Natural Value Even in a community or state whose economic affairs were ordered on communistic principles, goods would not cease to have value. Wants there would still be, there as elsewhere; the available means would still be insufficient for their full satisfaction; and the human heart would still cling to its possessions. All goods which were not free would be recognised as not only useful but valuable; they would rank in value according to the relation in which the available stocks stood to the demand; and that relation would express itself finally in the marginal utility. Social supply and demand, or amount of goods and utility socially compared with one another, would decide value. The elementary laws of valuation, as we have explained them, would be entirely and unlimitedly effective for the whole community.
That value which arises from the social relation between amount of goods and utility, or value as it would exist in the communist state, we shall henceforth call "Natural Value."(1*) Ichoose the name in full consciousness of the double sense which an appeal to the "natural" has in the disposition of human affairs. In its simplicity, purity, and originality it is so attractive, and at the same time so contradictory to all experience, that it is doubtful whether it can ever be more than a dream. So too we shall think of the communistic state as the perfect state. Everything will be ordered in the best possible way; there will be no misuse of power on the part of its officials, or selfish isolation on the part of its individual citizens; no error or any other kind of friction will ever occur.
Natural value shall be that which would be recognised by a completely organic and most highly rational community.(2*)The laws which we found in the elementary theory of value are its natural laws, as those would take shape under the simplified assumption that goods come into men's disposal without requiring to be first produced. If we do away with this assumption we obtain the natural laws of value in production. It will now be our task to find out these laws. We shall ask ourselves what productive instruments would be likely to obtain value in a communistic state, whether labour alone, or also land and capital; in what measure they would obtain value; whether there is a natural rent from land and a natural interest on capital --and so on through all the circumstances of production, till we arrive at the question of cost value and its natural measurement.
The relation of natural value to exchange value is clear.
Natural value is one element in the formation of exchange value.
It does not, however, enter simply and thoroughly into exchange value. On the one side, it is disturbed by human imperfection, by error, fraud, force, chance; and on the other, by the present order of society, by the existence of private property, and by the differences between rich and poor, -- as a consequence of which latter a second element mingles itself in the formation of exchange value, namely, purchasing power. In natural value goods are estimated simply according to their marginal utility; in exchange value, according to a combination of marginal utility and purchasing power. In the former, luxuries are estimated far lower, and necessaries, comparatively, much higher than in the latter. Exchange value, even when considered as perfect, is, if we may so call it, a caricature of natural value; it disturbs its economic symmetry, magnifying the small and reducing the great.
