Suppose you put a man into a little primitive place like Andorra (which is a tiny independent state shut off from the world in a valley of the Pyrenees), and he is paid there £1,000 a year. He cannot live in a house with more than a small rental, because there are no big houses to be had. Everybody lives in simple, little houses. He cannot spend his money on many things. There are no roads, no use for a motor car; no railways, so he cannot spend money on railway fares; no theatres or cinematographs--none of the hundred things which we have here on every side. He can buy bread and meat, and wine and clothing, and very little else--for there is nothing else to be bought. In other words, the number of _sets of things_ (that is what the word “categories” means--“sets of things”) on which he can spend money is a great deal less than what it would be in London. A man with £1,000 a year in London and a family to keep is, of course, very much better off than a labouring man, but still he is not rich, as rich people use the term. He will live in a house for which he must pay perhaps £200 a year, counting rent and taxes. Then he will--he usually must--travel, and that will cost him perhaps £50 a year. Then his friends will expect to meet him and he must have them at his house, and he will have to spend a good deal in postage and telegraphing--and so on. The man in Andorra with £1,000 a year simply would not know what to do with it. He would be so “well off” that he would have a very large surplus--more than half--to give away, or to help other people with, or to save and invest. But exactly the same sort of man, with the same ideas and bringing-up and necessities, put down in London would certainly not be able to save a penny of his £1,000 a year. So we see that the social value of £1,000 a year in Andorra is very different from the social value of the same sum in London. Some people might be inclined to laugh at this difference, and to say: “Oh, yes! but the man in London could, if he liked, save, simply by not spending on those various categories, as you call them.” Yes; he as an individual might choose to live an odd life of his own and not do what other people do. But _Society as a whole_--that is, all the community round him--in London is, as a fact, spending upon those various, very numerous, categories, while in Andorra he does not, for he _cannot_, spend upon them; they are not there to be purchased. Therefore it is true that the _social value_ of the same sum, with the same index number, is on the average very much higher in Andorra than in London.