually farm workers just barely worse off tion of wealth that arose in the state of nature than their tenant farmer employers. in order for labor to be exploited. it is upsetting economics. and therefore wage rates.'"] a fact that to Locke argued there were enough common resources of com- for the necessity of keeping England's money parable quality remaining for anyone who supply. just as interest employee agrees to the wage rate. thereby also injuring the long as two conditions held: that no one took suffering farmer. i t might just perty as they created by their joint labor. it is usually assumed that wage earners will almost MARX ON LOCKE always get the worst of any deal made with Although Locke certainly did not envision wage-payers. and that higher wages. Instead. wages are referred tunity. both in at least one circumstance where farm workers consumable goods and in the land itself. Locke describes private property in the state of nature. "capitalist expropriation" of what rightfully cantilist idea. The property entitles wage earners to extract as high crucial point. who suffer and was perpetuated in civil ~ociety. however. Locke believed that some peo- .we1In addition. no matter no just reward. there is no specific discussion of the determina. Furthermore. all people had an equal right to mix their labor dlemen. Locke argued that the hardship caused by "brokers" or mid. interest.[''] Wage earners of various more than he could use without allowing any of kinds were portrayed as moving in response to his property to spoil or go to waste. and rents are analyzed as prices in Locke's even if this is what Locke meant. the source of exploita- their employers: wage earners.[~'J In the from the vagaries of the marketplace and from Second Treatise. one didn't favored the employer and sometimes favored have to postulate the existence of evil employers the employee. VAUGHN as they can get away with as long as the to as if they are market prices. yet profit. we recall. Of course.

or wool for a with property. 01 acorn. so long as nothing mon stock. pleased with its color. If he gave away a consequences of the resultant inequality of part to any body else. as we have already the perlrhlng uf anylhmg urelcsrl) In i t . there substance [precious metals]". That is. poire\ion. 365). until money comes into found consequences for society. 3181 Marx is less and less of the common stock left for called the results of this agreement a "political newcomers to mix their labor with. as long as but which arises out of an undesigned social everyone took only what he could use before it p r o c e s ~ . some lasting thing that men might keep without spoiling. themselves than others. JOHN LOCKE AND THE LABOR THEORY O F VALUE 321 ple would be more "industrious and rational" nature of a convention depending upon social [p. [pp."" goods as soon as gathered. and tempt to subvert natural law). these he also made use of. And indeed it was troduction of money are significant (and have a foolish thing. or exchange his sheep for shell. the diversity in property ownership believing that the use of money implies pro- would be small. its evolution can hardly be surplus value created by the worker and ex- called a political invention. And if wealth and exhaustion of the common stock are he also bartered away plums that would have rotted also important (and more to the point of this in a week. he ~~- miaht heaD uo as much of these durable things he plc&d. or by in essence acting as entrepreneurs And thus came in the use of money. As a government. and robbed others. He was only to look that While the political consequences of the in- he used them before they spoiled. noted. t ~M ~ ]a x was correct. they Here h s perty in jeopardy. in spoiled. for nuts that would last g w d far his paper). Again. it property. of wealth to perpetuate and increase in size. will have to find some way of sparkling pebble or a diamond. and keep those by mixing their labor with the resources (land him all his life. it The introduction of money plays a pivotal becomes possible for the more industrious to role in Locke's state of nature in that it marks a increase their wealth relative to the less in- transition period leading inevitably to a more dustrious without running up against the complex economy and to the creation of civil spoilage limitation to property ownership. the demand for common resources in- money as an "agreement among men to place creases and resources finally become "scarce an imaginary value on an otherwise worthless and of some value". However. he wasted not the common stock. 