There is an understanding among economists, dating at least as far back as Adam Smith, that, in economic science and discussion, the ordinary terms of the industrial world are to be used in the sense generally attached to them in that industrial world. In many respects this has been unfortunate: the science is bound for ever to a loose nomenclature. It is particularly unfortunate for English political economy, which has not the possibility, so enviable in German science, of combining a new predicate with an old stem in such a way that the combined word is exact and yet not unfamiliar. Hence very many terms in economics have a long and chequered history attached to them, according as economists, in writing their systems, have tried either to follow the usage of the market and the street, or to free themselves from the vexatious restraint. No term affords a better illustration of this than the word Value. It is deeply rooted in popular conception and in popular speech. Of all words used in economic theory, it has most need of exact definition, because there the theory of value occupies the chief place. Yet the history of economic science is strewn with the wrecks of theories of value. Every one knows Thornton’s story of how Sydney Smith retired from the Political Economy Club, because his chief motive for joining it had been to discover what Value was, while all he had discovered was that the rest of the Club knew as little about the matter as he did! Every one, too, has smiled at Mill’s statement, made in 1848, that there was nothing in the laws of value which remained for him or for any future writer to clear up. And many felt sympathy with Jevons when he threw the term overboard altogether, declaring that neither writers nor readers could avoid the confusion so long as they used the word. But although it might be possible, by a very strict attention to proof sheets, to keep the word out of a book, it would not be possible to keep it out of the economist’s mouth, any more than it would be to banish it from ordinary speech. And—happily, as it seems to me—the recent writings of the Austrian school have shown that we may retain the old familiar word, and yet attain the exactitude of scientific nomenclature. There is a time-honoured classification to which is due much of the present confusion. In the _Wealth of Nations_ (Book i. chap, iv.), occurs the following passage: