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Published online by Cambridge University Press: 14 March 2022
As a concrete extension of analyses of scientific method and social study already undertaken in the pages of this journal and elsewhere, the present article will endeavor to clarify certain long-standing preconceptions in classical and neo-classical economic doctrine which still persist and which, in the light of 20th century methodology, can be given no other label than that of pseudo-scientific. These preconceptions revolve primarily about the ideas of “value,” “cost,” “utility,” and “price,” which ideas have suffered little change to the present day and which even early writers recognized as being vague and ambiguous.
1 Cf., Joseph Mayer, “Pseudo-Scientific Method in Economics,” Econometrica, October, 1933, pp. 418–430; “Toward a Science of Society,” The American Journal of Sociology, September, 1933, pp. 159–179; “Scientific Method and Social Science,” Philosophy of Science, July, 1934, pp. 338–350; and “The Techniques, Basic Concepts, and Preconceptions of Science and Their Relation to Social Study,” Philosophy of Science, October, 1935, pp. 431–483, especially section dealing with economic utility and value, pp. 475–481.
2 David Ricardo, “On the Principles of Political Economy and Taxation,” 1st ed., John Murray, London, 1817, p. 5: “From no source do so many errors, and so much difference of opinion in that science [political economy] proceed, as from the vague ideas which are attached to the word value.”
3 Cf., Adam Smith, “Wealth of Nations,” J. F. Dove, London, 1826, p. 33; Ricardo' op. cit., Ch. I, On Value; and J. H. Hollander, “The Development of Ricardo's Theory of Value,” Quarterly Journal of Economics, August, 1904, pp. 455–491.
4 Ricardo, op. cit., 1821 ed., pp. 80, 84, 85. In making this distinction between market and natural price, Ricardo was following Smith.
What Ricardo designated as ‘natural’ price was called by later economists ‘normal’ price.
Cf., also, C. W. Macfarlane, “Value and Distribution,” Lippincott, Philadelphia, 1898, p. 26; also Veblen's criticism, infra.
5 Cf., F. W. Taussig, “Principles of Economics,” 3rd ed., Macmillan, New York, 1930, vol. I, pp. 168–69. Cf., also, Adam Smith, op. cit., p. 37; “Letters of Ricardo to McCulloch,” edited by J. H. Hollander, Macmillan, New York, 1895, letter of May 2, 1820, p. 65; J. E. Cairnes, “Political Economy,” Macmillan, London, 1874, pp. 80–81; S. M. Macvane, “Marginal Utility and Value,” Quarterly Journal of Economics, April, 1893, p. 269. With respect to economic value in general see:—Gustav Cassel, “Theoretische Socialökonomie, 5th ed., C. F. Winter, Leipsic, 1932; Werner Falk, ”Das Werturteil,“ Borschardt, Berlin, 1932; Else Frohnhäuser, ”Das Werturteil in der Volkswirtschaftslehre,“ Oldenbourg, Munich, 1929; Walton H. Hamilton, ”The Place of Value Theory in Economics,“ Journal of Political Economy, March and April, 1918, pp. 217–245, 375–407; Rudolf Kaulla, ”Die Geshichtliche Entwicklung der Modernen Werttheorien,“ H. Laupp, Tübingen, 1906; Ludwig von Mises, ”Grundprobleme der Nationalökonomie,“ G. Fischer, Jena, 1933; C. and C.-H. Turgeon, ”Premières Études, La Valeur d'Après les Économistes Anglais et Français,“ 3rd ed., Librairie de la Société du Recueil Sirey, Paris, 1925; Allyn A. Young, ”Some Limitations of the Value Concept,“ Quarterly Journal of Economics, May, 1911, pp. 409–428.
6 Raymond T. Bye, “The Nature and Fundamental Elements of Costs,” Quarterly Journal of Economics, November, 1926, pp. 30–31.
Cf., also, Jacob H. Hollander, “Ricardo's Theory of Value,” Quarterly Journal of Economics, August, 1904, pp. 455–491; and his “David Ricardo, a Centenary Estimate,” The Johns Hopkins Press, Baltimore, 1910.
