We see that it is possible to mean either pain or potentiality cost by the words “labor cost.” Labor as “pain” and labor as productive power are not the same thing but the first is incident to the second. It remains to consider the relation of entrepreneur’s expense to the two elementary forms of cost. Torrens desired to exclude the money outlays of the entrepreneur in interest charges from the money cost of production of a good. That is, he maintained that what he called “profits,” the chief constituent of which was interest, is no part of cost of production. This view was never adopted by any subsequent economist of weight. The very simple reasons why it is indefensible were mentioned in the chapter on Torrens. Conceding then that interest is a part of entrepreneur’s cost, the relation of the latter to “pain cost” can be stated in a few words. The total “pain cost” of any article, which is produced by entrepreneurs, finds its remuneration in those payments which go to make up _cost_ from the view-point of the entrepreneur. The point to be held fast, a point already emphasized, is that the subjective costs of goods so produced can influence their exchange values only by way of influencing their entrepreneur’s costs. The relation of entrepreneur’s expense to potentiality cost is less simple and familiar than the foregoing. It will best be taken up in a subsequent section after we have endeavored to state the gist of the utility theory of value. We may conclude the present discussion of cost concepts by noting that there are several ways of reckoning or analyzing entrepreneur’s cost. (1) Adam Smith’s method, adopted by Malthus, is set forth in the following definite words written by the latter: “The cost of producing any commodity is made up of all the wages, all the profits, and all the rent which ... are necessary to bring that particular commodity to market in the quantity required.”[208] (2) Perhaps the most approved modern method of analyzing the elements in entrepreneur’s cost is merely into wages and interest. In this case rent paid for the use of land is treated in the same way as rent paid for buildings or for machinery or power. (3) The most direct treatment of entrepreneur’s cost defines it shortly as including the prices of all the productive agencies used up in the making of the product, or as the value of raw material, machinery, and labor power “entering into” the product. It is always necessary to explain immediately that some production goods are in no sense consumed in the making of the product. Such are the land and buildings. Some production goods are consumed only in very small part in the making of a single product. The total money cost of a product is according to one system divided into “prime cost” and “establishment cost.” The former includes the prices of all those elements which are entirely used up in making the product. The latter includes the product’s due share of the