exchange, or a quantitative thing which precedes exchange and is merely measured by it. This being the case, it is fortunate that most of the working theory of economics is either price theory or at least can be translated into terms of price. Thus the practical economist, and even the theorist of a pragmatic turn of mind can look on quite contentedly and say, with Sir Lucius, "It's a very pretty quarrel as it stands.”

Is it possible that the whole dispute is as unnecessary as the argument about ratios? We think of a bushel of wheat having exchange value before it is sold. But so far as this quality, or relation, to which the sale gives a quantitative measure, is the result of previous sales of other bushels and of the whole state of mind of the people concerned that has grown out of settled habits of exchange, it would hardly seem worth debating which comes first in the social scheme of things. It is much like the question of the relative priority of the chicken and the egg.

If things exchange for each other, that is another way of saying that they are able so to exchange; or rather, to move men to exchange them; they have the capacity or quality or power of entering into this relation. The relation and the quality are but two phases of one fact: whoever states one implies the other.1 And this means, in a tolerant world, that whoever gives the name "value" to one of these concepts implies the right of any one else to give the same name to the other in his own discussions. The two concepts must behave alike, since one is only known through the other.

1 Since writing the above, my attention has been called to a discussion of the general question of qualities and relations in F. H. Bradley's Appearance and Reality, ch. III, in which he says: "Relation presupposes quality and quality relation. Each can be something neither together with, nor apart from, the other, and the vicious circle in which they turn is not the truth about reality." Moreover, while a relation between A and B implies qualities, the author says nothing of a common quality possessed by both A and B by virtue of which they are related. It is by virtue of being different that A and B can enter into relation with each other. Just so it is by virtue of being different that shoes and money are exchanged for each other, or shoes and bread.

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So far, those who call value a quality have accepted it as a quality which is measured by the test of exchange. And so long as this is true, the practical reasoning of one school must be surprisingly like the practical reasoning of the other. Strength is a quality, but if wood-chopping be made the official measure of it, it might as well be a mere relation between working time and woodpiles. In such a case it is not strength or power in general that is being measured, not even muscular strength, but merely power-to-chop-wood. Similarly value may be considered as a quality like strength, and called "social marginal utility" or power in motivation," but when it is measured no one thinks of using a psychological laboratory for the purpose. The thing really measured is motivation as registered in one particular kind of action, it is not utility in general but the power utility has to produce one kind of effect. The runner may think of his speed as his personal quality and the judge of the races may think of it as a relation between yards and seconds, but to both alike the tape and the stop-watch tell the story of the speed attained in the contest.

Is it possible that some day there will be economists who think of value not only as a quality, but as a quality which may be measured in ways that would conflict with the measure of the exchanges? Perhaps we shall be called on to distinguish between "social value" and "exchange value" as Wieser distinguished between

exchange value" and "natural value." If such a distinction is made, it will furnish a difference that will call loudly for settlement.







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I. Relation of value concept to causal theory of value, 675. — II. Various roots of relative conception of value: "Relativity of Knowledge," 676. Geometrical conceptions of relativity; parallel argument for relativity of value, 677. — Doctrine of fixed sum total of values, 680. Haney's expressions, 681.- Usage in English, French and German, 681. - III. General rise or fall of values, 682. — Can one good alone have value? 683. Abstract v. concrete ratios, 684."Rate of exchange" as abstract ratio, 685.- 'Rate of exchange " useless for economic analysis: views of J. B. Clark, Böhm-Bawerk, Carver and C. M. Walsh, 685. — IV. Illustrations of need of absolute value concept, 687.- Fisher's "general price level" an indefensible substitute, 688. Shift in Laughlin's argument, 690.-V. Speed and value as ratios, 691.-The "mathematician's fallacy," 692. — Differences between measurement of speed and measurement of values, 693. — VI. "Rate of exchange" as "price," 695. — VII. Different consequences of absolute and relative value concepts in economic analysis, 695. (1) Value a wider concept than exchange, 695. — Value in sociology and in economics, 696. — Value and exchange in socialistic state, 696. (2) Value and exchangeability not correlated, 697. — Nor do prices always correctly express values, except in static theory, 698. Values as causes of prices, 698. — Temporal relation of cause and effect, 698.- (3) Prices often partly controlled by non-economic values, 699. —Law, custom, and morals in relation to prices, 699. — Exchange theory of value cannot shirk consideration of these cases, 702. - VIII. (4) "Power in exchange as equivalent of value, 702. — IX. (5) Schumpeter's use of relative concept as regards land value, 703. X. Conclusion, 705.