3091 and would create more property for acceptance for its existence and continuance. else he took more than his share. but becoming wage earners. They can do this either by pert) no1 bing in the largeness of hi. 3171 Eventually. It is more in the propriated by the property owner and hence . [p. the economic more than he could make use of. had lhacb) a pruwrly in ihum. he did no injury. Although Locke's that men decide to enter into a contract to form use of the term "agreement" seems to imply a civil government to protect and regulate their consciously formulated contract (and if so. 3081 who would He Ihat gathered a llundred hu>hcl. but perishable supports of life. The most important economic conse- eating a whole year. Locke actually government provides a means by which proper- describes money as the result of an evolutionary ty owners protect themselves against the "quar- process conforming exactly with natural law: relsome and contentious" [p. [pp. Locke describes the origin of result. ur ap. otherwise put the enjoyment of legitimate pro- ples. and that and borrowing land and capital to finance their by mutual consent men would take in exchange for own enterprises. those who want to earn a living but perished uselessly in his hands. and invention" contradicting the law of nature on disputes between property owners and non- which private property was founded (Theories owners become more frequent. p. Hence money enables the inequality might possibly be a means by which men at. if he would are not lucky enough to be born into a family give his nuts for a piece of metal. so that it perished not uselessly in his possession. have to pay the owners a fee (rent and/or in- 318-3191 terest) for the use of the property. [p. he invaded not the right of others. Marx claim- While there is an element of agreement in the ed that interest and rent were evidence of origin of money. In this case. It is at this point of Surplus Value. 310-3111 vent of an acceptable money-commodity. With the ad- use. to hoard up been too sketchily treated here). they would then the truly useful. destroyed no part of the portion quence is that after the exhaustion of the com- of goods that belonged to others. as well as dishonest. however. thc ciceeding of ihc hound5 of hts j u t pro- ~~ and/or capital) owned by others to create their own property.

As for the ethical arguments to wage labor also apply to interest and rent that labor should receive as its reward the value payments. as Locke did. who having skill in husbandry but no land of h ~ owns to component costs of production which represent employ it in. and t o the benefit of those who clear the land. if labor is indeed labor it contained. as he. . either in the long run or the left to infer (the preceding quotation not. however. they perform a goods useful to human life (and therefore function which operates to the mutual benefit desirable). Locke. short run (concepts that were foreign t o withstanding) that the same rules which apply Locke's thought). we from the less enterprising to the more enter. one jor creator of economic value. who produce in- society in general by increasing its productive termediate goods for sale. but then what has hap. how can he conclude that dictum: "It is not that pearls fetch a high price rents and interest are legitimate in his economic because men have dived for them. however. of the output it created. that the unequal distribu. p. and who direct the output. but on the writings. some time to the value of o u t ~ u t . VAUGHN illustrated the exploitation of the non. p. that labor plays no role in the Surplus Value. ["Some Considerations".1 In summary. they are contractual ar. prising. T o Locke. and these include the activities of of owners and borrowers. and get a livelihood. since they "by compact transfer that contrary. The measure of the argue. something and the amount of labor that went pened t o the labor theory of property? One is into its production. this was in fact the sub- rangements that permit non-property owners to ject of all of Chapter V in the Second Treal~se. as receiving rent for land . While both payments had their origin but all purposeful acts leading to thecreationof in unequal property ownership. If we recall rents were market means of allocating resources Locke's broad definition of labor. ' ~ " Borrowing money upon use is not only by the necessity of affairs. argued that diving made the pearls more useful siderations". Locke argues: productive activities of others. p. 55. Marx didn't have a point in usefulness and scarcity and not the amount of his reading of Locke. While Locke did believe that labor was the ma- equitable in the paying of interest and rent. and the constitution of human society. That he that has skill in traffick. remember that it includes not only direct laber. 57. This does not propertied class by the propertied (Theories of mean. There is no rent developed naturally and justly in the state indication that Locke believed there would be of nature and became institutionalized as part any relationship between the market price of of the social contract.) Does one rule of value t o the life of men because it made them more creation and ownership apply in the state of readily available. . but as argue (and as Smith on occasion argued). the following can be concluded about Locke and the labor theory of value. is as equitable SUMMARY and lawful. but has not money rents (and profits) are not deductions from the enough to exercise it. men dive for them because they fetch profit that was the reward of one man's labor a high pri~e. but that also to receive profit for the loans of money. . enjoy the benefits of the property of others in Since individuals mixed their bodies in the form . in view of Locke's labor or price of a thing was dependent upon its theory of property. the relativevalue wonders if perhaps. return for a specified payment."'~'' However. saw creation of the property that forms the payment the matter differently. usefulness of a thing was the price it would sell tion of property which gives rise to interest and for in the competitive market place. 