Appendix C: The Nature of Value

Attempts to determine the factors common to all forms of the value of goods, and thus to formulate the general concept of “value,” can be found in the works of all recent German authors who have independently treated the theory of value. Moreover, they have all tried to distinguish the use value of goods from mere utility.

Friedländer (“Theorie des Werthes,” Dorpater Universitäts Program, 1852, p. 48) defines value as “das im menschlichen Urtheil erkannte Verhältniss, wornach ein Ding Mittel für die Erfüllung eines erstrebenswerthen Zweckes sein kann.” (See also H. Storch, Cours d'économie politique, St. Petersburg, 1815, I, 36.) Since the relationship described by Friedländer (provided that the end desired is the satisfaction of a human need or an end that is causally connected with the satisfaction of a human need) is what is responsible for the utility of a thing, his definition is identical with one in which the value of a good is conceived to consist in its recognized fitness for attaining an end, or as the recognized utility of a thing. But utility is a general prerequisite of goods character and Friedländer’s definition is therefore too broad, quite apart from the fact that it does not touch upon the nature of value. Indeed, Friedländer comes to the conclusion (op. cit., p. 50) that non-economic goods are just as much objects of human valuation as economic goods.

Like many of his predecessors, Karl Knies (“Die nationalökonomische Lehre vom Werth,” Zeitschrift für die gesammte Staatswissenschaft, XI ²¹, 423) sees in value the degree of suitability of a good for serving human ends. (See also the earlier editions of Wilhelm Roscher’s Die Grundlagen der Nationalökonomie, e.g., the Fourth Edition, Stuttgart, 1861, p. 5.) I cannot concur in this view, because although value is a magnitude that can be measured, the measure of value belongs as little to the nature of value as the measure of space or time to the nature of space or time. In fact, Knies himself senses the difficulties to which his conception of value ultimately leads, since he also acknowledges usefulness, utility, and even goods-character as definitions of value and remarks that “die Werttheorie . . . [ist] . . . an einzelnen Stellen thatsächlich im Ganzen auf die Combination beider Bedeutungen des Wortes Werth aufgebaut” (ibid., pp. 423–424). He does not, therefore, reach any uniform principle of value.

A.E.F. Schäffle (“Die ethische Seite der nationalökonomischen Lehre vom Werthe” originally published in Akademisches Programm zur Feier des Geburtsfestes Sr. Majestät des Königs Wilhelm, Tübingen, 1862, and reprinted in A.E.F. Schäffle Gesammelte Aufsätze Tübingen, 1885, I, 184–195) proceeds from the view that “eine potentielle oder actuelle vom Menschen mit bewusstem Willen gestaltete Beziehung zwischen Person und unpersönlichen Aussendingen ist also stets erforderlich, wenn vom Wirthschaften und von wirthschaftlichen Gütern soll die Rede sein können. Diese Beziehung lässt sich nun sowohl von Seite des wirthschaftlichen Objectes als von Seite des wirthschaftlichen Subjectes auffassen. Objectiv ist sie die Brauchbarkeit, subjectiv der Werth des Gutes. Brauchbarkeit (Dienlichkeit, Nützlichkeit) ist die Tauglichkeit der Sache, einem menschlichen Zwecke . . . zu dienen. Werth aber ist die Bedeutung, welche das Gut vermöge seiner Brauchbarkeit für das ökonomische Zweckbewusstsein der wirthschaftlichen Persönlichkeit hat.” (Ibid., p. 186). But Schäffle himself shows that this definition of value is certainly too broad when, in his later writings (e.g., Das gesellschaftliche System der menschlichen Wirthschaft, Tübingen, 1873, I, 162) he defines value as “die Bedeutung eines Gutes, um der dafür zu bringenden Opfer.” His earlier definition is too broad because non-economic goods also have utility and may be consciously applied to the purposes of men even though they have no value. It does not, therefore, confine value to economic goods, although Schäffle, a penetrating scholar, is fully aware of the fact that value is never attributed to non-economic goods (Gesammelte Aufsätze, p. 187). His more recent definition, on the other hand, is clearly too narrow, for nothing is more certain than that there are numerous economic goods that come into the command of men without the least sacrifice (alluvial land, for instance), and still other economic goods that cannot be attained by any economic sacrifice at all (inborn talents, for example). But Schäffle nevertheless placed an important factor for the deeper understanding of the nature of value in the clearest possible light. For according to him it is not the objective suitability of a good in itself (ibid., p. 186), nor the degree of its utility (ibid., pp. 191–192), but the importance of a good to an economizing individual that constitutes the essence of its value.

