2. Although Senior is careful to give limitation of supply as the factor which, combined with usefulness, occasions value, he still holds that cost of production may govern value under certain ideal conditions. These conditions are described as those of “perfect competition,” but he means a great deal more by this than these words signify to-day. Senior’s conception of cost, however, is different from Ricardo’s. “By _cost of production_ we mean the sum of labour and abstinence necessary to production.”[138] Labor is defined, with especial reference to cutting off the extension of the term attempted by McCulloch,[139] to be “voluntary exertion of bodily or mental faculties for the purposes of production” (p. 57). The new word _abstinence_ is defined as follows: “A term by which we express the conduct of a person who either abstains from the unproductive use of what he can command, or designedly prefers the production of remote to that of immediate results.”[140] For the variety of conceptions of cost, expressed and implied in the writings of his predecessors, Senior substitutes a consistent definition of cost in terms of subjective sacrifice. With this improved concept as an aid, he is enabled to resolve many of the difficulties which had beset earlier debates upon the meaning of cost. The objection of Mr. Torrens to the inclusion by Mr. Malthus of “profits” in cost is good, says Senior, as against Mr. Malthus’s word _profits_. “Want of the term abstinence, or of some equivalent expression has led Mr. Malthus into inaccuracy of language.... When he termed profit a part of the cost of production, he appears to us to have meant not profit, but that conduct which is repaid by profit: an inaccuracy precisely similar to that committed by those who term wages a part of the cost of production; meaning not wages, which are the result, but the labour for which wages are the remuneration.”[141] The clearness of thought here is gratifying in comparison with earlier discussions, but, as we have had occasion to urge before, the idea that it is erroneous to consider wages and profits as cost, confines the term to the meaning of subjective cost whereas there can well be other forms of cost. It may cost coal and machinery to produce an article, just as it may cost labor and abstinence. 3. The true cost of production of commodities, affirms Senior, would regulate their values if the only obstacles to their supply were the labor and abstinence required for their production. There are two different arguments given to substantiate this proposition. The first partially corresponds to the “philosophical” account of value, being stated in highly generalized terms without regard to the division of society into classes of capitalists and laborers.