What return does the government get for these services to production? Offhand, one might say that the government receives its return in taxes. In a sense this is true, for taxes, like interest, wages, and profits, must be paid from the selling price of goods. Taxes, indeed, must be provided for before profits can be determined. But it is not usual, nor is it accurate, to speak of taxes as a reward or return for services which the government renders. Revenue in the form of taxation is essential in order that a government may function properly, yet there is no close relation between the rate of taxation and the amount of service given. This whole question of taxation, in theory and in practice, will be discussed further on. SOME ESSENTIAL ECONOMIC ACTIVITIES [Sidenote: The way in which each factor in production obtains its share.] =Exchange.=—It has been shown that several factors in production are each entitled to their share. This share is reckoned in terms of money because every producer gets his own return in terms of money. In other words goods are exchanged for money, and money in turn is exchanged for other goods or service. This mechanism of exchange engages the energy of a great many individuals and institutions, such as wholesalers, retailers, brokers, and banks. Economic goods would have relatively little value if they could not be translated into money and thus distributed from hand to hand. No one, as a rule, can live and flourish by consuming exactly what he produces and nothing else. He must use his share in what he produces as purchasing-power to secure whatever best satisfies his own wants. Money is the lubricant which facilitates this; in a word, it is the medium of exchange. [Sidenote: Definition of value.] =Value and Price.=—Exchange takes place on a basis of relative values. He who sells goods or services receives something of assumed equal value in return. But what is value? The term value is employed in two different senses, value in use and value in exchange. By the former we mean the intrinsic utility of a thing. Air and sunlight, for example, have a high value in use; they are indispensable to life in fact; but they have no value in exchange. When the economist speaks of value he means value in exchange or market value, that is to say the ratio in which one commodity or service will exchange for other commodities. If a ton of coal can be exchanged for a large quantity of cloth, or food, or labor, its value is high; if it can be exchanged for only small amounts of these other commodities, its value is said to be low. [Sidenote: Definition of price.]