7 Cf., Adam Smith, “Wealth of Nations,” J. F. Dove, London, 1826, p. 51; and J. L. Myres, “The Beginnings of Science,” in F. S. Marvin's “Science and Civilization,” Oxford University Press, London, 1923, pp. 10–12.
8 Cf., Jacob H. Hollander, “Economic Theorizing and Scientific Progress,” American Economic Review, Supplement, March, 1916, pp. 124–139; also, Mayer, “Pseudo-Scientific Method in Economics,” op. cit., and “Toward a Science of Society,” op. cit.
9 Adam Smith, op. cit., pp. 41, 52–53. Cf., also, Harlan L. McCracken, “Value Theory and Business Cycles,” Falcon Press, United States, 1933, chapters on ‘embodied’ and ‘commanded’ labor; and Hollander, “Ricardo's Theory of Value,” op. cit., pp. 461–463. To Hollander belongs the credit of re-establishing the distinction between ‘embodied’ and ‘commanded’ labor in modern discussion. See J. R. Commons, “Acknowledgement,” The Review of Economic Statistics, April, 1923, p. 114. Cf., also, “Letters of Ricardo to Malthus,” edited by James Bonar, Clarendon Press, Oxford, 1887. Regarding Malthus's use of commanded labor, Ricardo wrote (pp. 236–237): “I still think that the invariability of your measure is the definition with which you set out, and not the conclusion to which you arrive, by any legitimate argument.” Cf., also, ibid., p. 218; and David Ricardo, “Principles,” op. cit., 1817 ed., pp. 6–11. Speaking here of Smith's commanded labor theory, Ricardo wrote:
“… Sometimes he speaks of corn, at other times of labour, as a standard measure; not the quantity of labour bestowed on the production of any object, but the quantity which it can command in the market: as if these were two equivalent expressions, and as if because a man's labour had become doubly efficient, and he could therefore produce twice the quantity of a commodity, he would necessarily receive twice the former quantity in exchange for it.
“If this indeed were true, if the reward of the labourer were always in proportion to what he produced, the quantity of labour bestowed on a commodity, and the quantity of labour which that commodity would purchase, would be equal, and either might accurately measure the variations of other things: but they are not equal.”
10 Hollander, “Ricardo's Theory of Value,” op. cit., pp. 455–491; also his “David Ricardo, a Centenary Estimate”; “Letters of Ricardo to McCulloch,” edited by Hollander, Macmillan, New York, 1895; “Letters of Ricardo to Trower, 1811–1823,” edited by Bonar and Hollander, Clarendon Press, Oxford, 1899; and “Letters of Ricardo to Malthus, 1810–1823,” edited by Bonar, Clarendon Press, Oxford, 1887. Some recent authors appear to disagree with the more generally held point of view regarding Ricardo's primary early interest in practical problems. Cf., E. S. Mason, “Ricardo's notes on Malthus,” Quarterly Journal of Economics, August, 1928, pp. 684–696 (687–688).
11 Ricardo, “Principles,” op. cit., 1817, p. 16. Also, Ibid., p. 67. This, of course, assumes conditions of freely operating competition as applied to land. Also, Ibid., 1821, pp. 36–41.
12 Cf., R. Torrens, “Cash Payments with Strictures on Ricardo,” R. Hunter, London, 1819; and Hollander, “Letters of Ricardo to McCulloch,” op. cit., pp. 15–16, Note; pp. 47–48, December 18, 1819; pp. 63–65, May 2, 1820; Letter of August 21, 1823, p. 177. Cf., also, T. R. Malthus, “Principles of Political Economy,” Wells and Lilly, Boston, 1821; J. R. McCulloch, “The Principles of Political Economy,” Tait, Edinburgh, 1825; James Mill, “Elements of Political Economy,” Baldwin, Cradock and Joy, London, 1821, pp. 72–75; “The Works of David Ricardo,” edited by McCulloch, Murray, London, 1846.