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IN what follows, I shall regard myself more as Professor Clark's collaborator in a symposium than as his opponent in a debate. At certain points I shall definitely join issue with him, at certain points I shall build upon

his analysis, and I shall try to answer the questions he raises as to the implications of the social value theory. But I shall allow myself a wider range than the topics specifically raised by him, because I do not think that he has included enough considerations to furnish a solution to his problem. I welcome the opportunity which his criticism of some of my doctrine gives to go over the ground again, taking account not only of his views, but also of the views of some other critics.

At the outset, I concur with Professor Clark in the view that it is well to divorce as far as possible the terminological, formal, and logical aspects of the question from the more important questions of causation. This distinction is emphasized in my Social Value. I shall give the major part of my attention to arguments drawn from considerations of logic and scientific method, rather than to arguments based on my own general theory of value. That the two problems cannot be entirely divorced, however, is well enough illustrated in Professor Clark's own paper, particularly in the following (p. 672): "We think of a bushel of wheat having exchange value before it is sold. But so far as this quality, or relation, to which the sale gives a quantitative measure, is the result [italics mine] of previous sales of other bushels and of the whole state of mind of the people concerned that has grown out of settled habits of exchange, it would hardly seem worth debating which comes first in the social scheme of things. It is much like the question of the relative priority of the chicken and the egg." If I could accept this as a theory of the causes governing the value of the bushel of wheat, I might find it easier to concur in Professor Clark's view as to the definition of value. But I do not believe that the passage contains, even in embryo, an adequate theory of the causes governing values.

The history of prices, and the settled habits of exchange, do not seem to me particularly significant elements out of which to construct a theory of value. But my chief concern at present, as Professor Clark's, lies in the formal and logical aspects of the value concept, to which I now turn.


The notion of value as relative is Protean. Or perhaps, since old Proteus was, somehow, the same individual despite his many forms, it is better to say that many different notions, having different philosophic roots, go by the name of the relative conception of value. One root is the psychological doctrine that feelings can exist in the mind only if in contrast with something else - the contrast being made more fundamental than the feelings contrasted. A single feeling is an impossibility. This doctrine lies at the root of Simmel's theory of relativity, and has been made some use of by Professors Seligman and Pantaleoni. I have dealt with this type of doctrine elsewhere,1 and for the present shall simply say that I regard the doctrine as psychologically untenable,' and that I do not consider the inference drawn from it with reference to the nature

1 Social Value, pp. 19-20, n., and ch. 10.

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Cf. William James' criticism of the contention that " semper idem sentire ac non sentire are the same. "The Relativity of Knowledge,' held in this sense, it may be observed in passing, is one of the oldest of philosophic superstitions. Whatever facts may be cited in its favor are due to the properties of nerve-tissue, which may be exhausted by too prolonged an excitement. But if we physically could get such a feeling that should last eternally unchanged, what atom of logical or psychological argument is there to prove that it would not be felt as long as it lasted, and felt for just what it is, all that time?" The Meaning of Truth, p. 4, n. Cf., also, James' Principles of Psychology, II, pp. 9 ff. Knowledge, I should maintain, is relative only when it is "knowledge-about." Knowledge of Acquaintance" is absolute, i. e., is a term of the "knowledge-about "relationship. Cf. James' Principles of Psychology, vol. i, pp. 221, 222. Cf., also, Dewey's Studies in Logical Theory, chs. 1-1, esp. ch. 3. I am content to rest my view of the matter on authority here, noting that Bergson's view is essentially the same as that of James and Dewey. (Time and Free Will, passim.) All three of these thinkers need terms before they can talk about relations.

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