The Ultimate Standard of Value [29]
"We shall certainly find that the rule of equal values for equal pains is not the law which actually determines exchange ratios." -- Quarterly Journal of Economics, January, 1894.
21. It would be easy to find many other and possibly better examples than that of the artist. In his case the artistic impulse is always strongly opposed to the action of the purely economic motives. Possibly the best example would be an inventor. He is in a position to produce a useful object, without any help from others, and is entirely free to determine the length of his working day.
22. "Der Naturliche Wert," Wien, 1889, Preface, p. iii.
23. "Wealth of Nations", Bk i, ch. v. and vii.
24. "Marginal Utility and Value", pp. 262, 269.
25. Economic Journal, June 1892, p. 334.
26. Ibid., p. 335.
27. Ibid., p. 337.
28. Ibid., passim, especially p. 334.
29. "Principles", note on Ricardo's Theory of Cost in Relation to Value, Bk. vi., Ch. vi.
30. "Elements", Bk. vi., Ch. ii, sect. 2, and corresponding place in "Principles."
31. "Elements", Bk. vi., Ch. v, sect. 4, and corresponding place in "Principles".
32. See above, p. 24.
33. In a paper, replying to Dietzel, on "Wert, Kosten und Grenznutzen", in Conrad's Jahrbucher, third series, book iii. p. 332.
34. The change of occupation is not always brough about by individuals abandoning the occupations in which they are engaged. When in any branch of employment the decrease from death, etc., is not offset by the number entering the same, we haave a change of occupation. Those who make up the difference have gone into other lines. Though operating more slowly, the effect of this is the same as if individuals made a direct change.
35. Professor Marshall has very correctly remarked that the use of the term normal is more of less arbitrary. A price which we would call normal, when we have in mind a period of cetain length, we would no call normal when considering a longer period ("Principles", Bk. vii, ch. vi., sect. 4) Otherwise I would certainly insist that the real law of cost has to do with no longer period than is sufficient to allow the adjustment of the price of the ware to the equalized position of wages (and interest); the wider adjustment of the wages of labor to the cost of maintaining the laborer, which under certain circumstances might require a still longer period of time, is an entirely different problem. So far as this can be further maintained as a general law, it is in no sense an effect of the real law of cost, but should be regarded as the effect of another law -- a law which has no actual connection with the real law of cost. It depends upon the action of quite different forces and in its result has but an external or non-essential similarity, which has led to the unqualified evil of confounding the two laws. The impelling motive of that law of cost, which really influences the price of wares, is usually a shrewd estimating of economic conditions, the striving for the greatest possible utility and the avoidance of harm. The motive of a pretended iron law of wages is on the one side the irrestibleness of sexual desire, and on the other the great mortality which results from insufficient food. But the effects of such natural forces can no more be credited to the vulgar economical law of cost than the aggregation of a great number of men in large cities can be credited to the law of gravitation, which of course, because of a similar play upon external analogies, has already been maintained by Carey.
36. I would not fall to mention that the position of wages which corresponds to or equals the "net product of the last employed laborer" is, according to Professor Marshall's view, in no sense a temporary market price, but a sort of "long period price," which requires for its development a more or less prolonged leveling process. It is a sor of centre of gravity for the oscillations of the supply and demand of labor.
37. In this attempt Wieser has taken a prominent part. Compare his "Ursprung und Hauptgesetze des Wirtschaftlichen Wertes", 1884,
21. It would be easy to find many other and possibly better examples than that of the artist. In his case the artistic impulse is always strongly opposed to the action of the purely economic motives. Possibly the best example would be an inventor. He is in a position to produce a useful object, without any help from others, and is entirely free to determine the length of his working day.
22. "Der Naturliche Wert," Wien, 1889, Preface, p. iii.
23. "Wealth of Nations", Bk i, ch. v. and vii.
24. "Marginal Utility and Value", pp. 262, 269.
25. Economic Journal, June 1892, p. 334.
26. Ibid., p. 335.
27. Ibid., p. 337.
28. Ibid., passim, especially p. 334.
29. "Principles", note on Ricardo's Theory of Cost in Relation to Value, Bk. vi., Ch. vi.
30. "Elements", Bk. vi., Ch. ii, sect. 2, and corresponding place in "Principles."
31. "Elements", Bk. vi., Ch. v, sect. 4, and corresponding place in "Principles".
32. See above, p. 24.
33. In a paper, replying to Dietzel, on "Wert, Kosten und Grenznutzen", in Conrad's Jahrbucher, third series, book iii. p. 332.
34. The change of occupation is not always brough about by individuals abandoning the occupations in which they are engaged. When in any branch of employment the decrease from death, etc., is not offset by the number entering the same, we haave a change of occupation. Those who make up the difference have gone into other lines. Though operating more slowly, the effect of this is the same as if individuals made a direct change.
35. Professor Marshall has very correctly remarked that the use of the term normal is more of less arbitrary. A price which we would call normal, when we have in mind a period of cetain length, we would no call normal when considering a longer period ("Principles", Bk. vii, ch. vi., sect. 4) Otherwise I would certainly insist that the real law of cost has to do with no longer period than is sufficient to allow the adjustment of the price of the ware to the equalized position of wages (and interest); the wider adjustment of the wages of labor to the cost of maintaining the laborer, which under certain circumstances might require a still longer period of time, is an entirely different problem. So far as this can be further maintained as a general law, it is in no sense an effect of the real law of cost, but should be regarded as the effect of another law -- a law which has no actual connection with the real law of cost. It depends upon the action of quite different forces and in its result has but an external or non-essential similarity, which has led to the unqualified evil of confounding the two laws. The impelling motive of that law of cost, which really influences the price of wares, is usually a shrewd estimating of economic conditions, the striving for the greatest possible utility and the avoidance of harm. The motive of a pretended iron law of wages is on the one side the irrestibleness of sexual desire, and on the other the great mortality which results from insufficient food. But the effects of such natural forces can no more be credited to the vulgar economical law of cost than the aggregation of a great number of men in large cities can be credited to the law of gravitation, which of course, because of a similar play upon external analogies, has already been maintained by Carey.
36. I would not fall to mention that the position of wages which corresponds to or equals the "net product of the last employed laborer" is, according to Professor Marshall's view, in no sense a temporary market price, but a sort of "long period price," which requires for its development a more or less prolonged leveling process. It is a sor of centre of gravity for the oscillations of the supply and demand of labor.
37. In this attempt Wieser has taken a prominent part. Compare his "Ursprung und Hauptgesetze des Wirtschaftlichen Wertes", 1884,