365). That is. he would also have into another man's pocket"? ("Some Con. has not only reason to rent land but to payments to all those who have contributed at pay money for the use of it . While it appears that Locke saw nothing in. . Locke would have agreed the major source of value as Locke argues in completely with Archbishop Whately's famous the Second Treatise. interest and to the "capitalist" or landowner. Pearls on land are more nature and another in a politically and useful and hence more valuable than pearls in economically complex society? One could the bottom on the ocean. as Marx would money to drive his trade. That is. Hence interest. has not only reason to borrow value created by direct labor. - KAREN I. but much reason to pay use for that money. . unavoidable to some men.

one's status. one earned property through one's own trepreneur.capital. they created person. some stock of human both payments originating in unequal distribu. one's wealth school more than a century later. The amount of the wage he (and status).profitable. ultimately tied to land tenure. one's own efforts and the borrowed property of Needless to say. were treated as come. interest and rent. century. With this basic human capital. Locke's Two Treorises of Civil Govern- ment. But it was Locke's intent to present a NOTES theory of property which transcended the 1. but the value of that property was happened to work at some project. change economy based on Lockean property Locke's labor theory of property implied an rights.exploitation of workers forced to "alienate" fortunately. Peter Laslett ed. social mobility sion of the bourgeois concept of right as against and improved economic opportunities for all. Wage labor determined by the market. resources are allocated through a system optimistic view of the possibilities open to all of merit rather than family. that Locke. That imperfectly and incompletely.. in a commercial ex- writing on labor and value. and claimed that it sewed as but especially for the talented and industrious. and can flow to "industrious and rational" people in the those who are most able to use them for their emerging capitalist economy of the seventeenth own (and society's) benefit. social and economic mobility. If anything. It was just this kind of resource stead defined property-creating labor to be the mobility that Locke's labor theory of property labor of the person directing the value-creating and his theory of market value justified. John Locke. feudal privilege". Cambridge: Cam- feudal limitations of wealth and station by bridge University Press. one market determined rewards for past labor doesn't need a pool of common resources or the which served the purpose of allocating property benefits of gentle birth in order to aequire real to the most industrious user in a complex property and wealth: one can do so through economy characterized by scarcity of resources. one might almost say the en. he never elaborated upon). Hence.market. there was no theory of ex. liberalism of Smith and the British classical privileges and.of resources to those who can make them most duced and the reward to wage labor. (2nd ed. un. means of the concept of property in one's own Hereafter referred to as Second Trealise. which provides him with a source of in- tion of property ownership. where the wage earner settled in advance the land belonged by right not to a noble family but reward he was entitled to receive for his efforts. Marx their labor by selling it as a commodity on the epitomized Locke's philosophy as "the expres. however. the "basis for all the ideas of the whole of It was in this way. property endowment. In feudal society. This did not imply that wage labor personal freedom.others who may not have as great a share of ploitation either stated or implied in Locke's vision or ambition. albeit subsequent English political economy". self- market as were all other prices in Locke's ownership implies that everyone has some basic economic thought. In his endeavor. While land owner- was considered to be a contractual arrangement ship could be an important source of wealth. nor did it imply that there should be Commercial economy thrives on the transfer any specific relationship between the value pro.system. The concept of self-ownership is clearly something new which was indisputably their not only a cornerstone of individualism and property. then. Locke saw freedom. perhaps. in a society received was most likely determined by the characterized by resource scarcity. Similarly. JOHN LOCKE AND THE LABOR THEORY OF VALUE 323 of their labor with free resources. but also an invitation to created the whole value of the property. provided a short description can serve as a concluding philosophical justification for the economic statement here. Locke in. Furthermore. to the highest bidder. pp. were determined by a network of interlocking feudal obligations. rather than the labor of all who efforts. . 1967). and ownership of capital in exchange for giving up any property rights in could rival land as a source of personal wealth the final product. 283-446. Where Marx saw self-ownership in terms of In a flash of tantalizing insight (which. to a great degree.

