The Ultimate Standard of Value [19]
sixty cents. In the same way, the market for the product of every additional laborer above one hundred and twenty must be found at a still lower point in the demand scale. Or at any given time there is a group of the least capable or willing buyers that corresponds to the last employed group of laborers. The valuation of this group of buyers determines, in the first instance, the value of the product of the last group of workers; and through this, since at the same time and in the same market, there can be but one price for the same product, the value of the product of every laborer in this branch of production.(38*) It even goes further than this, and determine the wages of the laborer. On the one side, no entrepreneur will, for any long period, pay his laborers more than he can obtain for the product of their labor. The value of the product will, therefore, be the upper limit of the rate of wages. Again, under conditions of free competition, he will not for any long time pay them less, for so long as the market price is in excess of the cost of production,(39*) the entrepreneur obtains a profit; but he or his competitors will be tempted by this to increase their production, and so to employ more laborers, until the difference between the valuation of the last buyer and the wages of the last laborer disappears. The same forces, which, in every branch of production, tend to fill the gap between the value of the product of the last employed laborer, and the rate of pay in this branch of production, tend also to fill another gap. Under conditions of perfectly free competition, there cannot, in the long run, be any serious difference in prices or wages in those branches of production, that are in free communication with one another. In the long run, the product of a day's labor and the labor itself cannot have a value of one dollar and twenty cents in the woolen industry, for instance, and only forty cents in the cotton industry. This would immediately give rise to a tendency in the productive forces to change their occupation, a tendency which would continue to operate until both of these branches of production, together with all others in communication with them, had been brought into a condition of equilibrium. But where will this point of equilibrium be? This must be decided within that general field of employment which include all the freely communicating branches of production; and it must be decided upon the same grounds or reasons which we have found to be effective for a single branch of production. There is a total or aggregate demand for all the products of labor. This is as limitless as our desire for well being, for enjoyment or for the possession of goods, and is graduated according to the intensity of this desire. If our desire for any product is very intense, and our means of payment abundant, then to us the marginal utility of the product will be high, while the marginal utility of money will be low. In other words, we will be willing to pay a higher price for this product than we would if our desire for it or our ability to pay for it were less. Hence, in the general, as in any special field of production, there may be several strata of demand. There may be one which in an extreme case would be willing to pay eight dollars for the product of a day's labor. Another might be willing to give two dollars, while others would find their limit at one dollar and sixty cents, one dollar and twenty cents, at one dollar, and at eighty cents. There may remain still others who desire to purchase, but whose wants are not sufficiently pressing or whose purchasing power is so limited that they either will not or cannot pay more than fifty, forty or twenty cents, and even less, for the satisfaction of that want to which the product of a day's labor would be devoted. To meet this practically unlimited demand we have a labor power which in comparison with this demand is always limited. It is never sufficient to satisfy all our desire; if it was we would be in paradise; we must, therefore, always choose which