Rural Wealth and Welfare: Economic Principles Illustrated and Applied in Farm LifeFairchild, Geo. T. (George Thompson)
Science
Rural Wealth and Welfare: Economic Principles Illustrated and Applied in Farm Life
Fairchild, Geo. T. (George Thompson)
Agriculture -- Economic aspects; Economics
In general, we measure utility by the relation between the nature of any
object and human nature as expressed in wants. A bushel of wheat has
utility equal to the number of loaves of bread it will furnish to hungry
humanity. In this respect every bushel may have the same utility as every
other. This would be true if every bushel of wheat was wanted by hungry
people able to exert themselves in securing it; but if five bushels of
wheat are sufficient for each human being in a year’s supply of bread, a
distribution to all the world of more than five bushels to each would make
some of the wheat useless. So if the world’s product of wheat more than
supplies the world’s want, the extra amount will be without utility unless
some means of storing against future want is devised. In that case the
utility of the stored portion will be lessened by the extra exertion
required to store it until the need comes. One may be glad to pay
twenty-five cents for a good dinner, but an equally good dinner offered
immediately afterwards will have no utility, unless he can save it for
supper. If the dinners offered are so many as to imply that several will
be useless, the value of each is likely to be affected by this estimate of
lost utility in some. Dinners in that case are liable to be furnished for
what they are worth for cold suppers.
If any article of commerce, like wheat, has its highest utility in one way
of meeting wants, as in bread, that utility will have a strong influence
upon value as long as the supply of wheat is not too great for this want.
If the supply of wheat should be so great that only a small portion could
be used for bread, other utilities would be sought. It would be used for
feeding hens, and perhaps for cattle feed. If still the amount is too
great to be consumed, it might be used for starch. In this case the least
useful portion is likely to furnish the estimate of value for the whole.
Both the raiser of wheat and the user will consider the lowest use as the
probable basis for sale.
Before the opening of the Erie canal a farmer in northern Ohio drew a load
of wheat twelve miles in hope of a market. The dealer said: “It isn’t
worth anything, since nobody has any use for it. If you had a load of
sand, I could pay you for that, to fill the mud-hole in front of my
store.” Since the utility of some wheat was nothing, the value of all
wheat tended to nothing. On the other hand, if wheat is scarce in the
community, it will be used only to meet the wants of the delicate or the
fastidious, whose comfort and life may depend upon it. In that case its
general value will be estimated by its higher utility, whatever other use
it is put to. That is called a final utility, which, in any particular
case, is the lowest use implied in consuming the supply. And this final
utility is the only one influencing the estimate of value.
Public-domain text, read in full here on John Shaqi.
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