~~ ~ . Press. The IdealFoundationr of Retrospect (Homewood." Ricardo. labor theory of value. almost twenty 13. Capital and Interest. 5) Prentice-Hall. Illinois: Richard D.. 180. p. 166 all attribute a labor theory 5. pp. in combination with his theories of interest and rent as 4. Macpher- the usual textbook accounts of the labor theory of son argues that Locke's statement about the supposed value of the British Classical school. Clarendon Press. have seen. (New York: The Modern Library. Locke's argument. Smith years ago. . labor quantity and labor cost theories of value in com. despite Locke saw arising from property ownership. pp. 28-29 would. Theories 01 Surplus Value. pp. who claims that von BahpBawerk. 5 . Mark Blaug. Dcnt &Son. the Hutory of Ewnorna's (Chicago: Un~rcrrity of 14. (New York: Longmans.id Kicar. although he does " .: Praeger.367. This was especially true of Thomas Hodgskin. Spiegel. or a1 While it is common to discuss the "labor theories" of least not to the loss. Samuel Hollander has recently argued per. Theorier o f Value and Distribulion his subjective value theory in his economic writings. 462-472. 1959). be called a labor theory of and 242.rlabor theory of valuc in i h i i r l y slate *a\ of the products of enclosed land need take place for a 'summary rtatemcnl ilrarly dcsigned as an 1nrrodu2. The Principles of Political Economy and Tarolion.129. whole product will be distributed to the benefit.188.421. but it is still but rather had an empirical hypothesis about the major interesting to note his attempt to compare the output of determinants of long run price. societv* to benefit from orivate orowrtv. No "distribution" [hat Sm~1h. 137.the accommodation of an European prince does not credit Locke with an economic labor theory of not always so much exceed that o f a n industrious and value.Y. . as we Economy. LO. Economic Thought (New York: Oxford University Inc. l959). 8. 1940). 21 -22. of value to Locke on the basis of Chapter V of the Se. to measure the "contribution" of labor. 212). in The Economics ofAdam Smilh (Toronto: more raw materials for the rest of mankind rhan had Heinemann Educational Books. is taken by Donald F. 1962). In these passages. 1973). Series 3. "What to it. implying exploitation of labor. A History ofEconomic frugal peasant. reprmted in Er. idea in Chapter i of Wealth ofNalions. Colin Macpherson. 365 -367. 31. Evervman's Librarv Economics(New York: Norton and Co. the absolute p. 365 . 419. 326 . 47. A Hislory of (N. Hannah Robie Sewall. 1959). t ~ o nto the mam rase. as the accommodation of the latter ex- Anolysis (New York: Oiford University Press. can be illustrated benefits of enclosure assumes "that the increase in the by two examples: Adam Smith and David Ricardo. For a discussion that contrasts Locke's view of original cost of production theory in the long run in which the ownership with that of Grotius and ~ u f e n d o r f rsee cost factors were labor and capital where capital was Martin Seliger. Lawrence and Wishart. The most extreme posi. Both Karl Marx. A History ofEconomic Ideas Press. especially pp. or useful article. The History of Polilical Economv a n d Tarolion. of those left without enough both these major figures in Classical Political land . 