Law of value

“ The law does not get its power from the emotion of the judge who gives a decision, nor does the value of a rare painting rest chiefly in the intensity of desire of the few rich connoisseurs who compete for it. Back of the judge, giving validity to his decision, stands the will of the group; back of the rich connoisseurs stand the legal and other social values concerned with the distribution of wealth, by virtue of which they are able to make their wants felt in the market. ”

“ My dissent comes when he seeks to erect the abstractions of the jurist into a complete social philosophy! Law is only a part of the system of social control, and economic values, while influenced by legal values, are far from being explained when legal factors only are taken into account. Legal factors often play a more direct part in connection with the value of money than in connection with other values, but they do not dominate the value of money. ”

“ The injustice of appreciating partially and exclusively the money of a minor order, or of any portion of society, is yet farther illustrated, by recollecting, that appreciation is necessarily attended by its correlative, depreciation; and that the effects of the one in moral geometry, are an exact mensuration of the effects of the other. Value is relative. If the money or property of one portion of the society, is made by law to be worthless, the money or property of those not thus oppressed. ”

“ The function of economic values is to guide and control the economic activities of men, to send labor from one industry to another, to cause one sort of thing to be produced or another, to supply the motive force which impels industry. Legal and moral values also directly affect industry, often working to check the results which the economic values alone would lead to—as when the law forbids the production and sale of liquor, or checks child labor, etc. ”

“ Belief, custom, law, patriotism, particularly a network of legal relationships growing out of contracts expressed in terms of the money in question, the policy of the state as to receiving the money for public dues, the influence of a set of customary or legally prescribed prices, which tie the value of [Pg 137] money to a certain extent to the values of goods—factors of this character can add to the value of money, and can, conceivably, even sustain it when the original source of value is gone. Social economic value does not rest on marginal utility. ”

“ Every thing receives a value from its use, and the value is rated, according to its quality, quantity and demand. tho’ goods of different kinds are equal in value now, yet they will change their value, from any unequal change in their quality, quantity, or demand. ”

“ If we say that interests are to be catalogued or inventoried, that they are then to be valued, that those which are found to be of requisite value are to be recognized legally and given effect within limits determined by the valuation, so far as inherent difficulties in effective legal securing of interests will permit, the question arises at once, How shall we do this work of valuing? ”

“ The prestige of the wealthy and successful men would induce imitation even if the advantage were not clearly seen. Then a tradition and a custom grows up. With the growth of tradition and custom, picking out one or a small number of things as particularly desirable objects to accumulate because of their saleability, with the practice of accumulating these articles in excess of intended consumption, money becomes an accomplished fact. There is no need for agreement or legislation. Money is not, in its origin, certainly, a matter of law or conscious public planning. ”

“ On the contrary, the dynamic law of wants is that wants expand. As old wants are satisfied, new wants arise, so that, in the course of time, marginal utilities do not sink—the competition of new wants forces up the margins of the old wants. ”

“ Thus are men enabled to build dwellings, to prepare clothing, and to supply all the ingenious comforts and enjoyments which make up the products of industry.—On the other hand, the value of Money is only indirect. ”

“ In the assertion that value is primarily intrinsic, it opposes the idea that anything which is an object of desire to numbers, and is limited in quantity, so as to have rated worth in exchange, may be called, or virtually become, wealth. And in the assertion that value is, secondarily, dependent upon power in the possessor, it opposes the idea that the worth of things depends on the demand for them, instead of on the use of them. ”

“ The value principle, in some form of expression, is, as I have said, the only recognized principle of trade throughout the world. "A thing is worth what it will bring in the market." Still, if I were to charge you $500, or a fourth part of that sum, and, taking advantage of your necessities, force you to pay it, everybody would denounce me, the poor wheelwright, as an extortioner and a scoundrel. ”

“ Its problems are problems of human nature and social relationships, its laws are psychological laws, particularly the laws of suggestion, [Pg 578] imitation, and the like, its tools are the newspaper, the sign-board, the whispered word, the cigar and the dinner with wine, sound logic, money and credit instruments, the prestiges of men and institutions. For men whose work lies in controlling and making values, rather than in making passive technical adjustments to existing values, the theory of value, as I have defined it, is of supreme importance. ”

“ Money is not a pledge, as some call it. it’s a value payed, or contracted to be payed, with which ’tis supposed the receiver may, as his occasions require, buy an equal quantity of the same goods he has sold, or other goods equal in value to them: and that money is the most secure value, either to receive, to contract for, or to value goods by; which is least liable to a change in its value.
Silver money is more uncertain in its value than other goods, so less qualified for the use of money. ”

“ If the ballance of trade was equal, foreign money raised, and Scots money not raised in proportion; foreign money would be brought in, and a greater value of Scots money would be carried out. ’tis the same loss to a country when money is raised, and goods do not rise in proportion: if foreigners send in money to buy goods, and this money when exported is not valued so high as here; the return in goods will be so much less, besides the want of the profit we would have had on the export of our goods. ”

“ I.18 What we have been speaking of as property is the right to the services, uses, or benefits of wealth. By benefits of wealth is meant the desirable events which occur by means of wealth. Like wealth and property, benefits also may be measured, but in units of a still different character. Benefits are reckoned either "by time,"—as the services of a gardener or of a dwelling house; or "by the piece,"—as the use of a plow or a telephone. And just as the concepts of transfer, exchange, price, and value apply to wealth and property, so do they apply to benefits. ”

