The Ultimate Standard of Value [12]
not imply that the value of the goods corresponds to the disutility or pain of labor, but actually exclude this assumption. Exclude it not merely by chance or temporarily, but of necessity and permanently. In order to avoid needless repetition, we will take an example that is sufficiently comprehensive to include nearly all possible cases. In the production of nearly all ware there come into play, beside the commoner sorts of labor, some better paid skilled labor. In the making of a common cloth coat, we will have the labor of some skilled cutter, or of a manager with a higher standard of life. Again, in the weaving of the cloth, we find the better paid labor of factory bookkeeper, manager, etc. If we go back to still earlier stage-the manufacture of the machine or looms, the mining or preparation of the steel, etc. -- it is clear that the better paid labor of the engineer, foreman and manager will enter into the cost. Let us now assume that the production of a cloth coat, including all stage, costs three days of common labor at eighty cents and one day of skilled labor at one dollar and sixty cents. Let us also assume, for the sake of the argument, that the wages of eighty cents is an exact equivalent or recompense for the pain of a day's labor. If the amount of this pain of labor is to figure as the regulator of price, then under the above assumptions, the price of the coat should not exceed three dollars and twenty cents, for the skilled labor of the engineer or bookkeeper is not more painful than that of the common miner or tailor. Hence, if we take the pain as the standard, we cannot reckon the former as greater than the latter. And yet we all know that under the above assumptions, a cloth coat could not, for any long time, be put upon the market for less than four dollars (not including interest). This is manifestly out of proportion with the disutility of the labor. And yet, according to the law of cost, the price of the coat in the long run, and under conditions of free competition, should tend or gravitate toward this disutility.(20*) The lack of agreement of the cost, in the sense of the classical law of cost, with the disutility of labor, may be shown by approaching the question from an entirely different point of view. This brings us to an interesting counter test, which, if I am not greatly mistaken, has hitherto entirely escaped the attention of economists. We have occasionally remarked that the wages of skilled laborers, as a rule, are determined upon other grounds than the amount of pain which these persons endure. In particular case, it is possible to find a justification for the casuistical assumption which regards utility and disutility as exercising an equal influence, both upon the remuneration of labor and the value of the goods produced. This is just as true as regards the ordinary carpenter, or locksmith, as in the case of some famous artist, such as Titian or Van Dyck. In short, it is true of all men who, because of the scarcity of their talents, possess a sort of monopoly in the production of certain goods. How long they will work per day will depend, in part at least, upon the degree of fatigue that they must undergo. This, however, does not give us a fixed limit. How long a great artist will work depends, as in the case of the common laborer, upon several conditions. Among others upon the rate of pay that he can obtain for the product of his more prolonged effort. An artist may not be willing to work overtime to paint a picture, for which he will receive forty dollars. He might, however, not only willingly but gladly prolong his working day if he were offered four thousand dollars for the completed picture. In short, there is nothing to prevent the producer of a monopoly good from so prolonging his day's labor, and thereby the daily supply of his monopoly ware,(21*) until the marginal utility, of the money received for the last unit of labor time, is in exact equilibrium with the disutility of this last unit of labor time. It cannot be denied that under such circumstance