Present value

“ It is the belief of the present writer—not shared by all his critics!—that the definition of value which follows, and the conception of the function of value in economic theory involved in it, conform to the actual use of the term in the main body of economic literature. The theory of the causes of value here advanced is new, but the definition of value, and the conception of the relation of value to wealth, to price, to exchange, and to other economic ideas, seem to the present writer to conform to what is implied, and often expressed, in the general usage of economists. ”

“ It is the fundamental and essential attribute or quality of wealth, the common or homogeneous element present amidst the diversities of the physical forms of wealth, by virtue of which comparisons may be instituted among different kinds of wealth, and different items of wealth may be added to make a sum, put into ratios of exchange, and so on. ”

“ And you will find that the essence of the mis-teaching, of your day, concerning wealth of any kind, is in this denial of intrinsic value. What anything is worth, or not worth, it cannot tell you: all that it can tell is the exchange value. What Judas, in the present state of Demand and Supply, can get for the article he has to sell, in a given market, that is the value of his article:—Yet you do not find that Judas had joy of his bargain. ”

“ But unless everything relating to the activity of a highly organized being is to be denominated subjective, I see no ground for calling it subjective. So far as I can make out, the emphasis upon a psychological treatment of value and valuation in a subjective sense is but a highly awkward and negative way of maintaining a positive truth: that value and valuation fall within the universe of action: that as welcoming, accepting, is an act, so valuation is a present act determining an act to be done, a present act taking place because the future act is uncertain and incomplete. ”

“ Remembering the poetic rendering of our concrete experience, we see at once that the element of value, of being valuable, of having value, of being an end in itself, of being something which is for its own sake, must not be omitted in any account of an event as the most concrete actual something. ‘Value’ is the word I use for the intrinsic reality of an event. ”

“ 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. ”

“ If, on looking back upon past history, we pronounce that an event had value, we do so because we see that it served, or might have served, some end of which we approve. Its value is relative in our eyes to some end or purpose which was relatively future to it. The objects which we aim at, the ends after which we strive, are in the future. Those things have value which may subserve our ends and help us to attain our purposes. ”

“ If we then ask him what he means by value, he tells us that things are valuable in proportion as they possess utility. If again we ask him to explain to us by what means we are to judge of the utility of objects, he answers, by their value. Thus then the measure of value is utility, and the measure of utility is value. ”

“ For indeed we prize life not by the sum of our possessions, but only by the rate and steadiness of our growth. "Not the possession," says Lessing, "or fancied possession of the truth, but the endeavor after it, determines a man's value. ”

“ Value is not objective—intrinsic in the object—but subjective, varying with the desire and intentions of the possessors or would-be possessors; and, because it is thus subjective, there cannot be a definite ideal value which every article ought to possess, and still more a just price as the measure of that ideal value.' In these and similar observations to be found in the Growth of English History and Commerce, Dr. ”

“ Economic values are dubiously objective. We use both forms of expression. We say on the one hand, "I want wheat," "There is a demand for wheat," or, on the other, "Wheat is worth one dollar a bushel." Conversely, "There is no demand for the old-fashioned high-framed bicycle" or "It is worthless." The Middle Ages regarded economic value as completely objective. A thing had a real value. ”

“ My own theory of value, which finds the roots of economic value ramifying through the total social psychological situation, rather than in utility or labor-pain alone, involves possibilities like these. ”

“ Valuations are made more accurately on the margin of eternity. The things that have been shaken and that have perished—of how little value are they seen to be, compared to the things that cannot be shaken! ”

“ And that not according to the earthly standard of value, where the question always is, How much? but according to the standard of heaven, where men's judgments of much and little, great and small, are all unknown. ”

“ Chapter IX. Value The Basis Of Exchange. The nature of value.—Perhaps no question in the discussion of wealth is of greater importance than the nature of value. Certainly the measurement of value in all our property is the basis of all exchanges, of all book accounts, and of all inventories. The worth of any piece of property in such estimates always involves some comparison, either of things possessed or of exertion required or of satisfaction yielded. In comparing an apple and a peach, both equally attainable, we may value the peach most highly because it gratifies desires in higher degree. ”

“ It was necessary to point out that the very same facts which can be arranged chronologically and in the order of their evolution can also be—and, as a matter of fact, by every man are—arranged more or less roughly, more or less correctly, or incorrectly, in the order of their value. It is now necessary for us to set our faces towards the future. I say "necessary" for the simple reason that the idea of "value" carries with it a reference to the future. If a thing has value, it is because we {13} judge that it may produce some effect and serve some purpose which we foresee, or at least surmise. ”

“ Modern economists—chiefly those of the Austrian school—have analyzed the subject more thoroughly, especially the relation between the two conceptions, and have shown that utility or subjective value, as it is generally termed by them, is an expression both of human desire and of the quantity of the necessary commodity available to satisfy such desire. ”