An interesting contribution to the correct conception of value has been made by H. Roesler (“Zur Theorie des Werthes,” Jahrbücher für Nationalökonomie und Statistik, XI ²², 279–313 and 406–419). Roesler comes to the conclusion that “die herkömmliche Unterscheidung zwischen Gebrauchs- und Tauschwert unrichtig sei und mit dem Moment des nützlichen Gebrauchs der Dinge der Begriff des Werthes absolut nicht verbunden werden könne; dass viel mehr der Begriff des Werthes nur ein einheitlicher sei, die Vermögensqualität der Dinge bezeichne und durch Realisierung der Vermögensrechtsordnung zur concreten Erscheinung komme.” (Ibid., p. 406.) Roesler’s peculiar point of view is evident in this passage, but so also is the fact that his conception is a forward step. For he correctly delimits the sphere of objects that constitute wealth and strictly separates the utility of goods from their value. But I cannot agree with Roesler if he makes the wealth-character of a good the determining principle of its value, since both a good’s wealth-character and its value are consequences of the same quantitative relationship (the relationship described in the text above). Moreover, Roesler’s conception of wealth character seems questionable to me because it was borrowed from jurisprudence (see ibid., pp. 295 and 302ff., and also Christian von Schlözer, Anfangsgründe der Staatswirthschaft, Riga, 1805, p. 14). Like their economic character the value of goods is independent of social economy, of the legal order and even of the existence of human society itself. For value can be observed in an isolated economy, and cannot therefore be founded upon the legal order.

Among earlier attempts to define the general concept of value I wish also to mention those of: Geminiano Montanari (Della moneta, in Scrittori classici Italiani di economia politica, Milano, 1803–5, II, 43); A.R.J. Turgot (“Valeurs et Monnaies” in Oeuvres de Turgot, ed. by G. Schelle, Paris, 1913–23, III, 79ff.); E.B. de Condillac (Le commerce et le gouvernement, reprinted in E. Daire, [ed.] Mélanges d’économie politique, Paris, 1847, I, 251ff.); G. Garnier (in the Preface to his French translation of A. Smith’s Wealth of Nations under the title La Richesse des Nations, Paris, 1843, I, xlviff.); and H. Storch (op. cit., I, 56ff.) Among these, it is Condillac’s definition of value in particular that bears no small resemblance to the recent developments of the theory of value in Germany.

The next paragraph appears here as a footnote in the original.,TR. ↩
“Werthquote.” Menger presents the argument underlying this proposition at length on pages 163 to 165. But an explanatory note may ↩
The remainder of this paragraph is a footnote in the original.,TR. ↩
It is not just the technical means of production that must be regarded as goods of higher order, but in general, all goods that can be used for the satisfaction of human needs only by being combined with other goods of higher order. The commodities that a wholesale merchant can pass on to the retailer only by employing capital, incurring costs of shipping, and using various specific labor services, must be regarded as goods of higher order. The same is true of the commodities in the hands of a grocer. Even the speculator adds to the objects of his speculation at least his entrepreneurial activities and his capital services, and often storage services, warehousing, etc., as well (see Hermann, op. cit., p. 65). ↩
“gebunden.”,TR. ↩
Since, other things being equal, the productiveness of a production process and the value of the capital services used are both greater the longer the time period required for the production process, the values of goods of higher order, which can be employed in productive processes of very different duration, and which therefore assure us, at our choice, consumption goods of different values at different points in time, are brought into equilibrium with respect to the present. ↩
The next paragraph appears here as a footnote in the original.,TR. ↩
The remainder of this paragraph is a footnote in the original.,TR. ↩
H.v. Mangoldt, Die Lehre vom Unternehmergewinn, Leipzig, 1855, pp. 36ff. ↩
Menger here appends a lengthy footnote which has been incorporated into the text as the last three paragraphs of this chapter.,TR. ↩
N.F. Canard, Principes d’économie politique, Paris, 1901, pp. 5ff.; Carey, op. cit., III, 131ff.; Frédéric Bastiat, Harmonies économiques, in Oeuvres complètes de F. Bastiat, Paris, 1893, VI, 297ff.; Max Wirth, Grundzüge der National-Oekonomie, Köln, 1871, I, 284ff.; Hermann Roesler, Grundsätze der Volkswirthschaftslehre, Rostock, 1864, pp. 500–513. ↩
The remainder of this paragraph is a footnote in the original.,TR. ↩ ↩²
