The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
3. _Labor and material wealth are complementary and indispensable to
each other in most of their uses._ The discussion of material wealth and
its value apart from the subject of labor, of the problem of rent and
interest apart from that of wages, does not imply that this material
wealth would have the same value in real life if labor were absent. As
one field affects the value of another field, and one good, by
substitution, the value of another good, so does labor affect material
wealth. Some material wealth can be used apart from labor, but most of
it must be used in combination with some labor. Rent, therefore, is not
determined in concrete cases apart from men and their services. It is
allowable, however, in abstract analysis, to simplify the question by
leaving out a difficult complication, and thus to set forth more clearly
the logical bearing and effect of a certain factor.
[Sidenote: Certain shares of the product are logically attributed to
each]
Each of two kinds of agents used together affects the utility of the
other, and the value of the product. If neither can be credited with the
whole value, how is any distribution to be made between them? It is not
possible to measure their technical services in the product, but it
usually is possible to gage their marginal utility under particular
conditions. Flour, water, and labor are needed to make biscuits; but
water being a free agent, does not enter into the combination with any
marginal utility. A match also is almost indispensable to start the fire
(and who has not seen the time when he would give far more for a match
than for a bucket of coal), but as things usually are, the match is
credited with a value of a very small fraction of a cent. Again, how is
to be measured the economic service of the tree and of the labor needed
for gathering its fruits? There is here suggested the superficial aspect
of what is known as the problem of complementary values. Where two or
more things are indispensable to a product, how much shall be credited
to each?
[Sidenote: Labor gratifies directly and indirectly]
4. _Human service has the same general relation to wants that material
goods have, affording gratification either directly or indirectly._ It
is axiomatic that to be "economic goods" human efforts like material
goods must afford utilities whose importance is felt. Many services give
pleasure directly and are immediately consumed. A tropical potentate has
an attendant to fan him, and another to carry an umbrella; a humble
citizen is shaved, doctored, sung to, and played for. The gratification
in such cases is directly produced in personal comfort, in the
consciousness of heightened beauty, in the feeling of self-esteem. Value
is thus created and consumed immediately, taking no material form apart
from the consumer.
[Sidenote: Labor embodied for a time in material form]
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