A NEW MONETARY SYSTEM 151 The Standard of Value 158 The Medium of Exchange 164 CHAPTER X. MERITS AND OBJECTIONS CONSIDERED 181 Merits of Plan 181 Objections Answered 187 CHAPTER XI. CONCLUSION 196 INDEX 205 HONEST MONEY CHAPTER I. VALUE AND THE STANDARD OF VALUE. _Definition of Value._ A clear conception of the meaning of the term _value_ is the first essential to a discussion of the subject of money. Under the general term _value_ the older economists recognized two distinct conceptions, which they distinguished as _value in use_ and _value in exchange_. To the former they gave little attention, merely stating that while it was essential to value in exchange, the latter was not proportional to nor determined by the former, and citing air and water as familiar examples of objects having great utility, or use value, yet having little or no exchange value. Modern economists--chiefly those of the Austrian school--have analyzed the subject more thoroughly, especially the relation between the two conceptions, and have shown that utility or subjective value, as it is generally termed by them, is an expression both of human desire and of the quantity of the necessary commodity available to satisfy such desire. The utility of a thing grows less as the quantity of it increases, and it is the utility of the last increment of supply, or the marginal utility, that determines the subjective value of the whole supply, and it is the ratios between these subjective values that determine exchange values. Air and water, for instance, have no great utility, as viewed by the older economists, except where the supply is limited; ordinarily, their abundance makes their utility, or use value, small. It is not essential to the purpose of this work to enter into an abstract discussion of the theory of value further than is necessary to make clear the fact that the present analysis in no way lessens or invalidates the distinction between the two conceptions of value noted by the earlier economists,--a fact which has been overlooked by some who have accepted the marginal utility theory. The distinction remains, broad and clear. The one conception, whether called "value in use," "marginal utility," or "subjective value," pertains wholly to the relation which a single good, or unit group of goods, bears to a single individual, or society unit, in respect to human well-being, and has no reference or relation to any other individual or other good.