The Ultimate Standard of Value [20]
of our desires we will gratify. Under the influence of self-interest we will satisfy them according to the height or amount of the fee which we are willing to pay for their satisfaction. That stratum of the demand which is prepared to pay eight dollars for a day's labor will not suffer any inconvenience for lack of the desired commodity. So, too, that stratum of the demand which is willing to pay two dollars will not suffer any inconvenience. Nor will those suffer that are prepared to pay one dollar and sixty cents, one dollar and twenty cents, one dollar, etc. But the point must finally be reached where such satisfaction cannot be obtained. This point will, of course, vary with the circumstance or conditions of particular lands or time. Here eighty cents, there sixty cents, and elsewhere forty or even twenty cents, but such a point will always and everywhere be found. Let us assume a concrete case in which this point is at eighty cents. The existing productive power is here fully employed in the satisfying of those wants, for whose satisfaction we are willing and able to pay eighty cents for a day of common labor. In this case the stratum of the demand whose valuation is eighty cents is the last stratum for the satisfaction of whose desire the last laborer is active.(40*) it is the valuation of this stratum which determine both the value of the product and the wages of labor. All those desires for whose satisfaction we are either unwilling or unable to pay at least eighty cents must remain unsatisfied. This on the one hand will affect some of the unimportant needs or desires of the well-to-do class, on the other, alas, it will affect many of the more important needs of those whose means are limited, whose entire purchasing power has been exhausted in prodding for still more pressing wants. Let us now assume that, under otherwise unchanged conditions, there is an increase in the number of laborers entering into the problem, say through the sudden abolition of the standing army, or through a great influx of laborers from other lands. The additional laborers must and will find employment in providing for a still lower and hitherto unsatisfied stratum of the demand, that stratum, for instance, whose valuation is only seventy cents. This stratum is now the lowest for which the last laborer is active, and its valuation determines both the value of the product and the wages of labor.(41*) What, under these conditions (the statement of which I hope will meet the approval of my honored English and American colleagues), is the role played by the law of costs? An exceedingly simple one. It guarantees that the existing productive power shall be directed to the satisfaction of the existing needs, according to the height of the fee which they are able and willing to pay. It brings about for the productive power in an indirect way, just what occurs in the case of the finished product in a direct way, upon every open market the supply of the finished product goes as far as it will reach to the best paying of those who desire to purchase. The market price of the same ware, on the same market, at the same time, is uniform. This fixes, very clearly and definitely, the boundary between those who are willing and able to purchase at that price, and those who are willing to do so but not able. If, for instance, the market price is eighty cents, then all those to whom the money marginal utility (Geldgrenznutzen) of the commodity is eighty cents, or more, will provide themselves with the commodity, all those to whom the money marginal utility of the commodity is less than eighty cents must deny themselves this commodity. No one will intentionally reduce the price of his commodity, to those who are willing and able to pay one dollar and twenty cents, in order to favor those who will or can pay only forty cents. This same function is performed for the productive power by the law of cost. The latter does not meet the consumers and their needs directly; it does not come in contact with them upon a common market; but it reaches the public