Theory of Value
On value, Petty continued the debate begun by Aristotle, and chose to develop an input-based theory of value: all things ought to be valued by two natural Denominations, which is Land and Labour (p. 44). Both of these would be prime sources of taxable income. Like Richard Cantillon after him, he sought to devise some equation or par between the 'mother and father' of output, land and labour, and to express value accordingly. He still included general productivity, one’s 'art and industry'. He applied his theory of value to rent. The natural rent of a land was the excess of what a labourer produces on it in a year over what he ate himself and traded for necessities. It was therefore the profit above the various costs related to the factors involved in production.
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“We commonly say that the rich man can speak the truth, can afford honesty, can afford independence of opinion and action;—and that is the theory of nobility. But it is the rich man in a true sense, that is to say, not the man of large income and large expenditure, but solely the man whose outlay is less than his income and is steadily kept so.”
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