Taking the whole period covered in this history, we see that a goodly number of points of criticism were raised against the pure labor-cost theory. The reader may have noted that all these points were implicit in the work of Senior, and in his alone. Does the entrepreneur’s payment of land rent, of interest on capital, and his payment of a superior wage to skilled labor (a wage out of proportion to the disutility of skilled labor), make impossible the theory that labor cost regulates value? Is it not possible that labor cost may be conceived in some way, perhaps as “marginal cost,” or “social marginal disutility,” such that the exchange values of the products of industry can be shown to depend upon the labor cost of these products? In the following pages the writer will try to give an answer to this question, so far as it lies in his power. It will be indispensable to bear with a considerable number of preliminaries. The ultimate relation of cost (in any or all of its forms) to value, cannot be discussed with any success, unless the parties to the discussion have reached some understanding as to the relation of utility to value and as to the meaning of other proposed laws of value than cost laws. Merely a moderate acquaintance with the contemporary literature of economic theory gives complete assurance that the necessary understanding just mentioned cannot be presumed to exist, but must be established as carefully as possible. 2. Historically, there have been two distinct conceptions of cost—at least in English political economy—namely, (1) labor cost, and (2) entrepreneur’s cost. Logically, there are two elementary forms of cost, (1) pain cost, and (2) potentiality cost. The first consists in the human discomforts or undesirable feelings incidental to the production of wealth, whether the disutility of labor, or that of “abstinence” or “waiting.” This is also frequently called “true,” “real,” or “subjective” cost. The terms “true” and “real” are hardly commendable, for the other elementary form of cost is quite as real as this. The word “subjective” is genuinely distinctive, but probably less so than the generic term “pain.”