第2章

Chapter10

TheParadoxofValueAssumethatamanownsonegood，andthattheemploymentofitgivesautilityequalto10；andsupposethathisholdinggraduallyincreasesupto11goods，inthecourseofwhichthemarginalutilitydecreasesproportionallydownto0。Thevalueofthestockateachpointwillbeasfollows:——

WhenhehasThevalueis=

11x1010

22x918

33x824

44x728

55x630

66x530

77x428

88x324

99x218

1010x110

1111x00

goodsunitsofvalueHerearegulardecreaseofthemarginalutility，and，therefore，ofthevalueofthesinglegood，isseentotakeplacealongwithanincreaseofthesupply，andfurtherexplanationisunnecessary。Eachadditionalgoodbringswithitadiminishedincrementofutilityandmust，therefore，bringonlyadiminishedincrementofvalue。Itisotherwisewhenweconsiderthevalueofthewholestock，andfollowitsdevelopmentfrom10upto30，andbackagainfrom30downto10and0。Judgedfromthestandpointofthataspectofvaluewithwhichdailyeconomicallifeimpressesus，thisscaleseemscompletelyparadoxical。Valueiscommonlyregardedbyusasasimpleandabsolutelydesirablecharacteristicofgoods，mathematicallyexpressibleasapositiveamount。Itcorrespondswiththisviewwhentheseriesshowsanincreaseofvaluealongwiththefirstadditionstothestock，butitentirelycontradictsitwhen，towardstheendoftheseries，everyfurtheradditiontothestockisaccompaniedbyacorrespondingdecreaseinvalue，until，finally，whenthepointofsuperfluityisreached，valuecompletelydisappears。Whencecomesthiscontradiction？Howisittobeexplained？Thefirsthalfoftheseriesappearstoconfirmtheviewthatvalueissomethingdesirable，somethingpositive，whilethesecondshowsitasanegativequantity，somethingburdensomeorevil。Whichthenistrue？Andhowcanbotheverbebroughttoagree？

Veryeasily，sosoonasonegivesupthepreconceivednotionthatvalueisasimplepositiveamount。Value(asmarginalvalue)

arisesfromacombinationoftwoelements，theonepositive，theothernegative。Itisacomplexamount；or，moreexactly，aresidualamount。Sosoonasonedistinguishesbetweenthesetwoelementsintheformationofvalue，theserieswehavejustdrawnaboveexplainsitselfinthesimplestmannerpossible；andthesemblanceofirregularity，whichmusthaveprovedinsuperableforthosewhoexpectedandsoughtasimpleprogression，disappears。

Bothelementsintheformationofvaluehavebeenexplainedbywhathasalreadybeensaid。

Thepositiveelementistheenjoymentintheuseofgoods。

Everyadditionalusewhichisfurnishedbyanewly-acquiredgoodiswelcome。Thegoodwhichisfirstacquiredbringsthelargestincrementofutilitybecauseitsatisfiesthemosturgentstageofdesire；everyonethatfollowshasalesserutilitybecauseitmeetsadesirewhichhasbeenalreadycomparativelysatisfied。

Andshouldtheaccretionofgoodscrossthemarginofwant，therewillbenoadditiontothepositiveelementintheformationofvalue。Therewillnowbenoemploymentforadditionalgoods；theywillnotbringenjoymenttoanyone。

Takingtheformerfigures，theincrementofthepositiveelementinvaluewillbeasfollows:——

Withtherewillbe

110

29

38

47

56

65

74

83

92

101

110

goodsunitsofgoodsAndthetotalamountofthispositiveelement，calculatedforthewholestock，willbeasunder:——

WithThetotalenjoymentis

110

219(10+9)

327(19+8)

434(27+7)

540(34+6)

645(40+5)

749(45+4)

852(49+3)

954(52+2)

1055(54+1)

1155(55+0)

goodsunitsofvalueThenegativeelementarisesfromtheindifferencewithwhichmennaturallyregardgoods。Onlywhenforcedtoit，dowetransferourinterestfromtheusesofgoodstothegoodsthemselves；and，intheprocessoftransferring，wehavetoovercomeanaturaloppositionwhichvariesinstrengthaccordingtothecircumstances。Thegreatertheneed，themoreeagerwillwebetogetpossessionandkeeppossessionofgoods:thesmallerinthiscasewillbetheopposition。Theoppositionwillbecompletelybrokendownwhereourneedrisestoextremity，forhereweidentifyourdestinywiththatofthegoods，andintheirlossweseeourowncalamity。Ontheotherhand，theoppositionwillbecompletewhereeverythingispresentinsuperfluity；herewecanenjoywithoutanyfeelingofgratitudefor，orinterestin，theobjectswhichprocureforustheenjoyment。Betweenextremestneedandsuperfluitytheoppositionisagraduatedone:webestowupongoodsanamountofinterestderivedfromtheinterestwehaveintheservicestheyrenderus。Butwedonotgivethemthewholeofthisinterest；wemakeacertainreservation。Thatistosay，allthesingleitemsofastockareconsideredonlyatthevalueoftheirmarginalutility。Thesurplusvalue，thatwhichgoesbeyondtheirmarginalutility，iswithheldfromthegoods。

Here，then，isthenumericalexpressionforthestrengthofthisopposition:thenegativeelementintheformationofvalueisequaltothesubtractedsurplusvalue。Makinguseonceagainoftheforegoingfigures，wefindthat，solongasweownonlyonegood，thereisnodeductionintheformationofitsvalue；theentirevalueoftheuseistransferred，undiminished，tothegood。Withtwogoods，ontheotherhand，therewillbeadeductionof1fromthevalue，aseachoftheseisvaluedonlyaccordingtoitsmarginalutility9，whiletheutilitiesofbothaddedtogetheramountto10+9。Threegoodshaveeachavalueonlyof8，andtheirutilityisequalto10+9+8，thesurplusvaluedeductedbeingtherefore3。Reckoningfurtherinthesameway，weshallfindtheminusamountintheformationofvalueasfollows:——

Withastockoftheminusis

10

21

33

46

510

615

721

828

936

1045

1155

goodsunitsofvalue。

Ifweputtogethertheplusandminusamountsweshallobtainthefollowingasresult:——

Positive(+)Negative(-)Residual(+)

110010

219118

327324

434628

5401030

6451530

7492128

8522824

9543618

10554510

1155550

goodsunitsofvalueunitsofvalueunitsofvalueThusweobtainthesamescaleasthatwhichresultedfromthemultiplicationofamountbymarginalutility。

Itisnowseenthattheapparentirregularityofthescaleisreallyaconsequenceofthestrictregularityofitsconditions。

Thevalueofasupplymustincreasewiththeincreaseofitsitemssolongasthepositiveelementpreponderates；inotherwords，solongastheincrementofvalue，furnishedbytheutilityofthenewly-acquiredgood，isgreaterthanthevaluewhichislostthroughthedecrementofvaluewhichitsadditioncausestoeverygoodalreadyinthestock。Thisistheascendingbranchofthemovementofvalue，or，aswemightcallit，the“upgrade“ofvalue。

Ontheotherhand，thevalueofasupplymustdecreasewithitsaugmentation，wheneverthenegativeelementgainstheascendency。Thisisthedescendingbranchofthemovementofvalue，orthe“downgrade“ofvalue。

Strangethoughitseems，thevaluemusttouchzerotwiceinthecourseofitsdevelopment:intheonecase，wherewehavenothing；intheother，wherewehaveeverything。Ifwepossessnothing，therearenoobjectstovalue；ifwepossesseverything，thereis——justonaccountofthesuperfluity——nosubjectiveinducementtoanactofvaluation。Onlyifwepossesssomething——beitmuchorlittle——doesthephenomenonofvalueappear；

andbetweenthetwozeropoints，sodifferentintheirimportance，ithasitsexistence。Itpresentsitselfwiththefirstgoodsthatcomeintoourpossession，andincreasesuptoacertainculminatingpoint，fromwhichitdecreases，until，whensuperfluityisreached，interestisagaincompletelywithdrawnfromthegoods。

Asamatteroffact，humaneconomiesmovealmostentirelyintheascendingbranch。Inmostthingswearesofarfromhavingasuperfluitythatalmosteverymultiplicationofgoodsshowsacorrespondingincreaseinthetotalvalue。Thesinglegoodcertainlyfallsinvalueasthestockincreases，butasarulewefindthatthelossintheitemsisoutweighedbythegainonthewhole。Onthisaccountweareaccustomedtomeasurewealthandrichesbythesumofvalueoftheirconstituentparts，andregarditasamisfortuneifthevalueofpropertyandrevenuegoesdown。Andthereforeitappearstousparadoxicalwhen，attimes，weareforcedtonoticethat，althoughtheamountofgoodsandofenjoyments，ofwealthandwell-being，hasbeenaugmented，theirvaluehasdecreased。Itmaybethatexceptionallyfavourableweatherhasresultedinanover-abundantharvest；oritmaybethediscoveryofsomenewproductivestratumofunsuspectedfertility；orsomesuddenandenormousincreaseofreturnsthroughadvanceintechnicalprocesses:oritmaybecausedbysomeerroronthepartoftheproducer，whohasbeenmisledbygreedofgain，oramistakenandexaggeratedestimateofdemand，intotoogreatlyenlarginghisproduction。Butitisalwayssomeunusualaccidentwhenindividualbranchesofeconomyaretransferredtothedescendingbranchinthemovementofvalue。Itisimprobablethatourwholeeconomicsystemwilleverpermanentlycomeundersuchfavourableconditions，andproductionbebroughtsoneartosuperfluity，thattheascendingmovementofvaluewillceasetobethedominantone。Theexample，however，ofthosefewfreegoodswhichnatureoffersleavesusnoroomfordoubtthatvaluedisappearswheneversuperfluityisreached；andthisisreallythebestproofforourcontentionthatvaluemustbegintodecreasewheneversuperfluityapproaches。Eventhoughexperienceshowsthescaleofvaluetohavemanygaps，yetitgivesussufficientfactstoletustraceitsidealcoursefromendtoend。