“ It may surely be of some use, or, at least, it may give some satisfaction to the public, to have so decisive a proof of the increasing value of by far the greatest, the most important, and the most durable part of its wealth. ”

“ We wish to set our own value on everything, as if the things of the spirit meant the same thing as money, as if they did not depend upon quite another spirit than that of the accountants and geometricians. ”

“ 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. ”

“ I have given an extended analysis of the psychology of confidence, and of the psychological nature of credit, in my chapters on that topic. It is enough to say here that we have in credit phenomena things which are of the very stuff of economic values in general. Beliefs and hopes are factors in economic values, and values wax and wane with them. There is little indeed in the psychological and institutional aspects of the theory of prosperity which an adequate theory of value would not contain. ”

“ But, of course, as a matter of fact, none of them do exist quite alone, and hence it may quite consistently allow that, as it is, many of them do have very great value. Concerning kinds of value, other than intrinsic value, it does not profess to lay down any general rules at all. ”

“ A thing, for instance, which has evident value with reference to the greatest durability of a race might possess quite another value, if it were a question of creating a higher type. The good of the greatest number and the good of the smallest number are antithetical points of view in valuation ”

“ The term value is employed in two different senses, value in use and value in exchange. By the former we mean the intrinsic utility of a thing. Air and sunlight, for example, have a high value in use; they are indispensable to life in fact ”

“ The view which has here been taken of the nature of wealth, namely, that it consists in an intrinsic value developed by a vital power, is directly opposed to two nearly universal conceptions of wealth. ”

“ When we consider, further, that value itself is relative, and that two things are necessary to constitute it, independently of the third thing which is to measure it, we may define a Measure of Value to be something, by comparing with which any two other things, we may infer their value in relation to one another. ”

“ We say that a man is tall, or heavy, or that the room is hot—qualitative statements; or we may say exactly how tall, or how heavy, or how hot—quantitative statements. The distinction between qualitative analysis and quantitative analysis in chemistry implies the same idea. Thus we may speak of a piece of wealth as having a definite quantity of value, or say that the value of the piece of wealth is a definite quantity. ”

“ But value is always a matter of psychological significance, and never a matter of mere material fact. And these psychological significances are not explained by such simple individual phenomena as labor-pain, or marginal utility, but always by reference to the total social-mental system, including its laws, its mores, its institutions, its centres of power and prestige, its modes and fashions, etc. ”

“ Note, God does, and we should, value things according to their real worth: and the use of things is the best criterion of their real worth. Those are most valuable that best answer the highest purposes. ”

“ To-day, as yesterday, even though it be possible to recognize more clearly that it is too incomplete and relative ever to have any actual value, it is necessary to carry it as high and as far as we can. ”

“ You are an integral factor, so to speak, of the social problem, but your value is determined by your relation to other quantifies in the complex system with which you are identified. As a segregated unit, you diminish in value. ”

“ 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 question of value is a question of the extent to which the given item of wealth forwards the end of nature's unfolding process. It is valuable, intrinsically and really, in so far as it avails the great work which nature has in hand. ”

“ By virtue of this common or generic quality, it is possible to add wealth together to get a sum, to compare items of wealth with one another, to see which is greater, to get ratios of exchange between items of wealth, to speak of one item of wealth, say a crop of wheat, as being a percentage of another, say the land which produced it, etc. ”

“ The abstract idea of wealth or of value in exchange, a definite idea, and consequently susceptible of rigorous treatment in combinations, must be carefully distinguished from the accessory ideas of utility, scarcity, and suitability to the needs and enjoyments of mankind, which the word wealth still suggests in common speech. ”

“ To have value, it must become an object of barter, of circulation, in short, of exchange. As its value depends upon its utility, so when it can no longer be used it again becomes a useless mass of perishable wealth. ”

“ Such as have value, they say, are "preferred," while such as have negative, instead of positive, value are "rejected." Value they define as, first, any contribution to harmonious living, such as attaches to every good; secondly, some faculty or use which indirectly [52] contributes to the life according to nature: which is as much as to say "any assistance brought by wealth or health towards living a natural life" ”

“ In these three we have, perhaps, the firmest basis which it is possible to construct for the value of anything! When religion is added, as has often been the case with the precious metals, the basis becomes solid indeed! Modern social psychology has increasingly made clear the power of the first. Social expectation can take the raw stuff of human nature, and mold it into almost any form it pleases. ”

“ And by the term proper value, they mean that quality of things, which causes them to concur in producing a well-regulated life; and in this sense, every good has a proper value. Again, they say that a thing has value, when in some point of view, it has a sort of intermediate power of aiding us to live conformably to nature; and under this class, we may range riches or good health, if they give any assistance to natural life. ”

“ The next point to note is that our conscious experiences and activities themselves have not only their intrinsic value, as they pass, but an extrinsic value, as means toward future intrinsic values. Each phase of experience has its own worth, while it lasts, and also has its results in determining future phases with their varying degrees of worth. ”