Standard of value

“ But if the standard for use in making valuations be confessedly empirical and value an elusive quality not of things separately, but of things in relation, there is a countervailing difference between a standard of length and a standard of value, which results in disposing of the objection that the standard is empirical. ”

“ Of such a commodity we have no knowledge, and consequently are unable to fix on any standard of value. It is, however, of considerable use towards12 attaining a correct theory, to ascertain what the essential qualities of a standard are, that we may know the causes of the variation in the relative value of commodities, and that we may be enabled to calculate the degree in which they are likely to operate. ”

“ There is an absolute necessity for some standard of cost, and it is not a question of principle but of expediency what article is adopted. It is the same necessity which is recognized at present for a standard of value, which is sought for, and by some persons erroneously supposed to be found in money. ”

“ Wherever a determinate good exists, there is an adequate stimulus to action, and no judgment of what is to be done or of the value of an object is called for. It is frequently assumed, however, that valuation is a process of applying some fixed or determinate value to the various competing goods of a situation; that valuation implies a prior standard of value and consists in comparing various goods with the standard as the supreme value. This assumption requires examination. If it is sound it deprives the position which has been taken of any validity. ”

“ A standard is that which stands still whilst other things move, and by this means serves to indicate or measure the degree in which those other things have advanced or receded.
X. Doubtless; and a standard of value must itself stand still or be stationary in value. But nothing could possibly be stationary in value upon Mr. Ricardo's theory, unless it were always produced by the same quantity of labor; since any alteration in the quantity of the producing labor must immediately affect the value of the product. Now, what is there which can always be obtained by the same quantity of labor? ”

“ A standard of value is simply a measure by which values at different periods are compared. The measure of value contemplates the estimation of commodities at the same time; the standard of value, their estimation at different times. The standard of value is often called the standard of deferred payments. Credit organization involves future payments. These payments are expressed in money and present goods are transferred for a promise to pay money in the future. ”

“ It is evident that a commodity possessing all these advantages must have some intrinsic qualities which all exchangers would recognise—that it must be a standard of value—at once a commodity possessing real value, and a measure of all other values. ”

“ Pain and [Pg 243] pleasure give the real value of actions; they are the currency with a definite standard into which every general rule may be translated. There is always a common measure applicable in every formula for the estimation of conduct. If you admit your Moral Sense, you profess to settle values by some standard which has no definite relation to the standard which in fact governs the normal transactions. ”

“ With respect to the variations in value, of which every thing valuable is susceptible, if we could for a moment suppose that any substance possessed intrinsic and fixed value, so as to render an assumed quantity of it constantly, under all circumstances, of an equal value, then the degree of value of all things, ascertained by such a fixed standard, would vary according to the proportion betwixt the quantity of them, and the demand for them, and every commodity would of course be subject to a variation in its value, from four different circumstances. ”

“ It is, however, a notable truth that the standard for valuation can be nothing better than an empirical one. Like mathematical quantities, value has no independent existence, but, unlike mathematical quantities, value has not even existence as a quality of one object. ”

“ Natural Value.—This tendency toward cost prices—those which afford to the producers wages for all their labor but no true entrepreneurs' profit—establishes a further law, that of "natural value," and this it is that fixes the standard to which, in the long run, market values, as adjusted by supply and demand, tend to conform. A market value is natural or unnatural according as it does or does not conform to a certain standard, and this ultimate standard itself is the cost of producing the several kinds of goods. ”

“ Consequently, the value of the variable quantity of produce which, under different circumstances, forms the wages of a given number of men, being composed of the values of the two elements, labour and profits, varying as above described, must be constant, and may therefore, with propriety, be proposed as a standard measure. ”

“ The division of economists into schools, and the war waged between practical men and theorists, have arisen in large measure from the ambiguity of the word wealth in ordinary speech, and the confusion which has continued to obtain between the fixed, definite idea of value in exchange, and the ideas of utility which every one estimates in his own way, because there is no fixed standard for the utility of things. ”

“ But when the material composing the standard is falling in value and prices are rising, they immediately discover that the maintenance of the value of the standard is the all-important consideration, and that its material is of no importance whatever and should be at once changed to "redress the situation." ”

“ The economists seem always to have understood by the measure of value only a standard, a sort of original unit, existing by itself, and applicable to all sorts of merchandise, as the yard is applicable to all lengths. ”

“ Of the proportion, which the product of any region bears to the people, an estimate is commonly made according to the pecuniary price of the necessaries of life; a principle of judgment which is never certain, because it supposes what is far from truth, that the value of money is always the same, and so measures an unknown quantity by an uncertain standard. It is competent enough when the markets of the same country, at different times, and those times not too distant, are to be compared; but of very little use for the purpose of making one nation acquainted with the state of another. ”

“ A common monetary standard will be established, with the consent of the various governments, by which industrial transactions will be greatly facilitated. Three spheres made respectively of gold, silver, and platinum, and each430 weighing fifty grammes, would differ sufficiently in value for the purpose. The sphere should have a small flattened base, and on the great circle parallel to it the Positivist motto would be inscribed. ”

“ 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. ”

“ The reason is, that it would thereby leave unexplained all individual decisions in economic matters, e.g. it would not even explain why any one buys. For by objective standards wares and prices have the same value; by objective standards we give equals for equals, for which we should have no motive. ”

“ 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. ”

“ 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 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. ”

“ 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. ”

“ 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 ”

“ It would be easy to elaborate the points in which morals, laws, and economic values are alike, and to show in detail that the theory of economic value is merely a special case of the general theory of social value. ”

“ What do we say, in fact?
To determine value,—in other words, to organize within itself the production and distribution of wealth,—society proceeds exactly as the mind does in the generation of concepts. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ The differing values of men in a social population are determined, as other values are measured, by the working of the law of diminishing returns.
Roughly stated, this law is that successive additions of any valued thing bring ever diminished returns. The first quantity of anything is of infinite value. ”

“ 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. ”

“ It is no part of us as objects. What, however, does belong to us as objects, is our value. Our natural intercourse as commodities proves it. In the eyes of each other we are nothing but exchange values. Now listen how those commodities speak through the mouth of the economist. "Value"— (i.e., exchange value) "is a property of things, riches"— (i.e., use-value) "of man. Value, in this sense, necessarily implies exchanges, riches do not." [34] "Riches" (use-value) "are the attribute of men, value is the attribute of commodities. A man or a community is rich, a pearl or a diamond is valuable ... ”

“ 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. ”

“ More fundamental, and more general, including "power in exchange," but not exhausted by it, is the power which objects of value have over the economic activities of men. This is the fundamental function of values. The entailed estate, which cannot be sold, still has power over the actions of men. The care which is taken of it, the amount of insurance which an insurance company will write on it, etc., are manifestations and measures of its value. ”

“ If there were no possibility of marketing the products, he would be equally helpless, and his idea be equally valueless. The general range of values, under our present system of division of labor, private property, private enterprise, etc., depend on the possibility of exchange. ”