Chapter11

TheAntinomyofValueandtheServiceofValueAsconsequenceoftheobservationthat，intheoverwhelmingmajorityofcases，thevalueofpossessionsincreaseswitheconomicprosperity，theexceptionshavebeeneitherentirelyforgotten，orputononesideasunessentialandunimportantdisturbances。Theideahasgoneabroadthatvalueisthehighestprincipleineconomiclife，andthatalloureconomicactionmustberegulatedwithreferencetoit。Ithasbeensaidthatpeopleshouldsoactastoobtainonthewholethegreatestamountofvalue。

Ifthisideawerecorrect，oureconomiclifewouldbedirectedbyapowerwhichwould，insomemeasure，workagainsttheaimsofeconomicconduct；totheextent，namely，ofpreventingtherealisationofeconomicendsbeyondacertainpoint；thatis，beyondtheupgradeofvalue。Andonewouldbejustifiedinspeakingofanantinomyinthelawofvalue，whichwouldrefernotonlytoexchangevalue，asProudhonhasasserted，buttoeveryformofvalue。Itwouldbeexpedientforeveryone，notonlyfromamoney-makingandsellingpointofview，butinhisownprivateeconomy——evenforaRobinsonCrusoewhocouldnotsellatall——toconvertsuperfluityintowant，andwantintogreaterwant，inordertocreateandincreasevalue。Noone，however，wouldwishtoactinthisway，anditisthereforeuntruethatvaluehastheguidanceofoureconomies。Thehighestprincipleofalleconomyisutility。Wherevalueandutilitycomeintoconflictutilitymustconquer；thereisnothinginthenatureofvaluewhichcouldgiveittheascendency。Utilityisimperfectlycontainedinvalue，withtheaccompanyingpeculiaritythattheamountofutilitywhichiscontainedisintimatelyassociatedwiththeveryideaofgoods。Butthislatterphenomenoncannothavetheeffectofpreventinganyonefromenteringintotransactionswhichacompleteadditionoftheutilitiestobegotfromthegoodsacquiredwouldshowtobeprofitable。IfIwereable，byanymethodwhatever，tosecureformyselfaconstantsuperfluityofalltheservicesofgoods，theideathatmyinterestneednotthereafterbecaredoverfromtheservicestothegoodsthemselves，wouldnotcausemeamoment\'shesitationinsecuringthesuperfluity。OrsupposethatI

expectedagreatamountofutilityfromsometransaction。andthetransactionatthesametimecausedmeacertainlossofinterestinthegoods，thislattercircumstancewouldnotdetermeinthefaintestdegreefromcarryingthroughthetransaction。

Undertheseconditions，then，whatserviceremainsforvaluetorenderineconomiclife？Ahighlyimportantone。Thecaseswherethereisaconflictbetweenvalueandutility——whereincreaseoftheoneisdecreaseoftheother——occurbutseldom。

Experienceshowsthateconomiclifemovesalmostalwaysonthe“upgrade，“andherethetendenciesofincreaseordecreasearesimilarforvalueandutility。Whenevertheutilityofastockincreaseswiththeaugmentationofthestock，thevaluealsoincreases，andwhenevertheutilityofastockdecreaseswithadiminutionofthestock，thevaluealsodecreases。Agreatervaluealmostalwayscorrespondswiththegreaterutility，andalesservaluewiththelesserutility，andonthisaccounttransactionswhichcommendthemselvesinconsiderationoftheirutility，commendthemselvesalsoinconsiderationoftheirvalue。

Theserviceofvalueconsists，then，inrepresentingutilitywhereverbothshowthesametendency。Wedonotcalculateutilities；wecalculatevalues。Valueistheforminwhichutilityiscalculated，andthisrenderscalculationinfinitelymoreeasy。Itisdifficultindeedtoestimatetheutilityofastock；easytoestimateitsvalue。Thatistosay，thevalueofastockcanbeexpressedasthesingleproductofstockandmarginalutility；itisamultipleofthemarginalutility:

whereasutilitycanbeexpressedonlybyasumwhichcontainsasnumerousandasvariousamountsasthestockcontainsitems。Theutility，forinstance，ofaharvestofamillionquarterscanberepresentedonlybyanalmostinexhaustibledescriptionofallthebenefitsaccruingfromit，fromitsgreatesteffectsdowntothoseoftheleastimportantemploymentseconomicallypermissibleinthecircumstancesofthecase。Thevalueofthissameharvestiseasilyandshortlyascertainedbymultiplyingtheutilityofthemarginalemploymentsbythewholeamount。mathematicallyexpressed，theformulaforexpressingtheutilityofastockof50items，themostintenseuseofwhich——thatofthefirstitem——reachesthefigureof100，ifweassumearegulardecreaseinintensityforeverysuccessiveitem，willrun:100+99+98+……51。Butthevalueformulawillbesimply:——50x51。(1*)

Thesimplificationofeconomiccalculationbytheuseofavalueinsteadofautilitymeasurementisnoticeableinproportiontotheeconomicstateofdevelopment。Whiletheutilityformulabecomescontinuallymorewearisomeandlessclear，thevalueformulabecomesmorecomprehensiveanduniform，particularlythroughtheentranceofcosts，——whichweshalldiscusslater。Wheremoneyisthemediumofexchangeeverythingismeasuredequally，forpurposesoftrade，accordingtoitsmoneyvalue；allutilityinitsillimitablevarietyisreckonedbythevalueofcoin，theseparateitemsofwhichareallequaltoeachother，andtheamountsofwhichappearinthecalculationsasmultiplesofoneandthesameunit。

Itisthepossibilityofcalculatingutilityintermsofvaluewhichfirstputsusinapositiontodrawoutexacteconomicplansandforeseetheirnecessarylimitation。Thusvaluecomestobethecontrollingpowerineconomiclife。

NOTES:

1。Thevalueformulaisanabridgedutilityformula。Onlythatpartisleftoutwhich，ontheonehand，renderscalculationmoredifficult，and，ontheotherhand，isreallyunnecessaryasanadequatemotivetoeconomicactions；viz。thatsurplusutilitywhichisabovethemarginalutility。Economicactionswhichhavevalue(intheupgrade)fortheirmotive，arenotonlyapproximately，butcompletelyandexactlyweighedandlimited。

Thegreaterutilityisalwaysreachedwhenthegreatervalueisaimedat。

Itmaybeinterestingtogomoreintodetailregardingthis。

Therearetwooccasionsonwhicheconomicgoodsbecomeobjectsofvaluation；first，whenwewishtoacquiregoods，andtomeasuretheamountoftheacquisition；and，second，whenwewishtopartwithgoodsinordertodevotethemtosomegivenend，andtomeasuretheamountoftheservicewhichtheythuswillrender。Ontheoneside，then，wehavetomeasureresultsingoods，and，ontheother，outlaysingoods。Itmayberemarkedinpassingthat，withoutsomesuchendinview，goodsarenevervalued:theyarenevervaluedforvaluing\'ssake。Atmost，goodsarevaluedinadvancetobereadyforanycontingency；butvalueneverplaystherolesoreadilyascribedtoitby，theory；——itneveractssimplyasthemeansofvaluingwealth。Wealthmaybevaluedinallsortsofways，accordingtothepurposewhichitisintendedtoserve。Therulesofvaluationwhichareactuallyfollowedhavetheirorigininthefactthattheyservetowardstheendsofeconomiclife，whateverthesemaybe。Valueisadaptedtoitseconomicenvironment，andcanonlybeunderstoodthroughit。

First，astothemeasurementofresultsingoods。Allacquisitionsofgoodswhichincreasevalueareprofitable。Oftwoacquisitions，betweenwhichonemaychoose，thatonewillbechosenwhichgivesthegreateramountofvalue，becauseitalsogivesthegreaterutility。Augmentationsofvaluearisingfromintentionaldestructionofgoodsareunprofitable，and，inconsiderationofutility——whichisthestrongerconsiderationwhereverthereisacollisionbetweenitandvalue——areforbidden。Acquisitionsofgoodswhich，inasmuchastheyfollowthe“downgrade“ofvalue，diminishtheamountofvalue，areneverthelessprofitable。

Anincreaseofvalueoccasionedbyincreasednecessity，andunaccompaniedbyanychangeintheamountofgoods，mustnotbedescribedasaneconomicalresult。Itisnotcreatedbyanyeconomicalact。Oncecreated，however，itnaturallyinfluenceseconomicaction，etc。，throughthefactthatitchangesthevalueofgoodsusedasoutlay。

Second，astothemeasurementof“outlay“ingoods——whetherinpurchaseofothergoods，orinproduction，orinmeresatisfactionofpersonalwant。Ineveryappropriationofgoodstoaparticularpurposethevalueofthesacrificeinvolvedmustbeestimatedancomparedwiththeexpectedresult。Thegreaterthesacrificeofvalue，——ifwedisregardthecircumstancesofthe“downgrade，“——thegreaterthesacrificeofutility，anditmustbejustifiedandmadegoodbytheobtainingofahigherresult。Itisdifferenttoshowthisasregardsconsumption。Theemploymentofgoodstowardsthesatisfactionofpersonalwantsmustalsobeguidedbythevalueofgoods。Buthowcanmarginalvalueservethisend？Wouldnotthatrequirethatonlymarginalwantsbesatisfied？Thedifficultysolvesitselfwheneverwegiveuptheoldanddeep-rootedbuterroneousbeliefthatconsumptionassuchisaneconomicalact。Consumptionassuchdoesnotarisefromanyeconomicalconsiderations。Itisonlyeconomisinginconsumptionthatiseconomical(seeUrsprungdesWerthes，p。

