THIS little book was written in 1891, when I was fresh from my translations of Böhm-Bawerk and somewhat overborne, perhaps, by the ideas of his school. It has been out of print for many years, and, although often pressed to republish it, I refrained, for the reason that a busy life had prevented me returning to the later developments of that school.

THIS book has few pretensions to originality. The theory is that enunciated by Menger and Jevons, and worked out by Wieser and Böhm-Bawerk. I have done little more than take it out of its German setting, and pass it through my own mind. As the translator of Böhm-Bawerk’s Capital and Interest and The Positive Theory of Capital, I may claim to have more than a superficial acquaintance with the work of the Austrian school, and this must form my credentials for the present Introduction.

WRITERS AND BOOKS REFERRED TO

CARL MENGER (Professor in the University of Vienna), Grundsätze der Volkswirthschaftslehre, Vienna, 1871.

FRIEDRICH VON WIESER (Professor in the University of Prague), Ueber den Ursprung und die Hauptgesetze des wirthschaftlichen Werthes, Vienna, 1884.

Der natiirliche Werth, Vienna, 1889, translated as Natural Value, Macmillan & Co., 1893.

THERE is an understanding among economists, dating at least as far back as Adam Smith, that, in economic science and discussion, the ordinary terms of the industrial world are to be used in the sense generally attached to them in that industrial world. In many respects this has been unfortunate: the science is bound for ever to a loose nomenclature.

POLITICAL Economy is based on the analysis of economic conduct. As has been said, we are not at liberty to lay down new categories or even to give new names to economic phenomena.

UTILITY and not Value, says Wieser, is “the supreme principle of all economy; where value and utility come into conflict, utility must conquer.” The statement is suggestive. The economic goal of civilisation is to turn the whole natural environment of man from a relation of hostility or indifference into a relation of utility. Certain goods we have from nature without money and without price, and the incessant effort of the industrial world is in the direction of bringing all goods nearer to that category.

IF the cause of any good having value is that the satisfaction of some want is dependent upon it, the degree or amount of value must, one would imagine, be measured by the importance of the dependent want; that is to say, by the amount of wellbeing its satisfaction conditions. But here most people will hesitate.

THUS far we have seen that, utility being the general relation in which all goods, by their very definition, stand to human wellbeing, value is that higher, more intimate, more limited relation in which some particular importance to human wellbeing is conditioned by the having or losing of some particular good, and a relation of actual dependence is established between the want and the good. We pass now to the positive consideration of the measurement of value.

A CHAPTER may be devoted to answering certain doubts which naturally arise in the reader’s mind, and to disentangling some complications which hide the working of our fundamental law.

As the ultimate goal of economic effort is not the obtaining of goods but the satisfaction of human want, we are not finished with our subject till we have traced the finished good to its end and raison d’être in affording this satisfaction. In the present chapter, we have to consider cases where several goods contribute to one satisfaction, and to find what influence this satisfaction has upon their separate values.