The basic facts of economics : $b A common-sense primer for advanced studentsPost, Louis F. (Louis Freeland)
General
The basic facts of economics : $b A common-sense primer for advanced students
Post, Louis F. (Louis Freeland)
Economics
For further illustration of Value and Utility thus defined, nothing has
greater Utility--greater “total” Utility, if that professorial term be
preferred--than the sun; but the sun has no Value except as its Utility
is controlled by ownership of Land favorably situated with reference
to it; for it cannot be exchanged in Trade for anything else. Nor has
it Price, for Money cannot buy it. Though it may be bought and sold to
some degree indirectly through the buying and selling of Land which
controls the sun’s utility to that degree, this value is not sun-value
but Land Value.
Yet all commodities--whether in the Wealth class, as a house or food;
or the Land class, as a natural building-site, or an ore deposit, or
soil fertility, or the sun to the degree that its light and heat are
owned through ownership of Land--have Utility, Value and Price. The
last of the three is expressed in terms of Money.
Money is the common medium of Trade. Where and when Money is in use, he
who wishes to trade a hat for shoes need not hunt for somebody who has
shoes but wants a hat instead; all he need do is first to find some one
who has shoes and wants Money. And since persons who want Money (which
as a common medium of Trade is in effect everything in the channels
of Trade) are so many in comparison with those who at a given time
want shoes, Money infinitely diminishes the difficulties of trading
commodities.
Money is also a common denominator of Value, as we have already
observed. Without it each of us would be obliged to express the Value
of each exchangeable object in the complicated terms of all other
exchangeable objects. We should have to say, for example, that a hat
has the Value of a pair of shoes or of a chair or of an umbrella and so
on; that a pair of shoes has the Value of a hat or of a chair or of an
umbrella, and so on; that a chair has the Value of an umbrella or of a
pair of shoes or of a hat and so on; and that an umbrella has the Value
of a hat or a pair of shoes or of a chair and so on. And then we should
have to complicate the comparisons with specifications of quality. But
Money terms obviate the necessity for such vague and multifarious Value
comparisons as are here merely hinted at. They enable us to say that
a hat, a pair of shoes, a chair, an umbrella are each of the Value of
five dollars, or a pound sterling, or so many francs, according to the
names and fidelity to financial standards of Money pieces in the places
where we engage in Trade, and according also to the quality of the
commodities specified.
It should, however, be here repeated and emphasized, that Money pieces
in whatever form, be it coin or scrip, are themselves of slight
practical importance in the ramifications of Trade. Not tangible Money,
but the Money terms which measure and express the relative Values of
commodities--these play the great part.
Public-domain text, read in full here on John Shaqi.
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