Ricardo, Principles of Political Economy and Taxation, ed. by E.C.K. Gonner, London, 1891, pp. 44–61 and 392–420. ↩
See Karl Rodbertus, Zur Beleuchtung der sozialen Frage, Berlin, 1890, I, 89ff. ↩
Rodbertus (op. cit., pp. 117 ff.) argues that our social institutions make it possible for the owners of capital and land to take a part of the product of labor away from the laborers, and thereby live without working. His argument is based on the erroneous assumption that the entire result of a production process must be regarded as the product of labor. Labor services are only one of the factors of the production process, however, and are not economic goods in any higher degree than the other factors of production including the services of land and capital. Capitalists and landowners do not, therefore, live on what they take away from laborers, but upon the services of their land and capital which have value, just as do labor services, both to individuals and to society. ↩
The value of a piece of land is determined by the expected value of its services, and not the other way around. The value of a piece of land is nothing but the expected value of all its future services discounted to the present. Hence the higher the expected value of the services of land and the lower the value of the services of capital (rate of interest), the higher will be the value of land. We shall see later that the value of goods is the foundation for their prices. That the price of land can regularly be observed to rise rapidly in periods of a people’s economic growth is due to an increase in land rent on the one hand, and to a decrease in the rate of interest on the other. ↩
In Berlin, a seamstress working 15 hours a day cannot earn what she needs for her subsistence. Her income covers food, shelter, and firewood, but even with the most strenuous industry she cannot earn enough for clothing (see Carnap, in Deutsche Vierteljahrsschrift, 1868, part II, p. 165). Similar conditions can be observed in most other large cities. ↩
A laborer’s standard of living is determined by his income, and not his income by his standard of living. In a strange confusion of cause and effect, however, the latter relationship has nevertheless often been maintained. ↩
To Chapter VII. See notes 3 and 4 of Chapter VII.—TR. ↩
The next two paragraphs appear in the original as a single footnote after “labor services” at the beginning of the third paragraph preceding.,TR. ↩
A special characteristic of price formation in the case of the services of capital is due, as we shall see later, to the fact that these services cannot ordinarily be sold without transferring the capital itself into the hands of the buyer of the services of capital. There is a resulting risk for the owner of the capital for which he must be compensated by a premium. ↩
See Schüz, “Ueber die Renten der Grundeigenthümer und den angeblichen Conflict ihrer Interessen mit denen der übrigen Volksklassen,” Zeitschrift für die gesammte Staatswissenschaft, XI (1855), 171ff. ↩
Adam Smith, op. cit., p. 13. ↩
The remainder of this paragraph appears here as a footnote in the original.,TR. ↩
I need hardly point out that the figures in the text are not intended to express numerically the absolute but merely the relative magnitudes of importance of the satisfactions in question. Thus when I designate the importance of two satisfactions with 40 and 20 for example, I am merely saying that the first of the two satisfactions has twice the importance of the second to the economizing individual concerned. ↩
These considerations completely disprove the contention of a number of economic writers (Lotz and Rau, for example, among the more recent German writers) who have denied the productivity of trade. The effect of an economic exchange of goods upon the economic position of each of the two traders is always the same as if a new object of wealth had entered his possession. Trade is therefore no less productive than industrial or agricultural activity. ↩
The next paragraph appears here as a footnote in the original.,TR. ↩
“die menschlichen Wirthschaften”,TR. ↩
Carey’s portrayal of merchants as economic parasites because they claim a portion of the gain arising from the exploitation of the available opportunities for economic exchange transactions (op. cit., III, 23–25) is based on his erroneous ideas about the productivity of trade. ↩
See Appendix F (p. 305) for the material originally appearing at this point as a footnote.,TR. ↩