133)。Thedemandsofeconomisingare，however，exactlymetwhenwekeeptothemarginalutility。Inotherwords，valuedoesnotcontrolconsumption:itonlyforbidsuneconomicalconsumption；

that，namely，whichwouldnotassureuninterruptedsatisfactiondowntothelowestattainableutility。Thisprohibitionandnothingelseisexpressedinmarginalvalue；noemploymentofgoodswhichgoesbelowthemargindrawncanbeallowed。Throughthefactthatwantonitssideisactiveanddemandssatisfaction，economicsatisfactionisreachedbyacombinationofclaimsandrefusals。Whoeverpossesses1000itemsofthevalueof10，maypermithimselfeveryenjoymentwhichhasanintensityof10ormore。Whoeverpossesses2000itemsofthevalueof8maygofurther，andallowhimselfallenjoymentswhichhaveatleastanintensityof8，twothousandtimes。Thisisthetruemeaningofthatestimateofthevalueofsuppliesofconsumptiongoods，towhichwegenerallygivethemorematerialformulation，thatthefirstpossesses1000x10=10，000，andthesecondpossesses2000x8=16，000unitsofvalue。

See，uponthecalculationofvaluemyUrsprungdesWerthes，p。180，andBohm-Bawerk\'sWerth，p。46；further，ontheserviceofvalue，BookII，chaps。ivandvandBookV，chap。xiiibelow。

NaturalValue byFriedrichWieserBook2

ExchangeValueandNaturalValueChapter1

PriceExchangegivesrisetoaphenomenonwhich，originatingfromvalue，reactsuponitinthemostpowerfulmanner；thisphenomenonisprice。Itisnotourtaskheretodealeitherwithpriceorwiththeformsofvaluedependingonit。Ourconcern——

aswillbeshownclearlyenoughlateron——israthertodescribenaturalvalue；i。e。valueasweshouldfinditinacommunityatahighstageofdevelopmentcarryingonitseconomiclifewithoutpriceorexchange。Neverthelessitwillnotdosimplytodisregardexchangeandtheformsofvalueconnectedwithit。A

descriptionofsocialconditionswhoseactualorpossiblerealisationisextremelydoubtful，wouldbesomewhatpurposeless，ifthedescriptiondidnotadmitofsomeapplicationstolifeasweknowit。Nowtomaketheseapplicationswemustunderstandpriceandexchangevaluetotheextentofrenderingacomparisonpossible。Attheleasttheirgeneraloutlinesmustbeindicated，soastoserveasbackgroundagainstwhichtheclearerpictureofnaturalvalue，whichweintendtodraw，willstandoutinrelief。

Inthiswayweshallbeabletojudgewhetherthefundamentalfeaturesinbothcontrastoragree。

Forthispurposeitwillbesufficienttodescribethatparticularcaseoftheformationofpriceinwhichitspeculiarprinciplecanbemostclearlydiscerned。Thisisatthesametimethenormalformationofpriceundertheorganiseddivisionoflabour。Ontheoneside，wehavenumeroussellers，whoseaimisthesaleofstockswhichtheyhaveproducedforthemarket，andwhichtheycouldnotpossiblyusethemselves；ontheotherside，wehavenumerousbuyerswhocompetewitheachotherinbuying，justastheotherscompeteinselling。Menger\'stheoryofprice，andthatcontainedinBohm-Bawerk\'sWerth，whichgoesconsiderablyfarther，maybeusedasstarting-pointsforourownstatement。Intoanyfurtherconsiderationoftheabundantliteratureexistingonthesubjectofpriceourpresenttaskwillnotpermitustoenter。

Supposeapersonwishestoacquireanobject，nomatterwhat，hewillnot，howeverstronghisdesire，agreetopayanypricethatmaybeasked。Thereisacertainmaximumatwhichhewouldratherwithdrawfromthemarketthanraisehisofferfurther。

Thismaximumisdeterminedbytwovaluations:first，thevalueinuseofthegoodthatistobeacquired(whichwillbedeterminedaccordingtothelawslaiddowninthepreviouschapters)，and，second，theexchangevalueofthesumofmoneythatwillhavetobepaid(theestimateofwhichwillbeconsideredinthenextchapter)。Thesumofmoneywhoseexchangevalueisequaltothevalueinuseofthedesiredgood，determinesthemaximumoffer。

Tooffermorewouldinvolvealoss，asmorevaluewouldbegiventhanreceived。Thisruleholdsequallyforallwould-bebuyerswithoutexception。Everyonewhothinksofmakingapurchaseputsboththesevaluationsbeforehim；establishesinhisownmindthisequationorequivalence；andcomestothemarketresolvednottogobeyondit。Butalthoughtheruleisthesameforallconcerned，theresultsofitsapplicationintheindividualcaseareveryunequal，inasmuchastheamountsthatenterintothecalculationdiffergreatlyfromeachother。Thevalueinuseofthegoodthatonebuyswillvaryaccordingtothedifferentdegreeofindividualneed——whichmaydependonnaturalinclination，onaccidentalcircumstances，oronthedegreeofsatisfactionalreadyreached——andaccordingtotheamountofsupplyonealreadyhas。Theexchangevalueofthemoney，ontheotherhand，willvaryprincipallyaccordingtotheamountoftheperson\'swealth(seeonthissubjectthefollowingchapter)。Whenoneconsiderstheverygreatvarietyofpossibleeconomicsituations，itwillbeseenthattheequationorequivalenceofbothvaluescannotfailtobeverydifferentfrombuyertobuyer。

Thehighestoffercanbemadebythepersonwhoisactuatedbythestrongestdesire，andisatthesametimetherichest，becauseforhimthehighestrealvalueisexpressedinthegreatestsumofmoney。Whatacontrastfromtheoffersofpoormen，inwhosecasethesamedegreesofdesirearerepresentedonlybyamosttriflingsumofmoney，orfromthebidsofthosewhosedesire，intheparticularcase，issoslightthattheydonotcaretosetapartanythingbutasmallsumtowardsitssatisfaction！

Ifwebeginwiththehighestequivalent，thatofthemanwhoistherichestandthemostanxioustoobtainthegoods，andcomedowngraduallytothelowest，weshallobtainadescendingscaleofmaximumoffers。Bywayofexampleweshallassumethattheserange，inthehandsofahundredpurchasers，from？downto1s。；

andweshallassume，first，forsimplicity\'ssake，thateachpurchaserisdesiroustobuyonlyonesinglegoodoronesingleitem。

Herewecanseeclearlywhatisthepowerthatmustdecidethecompetitionofprices。Askilledsellermayattimessucceedininducinganinexperiencedbuyertopayapricewhichgoesbeyondhismaximum；but，asarule，thesellerswillnotbeabletodomorethandrivethebuyerstotheirmaximum。Theendeavourofaseller，whoishonestbutlookstohisownadvantageandactspurelyaccordingtohisowninterest，willbetofindoutthose，amongallthebuyers，whocanpaymost，andtodrivethem，ifpossible，tothemarginoftheirpurchasingpower。Ontheotherhand，thewould-bebuyerswilltrytobuyasmuchbelowthatasispossible。Theinter-competitionofbuyers，therefore，istotheadvantageofsellers，andtheinter-competitionofsellersistotheadvantageofbuyers。Weshallnowseehowfaritispossibleforeachsidetoachieveitsobject。Weassumeasbeforethatthesellersareforcedtogetridoftheentirequantityofgoodstheyhavebroughttomarket，aidhavenowishtoreserveanypartofitfortheirownuse，thegoodshavingbeenproducedforsaleandbeingofnopersonalusetothesellers。

Supposingonesinglegoodisputuponthemarket，itwillobviously——ifallareequallyalivetotheirownadvantage——

falltothatbuyerwhohasthehighestpurchasingpower，viz。

thatonewhosemoneyequivalentweputdownat？。Heisinapositionwhichenableshimtoexcludeallcompetingbuyers，andhewilldosoifheunderstandshisowninterest。Hemust，ofcourse，makeuphismindtogothelengthof99/，asthisisthepricetowhichhismostdangerouscompetitormaygo，——thatonewhosepurchasingpowerstandsnexttohisown。Andashe，forhisownpart，isunabletogivemorethan100/，thepricesettlesbetween99/and100/。

Suppose，again，thattwogoodsareputonthemarket；theonemustfalltothefirst，theothertothesecondintheseriesofcompetingbuyers。Thepricepaidbythelatter，ifrightlydetermined，mustliebetween99/and，98/；thatis，betweenhisownequivalentandthatofthenextcompetitor，——thebuyerwhomhemustoutbidifhewouldnothavehisacquisitionofthedesiredgooddisputed。Butthatbuyer，again，whomwecalledthefirst，willnot，underthesecircumstances，payanyhigherprice。

Thereisnownonecessityforhimtooffermorethan，99/；itwillsufficeifhe，alongwiththesecondbuyer，outbidthethirdbuyer\'sofferof98/。Whoeverbuysinanopenmarket，andfromcompetingsellers，paysforthesamearticlethesamepriceasispaidbyeveryoneelse。Howevergreatmaybehisownpurchasingpower，heneednotuseittoitsfullextent；therewillalwaysbeasellerwillingtolethimhavethegoodatthatsamelowestpricewhichhastobeconcededonthemarkettobuyersgenerally。

Iftherearethreegoods，theywillfalltothefirstthreepurchasers，andthepricewillbefixedequallyforallthreegoodsbetween98/and97/，——betweenthemoneyequivalentofthethirdandfourthpurchasers。Wheretherearetengoodstheonepriceisfixed，forallbuyers，between91/and90/；inordertodisposeofalltheirgoodsthesellersmustkeepthepricebelow91/，and，inordertoexcludetheothercompetitors，thebuyersmustkeepitover90/。Forfiftygoodsthepricewillstandbetween51/and50/，correspondingtotheequivalentofthe50thand51stpurchasers；forseventygoodsitwillbebetween31/and30/，correspondingtotheequivalentsofthe70thand71stpurchasers。Inshort，thelargerthestockwhichhastobesold，thelowerwillfalltheprice，asthispermitsoftheentranceofmorenumerousandlesscapablepurchasers，andthemarketpriceestablishedisoneandthesameforthewholemarket。IfwegivethenameofMarginalBuyer(followinganexpressionofBohm-Bawerk\'s)totheweakestbuyer，who，allthesame，mustbeallowedtopurchaseifthewholestockistobesold，thelawofpricewillrunthus:Pricemustatalltimessettlebetweentheequivalentsofthemarginalbuyerandthatofthebuyerwhostandsnextunderhim；viz。thatoneamongtheexcludedcompetitorswhohasthegreatestpurchasingpower。Wherecommoditiescomeforwardingreatquantitiesandhavealargesale，thedegreesofdifferencebetweentheequivalentsofvariousbuyers，whomweshouldmorecorrectlyconsiderasclassesofbuyers，——arenotgreat。Andforsuchcasesthelawofpricemay，quitecorrectly，bestillmoresimplystatedasfollows:

