The Origin of Value Whence do things get their value? If we put the question to any intelligent and trained man of business, who had no knowledge of the various attempts of theorists towards an explanation of value, whose mind was unbiassed by the forms of speech which echo learned theories and have passed into ordinary business use, and who was, therefore, capable of judging only through the medium of his own personal experience, he would undoubtedly answer, as the first theorists did, -- "from their Utility." He would be very much surprised to learn that several considerations made the truth of this answer improbable, and that many facts -- some of them to a certain extent generally known, and familiar even to himself -- seemed to prove, with almost absolute certainty, that utility could not be the source of value. These facts we may state as follows.
First: goods which are to be had in superfluity, and which any one may appropriate at will, no one will pay anything for, be they ever so useful. In many places water, although indispensable to man, is entirely without value. Of course this observation refers immediately only to value in money, the so-called "exchange value," and it might be thought that it was not true of value in the using of goods, the so-called "value-in-use." Closer examination shows, however, that it is true also of value-in-use.
In the household, as in the market, the superfluous is regarded as the valueless, and is clearly separated from those things of which there is no superfluity. However frugally we may act with regard to other things, we should never think of economising in things which we are always sure of having in over-abundance. No one will ever try to secure possession of them: there is no property in them; no interest is taken in them. They are used, but we think no more about them.
Second: things which have a great deal of use have often a smaller value than those which have little use. Iron, for instance, has less value than gold. This is true equally of its money value, and of its value-in-use, in the market and in the household. Even in the socialist state -- supposing its citizens still to possess the aesthetic sense -- it will be considered of less moment to lose an ounce of iron than an ounce of gold.
Third: a large quantity has, under certain circumstances, less value than a smaller quantity of the same thing. It is well known that the Dutch East India Company destroyed a considerable part of their produce and of their plantations, in order to create a more lively demand, and so secure for the remainder a greater value than the whole property had originally possessed.
The same thing is observed as regards the returns derived from good and from bad harvests, -- the bad harvests showing better than the good. This also, as I hope to show later, applies to value-in-use as well as to exchange value.
Fourth: while the measure of use is in such frequent and striking contradiction with that of value, it happens, as often and as strikingly, that value is in agreement with the exact antithesis of use -- namely, with costs. I say "antithesis"because, if goods, by their use, prove themselves the friends of man, they prove his enemy by the costs which they necessarily involve.