When I say that $B_{1}$ economically excludes $B_{2}$ , I do not mean that $B_{2}$ is excluded from the exchange by the use of physical force or because of legal incapacity. The distinction is important, since $B_{2}$ could easily own several hundred bushels of grain and thus have the power, physically and legally, to acquire A's horse and still not choose to acquire it. If he does not acquire it, his reason must be economic in nature,that is, by giving up a larger quantity of grain than 29 bushels, he would not provide better for the satisfaction of his needs than he would without the exchange. ↩
The opinion could arise that instead of the price in the case we have been discussing being formed between 30 and 80 bushels of grain it will be established at exactly 30 units. This conclusion would be correct if we were dealing with an auction sale in which no minimum price had been set in advance or if it had been set below 30 bushels of grain. In either case A would be compelled by the very nature of an auction to be satisfied with the price of 30 bushels, and the causes of the unusual price formation in auctions in general are to be sought in analogous relationships. But if economizing individual A does not bind himself from the beginning with an auction contract and can pursue his interest with complete freedom, there is no economic reason why the price of a horse should not reach 79 bushels of grain in an exchange between A and B, just as there is no reason why it should not be set at 30 bushels. ↩
The next paragraph appears here as a footnote in the original.,TR. ↩
No phenomenon is more common than that of a monopolist defending his position against the entry of a competitor in the most belligerent manner. But it is just as common to find him coming to an understanding with a competitor once the competitor has established himself. The monopolist’s first interest is to prevent a competitor from becoming established. But if a competitor has nevertheless succeeded in firmly entrenching himself, his economic interest consists in pursuing a modified monopoly policy in combination with this second firm whenever a monopoly policy proves to be possible even after the establishment of a competitor. Sharp competition is usually disadvantageous to both economizing individuals in cases of this kind. Hence two competitors, initially so hostile to each other, generally come to a quick understanding ↩
See Gustav Schmoller, “Die Lehre vom Einkommen in ihrem Zusammenhang mit den Grundprinzipien der Steuerlehre,” Zeitschrift für die gesammte Staatswissenschaft, XIX (1863), 53. ↩
Menger’s use of the term “utility” may prove confusing to modern readers unless the meaning he attaches to it is kept constantly in mind. This meaning does not permit him to use the term in designating the concept now called “marginal utility.” A thing has “utility” (in Menger’s sense of the term) if all the available units of the thing together yield a total utility (in our sense of the term) greater than zero even if the thing’s marginal utility (in our sense) is zero. In general, he contends that the concept “utility” is entirely objective and lacking in psychological content. He pictures it as an abstract relation between a species of goods and a human need (in a general sense as distinguished from the “concrete needs” of an individual — see note 4 of Chapter II). Utility is therefore, according to Menger, merely a prerequisite of goods-character (and hence of economic character), but has no quantitative relationship to value. For this reason, he repudiates any identification of “utility” with “use value” (see also note 3 of this chapter and Appendices C, D, and G). It is of course obvious that his lack of the term “marginal utility” was no barrier to his expression and elaboration of the concept. — TR. ↩
It was this error that misled Proudhon, op. cit., pp. 59ff., into stating that there is an irreconcilable contradiction between use value and exchange value. ↩
Wilhelm Roscher, Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte, Leipzig, 1861, p. 117; Bruno Hildebrand, “Naturalwirthschaft, Geldwirthschaft und Creditwirthschaft,” Jahrbücher für National-Oekonomie und Statistik, II (1864), 17; H.v. Scheel, ↩
The remainder of this paragraph and the next paragraph appear here as a single footnote in the original.,TR. ↩
See the first paragraph of Appendix H (p. 308) for the material originally appearing here as a footnote.,TR. ↩
"consciously directed to the all-around fulfilment of ethically rational purposes of life." ↩
See the last seven paragraphs of Appendix H (p. 309) for the material originally appended here as a footnote.,TR. ↩
The next paragraph appears here as a footnote in the original.,TR. ↩
The marketability of commodities is generally considerably increased by the growing needs and increasing wealth of a people. The marketability of a few commodities, however, is diminished by these factors. There are a number of commodities that can easily be sold in a poor country, but become practically unsaleable as soon as the country attains economic maturity (see pp. 234–5). ↩