Priceisdeterminedbythemoneyequivalentofthecurrentmarginalbuyer，ormarginalclassofbuyers。Itsettlesatafigureverynearit，andindeedalittleunderit。

Theveryfirstglanceshowsusthatthelawofpriceisnearlyrelatedtothelawofvalue。Thevalueofastockconsistingofseparateitemsisdeterminedasamarginalvalue，accordingtothemarginalutilityofthesinglegood；thepriceofastockwhichissoldinseparateitemsisalsodeterminedasamarginalamount，accordingtothepurchasingpowerofthemarginalbuyerofthesinglegood。Inbothcaseswhatdecides，is，ontheoneside，theamountofthestock，——additiontowhichshiftsthemarginandlessensthedeterminingamount，whilediminutionenlargesit——and，ontheotherside，thewantwithitsvaryinggradations。Inthecaseofprice，however，thereis，alongwiththedegreeofwant，anotherdeterminingfactwhichdoesnotexistinthecaseofvalue。Thisfactisthevaluationofmoneyfromthesideofthebuyer；thatistosay，hiswealthandincome。Beforehoweverproceedingtoexaminetheexceedinglyimportanteffectsofthisfact，wemustassureourselvesthatthelawofpricejustexplainedholdsalsointhecasewherebuyers，insteadofdesiringtopurchaseonesinglegood，desiretopurchaseseveralormorethanone。Onlyifthisisthecasecanthelawhaveanyrealinterestforus。

Weneednotwastemuchtimeoverthispoint。Suchabuyerwillhaveinhismindamaximumofferdeterminedinthemannerjustdescribed。Thecollectivevalueinuseofthegoodstobeacquired，estimatedinasumofmoneywhoseexchangevalue，accordingtothesubjectivevaluationofthewould-bepurchaser，isequaltothisvalueinuse，givesthemaximum。Themoreitemstherearetocalculate，thegreaterwillbethemaximum，reckonedasawhole，butthesmallerwillbethemaximumofthesingleitem，becauseinthiscasethevalueinuseoftheunitwillbeproportionallyless(andthehigheralsowillrisetheexchangevalueofthemoneyasconsequenceoftheincreasedexpenditureonthewhole)。Ife。g。apersonwerewillingtobuy10goodsatashillingeach，butweremadebythesellertobuy20instead，hewouldbeabletogiveonlyasmallerpriceperitem，asthelargerpurchasewouldbringwithitasmallerutility，andatthesametimethelargerexpenditurewouldbemoreheavilyfelt。Atnotime，however，willanypurchaser——andthisisourmostweightyproposition——consenttopayanythingbutoneandthesamepriceforoneandthesamearticle，andthatpricewillbetheequivalentofthecurrent“marginalitem，“saythe10thgoodinthecaseof10items，orthe20thinthatof20items——

alwaysassumingthatthemarketisanopenone，andthebuyeratlibertytopurchasemoreorlessaccordingtohispleasure。Ifinanyopenmarketapriceweredemandedforanyparticulargoodwhichwasinexcessofthemoneyestimateofthemarginalgood，thebuyerwoulddobettertoabstainfrompurchasingthisparticulargood，forwhichhewouldhavetopaymorethanitsvalue。Thesameconsiderationswhich——inestimatingthevalueinuseofastockthatmaybedividedupatpleasure——leadtoeverygood，withoutexception，beingvaluedatitsmarginalutility，alsonecessitatethat，inthepurchaseofastockwhichmaybegreaterorlessaccordingtodesire，foreverygoodwithoutexceptiononlytheequivalentofthemarginalutilityshallbepaid。Andhereweseethatthelawsofvaluewhichwehavealreadyexplainedhaveadirectinfluenceonthelawsofprice，andthatthelattercouldnotbeunderstoodwithouttheformer。(1*)Ifthisisonceestablishedthereislittlemoretosay。Ateveryextensiono？hispurchasesthebuyerwillcalculatehismaximum。Ifweweretoaddtogetherthecalculationsofallbuyersweshouldobtainthequantitiesofgoodswhichmightbeplacedagainsteveryconceivableprice。Wheregoodsareheldforhighfiguresonlysmallquantitieswillbesold，andthattothemost“capable“buyersforthesatisfactionoftheirmosturgentdemand。Wherepricesarelowlargerquantitieswillbesold，partlytotherichestbuyerstomeettheirlessurgentdemand，partlytootherswhoareless“capable。“But，atafixedprice，onlyafixedamountwillbedemandedandmaybesold。Ifnowsellers，ontheirside，cometomarketwithafixedquantityofgoodswhichmustbeentirelygotridof，theywillfindthepricealreadydetermined。Itisthatpriceatwhichjustthisamountisdemanded。

Hereagainwehavethesamedeterminantfacts；——theamountofsupplyalreadyowned，thedegreeofwantordesire；andthepurchasingpowerofthebuyers。Thetwolatterhave，however，thepeculiaritythatwhatdecidesisnotsimplythemoneyequivalentofthemarginalpurchaser，orthemarginalclassofpurchasers，butthemoneyequivalentofthemarginalpurchaser，orclassofpurchasers，forthemarginalgoodorgoods。

Wheresellersdonotwishtopartwiththeirwholesupply，buttoretainaportion，eitherfortheirownuseorforfuturesaleinsomealteredconditionofthemarket；where，insteadoffreecompetitiononbothsides，somemonopolyexists，orthesale，insteadofbeingpublicandopentoall，takesplaceprivatelyandinsmallgroupsorquiteinisolation；——insuchcasesourlawofpricecanactonlyimperfectlyorinagreatlyweakenedmanner。Atthesametimethecharacteristicelementintheformationofprice——thatthepurchasingpowerofthebuyersisputinthescale——willalways，excepting，atmost，theeaseofmonopolyonthesideofthebuyers，bepresentandretainitsimportance。Goodsarenotpaidforsimplyaccordingtotheamountofutility(i。e。ofmarginalutility)whichtheyrendertothebuyers，butalsoaccordingtotheamountofpurchasingpowerwhichthemarginalbuyersputonthatutility。

Ofthemanyweightyconsequencesarisingfromthisproposition，Ishallatpresentreferonlytoone。“Thehighestpricestherefore，“(toquotefromtheUrsprungdesWerthes，p。

26)“areobtainableforthosegoodswhicharetobehadonlyinsmallquantityandareobjectsofdesiretotherichestclasses；

thepricesofsuchgoodsrisetillallbutthewealthiestclasses——eventhosegroupsofthemiddleclasseswhoareinmostcomfortablecircumstances——areexcludedfromthecircleofpurchasers。Goodswhich，owingtotheirinferiorquality，aredesiredonlybythepoorerclassesobtainextremelylowprices，asalsodothosegoodsofbetterqualitywhicharesoplentifulthatthepoorerclassesmustbeadmitted，toaconsiderabledegree，withinthecircleofpurchasers。Mediumpricesarereachedbythosegoodsofwhichthemiddleclassesformthemajorityofthepurchasers，thosewhohavesmallmeanseitherbeingentirelyexcludedfrompurchase，orenteringthestruggleofcompetitiononlyinsofaraswillsatisfytheirintensestsensationofdesireforsuchgoods。Changesintheeconomicpossibilitiesofgreatclassesinacommunitywillnaturallyinducechangesinthepricesofgoods。Thegreatertheinequalitiesofwealth，thegreaterwillbethedifferencesinprice。Luxurieswillriseinpricewhengreatfortunesincrease，andwillfallwhentheydecrease。“(2*)

NOTES:

1。HerewehaveaprooffromexperienceforourstatementinBookI，chap。ixthat(forthesameowner)theseparateitemsofastock，sofarastheyareequaltoeachother，havethesameusevalue，andareallvaluedaccordingtotheamountofthemarginalutility。Oneandthesamebuyerwillnotconsenttopayotherthanonepriceforthesimilaritemswhichareallboughtatthesametime:hewillnotpaymoreforonethanforanother，andfornonewillhepayahighersumthanthemarginalequivalent。Thisshowsthathevaluesthemallequally，andallaccordingtothesamemarginalamount。Otherwisetherewouldbenothingtopreventhispayingdifferentpricesforthem，andpossiblypayingmorethanthemarginalequivalentforagreatmanyofthem——indeedforallexceptone，themarginalitem。

2。Itisasresultoftherecognitionofthisprinciplethatwefirstarriveatacompleteunderstandingoftheremarkablephenomenonwhichhasoccupiedtheattentionofsomanytheorists；

thatthevalueofgoodswhichcanquitewellbedonewithout，suchasdiamonds，maybesomuchgreaterthanthatoftheindispensablenecessariesoflife；thevalueofgold，forinstance，somuchhigherthanthatofiron。Ithasalreadybeenshown，intheelementarytheoryofvalue，thatthevalueinuseofanentirelyinsignificantgoodmustbegreaterthanthatofamuchmoreusefulonewhenthemarginalutilityoftheformeris，owingtoitsscarcity，comparativelyhigh，whilethatofthelatter，byreasonofitssuperfluity，hasfallenverylowdownonthescale。Evengreaterdifferencesarefound，undercertaincircumstances，inprices，andconsequentlyintheestimatesofexchangevalue，thanareshowninthedifferentestimatesofusevalue。Diamondsandgoldstandexceptionallyhighinpricebecausetheyareluxuries，valuedandpaidforaccordingtothepurchasingpoweroftherichestclasses；whilethecoarserfoodstuffsandironarelowinprice，becausetheyarecommongoods，inregardtowhichthedecisivefactoristhepurchasingpowerandthevaluationofthepoor。