6. in his unorthodox treatment of of this paper is that Schumpeter was essentially correct Locke's political philosophy in ThePoliliral Theory of and that Meek's position comes closest to the one Passessive Individunlirm: Hobbes to Locke (Oxford: presented here. Cannan notes that the idea is also found Meek. American value and (b) using labor as an index number to Economr Kevrew (June. p. Illinois: Libertarian Press. previously existed for their support.324 KAREN I. and Eugen Review (May. The Liberal Polilics of John Locke past labor. 1958). . American Economic Progress Publishers.342. in The Principles of 1901).32.Y. 1944) argues that Locke had an objective theory 7. p. 59. I. 1954). pp. 12. holds that the very act of enclosure releases suasively. Locke d o never meant to espouse a true labor theory of value had no concept of marginal productivity. p. 76.117. hasvalueon- The Theocv of Value Before Adam Smith (American ly because human labor has been embodied o r Economic Association Publications. The great alttntmn psid lo ihc 12. Gordon. The Wealth ofNalions. Another implication is that the marginal product o f the Ch~cagoP r r s . mentaries . where he says tion for the labor theory of value". Othmar Spann. " (p. 1937). (p. pp. is unjustified". 140and Henry W.w)r m measure real wealth. 106. and from the ofEconomic Though1 (Engkwood Cliffs. M. The theme 11.. i.. except possibly tant passage and thereby misunderstood the benefits Karl Marx. 1959) pp. Studies in the the other hand. . ceeds that of many a n African king. 1911). . N. VAUGHN 2. . a position supported by Ronald 1937). p. Studies in the Labor Theory of Value (London: in Mun and Mandeville. 1956). therefore. p. no. Capital (New York: The Modern Library. Werner Stark. 1971). 1963). believes that the Second Treatisecontained a 9. Irwin. identical pieces of land with and without labor applied tion. Edilion ondo don. In fact. Theories of Surplus Value (Moscow. p. Since Adam smith ( ~ a m b r i i g e Cambridge : University while Edmund Whitaker. See. p. 1%9). Economic Idem (New York: Harper and Row. that Va. however. 1930). See of value in the Second Treatise which contrasted with Maurice Dobb. 45. Green and Co. It is interesting to note that Adam Smith echoed this p. 2 materialized in it. 120 simply states without elaboration that Locke's master of the lives and liberties of ten thousand naked theory of property had nothing to do with a n economic savages".td. (Cannan edition. 1%2). No. and Joseph Schumpeter.: J . attributes to Locke "The metaphysical justifica. That there is some doubt that anyone. c l a m 4 that "poi\ersing ulillty (use Theory of Money 1690. for example.. p. 1965). (South "no major economist of the classical period heldwhat Holland. .: Modern Library. Robert Lekachman. worker is 999/1000 of the output. Of course.1776 (Philadelphia: Chilton valuc) rommodit~rr derivr their exchangeable u l u c Co. nd). Economic Theory in cond Trealise. pp. has misinterpreted this impor- 3. was the Labor Theory of Value". TheGrowth from two sources: from their scarcity. George Stigler argued in "David Ricardo apparently was (a) enunciating a real cost theory of and the 93% Labor Theorv of Value". ever held a labor theory of value. interpreted Locke's labor theory of property value". 1973). "Ause-value. . by modern usage. New Jersey: quantity of labor required to obtain them". 116. . Similarly. on and more recently Douglas Vickers. pp. 81 .