Theodor Mommsen, Geschichte des römischen Münzwesens, Berlin, 1860, pp. v–xx, and 167 ff.; Carnap, “Zur Geschichte der Münzwissenschaft und der Werthzeichen,” Zeitschrift für die gesamte Staatswissenschaft, XVI (1860), 348–396; Friedrich Kenner, “Die Anfänge des Geldes in Alterthume,” Sitzungsberichte der Kaiserlichen Akademie der Wissenschaften zu Wien: Philologisch-Historische Classe, XLIII (1863), 382–490; Roscher, op. cit., pp. 36–40; Hildebrand, op. cit., p. 5; Scheel, op. cit., pp. 12–29; A.N. Bernardakis, “De l’origine des monnaies et de leurs noms,” Journal des Economistes, (Third Series), XVIII (1870), 209–245. ↩
For obvious reasons, the words “Geld” and “gelten” in this and the following sentence are left untranslated.,TR. ↩
See the first two paragraphs of Appendix I (p. 312) for material originally appearing here as a footnote.,TR. ↩
Custom as a factor in the origin of money is stressed by Condillac, op. cit., pp. 286–290 and by G.F. Le Trosne, De l’intérêt social, Paris, 1777, pp. 43f. ↩
See Appendix J (p. 315) for material originally appended here as a footnote.,TR. ↩
See Stein, op. cit., p. 55; especially also Karl Knies, “Ueber die Geldentwerthung und die mit ihr in Verbindung gebrachten Erscheinungen,” Zeitschrift für die gesammte Staatswissenschaft, XIV (1858), 266; and Mommsen, op. cit., pp. vii–viii. ↩
August Böckh, Metrologische Untersuchungen über Gewichte, Münzfusse und Masse des Alterthums, Berlin, 1838, pp. 385 ff., 420 ff.; Mommsen, op. cit., p. 169; Friedrich O. Hultsch, Griechische und römische Metrologie, Berlin, 1862, pp. 124ff., 188ff. ↩
Wilh. Wackernagel, “Gewerbe, Handel und Schiffahrt der Germanen,” Zeitschrift für deutsches Alterthum, IX (1853), 548ff.; Jakob Grimm, Deutsche Rechtsalterthümer, 4th edition prepared by A. Heusler and R. Hübner, Leipzig, 1899, II, 123–124; Ad. Soetbeer, “Beiträge zur Geschichte des Geld- und Münzwesens in Deutschland,” Forschungen zur deutschen Geschichte, I (1862), 215. ↩
Aloys Sprenger, Das Leben und die Lehre des Mohammad, Berlin, 1861–65, III, 139. ↩
Friedrich v. Spiegel, Commentar über das Avesta, Wien, 1864–68, I, 94ff. ↩
Plutarch, Lives, with an English translation by Bernadotte Perrin, London: William Heinemann, 1914, I, 55; Pliny, The Natural History, translated by John Bostock and H.T. Riley, London: H.G. Bohn, 1856, IV, 5–6; Heinrich Schreiber, “Die Metallringe der Kelten als Schmuck und Geld,” Taschenbuch für Geschichte und Alterthum, II, 67–152, 240–247, and III, 401–408. ↩
Francesco Saverio Clavigero, The History of Mexico, Richmond, 1806, II, 188ff. ↩
A beaver skin is still the unit of exchange value in several regions of the Hudson’s Bay Company. Three martens are equal to one beaver, one white fox to two beavers, one black fox or one bear equal to four beavers, and one rifle equal to 15 beavers (“Die Jäger im nördlichen ↩
Roscher, op. cit., note 13 on pp. 313–314. ↩
Réflexions sur la formation et la distribution des richesses, reprinted in Oeuvres de Turgot, ed. by G. Schelle, Paris, 1913–23, II, 554. See also Roscher, op. cit., pp. 297–303, Knies, op. cit., p. 262. ↩
See on this especially J.A.R. v. Helferich, Von den periodischen Schwankungen im Werth der edeln Metalle von der Entdeckung Amerikas bis zum Jahre 1830, Nürnberg, 1843. ↩
It is perhaps equally obvious that these are not the limits described in Chapter V as those between which price formation must take place. Other interpretations may be possible, but it seems likely that the “limits” of this passage are simply the bids and offers chosen by two bargainers as arbitrary starting points in a haggling process, the seller intending to come down and the buyer to come up. In spite of Menger’s apparent implication in the second paragraph following that “the demand price” and “the supply price” of that paragraph are the limits described in Chapter V, they are evidently of the same character as the wool market “limits” here.,TR. ↩
See note 20 above.,TR. ↩
That is, the subjective equivalent of these goods to A is the price expected by A. The original German passage runs as follows: “der voraussichtlich dafür zu erzielende Preis ist für das wirthschaftende Subject A allerdings der Regel nach das Aequivalent dieser Güter.” ,TR. ↩
Although this difference has not yet been sufficiently observed in our science, it has long been the object of detailed investigations on the part of students of the law. This question is of practical interest to them in cases in which there are claims for damages as well as in ↩