“ Silver in bullion or money changes its value, from any change in its quantity, or in the demand for it: in either of these cases goods are said to be dearer, or cheaper; but ’tis silver or money is dearer or cheaper, being more or less valuable, and equal to a greater or lesser quantity of goods. ”

“ In a state of society, however, in which the industrial system is entirely founded on purchase and sale, each individual, for the most part, living not on things in the production of which he himself bears a part, but on things obtained by a double exchange, a sale followed by a purchase—the question of Value is fundamental. Almost every speculation respecting the economical interests of a society thus constituted, implies some theory of Value: the smallest error on that subject infects with corresponding error all our other conclusions ”

“ I expressed this important need in the following passage of my book. “The true ‘value’ of a thing is neither the price paid for it, nor the amount of present satisfaction it yields to the consumer, but the intrinsic service it is capable of yielding by its right use. ”

“ In this way a single individual, who has wants to be gratified only by exertion, forms an idea of value as founded upon some relation between his [pg 064] wants and his powers, between the desires to be gratified and the qualities of the object expected to give satisfaction.
Since wealth always implies an accumulated store of good things, every one comes to think of the worth of his accumulation as estimated by what it will do at any time, in any place, in satisfying any need. So, most naturally, we associate our ideas of value with trade. ”

“ Again, the quality of a thing that comes into human use is measured by the price given for it, for which purpose money was invented. Therefore, if either the price exceed the quantity of the thing's worth, or conversely the worth of the thing exceed the price, there is no longer the equality of justice; and consequently to sell a thing for more than its worth, or to buy it for less than its worth, is in itself unjust and unlawful.' [2] When two contracting parties make an exchange through the medium of money, the price is the expression of the exchange value in money. ”

“ The absolute value of a thing, then, is its cost in time and expense. How much is a diamond worth which costs only the labor of picking it up?—Nothing; it is not a product of man. How much will it be worth when cut and mounted?—The time and expense which it has cost the laborer. Why, then, is it sold at so high a price?—Because men are not free. Society must regulate the exchange and distribution of the rarest things, as it does that of the most common ones, in such a way that each may share in the enjoyment of them. ”

“ It is, in fact, obvious that in order to decide correctly at what state of things we ought to aim, we must not only consider what results it is possible for us to obtain, but also which, among equally possible results, will have the greatest value. And upon this second enquiry the comparative valuation of known goods has a no less important bearing than upon the investigation of the Absolute Good. ”

“ So long as foreign trade, and expence kept equal, exchange was at the par: but when a people imported for a greater value, or had other occasions abroad, more than their export, and the expence of foreigners among them would ballance; there was a necessity of sending out the ballance in money or bullion, and the merchant or gentleman who owed, or had occasion for money abroad, to save the trouble, expence and hazard of sending it out, gave so much per cent to another, as the trouble, expence and hazard was [Pg 39] valued at. thus exchange rose above the par, and became a trade. ”

“ Any thing that is propos’d to have a currency as money, and is given for a lesser interest than silver money, will be of less value.
It is not to be suppos’d any person will lend silver money at 2 per cent, when they can have 6 per cent in England. so a 100 lib. silver money, will yield as much as 300 lib. ”

“ If money were given to a people in greater quantity than there was a demand for, money would fall in its value; but if only given equal to the demand, it will not fall in value.
At present perhaps 3 or 400000 lib. is more than there is a demand for; but as trade and manufacture increase, the demand for money will be greater. ”

“ That any measures proposed for increasing the silver money or establishing a credit promising a payment of silver money are ineffectual. that silver money has fallen much from the value it had. that land is of greater value. that silver may lose the additional value it received from being used as money.
National power and wealth consists in numbers of people, and magazines of home and foreign goods. these depend on trade, and trade depends on money. so to be powerful and wealthy in proportion to other nations, we should have money in proportion with them ”

“ If a contract for paper-money could be satisfied by paying the same quantity of silver money, then that paper-money could not rise above the value of silver, and would fall with it. but as the paper money is a different species from silver, so it will not be lyable to any of the changes silver money is lyable to. ”

“ The value of gold, silver, merchandize, food, raiment, lands, and houses, is easily regulated, by custom, convenience, or necessity. Even the more capricious and imaginary worth of a picture, medal, or statue, may be reduced to something of systematic rule. Crowns and sceptres have had their adjudged valuation; and kingdoms have been bought and sold for sums of money. But who can affix the adequate price to a human soul? “What shall it profit a man, if he shall gain the whole world, and lose his own soul? or what shall a man give in exchange for his soul?” ”

“ Considering the present state of Europe, France and Spain being masters of the mines, the other nations seem to be under a necessity of setting up another money. the only reason can be given why it has not yet been done, is, that the nature of money has not been rightly understood: or they would not have continued buying silver from Spain above its value as a metal, when they had a more valuable money of their own ”

“ It follows, therefore, that to say that "a thing should bring what it is worth," which is the same as to say that "its price should be measured by its value," is quite the opposite of affirming that it should bring as much as it cost the producer to produce it. ”

“ Considering the benefit the nation will have by this addition to the money; that the land will be improv’d, so be more valuable, rents be well payed, and that debitors by paying a value equal to what is contracted for, may free their persons and estates from the danger they are now exposed to. ”