The Ultimate Standard of Value [24]
influence may be temporarily inoperative through all stage of production, or though free for part of the distance, it may at some point be permanently hindered by some kind of a monopoly. Let us illustrate this by an example. The production of one hundred weight of copper costs at a given time ten days of historically reckoned labor at eighty cents a day or eight dollars. This, of course, enters into the cost of all copper goods, and therefore into the price of copper wire, copper kettle, copper pans, etc. Now, because of a strong demand for electric wire the hundred weight of copper advances in price from eight to twelve dollars, nothing is more certain than that the coppersmith, the money cost of his material having risen, will advance the price of copper wire, etc. A copper kettle which weighs one hundred pounds and the production of which involved an expense of six dollars, had in the past a total cost of fourteen dollars; it now has an additional cost of four dollars and so must bring at least eighteen dollars, and this quite independently of the question, whether or not the historically reckoned cost of production has changed; whether ten or any other number of days of labor have been expended in its production; or whether we pay eighty cents or any other amount for a day's labor. The fate of the "historically" reckoned cost will likewise depend upon a variety of considerations; difficulty may be encountered in producing the additional amount of copper which is necessary to supply the increased demand. It may be necessary to employ more miners, in which case it is quite probable that the wages of the miners will advance. Or, perhaps, though we can obtain a sufficient force of miners at eighty cents, it may be necessary to work poorer veins, in which a hundred weight of copper will cost not ten but twelve days' labor. In both case the advance which first appeared in the money cost of a later stage of production, will be gradually transmitted, in a greater or less degree, to the elementary labor cost of the earlier stages of production. Finally, it is possible that we may be able to supply this increased demand for copper without any additional cost, or at the old rate of ten days of eighty cent labor to every hundred pounds of copper. In this case the increased demand for copper will eventually be satisfied at this rate of cost. The price of the copper, as well as that of the copper goods, will then have a correponding return motion until it reaches the original price of eight dollars. But in either event, it still remains true that the price of copper goods may be determined, at least temporarily, by other conditions than their historically reckoned cost. In practice numberless instances of this kind arise. Even though in the long run the elementary "historical" cost plays an important part, yet time is necessary for its influence to be felt through the whole of our complicated system of production. During this time the stage not yet effected by this leveling influence will follow the lead of their special "synchronous" cost. Let us now take a few examples, in which this leveling influence is free to operate over a limited area of the process of production, and then at a certain point becomes permanently inoperative. Take a chemical product, which we will assume to be sold at any given time, at its actual cost of production, say eight dollars. Let us further assume that some discovery is made by which the cost of this material is reduced to four dollars, and that the discoverer patents the process and allows others to use it for a fee of two dollars. The price of this product will now permanently adjust itself to a money cost of six dollars, which exceeds the elementary cost of four dollars by the amount of the patent fee or royalty of two dollars. Let us take another case, and assume that a hundredweight of coffee, when admitted into a country free of duty, will sell at a price which is just sufficient to cover its cost of production, which we will assume to be sixty-five dollars. Let