Adopting these names, in default of better, the “philosophical” account is the answer of the fathers of modern political economy to the general riddle of value, the riddle of its ultimate nature, or essence. At first blush it would seem that things must derive their value from their usefulness. But almost immediately the mind turns to the fact, which has since “classical” days become such a time-honored illustration, that bread is “more useful” than gold, but much less valuable. The usefulness of bread, as it is here understood, is its general or characteristic usefulness, its usefulness as a class of things, its power to preserve our health and strength. Meditating upon the importance of the entire class of utilities represented by bread, one is led to ignore the question whether the specific utility of a particular piece of bread, in the given circumstances of the supply of bread, is not less than the specific usefulness of a particular piece of gold for purposes of ornament, in the given circumstances of the supply of gold. This is the line of inquiry which leads to the utility theory. But having passed the place where this road branches off, the earlier speculation on value reached the conclusion that things possessing utility have their values determined by their cost in labor. This answer to the riddle seems foreordained, when once Adam Smith’s “value in use” is adopted as the sole conception of utility. Elaboration and illustration of this philosophy always leads to primitive and “natural” society, where the hunter and fisherman, rent-free and equal, exchange the products of their labor as measured in days. When, however, the attention turns to the market-price of goods in the actual world, it is observed as a matter of business experience, in contrast with speculation with regard to the essence of things, that the exchange value of commodities tends to equal the sum of the wages of labor, the “profits” of stock, and the rent of land[4] which must be paid to obtain their production. This is the “empirical” account. The principle discovered is that now known as the law of entrepreneur’s costs.[5]