Chapter2

ExchangeValueintheSubjectiveSenseThefactthatgoodscanbeboughtandsoldgivesanewandpowerfulimpulsetotheestimatingofvaluesinallindividualeconomieswhichexchangewithoneanother。InthehousekeepingofaCrusoeonlythevalueinuseofthingsobtains；whereas，inallindividualeconomieswhichtradewitheachother，exchangevaluealsohastobeconsidered。Thebestexplanationofthenatureofexchangevalue，ofitsrelationtovalueinuse，andoftheserviceswhichitrenderstotheindividualeconomy，willbegotifweexamineseparatelythedifferentcasesofitsoccurrence。

Moneyisalways，andbyallwhopossessit，estimatedaccordingtoitsexchangevalue。Itsuseconsistsinthespendingofit，——inthepartingwithitinpurchaseofothergoods(1*)

thatareexpectedtosatisfythosesensationsofwantwhichwouldotherwisehavenoprovision。Theexchangevalueofmoneyistheanticipatedusevalueofthethingswhichcanbeobtainedforit。

Thelaw，therefore，whichobtainsforthelatterobtainsfortheformer；itisdemandandsupply，accordingastheseexpressthemselvesinmarginalutility，thatdecidetheexchangevalue。

Thevariousthingswhichdeterminemoneyvaluetotheindividualarethefollowing:——theamountofmoneywhichisathisdisposal；thenatureandquantityofthegoodswhichcanbeobtainedundertheexistingmarketconditionsandprices；theutilitywhichthosegoodsareabletogive，asalsotheutilityalreadysecuredbypossessionsotherwiseacquired；and，lastly，theamountandurgencyofdemand。(2*)

Theunitofmoneyalwaysreceivesitsvaluefromtheleastimportantexpenditurewhich，inthecircumstancesofthepossessor，itserveseconomicallytodefray；everylargersumofmoney，andtheentireamountofmoneyowned，containsthismarginalunitvalueasoftenasthereareunits。Itisinevitablethatdifferentpersonsgiveveryvariousestimatesofvaluetothesamesumofmoney。Thecircumstancewhichmostlargelyinfluencestheseestimatesisamountofwealthandincome。(5*)

Thepennyismoretothepoormanthantheshillingtotherich。

Everyonemustbeconscioushowveryimportantitis，fortheproperorderingofhisowneconomicaffairs，thatheshouldhaveanexactideaofthevaluewhichmoneyhasforhim。Nooneisutterlyignorantofthis，andwitheverygoodhouseholdertheknowledgeisalmostapartofhimself。

Besidesmoney，allgoodswhicharemadeorheldforsaleareestimatedbytheirpossessorsaccordingtothisexchangevalue，——whetheritbethattheownercannothimselfmakeuseofthem，becausetheyareunsuitedtohispersonalneeds，orthat，althoughhemightbeabletousethem，theutilitytheywouldfurnishseemstootriflingtobeweighedagainsttheproceedsofasale。(4*)Theproximatebasisofvaluationistheexpectedmoneyproceeds，ortheexchangevalueofthatmoney；theultimatebasisisthatusevaluewhichisanticipatedfromtheexchangevalueofthemoneyproceeds。Againtheestimateofvalueleadsusbacktousevalue，andagainthelawofmarginalutilityobtains。

Thesamegoodonthesamemarketobtainsforallsellersthesameprice，buthowdifferentarethevaluationsofthatgoodonthepartofthosewhosewholeyearlyincomeisdependentontheirsale，ascomparedwiththosewhoseenjoymentwouldscarcelysurerweretheytodowithoutsellingthemfromoneyear\'sendtotheother！

Finally，numerousgoodswhichtheirownershavenotthesmallestintentionofselling，areestimatedbytheirexchangevalue。InfrustrationwemaymakeuseoftheexamplewhichBohm-Bawerk，whowasthefirsttoexaminethisparticularinstance，givesinhisWerth(p。37)。Apoormanvalueshisovercoatonaccountoftheuseheexpectsfromitasadefenceagainstcold，knowingwellthat，shouldhelosethecoat，hewillbeexposedtoalltheseverityofthewinterweather，ashedoesnotpossesssufficientmeanstopurchaseanother。Eventoamaninbettercircumstancesthelossofhisovercoatwouldbealoss；

butinthiscaseitcouldandwouldbereplacedatthepriceofmakinganother。Therichman，therefore，willnotvaluehiscoataccordingtoitsutility，butaccordingtothecostofprocuringit；inhisestimationthiscostwillstandlowerthantheutility，andtothatcosthecanalwaysreducetheinjuryhesuffersfromitsloss。Casesofthiskindofvaluationbyexchangevalueareinnumerable。Allhouseholdgoodswhich，whenlostorstolen，canbereplacedbypurchasearethusvalued。Hereweseethattheproximatebasisforvaluationisthemarketpriceatwhichthepurchasecanhemade，whiletheultimatebasisisagainausevalue；that，namely，whichisanticipatedinthevaluationofthepurchaseprice。(5*)Tosumup。Theexchangevaluewhichwehavehereexplainedisthatvaluewhichisascribedtogoods，eitherbyreasonoftheowners\'intentiontosellthem，orbecauseofthepossibilityofreplacingthembypurchase。Morebrieflystated，itisthatvaluewhichattachestogoodsonaccountofananticipatedactofexchange。Exchangevalueinthissenseandusevalueareofthesamenature；theformerisderivedfromthelatter，andisoneofitsformsofdevelopment。Bothformsofvaluefollowthesamegenerallaws；

botharesubjective；andtheamountofbothvariesaccordingtopersonalcircumstances。Thepriceofanarticlenevercompletelyexpressestheexchangevalueithasforitsowner。Thisdependsfurtheruponthe“personalequation“ofmoneytohim。

Subjectiveexchangevaluecannotbeabsentinanyindividualeconomywithoutcausingthegreatestconfusioninallitsexchangerelations。The“personalequation“ofmoneyisindispensableineveryeconomy，inorderthatwemayweighagainsteachothergoodsestimatedaccordingtotheirusevalue，andgoodsestimatedaccordingtotheirexchangevalue。Withoutitnoexpenditure，nopurchase，nosalecouldbelogicallymade。Thepoormancouldnotenterthemarketasapoorman，northerichmanasarich。Everyseparateactofexchangedependsuponit，andthusnotonlytheregulationofindividualeconomies，butthewholeofexchangedependsuponit。

Itismostwonderfulthatafactofsuchuniversalpractice，andofsogreatimportance，has，untilquitelately，beenalmostentirelyneglectedbytheory。Mengerwasthefirsttogiveitacleartheoreticalexplanation，andtoadoptitinhissystem；anditisnottheleastofhismanyservicestoeconomics。

NOTES:

1。Or，aswesaysimply，inpurchaseofgoods——moneyandgoodsbeinggenerallythoughtofasinoppositiontoeachother。

2。Forinstance，thevalueofashillingtomedepends(1)onthenumberofshillingsIhavetospend；(2)onwhatandhowmuchI

canbuyintheshopsforashilling；(3)onwhatuseIcanmakeoftheshilling\'sworthofgoodswhenIgetthem——which，again，depends(a)onhowmuchIhaveofsimilargoodsalready；and(b)

onmynaturaloracquiredcapacityofconsumingoremployingsuchgoods——W。S。

3。SeeJevons，p。152。

4。Ofcoursetheauthordoesnotmeanthattheconsiderationofpossiblepersonaluseofhisgoodsevercomesintothemindofthemakerormerchantwhosuppliesthemarket。Their“use“tohimistheir“exchange。“Wieserisonlymakingoutthelogicalpointthatevengoodsmadeforsalewouldnotbeestimatedattheirexchangevalueifitwerenotthatthepersonaluseislessthantheexchangeuse——W。S。

5。Onthechangeofmotivewhichresultsfromthisintheconflictofprice，seeBohm-Bawerk\'sWerth(p。515)。ImayperhapsbeallowedtopointoutthatinmyUrsprungdesWerthes(p。185)Ialludedbrieflytothecasedescribedabove。

Chapter3

ExchangeValueintheObjectiveSenseNoonecantakehisownpersonalvaluationofmoney，andofthemoneyvalueofgoods，outsideofhimself，andapplyittootherpeople。Noonewillpersuadeabusinessmantolethimhaveacommodityathalf-pricesimplybyprovingthatitismoredifficultforhimtoprocurethehalf-pricethanforsomeotherpersontoprocuredoubletheprice。Andnobusinessmancouldsellanarticleattwicethemarketprice，simplybecausehecouldprovethatthedoublegainwasnecessarytoenablehimtosatisfyhismosturgentwants。Everyoneneedstohaveanexactsubjectiveestimateofthevalueofmoneytohimself，asaprivateindividualeconomisinghisownresources，inordertodecideforhimselfwhatattitudehemaytakeupwithregardtothingsoutsideofhim。Butthispersonalattitudecanhavenoeffectonthemovementofgoodsinthegreateconomicexchangebetweenoneeconomyandanother，orintheendbetweenanyeconomyandhisown，exceptinsofarashemaysucceedininfluencingthepricesofgoods。Itisthepricesthatabsolutelydecideinexchange。Goodsfalltothosewhopaythehighestprices，and——whatismostimportant——theamountexpendeduponproductionisregulatedbythepricesexpectedfromthesaleofthegoods。Thosegoodswhichwillbesoldatthehighestpricesattractthemostmeansofproduction。Therankofgoodsineconomicexchange——theirexternaleconomicpower——isabsolutelydecidedbytheirprices，howeverindividualsmayjudgeastotheirintrinsicimportance。

Whenwespeakgenerallyofthevalueofgoodswemeantheeconomicrankgiventhembytheirprices。Agoodwhosemarketpriceis？00has，inthecommonusageofspeech，absolutely，andforeveryone，tentimesmorevaluethanonewhosepriceisonly？0。Thedearestgoodis，intheordinaryuseofwords，alsothemostvaluable。Butwemustmakeonesinglelimitation:goodshaveascribedtothemasvalueonlythosepriceswhicharepaidforthemintheusualrunofcases。Exceptionalprices，usuriousprices，and“cut“pricesformnofoundationforvalue；andaccordinglygoodswhosepricesfluctuategreatlyhave，incommonusage，nofixed“intrinsic“value。