Aristotle already observed that money serves as a measure in the trade of men (Ethica Nicomachea V. 5. 1133ᵇ, 16; and ix, 1. 1164ᵃ, 1). Among the writers who trace back the origin of money exclusively or predominantly to the need of economizing men for a measure of “exchange value,” or of prices, and who regard the money character of the precious metals as due to their special suitability for this purpose, I should like to mention here the following: Carlo Antonio Broggia, Trattato delle monete, (published 1743) in Scrittori classici Italiani di economia politica, Milano, 1803–05, IV, 304; Pompeo Neri, Osservazioni sopra il prezzo legale delle monete, (published 1751) in ibid., VI, 134ff.; Ferdinando Galiani, Della moneta, in ibid., XII, 23ff. and 120ff.; Antonio Genovesi, Lezioni di economia civile, in ibid., XV, 291–313 and 333–341; Francis Hutcheson, A System of Moral Philosophy, London, 1755, II, 55–58; David Ricardo, op. cit., p. 40; Storch, op. cit., I, 45ff.; Lorenz v. Stein, System der Staatswissenschaft, Stuttgart, 1852, I, 217ff.; Albert E.F. Schäffle, Das gesellschaftliche System der menschlichen Wirthschaft, Tübingen, 1873, I, 221 f. ↩
The next two paragraphs appear here as a footnote in the original.,TR. ↩
The chief representatives of this theory are the great English philosophers of the seventeenth century. Hobbes starts with the need of men for conserving perishable wealth that they do not intend to use for immediate consumption, and he shows how this end can be achieved by transformation (“concoctio”) of the perishable wealth into metallic money. He also shows how wealth can thereby be carried about more easily (Leviathan, ed. by A.D. Lindsay, “Everyman’s Library,” London, 1914, p. 133). Locke makes the same point (Two Treatises of Government, and Further Considerations concerning Raising the Value of Money, in The Works of John Locke, 12th edition, London, 1824, IV, 364–365 and 139ff.). ↩
Menger does not give references to the passages he quotes from Bastian and we were unable to find them in the published works of Adolph Bastian that were accessible to us. It is possible that Menger’s information was based on an unpublished lecture or on a personal communication from Bastian.,TR. ↩
The next paragraph appears in the original as a footnote appended at the end of the previous paragraph.,TR. ↩
See Adam Smith, op. cit., p. 26. ↩
To Chapter I. See notes 2 and 8 of Chapter I.,TR. ↩
“nothing is useful but what serves to the salvation of one’s eternal life.” ↩
“utility itself is measured by considerations of eternal life.” ↩
“Center of gravity” is the literal translation for “Schwerpunkt.” Menger’s title is “Ueber den Wechsel im ökonomischen Schwerpunkte des Güterwerthes.” A less awkward translation is not possible without loss of the flavor of the original.—TR. ↩
I classify indifferent exchanges such as this as definitely non-economic since in them the provident activity of men is set in motion aimlessly quite apart from all the economic sacrifices they may entail. ↩
“possessions that do not yield an annual product, such as precious objects, products destined for consumption.” ↩
“what is suited to the satisfaction of human needs.” ↩
“every means to a purpose of a man.” ↩
“the judgment we pass upon the utility of things . . . makes goods of them.” ↩
“those [things) which man recognizes as means to this end [satisfaction of psychological and physical needs].” ↩
“all that is recognized as being applicable to the satisfaction of a true human need” (Menger’s italics). ↩
“transferable rents made exclusive by private control of supply and elimination of competition.” ↩
To Chapter II. See notes 9 and 14 of Chapter II.,TR. ↩
“what can be obtained only for a definite sacrifice in the form of labor or monetary consideration.” ↩
“that are capable of being traded, or that, at least, facilitate trade.” ↩
“ends and means of economizing.” ↩
We are forced, so to speak, to buy these . . . goods by labor, economy, abstinence,,in a word by real sacrifices. ↩
“One cannot separate the idea of property from these goods. They would not exist if exclusive possession of them were not assured to the person who has acquired them. . . . On the other hand, property presupposes some form of society, contracts, and laws. Hence wealth so acquired may be called social wealth.” ↩
To Chapter III, Section 1. See note 1 of Chapter III.,TR. ↩
We were unable to locate this item. We suspect, however, that Menger’s reference is to the following work: Dorpat, Kaiserliche Universität, Facultätsschriften der Kaiserlichen Universität Dorpat, dargebracht zur Feier ihres funfzigjährigen Bestehens, etc. Dorpat, 1852, (see Catalogue of the Printed Books in the Library of the British Museum, London, 1881–1900, I, 202).,TR. ↩
