Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy — John Shaqi
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
making an addition to his hut, he proves that he values that gain ten
times as highly as he does either of the others. Establishing values
by means of such final costs is a process that goes on in every stage
of social evolution.
_Unlike Results of Creating Wealth and Using it Summarized._--Wealth,
then, affects a man as a consumer in one way and the same man as a
producer in an opposite way. In the one case the effects are
favorable, and in the other they are unfavorable. At a certain test
point the two effects may be equally strong as motives to action, and
so may be said to be equivalent. The man is impelled to work by his
desire for a final unit of wealth, and he is deterred from it by his
aversion for the final unit of labor which he will have to incur if he
secures the benefit. If he performs the labor and gets the benefit, he
neither gains nor loses as the net result of this particular part of
his labor, though from all other parts of his labor he gets a net
surplus of benefit. It is natural to measure all such economic gains
in terms of sacrifices incurred at the test point where these are
greatest. This is the labor one would have to incur in order to add
the means of gratification to his previous supply of consumers' goods.
_Minimum Gains offset Maximum Pains._--Running through and through the
economic process are these two different measuring operations. Man is
forever estimating the amount of harm that wealth does him when he is
in the act of producing it, and the amount of good it does him when he
consumes it; and there is always to be found a point where the two
amounts are equal. It is the point at which gains are smallest and
sacrifices greatest. It is at this point that men measure values in
primitive life and in civilized life. How in the intricate life of a
modern society the measuring is done we shall in due time see; for the
present it is enough that we perceive the universality of the law
according to which value is best measured by the disutility of the
labor which is most costly to the worker. Organized societies do
something which is tantamount to this. It is as though the whole
social organism were an individual counting the sacrifices of his most
costly labor and getting therefrom a unit for comparing the effective
utilities of different goods.
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