Asamatteroffactsomeparticulardesignationisindispensablefortherankingofgoodsineconomicexchange，anditisimpossibletofindanyotherdesignationthanthatofvalue。Andthisnotsimplybecauseweareforcedtoitfromtheoutsideasitwere，byordinaryusageofspeech，butbecauseitessentiallyjustifiesitself。Whatsubjectivevaluedoesfortheindividualeconomy，——measuringeveryoutlayandeveryreturn，anddecidingtheamountofconsumptionthatispermissibleandtheextenttowhichproductionmaybeextended，——isdoneforeconomygenerallybythisrankingofgoodsasitisdeterminedbyrelationtotheobjectiveprices。Itisthemeasureforoutlayandreturns，anduponitdistributionandproductionaredependent。Butitmustbeemphasisedthatthewordvaluealtersitsoriginalsensesomewhat，whentransferredfromthesubjectiverelationtowantstotheobjectiverelationtoprice。Subjectivevaluerepresentsadistinctfeeling；thatofbeingdependentuponthepossessionofagoodforthesatisfactionofawant，——adistinctdegreeofpersonalinterestingoods。Objectivevalue，ontheotherhand，merelyrepresentsadefiniteprice；adefiniteamountofpaymentwhichisexpectedorrequiredinbuyingandselling。Theformerhasitsmeasureinthedifferentgradationsofdesire，thelatterinthequantitiesofcoin，——inthefiguresoftheprice。

Ofcourseinternalvaluationsofpersonalinterestdo，alwaysandwithoutexception，attachtoobjectivevaluealso，butthesevaluationsareonlysubjective，beinggreaterforoneandsmallerforanother。Objectivevalueorpriceisnotintheleasttheexpressionoftheeconomicvaluationofgoods，evenwhenitistheresultofeconomiccompetition，andoftheindividualvaluationsofallthedifferentmembersoftheeconomiccommunity。Priceisasocialfact，butitdoesnotdenotetheestimateputupongoodsbysociety。(2*)Luxuriesarepaidformorehighlythannecessaries，butwhowouldaffirmthattheyarethereforeofgreatersocialimportance？Thoseverypersonswho，onthemarket，cometoanagreementregardingthepriceofgoods——compelledtheretobythepowerofcircumstances——willeachreservehisownjudgmentupontheimportanceofthegoodstohimpersonally；andthatauthoritywhichisearliestcalledupontodeliverthesocialjudgment，thegovernment，isuniversallyconsideredtobethefurthestremovedfromrecognisingthepricesofgoodsasameasureoftheirsocialimportance。Agovernment，indeed，is，forthemostpart，concernedwiththecarryingthroughofjustsucheconomictasksascouldnotbejustifiedbytheirmoneyreturn，iftheywerenotjustifiedbytheirutility。

Inwhatfollows，whentheword“exchangevalue“occurs，I

shallalwaysmean“exchangevalueintheobjectivesense。“Thereisnoneedtoformulatethelawof“exchangevalue“；weknowitalready，ifonlyinageneralway。Itisthelawofprice。(2*)

NOTES:

1。Theordinaryconception，whichmakespricethesocialestimateputupongoods，hastothesuperficialjudgmenttheattractionofsimplicity。AgoodAwhosemarketpriceis？00isnotonlytentimesasdearasBwhosemarketpriceis？0，butitisalsoabsolutelyandforeveryonetentimesasvaluable。Inourconceptionthematterismuchmorecomplicated，andaccordingtoitweobtainthefollowingpropositions。1。AispaidforwithtentimesasmuchmoneyasB:itspriceistentimesgreater。2。

Itsobjectiveexchangevalueisalsotentimesgreater——theweightiestconsequenceofwhichisthattentimesthecostmay，and，ifpracticable，willbeexpendeduponitsproduction。3。Buttheserelationsofpriceandofobjectivevaluedonotintheleastdegreecorrespondwiththerelativepositionofthetwogoodsinregardtotheireconomicimportanceorsubjectivevaluation。Pricealoneformsnobasiswhateverforanestimateoftheeconomicimportanceofthegoods。Wemustgofurtherandfindouttheirrelationtowants。Butthisrelationtowantcanonlyberealisedandmeasuredindividually。Supposebothgoodsareownedbythesameperson(orbypeopleunderexactlysimilarconditionsofwantandprovision)，Awill，ofcourse，havetentimestheimportanceofB。ButitmayjustaswellhappenthatA

hasexactlythesameimportanceforoneownerasBhasforanother；itmayindeedhappenthatA，inspiteofitsgreaterexchangevalue，hasforitsowner，supposinghimtobearichman，evenlessvaluethanBhastoitsowner，supposinghimtobeapoorman。IftherearemanygoodsoftheclassAandmanyoftheclassB，theindividualvaluationsofthevariousownerswillbewidelydiverse，andaunanimousjudgmentisnottobeexpected。Andthequestionhowitispossibletounitethosedivergentindividualvaluationsintoonesocialvaluation，isonethatcannotbeansweredquitesoeasilyasthoseimaginewhoarerashenoughtoconcludethatpricerepresentsthesocialestimateofvalue。

Seefurther，ontherelationofobjectivetosubjectiveexchangevalue，myUrsprungdesWerthes(pp。10and21；alsoBohm-Bawerk\'sWerth，introd。，etc。)，andSax(chaptersxlviiiandxlix)。

2。Exchangevalueis，sofarasconcernsitsapplication，withoutdoubtthemostimportantformofvalue，inasmuchasitgovernsthelargestsphere；——thatofindustrialeconomygenerally。

Politicaleconomy，outsidethatchapterwherethetheoryofvalueisgiven，isalmostexclusivelyconcernedwithit。Nowonder，then，thattheoreticaltreatiseshavetakenitastheirend。Butapplicationisonethingandexplanationanother。Toexplanationsubjectivevalueischiefinimportance，foronlythroughitcanexchangevaluebereached。Subjectivevalueistheoriginalandperfectformofvalue；exchangevaluetakenbyitselfandunrelatedtosubjectivevalueisimperfectandunintelligible。

Whatdoesitsignifytosaythatonearticlecoststhisandanotherthatpriceinmoney，ifwecannotsayhowmoneyandpricesarethemselvesvalued？Theoristswhohaveconfinedthemselvestotheexaminationofexchangevalue，or，whatcomestothesamething，ofprice，mayhavesucceededindiscoveringcertainempiricallawsofchangesinamountsofvalue，buttheycouldneverunfoldtherealnatureofvalue，anddiscoveritstruemeasure。Asregardsthesequestions，solongasexaminationwasconfinedtoexchangevalue，itwasimpossibletogetbeyondtheformulathatvalueliesintherelationofexchange；——thateverythingissomuchmorevaluablethemoreofotherthingsitcanbeexchangedfor。Whytheexchangedthingshadvalue；whythingsgenerallywereworthanythingtous；andhowthisvaluewastobemeasured；——thesetheoriescouldneverexplainnorhopetoexplain。Valuewasconceivedofrelatively，byreferringonethingtoanother；——astheratioofvaluablethings。

Absolutelyandbyitselfvaluewasnottobeunderstood。Itissignificantofthisinceptiontostatethatonethingcannotbeanobjectofvalueinitself；thatasecondmustbepresentbeforethefirstcanbevalued。

Theoryhasonlyverygraduallyshakenitselffreefromthismisconception，thiscircle。Whereanabsolutetheorywasattempted——suchasthelabourtheory，orthatwhichexplainedvalueasusefulness——somelogicalleapgenerallyreconnecteditwiththerelativeconception。Itwasforcedintothisbytheoverestimateofexchangevaluefromwhichitseemedimpossibletogetfree。AstrikingexampleofthisisRicardo\'stheoryofvalue。Asamatteroffactvalueisstillchieflyregardedrelatively。Germanliteraturehasforlonghadthegreatadvanceofmuchpenetratingcriticismofexchangevalue，andofmanifoldattemptstosupplementit，butithasneverthelessfailedinanyfinalsolution。Amongthelaterreformersofthetheoryofvalue，Jevonsisdistinguishedforthestrictnessandaccuracywithwhichheseparatesthetwoconceptionsofvaluefromoneanother，buthefailstoconstructatheoryofsubjectivevalue(seesecondnotetoBookI。chap。ix)，andtodeterminethefunctionsofbothkindsofvalue。Menger，ontheotherhand，hasacompletetheoryofsubjectivevalue，butmakesnoattempttodevelopobjectivevalue。

MyowninvestigationsintheUrsprungdesWerthesarealmostentirelyoccupiedwithsubjectivevalue。AndevenfavourablecriticshaveconcludedfromthisthatIdonotrecogniseobjectivevalue。Thereproachisthelessmeritedthat(onpage38)Ihaveespeciallyacknowledgedthenecessityforanobjectiveconceptionofvalue。TherelationofsubjectiveandobjectivevaluehasbeenbestdescribedbyBohm-Bawerk，and——particularlyasregardsthedistinctionoftheirseparatefunctionsineconomiclife——bySax。

Chapter4

TheAntinomyofExchangeValueExchangevalue——thatis，asjustexplained，objectiveexchangevalue——showsthesamemovementassubjectivevalue。

Witheveryadditiontotheamounttobesold(demandremainingconstant)，goesafallinthereturngotforthesingleitem，whilethetotalreturnrises:thisisthe“upgrade“ofvalue。

But，whenacertainpointisreached，thetotalreturnalsofalls:thisisthe“downgrade“ofvalue。Andwhere，finally，thereisuniversalsuperfluity，nopricewhatevercanbeobtained。

Thecausesofthismovementareevenstrongerinthecaseofexchangevalue。Itisinducednotonlybythenaturallimitationofwants，inasmuchasthesecannotreachbeyondthepointofsatiation，butalsobytheactuallimitationofthepurchasingpowerofmanybuyers，whohavenotmeansenoughtosatisfytheirwantstothepointofsatiation。Goodswhichwouldstillfindpurchasers，sofaraswantsareconcerned，oftenfindnosaleinthemarket，andconsequentlytheupperlimitofpriceisoftenreachedsoonerthanthatofsubjectivevalue。