“the relationship recognized by human judgment that a thing can be a means to the fulfilment of some desired end.” ↩
“in a number of instances, the theory of value . . . [is] . . . actually erected entirely on a combination of the two meanings of the word value.” ↩
“in order to be able to speak of economizing or of economic goods, a potential or actual relationship between persons and impersonal external objects consciously established by men must always exist. This relationship can be considered with reference to the economic object or from the standpoint of the economizing individual. Looked at objectively it is the utility of the good. Looked at subjectively it is the value of the good. Utility (serviceability, usefulness) is the suitability of a thing to serve a human purpose. . . . But value is the importance the good has, because of its utility, for the conscious economic purposes of the economizing individual.” ↩
“the importance of a good because of the sacrifices made in obtaining it.” ↩
“the traditional distinction between use value and exchange value is incorrect, and the concept of value cannot by any means be tied to the factor of things having useful employments. On the contrary, the concept of value is uniform, designating the wealth-character of things, and becoming a concrete phenomenon as a result of the institution of laws with respect to property.” (The italics in the quotation were added by Menger).,TR. ↩
To Chapter III, Section 2. See note 11 of Chapter III.,TR. ↩
The passage from Aristotle given here is a literal English translation of the German translation offered by Menger. In the standard English translation by W. D. Ross (The Works of Aristotle, London, Oxford University Press, 1925, Vol. IX), the passage runs as follows: “all goods must therefore be measured by some one thing. . . . That demand holds things together as a single unit is shown by the fact that when men do not need one another . . . they do not exchange, as we do when someone wants what one has oneself.”,TR. ↩
“since the dispositions of human minds vary, the value of things varies.” ↩
“the esteem value of an object, for an isolated individual, is precisely equal to the portion of his total faculties [labor] that answers his desire for the object or that he wishes to employ for its satisfaction.” ↩
“A thing is said to be useful when it serves for one of our needs; … according to this utility we esteem it more or less. … Now, this esteem is what we call value.” ↩
“Since use value is always a relation of a thing to man, the use value of every species of goods is determined by the magnitude and rank of the human needs the species of goods satisfies. Where there are no men and no needs, no use value exists. The total use value of any species of goods remains unchanged, therefore, as long as the needs of human society remain unchanged, and the use value of a single unit of the species is equal to this total use value divided by the number of units. Hence the larger the total number of units, the smaller becomes the portion of use value attributed to each unit from the total use value of the species and vice versa.” ↩
“the requisites for the estimation of the use value of goods cannot be found anywhere but in the fundamental elements of the concept of use value itself.” ↩
“Thus the magnitudes of the use value of goods depend (a) on the intensity of the human needs they satisfy, and (b) on the intensity with which they satisfy these human needs. . . . Hence we find a classification and scale of human needs to which corresponds a classification and scale of species of goods.” ↩
“Economic activity will be engaged in more energetically the more urgent a person’s need for a good and the more difficult it is to procure the good corresponding to that need. The more these two factors (intensity of desire and degree of difficulty of procurement) operate upon one another, the more strongly does the importance of the good enter into the consciousness that guides economic activity. All propositions about the magnitude of value and its changes are reducible to this fundamental relationship.” This passage could not be located in the reprinted edition of Schäffle’s essay, which alone was available to us. It is likely that the reprint constitutes only an incomplete version of Schäffle’s original article. But whether or not this is the case, it is quite clear from Schäffle’s other writings, for example, Das gesellschaftliche System der menschlichen Wirthschaft (Tübingen, 1873, I, 172), that Menger’s quotation accurately represents Schäffle’s thought.,TR. ↩
"The relationship of the measure of a given good to the run of goods in general." ↩