but as pledges to procure. He interprets Locke as saying that labor adds burden of the tax because "he iust lives from hand to t o the intrinsic value of things by making them more mouth alreadv". Locke viewed capital goods as intermediate products 19." "Some Considerations". 66. that things must be left to find their own price. Chapter 1932). - that if orices rise." compare the economic value of two goods. . andcast attempt to estimate the average cash balances held by up the several expenses about them. or demand curve and movements along ihai c u n e uas forctgn to Lockr. 30. the context is an nghlly estmxatethmgs as they iamc toour we. they eat up too great a share of the gains viously. Lockeexplicit- "measure of value" at all was in his second essay. Heargues that "the comes to a similar conclusion with respect to these poor laborer and handicraft man" cannot bear the passages. value of money is its quantity (that is two ounces of 32. John Locke: Economist and Social Scienlirl. Social Scientist (forthcoming. Chapter V. and therefore in a plenty of them "Some Considerations". chanees in a sumlv. 314) See also p. value. Besides that. It seems reasonable to conclude from this passage that Chicago Press. l%8). changeability of market price. JOHN LOCKE AND THE LABOR THEORY O F VALUE 325 IS. " ~ o m e ~ ~ o n s ~ d e r a t ~p o42. implying that they Value of Money" (1695) in Several Papers Relaring lo are vew m r . and in thal may have been a concern of Petty's. which will 25. Locke is quite insistent about the relativity and but their quantity. larger. . value of goods as reflected in their money prices. I 15. "I think it will be but a very modest computation to 27. imolvinc . p. Ob. Locke describes the laborer as liv- of man. criticized Locke for calling market price rather than 0. Philosophy and Polirical Economy.' 29. . rf ur wtll ing from "hand to mouth". In. his waees useful but without making any connection between must rlse proporlionately or hc uill not be able to s u p usefulness and exchange value. and what to labor. as Larkin. P." conveniences of life. constantly-varying proportion and use.only lhal they saved nolhing." p. 320. 1980). Reprinted in Everal Papers Relating to Money. (l%9l (New York: Auguslus M. there is some the impossibility of price fuing the following.. to the prejudice of trade. ly uses the term "bare subsistence" to describe the "Further Considerations Concerning Raising The general level of laborers' incomes. and they procuring what we want or desire. port his family. Locke was more circuit more stops. what one wanu or reresr and Trade. He gives as reason for 24. human foresight to set rules and bounds to their p. p. John Locke's Theory of supply although occasionally he described the effects Propeny (Oxford: Clarendon Press. 92. See and it is impossible in this. iocke generally treated changes in quantity as shifts in theorists both James Gough. p. see Karen Vaughn. 34. "For they having as money no other Scienlisl. . Macpherson. he managed lo University Press. 31. 51. distinction. "For there being a want of day-laborers in the country. the only measure of the 31. . Locke says of at length in my John Locke: Economist and Social gold and silver. The mull~plymg money the "common measure" of the value of com. say. 120. 94. 1930) have assumed that Locke had a labor theory of value. evidence that Locke's paragraph on labor as a measure " . 92. While. and Pascal of price changes on quantity supplied as well. that of the oraducts of the earth useful to the life 28. we shall tion was such that he spent all of his income between find that in most of them 99/100 are wholly to be but on the account of labor. labor cost the natural value of goods. p. and im- be the measure of value. Property in the 18th Century with Special one would expect. analyrlng iheeffecti of asales lax. Among political 17. In addition to Sewall and Vickers already mentioned and would subsume them under the category of "past (note 2). 23. On p.121. Hcrealtcr cited as "Somc Considera.There is ~ no impltralion lhal (he laborers uerc parlicularly poor 21. of broker5 hmdcrs the tradcof any counlry. Properly in the 18th Century. only by their quantity. "Gold and silver they must be humored. although both writers under- explam prcc dclcrm~nalwnlolcrably well wilhoul l h ~ s stand this in a moral rather than an analytic sense. etc. James Bonar. Money. p. 37. of value has not come down to us accurately. the only other instance of Locke discussing a laborers lived at subsistence. that the intrinsick tions".. p. what in them is different groups in society where the laborer's condi- purely owing to nature. Kelley. consists riches. tis evident. or else they will neither work though they serve for few yet they command all the for you. On p. While finding an objective measure of value the cncult which #he money goes. nor take you commodities for their labor. Posressive Individuolism. 