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Now in each of these cases the identification of the consequence to the individual with the consequence to society has proved a snare to the reasoner. A like fate awaits those who from the values imputed by individuals to their goods attempt to reach the value of the total wealth of society. The individual has the power of replacing his stock at the market rate, and it is therefore concluded that society can replace its stock at the same rate. And with equal ease of substitution market values must supplant subjective values as effectively in the valuation of social wealth as in the valuation of individual wealth. Now it is not at all true that society enjoys the same facility of substitution as does the individual on the contrary society cannot substitute at all. Granted the individual can replace his stock at the market price, it does not follow that a considerable group of consumers can replace their stocks at the same price. The inevitable effect of a large reinforcement to current demand is a rise in market value and consequently a greater imputation of value to the goods in question. The sum of values of society's wealth taken group-wise would therefore be greater than when taken individually. Enlarge the group and the disturbance of market values in the process of substitution would be still more marked. Another rise in "total value" would take place showing conclusively the unsoundness of a method of valuation that reaches such different totals for the same body of wealth. Finally, suppose society as a whole to lose its stock of goods. In this case replacement is utterly out of the question. The goods in the markets embraced within society are of course swept away with the rest. Markets cease because there is nothing to exchange, and with them vanish all market valuations. Substitution being no longer possible there is an end to measuring the value of a good by the value of its substitute. No longer stamped with an alien utility each acquires an importance proportionate to the satisfaction that was dependent on it. The conventional valuations of the market give

The system

way to the natural valuations of the consumer. of imputed values falls away and unmasks the true subjective values that express the significance of goods to their user or


The tyranny of the margin has been felt before this even in the valuation of a single species of wealth. Men have at times doubted if the fall of a penny per ounce in the London price of silver struck at once eighty millions from the value of the silver on the globe, and have marveled that a dispatch, a rumor or a committee report should be able in a day to restore this stupendous quantity of value. Men have wondered if the momentary and manipulated ups and downs of wheat, cotton, or copper, in the central ruling exchanges were to be carried back and applied to the world's stock of wheat, cotton, or copper. To do this were too much like reading the ocean's rise and fall in the swelling and sinking of the waves on the beach. But in none of these cases does the use of the margin as the standard of measurement result in such paradoxes and pseudo-conceptions as in the valuation of the wealth of society. It is the height of bad logic to ascertain the total value of society's stock by destroying in fancy successive portions of it and measuring the losses by the expense of replacing the first portion destroyed. The quest for true value requires a more unitary treatment. Just as in the case of the piano, the well, or the house, the value of a good representing a number of distinguishable services is related not to the marginal utility of these services but to their total utility, so the total value of the community's wealth rests not on marginal but on real utility, and is not distinguishable from the total sum of utilities. This conception alone is in harmony with the deliverances of common sense. Value in the sense of importance to well-being the wealth of society certainly has. And it is plain that the larger wealth, conditioning as it does the greater measure of well-being, has the greater, though perhaps not a proportionatly greater,


Furthermore, it is clear that the millennial abundance that should permit all wants to be satisfied, would condition the greater measure of well-being, and therefore possess the greater value.

Recurring now to the diagram on page 90, it is evident that the total value of the original wealth of the community is measured not by Area A BCE, but by Area A B C D. Likewise at the close of ten years total value is not A F H K but AFHD. If now the money of the community is to reflect or mirror total value, it must increase during the period of expansion in the ratio of A FHD to A B C D, which is in effect to adopt the total utility standard instead of the marginal utility standard proposed by Dr. Merriam. Such is the conclusion from the general analysis of value.

Addressing ourselves now to the concrete question of fairness between debtor and creditor a like conclusion seems to emerge. Of course a standard just to all debtors and creditors is Utopian. The utmost we can hope for is one that shall do justice in the normal or average case. Now, such a standard is not attained when we compel prices to sink with marginal utilities. It is true that the money a debtor pays to his creditor may go to provide the latter with marginal utilities: it may be expended at the margin of consumption. But it need not be for there are other utilities. If marginal utility were all that a debtor could hope to place in command of his creditor, it would be just to bind prices to marginal utility, and to cause equal sums of money at all times to buy equal quantities of marginal utility. But, as a matter-of-fact, any particular sum is far more likely to be expended for intramarginal utilities. The daily rejuvenation of the gaping clamorous brood of wants compels the creditor to provide for his necessity as well as for his comfort and enjoyment, to procure that which is necessary as well as that which is convenient merely or even superfluous. He cannot reach his margin of consumption until he has experienced a series of intra-marginal utilities.

A sane man receiving his year's income in five equal payments on the first day of January does not regard the fifth payment as available only for supplying him with utilities at his margin of use. Nor does he upbraid the fifth payer for returning less value than the others because, forsooth, that payment conditions only the slender utilities at the rim of his consumption. Likewise the payment of a debtor, though it but adds to a large assured income, should not be looked upon as expended solely for marginal utilities, but as devoted to procuring all sorts of utilities. All equal parts of a man's income must be held to contribute equally to their joint result, and a given portion must be esteemed not for its command over marginal utility but for its power to contribute to Total Utility. An example will make this clear. Suppose that for the average creditor an income of 100 units of commodity conditions a total utility of 1000. The importance then of a single unspecified unit will be ten. If now, added commodity increases total utility but slightly, so that an income of 120 conditions a total utility of only 1080, the importance of an unspecified unit will sink to nine. From this point of view a man who borrowed when incomes were 100 and restores the same quantity of commodity when incomes had risen to 120, may justly be accused of repaying less value. Yet this would be the nature of the transaction if the commodity standard prevailed and prices were not suffered to fall. The total utility standard on the other hand would require that the debtor return one and one-ninth units of commodity for every unit borrowed. Prices should, therefore, fall in just such measure as the power of an unspecified portion of goods to contribute to total utility has fallen. The relation of this to the third standard, will appear if we suppose that when incomes are 100 the marginal unit of goods adds eight units of utility while, when incomes are 120, it adds only two. According to the marginal utility standard the creditor should receive four times as much commodity as he lent. To realize this in money contracts would

require that prices fall to one-fourth of their former level. Such a requirement seems to me unsound in theory and unjust in practice.

The artificiality and arbitrariness of the marginal utility standard of value clearly appears in the statement of Dr. Merriam: "The permanent control of the same amount of value ensures that economically a man shall at all times be in the same position relatively to other men. This position will be kept, not in respect to social esteem merely, but in all respects." This view, that the creditor, if he is to receive the same value, must be kept in the same position relatively to other men, seems to imply that the sole importance of goods is to enable one to keep up with one's neighbors. Is this true to life? Regarding consumption in the midst of society, three notions are held. Some hold the individual and absolute satisfaction derived from goods to be everything; the social and relative importance to be nothing. The above-quoted statement implies that the social and relative is everything; the individual and absolute nothing. The best analysis of the facts shows, I believe, that the total well-being we derive from goods depends partly on the positive satisfaction experienced in use or consumption and partly on the social satisfactions that flow to us in consequence, the latter largely determined by the relation of our consumption to that of our neighbors. The fact that some "go in" for comfort and care nothing for "appearances," while others skimp in the household in order to be lavish in externals, shows the difference in estimate of these two elements of well-being, I, therefore, hold that, while due allowance must be made for the social aspect of consumption, we do not need to keep up a man's position relatively to other men in order that his control over value shall at all times be the same.

The result of the special analysis of value confirms the conclusion from the general analysis that total utility, and not "total value" based on marginal utility, is the scientific

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