money cost of the rest of the establishment, worn to a certain extent or occupied for a time in its making. Numerous practical formulæ are in use to aid in the difficult problem of imputing to the product its due share in the various general charges. A second necessary explanation connected with the third form of calculating entrepreneur’s cost is that, since the prices of the production goods have to be paid before the product is finished, each price must be increased by interest for the time of its advance, to give the complete cost of the product. In order to state the relation of entrepreneur’s expense to potentiality cost, it is not necessary to discuss in full the mutual relations of the various modes of calculating entrepreneur’s cost. Such a discussion would, it seems to the writer, involve us in the theory of interest and indeed in the entire theory of distribution. Fortunately it is sufficient for our present ends to point out that all forms of analyzing entrepreneur’s cost must be based upon the third, or, as we might call it, the practical method. If it is desired to reduce the cost of a product to wages and interest, the practical cost of the article as defined above will have to be ascertained as a starting-point. We will be content in a later section to trace the connection between potentiality cost and the practical form of entrepreneur’s cost. 3. It is impossible to give the term _value_ any one meaning. The word is so ambiguous that Jevons advocated its abandonment. The central thought of the value concept seems to be _capacity to excite desire_, but there are two grand kinds of economic value which are best designated, (1) exchange value and (2) esteem value.[209] The exchange value of an article has often been defined as a ratio—or specifically, as the ratio in which the unit of measure of the article exchanges for a multiple, or fraction, of the unit of measure of any other determinate thing[210]—and again as the quantity of that other thing for which it exchanges. But both of these conceptions are involved in metaphysical difficulties which make them impossible to employ in actual reasoning, and all writers are accustomed to make assertions about exchange value which are not in the least true of these, their purely formal, definitions. Walsh has shown most clearly that the only conception of exchange value free from difficulty is that of _power_ in exchange. Exchange value is the power in a thing by means of which its owner is enabled to command other things possessing a similar power.[211] This power is measured objectively by the physical quantity of some other thing selected for the purpose, but the value is not that quantity, though speaking elliptically we may say the value of a coat is twenty bushels of wheat or twenty dollars. The exchanging power in our daily thought is always and properly referred to the thing and not to the man or owner. When the thing is gone the power is gone.