"The true measure of the value of a good is found by dividing the magnitude of the good in question into the magnitudes of other goods. In order to be able to do this a common denominator for the magnitudes of all goods must be found. But this common denominator, or homogeneous element in goods can be found only in their homogeneous nature,that is, in the fact that all true goods originate from the six elements, matter, labor, production, need, usefulness, and true consumability, since if one of these elements disappears, an object ceases to be a good. These elements are contained in a given good only to a particular degree, and their magnitude determines the measure of each true good taken separately. From this it follows that the quantitative relationship of all the separate goods to one another, or the general measure of their value, is given by the ratio between these component elements of goods and their magnitude in one good relative to another. To determine and calculate this relationship is therefore to determine the true measure of value." ↩
To Chapter III, Section 3. See note 15 of Chapter III.,TR. ↩
"We find that the development of all nations was analogous to this extent, that capital was everywhere able to develop its economic power strongly only after the introduction and widespread use of metallic money and to reveal its more extensive power only at higher levels of civilization." ↩
To Chapter V See note 1 of Chapter V.,TR ↩
“what is sold or supplied, wholesale or retail, in shops, stores, at fairs, markets, etc.” ↩
“what is superfluous to a person for his support and which he passes on to others.” ↩
“A commodity is anything . . . that . . . can be given to someone else, especially in exchange for something else.” ↩
“stocks of goods that are kept ready for exchange.” ↩
"each product of an enterprise appearing as an independent good." ↩
To Chapter VIII, Section 1. See note 5 of Chapter VIII,TR. ↩
“a horse . . . or some other monetary payment.” ↩
We were unable to verify this reference.,TR. ↩
"goods kept ready for exchange or sale." ↩
"every good intended for sale." ↩
"surplus goods intended for trade." ↩
"valuables and goods destined for sale." ↩
"products that circulate or are destined for circulation." ↩
"the various products intended for trade." ↩

In this paragraph Menger implicitly assumes his time periods to be of equal duration. Reference to the definitions of the second paragraph preceding will confirm that this need not be the case.—TR.
See Appendix D (p. 295) for the material originally appearing here as a footnote.—TR.
Leopold v. Hasner, System der politischen Oekonomie, Prag, 1860, I, 29.
See John Prince-Smith, “Der Markt, eine Skizze,” Vierteljahrschrift für Volkswirtschaft und Kulturgeschichte, I (1863), part IV, 148ff.
In the original Menger repeats the table printed on p. 204. Since the two tables are identical it was considered permissible to omit it the second time.—TR.
From this it is at once evident that the great importance to human economy of markets, fairs, exchanges, and all points of concentration of trade in general, is due to the fact that as trading relationships become more complex the formation of economic prices becomes virtually impossible without these institutions. The speculation that develops on these markets has the effect of impeding uneconomic price formation from whatever causes it may arise, or of mitigating at least its harmful effects on the economy of men. (Prince-Smith, op. cit., pp. 143ff.; Otto Michaelis, “Die wirthschaftliche Rolle des Spekulationshandels,” Vierteljahrschrift für Volkswirthschaft und Kulturgeschichte, II, ¹⁷ part IV, 130ff., III ¹⁸ part II, 77ff.; Karl Scholz, “Der Wochenmarkt,” ibid., V ¹⁹ part I, 25ff.; A. Emminghaus, “Markte und Messen,” ibid., 61ff.)
“Absatzfähigkeit”, TR.
See note 2 of Appendix C concerning this work.—TR.
The average concrete need-unit (the average of all the separate need-units found among the various classes of society) is the general expression for objective economic use value. The fraction that expresses the shares that the various useful things contribute toward [satisfaction of] the need-unit, and that indicates their value relationship to the average concrete need-unit, furnishes the measure for the objective value of the various useful things.
To Chapter VIII, Section 1. See note 5 of Chapter VIII.—TR.
“either from its own nature or from man’s design” (see Gabriel Biel, Treatise on the Power and Utility of Moneys, translated and edited by R.B. Burke, Philadelphia, 1930, pp. 20–21).
“the invention and institution of money . . . comes from the law of nations.”
“That which has no value cannot be wealth. These things are not within the domain of political economy.”
To Chapter VI. See note 2 of Chapter VI.,TR.