We shall cease to wonder at resemblances, however, if we remember that our law of value cannot be a rival of any other law which has been recognised as giving, within its sphere, a satisfactory explanation of actual phenomena of value, except in the qualities of breadth of basis or accuracy of details. The impression which most of us, I imagine, have had in relation to the law of Supply and Demand as usually formulated, is that what it says is undeniable, but that it does not say enough. It devotes ample space to the phenomena of supply, but it leaves demand almost entirely without analysis. While it pays lip-service to value as a relative between the two, it gives the impression that the side of supply is so overwhelmingly important that demand may be taken for granted. What the theory which has been developed in the preceding pages does is indeed to make price a resultant of Supply and Demand, but at the same time carefully to analyse these ambiguous expressions, and make price rest finally on subjective valuations of commodities and of price-equivalents made by buyers on the one side and sellers on the other. CHAPTER XII COST OF PRODUCTION We have, now to compare the law of Value at which we have arrived with that most dwelt on by English economists. It is a matter of common experience that, in the case of articles manufactured on a large scale—“freely produced,” or reproducible at will—the price always tends towards equality with the cost of their production. On this experience is founded the familiar statement that the value of a good is determined by its cost. Speaking generally, Costs of Production are all the productive goods consumed in the making of a product,—raw and auxiliary materials, machinery, power, and labour. To speak more accurately, we should substitute the term Expenses of Production, thus indicating that the naturally incommensurable “efforts and abstinences” are measured by the money paid for them. On this theory, the value of a good comes from its _past_.