Therewould，nevertheless，bejustaslittlereasontospeakofanantinomyofexchangevalueasofanantinomyofsubjectivevalue，wereitnotthattheeconomicorder，underwhichsocietyexists，givestoexchangevalueanefficiencyinthegeneralbusinesseconomy，whichgoesfarbeyondthatofsubjectivevalueintheindividualeconomy。Ineveryself-containedprivateeconomyutilityisthehighestprinciple；but，inthebusinessworld，wherevertheproddingofsocietywithgoodsisinthehandsofundertakerswhodesiretomakeagainoutofit，andtoobtainaremunerationfortheirservices，exchangevaluetakesitsplace。Theprivateundertakerisnotconcernedtoprovidethegreatestutilityforsocietygenerally；hisaimisrathertoobtainthehighestvalueforhimself:——whichisatthesametimehishighestutility。Utilityapprovesitselfasthefirstprincipleintheundertaker\'seconomy；but，justbecauseofthis，intheconflictbetweenexchangevalueandsocialutility，itisexchangevaluewhichisvictorious，——sofaratleastastheundertakerhaspowertoactaccordingtohisowninterest。

Proudhon，therefore，isright——althoughhemaynothaveformulatedhiscontentionquitecorrectly——whenheaffirmstheantinomyofexchangevalue。Everyundertakerfindsittohisadvantagewhenhesucceedsinturningfreegoodswhichhecannotsell，intoeconomicallyscarcegoodswhichhecansell。Anditistohisadvantagewhenheissuccessfulinreducingtheamounttobesold，andraisingthereturns，justasitistohisdisadvantagetoincreasetheamountthatistobesold，andtherebydiminishthereturns。

TheconclusionwhichProudhondrawsfromthis——thatthediscordcanonlyberesolvedbyasocialistorganisationofsociety——isneverthelessincorrect。

Inthemaintheantinomydoesnotexistinthe“upgrade“ofthemovementofvalue。Andinthisupgradeisfoundbyfarthegreaternumberoftheactualformsofvalue。Further，theantinomyonlyholdsinsofarastheundertakerisabletorulesociety。Butwherethereisreallyfreecompetitionnoundertakerhasthispower。Underfreecompetition，socialutilitywillbe——

asitoughttobethefirstprincipleofeconomiclife。Hereeachofthecompetingundertakersisboundtostrivetowidentotheutmostthecompassofhisundertaking。Theincreaseofsupplywhichtheindividualproducercausesis，inrelationtosupplyasawhole，tootriflingtohaveanymaterialeffectinloweringprices，whileitmateriallyincreasestheamountwhichtheindividualshavetosell。Thuseveryonecalculates，and，onthestrengthofthiscalculation，productionisstretchedtotheutmostpossibleextent。Theeconomichistoryofourowntimeisrichinexampleswhichprovethatcompetitioncanpresspricesfaronthedowngradeofexchangevalue。

Inanyremainingcases，society——ifitistoescapeinjury——will，ofcourse，requiretocarryonproduction，orhaveitcarriedonbyindividuals，oncommonaccount；butsuchcasesaretoofewtocallforthesocialistorganisationofsociety。Fromthefirst，governmentshaveundertakensuchresponsibilities。Theantinomyofexchangevaluedoesnotnecessitateacompleteoverturnofthefreeeconomicorderofsociety；itmerelyrequiresthatitbesupplementedbysuitableinterferenceonthepartofgovernments。

Chapter5

TheServiceofExchangeValueinGeneralEconomyIfweconsidertheelementswhichgotoformexchangevalue，weareforcedtotheconclusionthatthechargeofantinomyisnottheheaviestthatmayberaisedagainstit。Entirelyapartfromthis，thelawofitsformationremainssuchthat，eveninthemostfavourablecircumstances——saywhenthereisnodisturbingelement，nosuspicionofforce，dishonesty，orerror，andwhenthetransactionisoneweareaccustomedtocallfreeandjust，——exchangevalueiscalculatedtorenderitsserviceineconomiclifeonlyinanimperfectmanner，andwithconsequenceswhichsocietyfeelstobeseriousevils。

Itmustbepremisedthattheservicerenderedbyexchangevaluetogeneralorindustrialeconomy，ascomparedwiththeservicerenderedbysubjectivevaluetotheself-containedeconomy，isgreaterbyoneadditionaltask。Inthelatter，valuehasonlytomeasureoutlayandreturnmateriallyagainsteachother，intheformer，itmustalsodosopersonally。Thematerialoreconomic-technicalserviceofexchangevaluerelateschieflytoproduction。Hereithasthefunctionofcontrol。Itgivesthemeasureforproductionandforexpenditureofcosts。Goodsshouldbeproducedaccordingtotherankoftheirvalue，andothergoodsshouldbesacrificedforthemascostsonlyinsofarasthecomparisonbetweenthevalueofamountproducedandthevalueofcostsallows。Thepersonalserviceofexchangevalue，ontheotherhand，comesin，principally，inthedistributionoftheproductsacquiredamongtheseparateindividualstakingpartintheexchange；inthiscasevalueisthemeasureofthepersonalacquisition。Toeveryparticipatorinthegreateconomicprocessmustbeassignedareturnequalinvaluetotheamountofhisoutlay——whetheritbeoutlayofwealthorexpenditureoflabour。

Theexchangevalueofallgoodswhicharebroughtuponthemarketinstocksorquantities，ismeasuredasamarginalvalue。

Thatistosay，eachunitofthestockisvaluedatthesameasthemarginalequivalent，andthewholestockisestimatedasamultipleoftheunit，——asproductoftheamountintotheunitvalue。Sofarexchangevaluegivesthesameappropriateandfaultlessassistanceintheeconomiccalculationasmarginalvaluegenerallydoes。Itsapplicabilitytothiskindofcalculationisindisputable。Itis，then，unnecessarytorepeatindetailwhathasalreadybeensaidonthesubjectingeneralininBookIchapterxi。

Inorder，however，properlytoappraisetheserviceofexchangevalueineconomiclife，itmustberememberedthatitdoesnotcontainexactlythesameelementsasdoesvalueinuseintheself-containedeconomy。Thelattersimplydependsuponutility:theformerisbesidesdependentuponpurchasingpower(seeBookII。chap。i)。Valueinusemeasuresutility；exchangevaluemeasuresacombinationofutilityandpurchasingpower。Thestockwhichisgreaterinusevalue(inthe“upgrade“)isalsoalwaysthericherinutility；thestockwhichisgreaterinexchangevalueisnotnecessarilyso。Inthelattercasethehighervaluemayarisefromhigherutility，butitmayalsoarisefromthegreaterwealthofthebuyers，andthestronginducementheldouttothemtothrowtheirrichesintothebalanceinthewarofcompetition。

Inthematerialserviceofexchangevalue，aswellasinthepersonal，thispeculiarmethodofitsformationobtainsimportance。Asaconsequenceofit，productionisorderednotonlyaccordingtosimplewant，butalsoaccordingtowealth。

Insteadofthingswhichwouldhavethegreatestutility，thosethingsareproducedforwhichthemostwillbepaid。Thegreaterthedifferencesinwealth，themorestrikingwillbetheanomaliesofproduction。Itwillfurnishluxuriesforthewantonandtheglutton，whileitisdeaftothewantsofthemiserableandthepoor。Itisthereforethedistributionofwealthwhichdecideshowproductionissettowork，andinducesconsumptionofthemostuneconomickind:aconsumptionwhichwastesuponunnecessaryandculpableenjoymentwhatmighthaveservedtohealthewoundsofpoverty。(1*)

Itmaybeofinteresttofollowsomewhatmoreparticularlythelawofdistribution，insofarasitisconditionedbythelawofexchangevalue。Thefavouringoftherich，andwithitthepervertedemploymentofgoods，reallygoesmuchfurtherthanthemerefactofwealthwouldallowonetosuspect。Therichhavenotonlytheadvantageoverthepoorofpossessingmoremeanswherewithtopurchasegoods；theyhavethefurtheradvantageofbeingforthemostpartinamorefavorablepositiontoutilisetheirmeans。Inthebattleofpricethedecisionlieswiththeweakestbuyers，whoare，asarule，alsothepoorest；andpriceisadaptedtotheirvaluation。Theymust，therefore，payforthegoodsexactlyashighlyastheyvaluethem，whiletheirstrongercompetitors，whopaythesameprice，payundertheirpersonalvaluation。Thebeggarandthemillionaireeatthesamebreadandpaythesamepriceforit；thebeggaraccordingtothemeasureofhishunger，andthemillionaireaccordingtothesamemeasure——

thatis，accordingtothebeggar\'shunger。Thepricewhichthemillionairemightbewillingtopayforthebread，supposinghewerehungryanddriventoofferhismaximum，nevercomesintothequestion。Itisonlywheretherichcompeteamongthemselvesforluxurieswhichtheymeantoreservefortheirownenjoyment，thattheypayaccordingtotheirownability，andaremeasuredaccordingtotheirownpersonalstandard。

Butthemoretheabilityoftherichissparedinthepurchasingofnecessaries，thegreaterarethemeanswhichtheyhaveover，wherewithtoextendandincreasethepricestheyofferforluxuries，andthemoredefectiveistheimpulsegivenbyconsumptiontoproduction。

