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sire" and "possession" as elements of value. J. Stuart Mill wrote "that a thing may have any value in exchange, two conditions are necessary. The thing must not only have some utility, there must also be some difficulty of attainment.” Professor Bowen and President Bascom, both following Mill, affirm value to consist of the two elements, "utility and difficulty of attainment."

De Quincey says: "Almost all writers have agreed substantially, and have rightly agreed, in founding exchange value upon two elements-power in the article valued to meet some natural desire, or some casual purpose of man, in the first place, and, in the second place, upon difficulty of attainment. These two elements must meet, must come into combination, before any value in exchange can be established."

Roscher writes ("Principle of Political Economy," 1878): "Goods, to obtain value in exchange, must, in addition to their value in use, have the capacity of becoming the exclusive property of some one individual, and therefore of being alienated or transferred." In this enumeration of elements, he agrees with Dr. Wayland, but disagrees with Mills and the others. Roscher elsewhere (sec. v) says: "The value in exchange of goods is based on a combination of their value in use with their cost-value." He thus, though not in immediate connection, recognizes all three of the elements represented in our triangle.

The affirmation of De Quincey, that "almost all writers have agreed substantially in founding" value upon utility and difficulty of attainment, has this much of truth in it, that in many of the definitions or discussions, both of these elements are involved or implied; but there are many definitions which can not be so construed.

The many disagreements shown between the writers quoted would be increased by a wider quotation. These disagreements are easily accounted for by the evident preoccupation of the mind with false conceptions of the nature and field of the

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science, and of its central and constructive idea, value. errors in these respects would be of less consequence, but for the fact that they affect, with their own viciousness, all the discussions based upon them.

This enumeration of errors will not be useless if it warns the reader to be constantly on guard to prevent his mind from sliding back insensibly into the error of confounding value with utility. Pages of useless debate might have been spared us in the writings of economists if this unconscious relapse into a false view had been avoided.

38. Synonyms of value.-There are several terms in constant use in connection with value, and often supposed to be synonymous with it. Their definition may properly come here.

Wealth, as used by economists, means any or all articles having value. In common speech it usually implies an abundance of such articles, or of property. The word is sometimes applied to the abundance of utility even where no true value exists. This has already been noticed.

Cost means, properly, the amount of labor and value expended in the production of any object of value at the time and place of valuation. In this sense, the value produced should equal the cost. Frequently, however, the word is applied to designate the money or other property paid for the object-the purchase money.

Price is value measured in money-the money equivalent. Commonly, the price means the amount demanded for any article. The term price has been so loosely used that it has been found necessary to define its different applications as so many kinds or forms of price. Thus we have cost price, by which is meant cost simply as defined above; market price, or the price asked in market; selling price, or the amount the article is actually sold for, and which, in cases of fraud or ignorance, may be greatly above or below its real value.

CHAPTER IV.

HOW VALUES VARY.

39. A true theory of value explains variations.-The incessant variations of value are the perpetual problem of trade and industry. They bring riches or ruin to thousands. They constitute, in political economy, that element of uncertainty which robs the science of half its credit and usefulness. If the economist could give rules to forecast the market for any commodity, he might have the ear of the world.

No theory or definition of value is true or complete which does not explain its variations. This explanation, though scientifically correct, may not, it is true, give the desired power of forecast; but it will show the basis on which any true forecast must be made. A rule may be right in principle, but it may fail in application for lack of the facts required. The rule for finding the area of a triangle-"multiply the base by one-half the altitude"-is correct beyond question; but if either the base or altitude is unknown, the rule can not be applied.

40. Variations of value not always variations of price. The variations of value must not be confounded with the variations of price. As price is, in general, value measured in money or some other commodity-or value expressed in the terms of money—the variation in price may be usually taken as indicating a variation in value. But prices are often speculative in character, anticipatory of future values, or imposed by monopoly with little regard to values.

No fact is more open and common in the business world than the fanciful fluctuations of prices, seemingly independent of real value. The same article may bear one price to-day and another to-morrow, influenced only by the whims of buyers or sellers, or by statements wholly false and illusory, of probable demands or supplies in market. But in all cases there is a pretense of value, and a virtual recognition of the fact that real values do exist and that price should conform to these values. The variations of prices may be taken as proofs that there are real variations in value; since if value was known to be always fixed and invariable, prices themselves must cease to vary.

41. Variations in utility.-Every true variation in value must arise from a variation in some one of the elements of value. In determining the changes or variations to which these elements are separately liable, we shall determine the true causes of all genuine changes in values themselves.

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Utility, which has been already defined as the power to gratify desire, is subject to two classes of variations. First, the desire remaining constant, the power of the object to yield gratification may be increased or diminished, as by growth or waste. Old wines gain in value, but old clothes lose. Second, the object remaining unchanged, the desire to be gratified by it may change. A bonnet made last year may retain its covering and adorning power, but the fashion has changed, and, the desire for the bonnet in question being lessened, its value is diminished. The changes of fashion occasion some of the most frequent fluctuations in market values, and these changes are purely changes in desires or tastes.

The discovery of a new use for any article or material, gives it a new value by relating it to a new set of desires. So, too, the discovery of some new and better means of gratifying a common desire, lessens the value of the old means of gratification by removing the desire for it. Thus, linen rags were almost without value till it was found they could be manufactured into paper; and the discovery of petroleum, and the illu

minating oils distilled from it, greatly diminished the demand for whale-oil, and cheapened its price.

42. Conflict of desires.-But the fluctuations in value, occasioned by changes in desires, are increased by the opposition of the several desires which enter into the common estimates of value. In exchange, each article offered for exchange appeals to a separate desire, and the strength of one desire may lessen the force of the opposing desire. The strong desire or need for money often leads men to sacrifice, or sell at a cheaper rate, the articles they have to exchange for money. The strength of a man's desire for a watch may lessen his feeling of need for a new coat when he can have but one of the two.

But, further, each party in an exchange has two desires—the desire for his own property and the desire for that of the other. Hence, in every estimation of value, four desires, two of each party, come into competition and help to determine the final judgment.

In general trade, the desires of the individual buyers and sellers have little to do in determining values. These individual desires may favor or hinder the sale of a single article; but both parties look to the larger public or general demand and supply to fix the real value. The individual buyer is only one of many hundreds whose wants are to be supplied; and if he demurs to the price fixed, the goods may be kept for other purchasers, whose desires are stronger or whose means are greater.

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43. Variations of efforts.-Effort is also a variable eleThe efforts required for the production of any commodity change, and this change will cause a variation in the value of that commodity. Books, when formerly made by hand, cost sometimes as much as a farm; but the invention of the printingpress reduced the value to less than that of a day's labor.

Three classes of change may affect the efforts of production: change in the processes; change in the material used; and

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