Value system

“ The mind grasps such a notion with difficulty, if at all. Logic is mechanical and mathematical, and mathematics and mechanics are static. [592] But further, we may in large measure bring the historical considerations into a cross-section picture, when it is a value system that is involved. Past facts exert their influence through present values; and future facts, which may be expected to modify future values, come into the present equilibrium as discounted present worths. ”

“ 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. ”

“ Land will be employed on that crop which gives the largest rent, etc. Men's physical activities, and their employment of their physical resources, are motivated by values. That is the function of values. On the other hand, physiographic and technological factors modify the lives and characters of men and peoples. Values are in part controlled by physiographic and technological conditions of life. But these technological and physiographic factors, in order to influence economic conduct, must first influence the value system. ”

“ According to this analysis, value, considered from the point of view of the association which producers, by division of labor and by exchange, naturally form among themselves, is the PROPORTIONAL RELATION OF THE PRODUCTS WHICH CONSTITUTE WEALTH, and what we call the value of any special product is a formula which expresses, in terms of money, the proportion of this product to the general wealth.—Utility is the basis of value; labor fixes the relation ”

“ When money, however, comes to serve, as it will at some future time, almost exclusively as a measure and standard of value, the system of exchange, being one of perfected barter, such properties become a matter of comparative indifference, and stability of value, joined perhaps to portability, is the most important quality. Before venturing, however, to discuss such complex questions, we must proceed to a preliminary discussion of the properties in question, which [Pg 19] may thus perhaps be enumerated in the order of their importance:
1. ”

“ 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. ”

“ For the purpose of the valuation process through which the impulse is so conveyed, human nature may, therefore, be accepted as uniform; and the theory of the valuation process may be formulated quantitatively, in terms of the material forces affecting the human sensory and of their equivalents in the resulting activity. In the language of economics, the theory of value may be stated in terms of the consumable goods that afford the incentive to effort and the expenditure undergone in order to procure them. ”

“ 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. ”

“ 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. ”

“ It will come out in greater fulness and force when, having taken into consideration the theory of Value and Price, we shall be enabled to exhibit the law of profits in the concrete—in the complex entanglement of circumstances in which it actually works. ”

“ Arbitraging transactions, as between different places, time-speculation, transferring labor and capital from one enterprise to another, increasing the supplies of some goods and reducing the supplies of other, changing land from wheat to corn, etc., etc.,—all these things are sources of gain, and they will be done, whatever the origin of the values involved. The new, dynamic enterprise, before it becomes actualized in concrete machinery, factory building, etc., and long before its income is actualized in money-receipts from the goods it is destined to produce, becomes an object of value. ”

“ As it will, however, clearly appear that no commodity can possess fixed and intrinsic value, so as to qualify it for a measure of the value of other commodities, mankind are induced to select, as a practical measure of value, that which appears the least liable to any of these four sources of variations, which are the sole causes of alteration of 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 ... ”

“ Taken thus, products present themselves not merely according to their sources, but according to their value as well, as the syntheses of their productive elements. That product which requires them in greater quantity has the greater value. ”

“ But this variation is not that of the economists, who place in their list of the causes of the variation of values, not only the means of production, but taste, caprice, fashion, and opinion. In short, the true value of a thing is invariable in its algebraic expression, although it may vary in its monetary expression.
2. The price of every product in demand should be its cost in time and outlay—neither more nor less: every product not in demand is a loss to the producer—a commercial non-value. ”

“ It is of course involved in this simple-looking but far-reaching change from "Wealth" to "Value," that Economics become at once and throughout a science of Persons buying and selling, and no longer as before a science of Things howsoever manipulated for and in their market. ”

“ The sacrifice of utility which we make in production consists therefore not only in the consumption of capital, but also in the sacrifice of interest, which is larger in proportion as the capital is larger and the period of investment longer. Accordingly, the current interest for the given interval of time is to be reckoned in the cost of production, and determines, together with the other elements of cost, the value of the products. ”