Thelawofvalueintheindividualeconomyisstrict，butitsstrictnessisundoubtedlynecessaryandsalutary。Itforbidssatisfactiontogobeyondacertainmarginalpoint，namely，thepointbeyondwhich，wheneverything，includingthefuture，iscarefullyweighed，themeanspossessedatthemomentwillnotsuffice。Anyviolationofthisprohibitionbringsitsownpunishment，when，tomakeupforthetriflingwantthathasbeenrashlysatisfiedatthemoment，afarmoreurgentdesirelateronhastogounsatisfied。Thelawofpricefollowsthelawofvalueindemandingamarginalpointbeyondwhichpurchasemustnotgo，butitdoesnotpresentthesameunquestionableandmaterialnecessity；andthenaturalandreasonablestrictnessoftheprohibitionistherebychangedintowhatseemspersonalandinconsistentseverity。Themanwhocannotfurnishthepricepaidbythemarginalbuyerisexcludedfromcompetitionwithintheeconomiccircle，justas，intheindividualhousehold，thequitetriflingdesiresareexcludedfromsatisfaction。Asinthehouseholdtherearemarginalwants，soineconomiclifearetheremarginalentities，andanythingbelowthatlevelispermittedtoexistonlybywayofcharity。Butwhile，intheindividualhousehold，themarginallineisdrawnnaturally，ineconomiclifegenerallyitisinfluencedalsobythemannerofthedistributionofwealth。Inthemidstofthecomfortandluxuryoftheopulentclasses，lawcondemnsthepoortoarestriction，asthoughtherewasnoaffluence，andnatureherselfforbadethegreatersatisfaction。

Thesearethechargeswhichmaybebroughtagainstthelawofexchangevalue。Theywouldsoonmakeshortworkofitcouldwenotanswerthem。Theexaminationofthesechargesandtheiranswerdoesnot，however，belongtothetheoryofvalue，buttothegreatertheoryofeconomicsandeconomicallaws；andthisbookdoesnotproposeeventoexhaustthetheoryofvalue。IonlywishedtoexplaintheelementsintheformationofexchangevaluesofarasisnecessarytoshowclearlywhatIshouldliketobeunderstoodbytheterm“NaturalValue。“Wehavenowarrivedatthispoint，andneedhesitatenolongerinpresentingtothereadermyexplanationoftheexpression。Thethingitselfisnotnewtous；thevaluewhichwelookedatinthefirstbook，undertheelementarytheory，isnaturalvalue。

NOTES:

1。OntheeffectofexchangevalueondistributionseeBohm-Bawerk\'sWerth，p。510。

Chapter6

NaturalValueEveninacommunityorstatewhoseeconomicaffairswereorderedoncommunisticprinciples，goodswouldnotceasetohavevalue。Wantstherewouldstillbe，thereaselsewhere；theavailablemeanswouldstillbeinsufficientfortheirfullsatisfaction；andthehumanheartwouldstillclingtoitspossessions。Allgoodswhichwerenotfreewouldberecognisedasnotonlyusefulbutvaluable；theywouldrankinvalueaccordingtotherelationinwhichtheavailablestocksstoodtothedemand；andthatrelationwouldexpressitselffinallyinthemarginalutility。Socialsupplyanddemand，oramountofgoodsandutilitysociallycomparedwithoneanother，woulddecidevalue。Theelementarylawsofvaluation，aswehaveexplainedthem，wouldbeentirelyandunlimitedlyeffectiveforthewholecommunity。

Thatvaluewhicharisesfromthesocialrelationbetweenamountofgoodsandutility，orvalueasitwouldexistinthecommuniststate，weshallhenceforthcall“NaturalValue。“(1*)I

choosethenameinfullconsciousnessofthedoublesensewhichanappealtothe“natural“hasinthedispositionofhumanaffairs。Initssimplicity，purity，andoriginalityitissoattractive，andatthesametimesocontradictorytoallexperience，thatitisdoubtfulwhetheritcaneverbemorethanadream。Sotooweshallthinkofthecommunisticstateastheperfectstate。Everythingwillbeorderedinthebestpossibleway；therewillbenomisuseofpoweronthepartofitsofficials，orselfishisolationonthepartofitsindividualcitizens；noerrororanyotherkindoffrictionwilleveroccur。

Naturalvalueshallbethatwhichwouldberecognisedbyacompletelyorganicandmosthighlyrationalcommunity。(2*)

Thelawswhichwefoundintheelementarytheoryofvalueareitsnaturallaws，asthosewouldtakeshapeunderthesimplifiedassumptionthatgoodscomeintomen\'sdisposalwithoutrequiringtobefirstproduced。Ifwedoawaywiththisassumptionweobtainthenaturallawsofvalueinproduction。Itwillnowbeourtasktofindouttheselaws。Weshallaskourselveswhatproductiveinstrumentswouldbelikelytoobtainvalueinacommunisticstate，whetherlabouralone，oralsolandandcapital；inwhatmeasuretheywouldobtainvalue；whetherthereisanaturalrentfromlandandanaturalinterestoncapital——

andsoonthroughallthecircumstancesofproduction，tillwearriveatthequestionofcostvalueanditsnaturalmeasurement。

Therelationofnaturalvaluetoexchangevalueisclear。

Naturalvalueisoneelementintheformationofexchangevalue。

Itdoesnot，however，entersimplyandthoroughlyintoexchangevalue。Ontheoneside，itisdisturbedbyhumanimperfection，byerror，fraud，force，chance；andontheother，bythepresentorderofsociety，bytheexistenceofprivateproperty，andbythedifferencesbetweenrichandpoor，——asaconsequenceofwhichlatterasecondelementminglesitselfintheformationofexchangevalue，namely，purchasingpower。Innaturalvaluegoodsareestimatedsimplyaccordingtotheirmarginalutility；inexchangevalue，accordingtoacombinationofmarginalutilityandpurchasingpower。Intheformer，luxuriesareestimatedfarlower，andnecessaries，comparatively，muchhigherthaninthelatter。Exchangevalue，evenwhenconsideredasperfect，is，ifwemaysocallit，acaricatureofnaturalvalue；itdisturbsitseconomicsymmetry，magnifyingthesmallandreducingthegreat。

Thefactthatnaturalvalueformsanelementintheformationofexchangevalue，putsourinvestigationintouchwithreality，andgivesititsempiricalimportance。Thevaluewhichwouldberecognisedbyanextremelyrationalandcompletelyunitedcommonwealthisnotentirelyforeigntothatvaluewhichisrecognisedbythesocietyofto-day。Everyindividualdesiresforhisownparttoformarationaljudgmentaboutvalue，butitisnotalwayswithinhispowertodoso；and，inthecomingintoconnectionwithothersinexchange，thefinaleffectbecomesaltered，asIsaid，intocaricature。Thereareinnumerablemoreorlesscorrectapproximationstonaturalvalue。Everyonefindsthemwithinhisowneconomiccircle；andevenwhenthesinglecirclescometogethertheseindividualvaluationsarenotentirelylost，butonlysomewhataltered。Itwillbeofinteresttoinvestigatecloselytowhatextentthephenomenaofexchangevalueareofnaturalorigin，andhowgreat，accordingly，istheformativepowerofnaturalvalueinexistingconditionsofsociety。Ibelievethesequelwillshowthatitisenormouslygreaterthanisusuallysupposed。Landrentis，perhaps，theformationofvaluethatismostfrequentlyattackedinourpresenteconomy。NowIbelieveourexaminationwillshowthat，eveninthecommunisticstate，theremustbelandrent。Suchastatemust，undercertaincircumstances，calculatethereturnfromland，andmust，fromcertainportionsofland，calculateagreaterreturnthanfromothers:thecircumstancesuponwhichsuchacalculationisdependentareessentiallythesameasthosewhichto-daydeterminetheexistenceofrent，andtheheightofrent，Theonlydifferenceliesinthis，that，asthingsnoware，rentgoestotheprivateowneroftheland，whereas，inacommunisticstate，itwouldfalltotheentireunitedcommunity。

Insuchastateitwouldnotformpersonalproperty，butitwouldbecalculatedseparatelyinthetotalincomeofthecommunity，andthatonessentialgrounds；——namely，inordertofindoutwhatisthequotawhichindividuallandscontributetothetotalreturn，andtojudgetherefromwhatoutlaymayandoughttobeexpendedtoobtainthisquota。Inotherwords，theeconomic-technicalservice，thatofcontrollingproduction，wouldremain，whilethepersonalpartitplays，asasourceofprivateincome，wouldfallaway。Shouldourexaminationsucceedinestablishingthisandsimilarfacts，noonewillbeabletodenythatithelpsustoaclearerunderstandingofexistingeconomicconditions。Itwouldshowwhatpartofthepresentformsofvaluenotonlyexistsforthesatisfactionofself-interest，butrendersatthesametimeatechnicalservicetosocialeconomy；

itwouldshowthereforewhatpartmustneverbegivenup，onpainofleavingtheeconomywithoutpowerofcalculationandwithoutcontrol。

Onthisaccounttheexaminationofnaturalvaluewillbeuseful，aswellforthosewhowishtounderstandtheeconomyofthepresent，asforthosewhowishtoevolveanewone。Defendersoftheexistingorderofthings，equallywiththosewhoarefightingtopreparethewayforanewandidealstate，may，withoutprejudiceandwithoutgoingagainsttheirprinciples，uniteinthisstudy。Naturalvalueisaneutralphenomenon，theexaminationofwhich，whatevermaycomeofit，canprovenothingforandnothingagainstsocialism。Iflandrentandinterestoncapitalarenaturalphenomenaofvalue，theywillhavetheirplaceinthesocialisticstatealso，withoutnecessarilybreakingitupandleavingthewayclearagainforcapitalistsandlandowners。Everynaturalformofvaluemaybeleftitsmaterialoffice，withoutconnectingwithitanypersonalprivilegeofincome。

Solittleisnaturalvalueaweaponagainstsocialism，thatsocialistscouldscarcelymakeuseofabetterwitnessinfavourofit。Exchangevaluecanhavenoseverercriticismthanthatwhichexposesitsdivergencesfromthenaturalmeasurement，although，indeed，thisformsnoparticularprooffortheessenceofsocialism。Asiswellknown，however，thesocialistshaveanothertheoryofvalue。Thisweshallfindagainandagainincontradictionwiththeclaimsthatrestonnaturalvalue，andalthoughwesaynothingagainstsocialism，butwishtoremainthroughoutwithintheneutralsphereofnaturalvalue，weshallbeobligedagainandagaintospeakagainstthesocialists。

Itwillbeofadvantagetothestatementwhichfollowsifwefirsttrytomakeageneralsurveyofthesocialisttheoryofvalue。