y socialist whatever could have anything to object to in this conclusion.
Now, how great will this value be in proportion to the value of the completed steam-engine? This is a point on which a superficial thinker may easily make a mistake. The point is, the labourer has up till now performed a fifth part of the technical work which the production of the whole engine requires. Consequently, on a superficial glance, one is tempted to infer that his present product will possess a fifth part of the value of the whole product—that is, a value of £110. On this view the labourer ought to receive a year's wage of £110.
This, however, is incorrect. £110 are a fifth part of the value of a steam-engine when completed. But what the labourer has produced up till now is not a fifth part of an engine that is already completed, but only a fifth part of an engine that will not be completed till four years more have elapsed. And these are two different things; not different in virtue of a sophistical quibble, but different in very fact. The one-fifth part has a different value from the other so surely as, in the valuation of to-day, an entire and finished engine has a different value from an engine that will only be ready for use in four years; so surely as, generally speaking, present goods have a different value in the present from future goods.
That present goods, in the estimation of the present time, in which our economical transactions take place, have a higher value than future goods of the same kind and quality, is one of the most widely known and most important economic facts. In the second volume of this work I shall have to make thorough examination into the causes to which this fact owes its origin, into the many and various ways in which it shows itself, and into the no less many and various consequences to which it leads in economic life; and that examination will be neither so easy nor so simple as the simplicity of the fundamental thought seems to promise. But in the meantime I think I may be allowed to appeal to the fact that present goods have a higher value than similar kinds of goods in the future, as one that is already put beyond dispute by the most ordinary experience of everyday life. If one were to give a thousand persons the choice whether they would rather take a gift of £100 to-day, or take it fifty years hence, surely all the thousand persons would prefer to take the £100 now. Or if one were to ask a thousand persons who wished a horse, and were disposed to give £100 for a good one, how much they would give now for a horse that they would only get possession of in ten or in fifty years, although as good an animal were guaranteed at that time, surely they would all name an infinitely smaller sum, if they named one at all; and thereby they would surely prove that everybody considers present goods to be more valuable than future goods of the same kind.
If this is so, that which has been made by our labourer in the first year, i.e. the fifth part of a steam-engine which is to be completed four years later, has not the entire value of a fifth part of an already completed engine, but has a smaller value.
How much smaller? That I cannot explain at present without anticipating my argument in a confusing way. Enough here to remark that it stands in a certain connection with the rate of interest usual in the country*43—a rate which is a matter of experience—and with the remoteness of the period at which the whole product will be completed. If we assume the usual rate of interest to be 5 per cent, then the product of the first year's labour will, at the close of the year, be worth about £100.*44 Therefore, according to the proposition that the labourer ought to receive his whole product, or its whole value, the wages due him for the first year's labour will amount to the sum of £100.
If, notwithstanding the above deductions, any one should have the impression that this sum is too small, let me offer the following for his consideration. No one will doubt that the labourer gets his full rights if at the end of five years h