“ The doctrine of Value is first presented by him as extremely simple,—the value of a thing depends on the labour employed in producing it. Then, as we go on, we find this is only true of 'the early stages of society before much machinery or durable capital is used,' while it is not meant to be true, even there, of objects that have a 'fancy' value, due purely to their scarcity. ”

“ When at any time it fails of so conforming, it is either from miscalculation, or from a change in some of the elements of the problem; either in the natural value, that is, in the cost of production, or in the demand, from an alteration in public taste, or in the number or wealth of the consumers. If a value different from the natural value be necessary to make the demand equal to the supply, the market value will deviate from the natural value ”

“ The fact is, that the value of truth is measured by precisely the same standard which determines the value of wealth. This standard is in neither case the importance of the article,—it is always its difficulty of attainment,—its cost of production. Has labour been expended on its formation or acquisition; then the article, if a material commodity, has a value in exchange—if a truth, it has a value in communication. ”

“ 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. ”

“ 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. ”

“ Every science must have to begin with a definite Class of facts, which lie in an easily circumscribable field, and which are not likely to be confounded with other facts of a differing nature. Economy has such a class of facts, that lie in such a field, and that cut themselves off by sharp lines from all other things. Valuables is its class of things. It has nothing to do with any other class of things. Its field is Value, or Sales, or Exchanges. This field is perfectly definite. Sales are never confounded with gifts, and are never confounded with thefts. ”

“ The term is a convenient one, and the student will do well to read his 7th chapter, on the "production of use-value and surplus-value"; in reading, he must remember Marx's definitions of value and use-value, which of course govern the whole. Value is human labor incorporated in a commodity; use-value is that which in a commodity satisfies some human want. ”

“ The chain of which each equation of value is a link, is liable at any moment to be lengthened by each new kind of commodity that comes into existence and furnishes the material for a fresh expression of value. ”

“ 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. ”

“ To create objects that have a value of any kind is to create riches, since the utility of things is the first foundation of their value, and it is the value of things which constitutes riches. But we do not create389 objects: all we can do is to reproduce matter under another form—we can give it utility. Production then is a creation, not of matter but of utility, and it is measured by the value arising from the utility of the object produced. The utility of any object, according to general estimation, is pointed out by the quantity of other commodities for which it will exchange. ”

“ When we do not distinguish different parts in the final process of production we do distinguish the value of the materials. The value of these materials may often be again decomposed many times, exhibiting as many clearly defined steps in the creation of the final value. At each of these steps we habitually estimate a creation of value, an addition to capital. ”

“ But they can be so easily and cheaply carried from one part of the world to another, that they have substantially the same market value all over the world. They are also, in but a small degree, liable to great or sudden changes in value. For these reasons, they serve well as standards—are perhaps the best standards we can have—by which to measure the value of all other money, as well as other property. ”

“ 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. ”

“ But if for money we substitute the objects necessary to give the producer the same power of production and accumulation as the natural money prices would have commanded, such returns maybe considered as the natural conditions of the supply of commodities, and may with propriety be denominated their natural value, in contradistinction to their natural price. ”

“ Let the number of persons be ever so great, who, upon the sale of a piece of goods, share in the profits; it is still essential, in such enquiries as these, to suppose them distinctly separate from the real value of the commodity; and the best way possible to discover exactly the proportion between the one and the other, is by a scrupulous watchfulness over the balance we are now treating of, as we shall presently see. ”

“ The most conspicuous method yet suggested for realizing such a Value level takes the specific form of a proposal to determine Money standards by frequent comparisons with the Price level of simple types of Wealth. Resting nominally upon the Value in Trade of such staples, this method rests fundamentally upon the Economic fact that Labor, as the continuous producer of all Wealth, is the real source and regulator at all times of all Values in the channels of Trade, and that Money is the measuring rod and its terms the language. ”