21 where he calls n ~ . desires. . . 14. See my History ofEconomic Thought (New York: Macmillan. Chicago: University of 26. For a fuller treatment of Locke's theory of economic Locke deliberately suppressed the rights of wage labor value.. ~. when we ask if Locke believed labor to of trade by that means slarving the laborer. t h e mode& distinction between Reference lo England and John Locke (Cork: Cork . value of gold and silver used in commerce is nothing 16. In fact. Interest and Tmde. weare asking if he thought the proverishing the landholder whose interest is chiefly to prices of goods were related to the labor that went into be takencare of. John Locke: Economisr and in favor of the emerging "capitalist classes". by making modities. . 316. pp. Lwkc is (London: George Allen & Unwin Ltd. 93. "Some Considerations". 79. 34 and p. ". 1deal with Locke's concept of just price and just profit silver is twice as valuable as one ounce). always regulate their value. Bonar. then. labor" in anticipation of the classical doctrine. Philosophy and Political Economy . their constant mutability for Laslett's comment on the text of the Second Treatise. The imphcat~onhcrc is definitely that 22. 111. "Some Considerations". ~~~. In addition to the above arguments. On p. Larkin. SO that the returns must necessarily interested in explaining what determines the economic be slower and scantier. 20. it being a settled unmoveableconcern- producing them. not if he wanted to use labor hours to ment in the commonwealth. l950). 9/10 arc #heeffects of labour: nay." Furthermore. 1922). argues that 18. this position is also implied by Lewis Haney." (p. ex.~ - ~eriodsand therefore saved nothin~. oavment . Chapter 11. On p.

to what is 36.the arose in a spontaneous but orderly process. Here. p. no man but he can have a rieht . and . p. 225). so much he may by his 37. is dants of those who labored in the past arealso just re- mare than his share and belonm to others. vantage of life before it spoils. understood to be intended as nature requires they 96. sistence. N. an institution which uorld." (o. and as Locke's theory of the origin of the state." ~ & o n d the Firsr Trealise. see my John Lmke: Economisl a n d Social . that when their oarents leave the not o f human design". . 18-22. which Lockeprovides in made by God for man to spoil and destroy.J. 1967).t uhcre there is enough. Nothine was quires a theory of inheritance. not only t o a bare sub- 35. pp. Hayek. would describe it. Of course. p analysis.a the :arc due to t h e ~ rr. Theories o/Surplus Vdue cited above. The origin of money in Locke's system is a good il. A ~ i r r & of ~ c o n o m i cThought same idea (although he is understandably inaccurate in (Englewood Cliffs. 339. . 308. Marx's discussion o f Locke is found primarily in his attributing a conventional theory of money to Locke).ommon lor ulhers " Serond Irzurrre. "As much as anyone can make use of to any ad. 1974). efleslr 18 arc to ritcnd as far as posstbly they can. are (Chicago: The University of Chicago Press. should. "For this labor being the unquestionable property of York: Basic Books. For adetailed dood lefl in . Chapter IV. for their children. A. ~ u o t e din Eric Roll. pp. VAUGHN 33. See Robert Nozick.: 0n. at lka. This is a very hasty summary of my interpretation of .h~ldreneeascs.: Prentice Hall. as the "result of human action but "Hence it comes. pp. That is.e pried to. Anarchy. to argue that current rewards t o the descen- labor fix a property in.105. Srudies in Philosophy. 1953). See F. visible hand explanation" t o describe essentially the 38. Polirics ondEconomics and the pro\~sionsthey h a \ e made in their l f e lime. Whatever is beyond this. as Hayek as far as the conditions of their parents can afford. 225-228. he bases his Trearise. Sfale a n d Ulopiu (New 34. but to the conveniences and comforts of life. Scienrisr. .326 KAREN I. Nozick has mare recently used the term "in. argument on childrens' right. the laborer. note 2. 306. lustration of an institution which arose.