13 Cf., Mayer, “Pseudo-Scientific Method in Economics,” op. cit., pp. 421–425; also, cf., Patten's comment regarding Smith's and Ricardo's position on this score: S. N. Patten, “Dynamic Economics,” University of Pennsylvania, Philadelphia, 1892, pp. 27–28.
14 Cf., F. W. Taussig, “Principles of Economics,” 3rd ed., Macmillan, New York, 1930, vol. I, p. 169; Bye, op. cit., p. 30; Edward S. Mason, “The Doctrine of Comparative Cost,” Quarterly Journal of Economics, November, 1926, p. 76; and H. J. Davenport, “The Economics of Enterprise,” Macmillan, New York, 1913, pp. 84–104.
15 For the historical development of classical cost theory, in addition to works already cited, see: Sir William J. Ashley, “An Introduction to Economic History and Theory,” Putnam, New York, 1894; W. Bagehot, “The Postulates of English Political Economy,” Putnam, London, 1885; F. Bastiat, “Harmonies of Political Economy,” J. Murray, London, 1860; James Bonar, “Philosophy and Political Economy in Some of their Historical Relations,” Macmillan, New York, 1893, and “The Economics of John Stuart Mill,” Journal of Political Economy, Nov., 1911, pp. 717–715; Goetz Briefs, “Untersuchungen zur Klassischen Nationalökonomie,” G. Fischer, Jena, 1915; Edwin Cannan, “A Review of Economic Theory,” King, Longon, 1929; R. T. Ely, “The Past and Present of Political Economy,” The Johns Hopkins University Studies, vii, Baltimore, 1884; C. Gide, “History of Economic Doctrines,” trans. by R. Richards, Heath, Boston, 1915; Benedikt E. Güntzberg, “Die Gesellschafts- und Staatslehre der Physiokraten,” Duncker and Humblot, Leipsic, 1907; L. H. Haney, “History of Economic Thought,” Macmillan, New York, 1912; Henry Higgs, “The Physiocrats,” Macmillan, London, 1897; J. K. Ingram, “A History of Political Economy,” Black, London, 1887; W. C. Mitchell, “Postulates and Preconceptions of Ricardian Economics,” in “Essays in Philosophy” (ed. by T. V. Smith and W. K. Wright), Open Court Publishing Co., Chicago, 1929, pp. 39–59; Sir R. H. T. Palgrave, “Dictionary of Political Economy,” Macmillan, London, 1894; S. N. Patten, “Essays in Economic Theory,” Knopf, New York, 1923, pp. 19–32, 144–163; Henry Sidgwick, “Scope and Method of Economic Science,” Macmillan, London, 1885; Leslie Stephen, “The English Utilitarians,” 3 vols., Duckworth, London, 1900, vols. ii and iii; Georges Weulersse, “Le Mouvement Physiocratique en France (de 1756 à 1770),” 2 vols., F. Alcan, Paris, 1910, also “Les Physiocrates,” G. Doin, Paris, 1931; A. C. Whitaker, “History and Criticism of the Labor Theory of Value in English Political Economy,” Columbia University Press, New York, 1904.
16 John Stuart Mill, “Principles of Political Economy,” Ashley Edition, Longmans Green, New York, 1909, pp. 459–461, 479.
Cf., also, J. S. Mill, “Essays on Some Unsettled Problems of Political Economy,” J. W. Parker, London, 1844; and Edward S. Mason, “The Doctrine of Comparative Cost,” Quarterly Journal of Economics, November, 1926, pp. 76–79.
17 N. W. Senior, “Political Economy,” 6th ed., Charles Griffin, London, 1872. Senior defined cost as “the sum of the labor and abstinence which its production requires; or, to use a more familiar expression, … the amount of the wages and profits which must be paid,” pp. 98–102. Also, J. E. Cairnes, “Some Leading Principles of Political Economy,” Macmillan, London, 1874; pp. 60, 72–81; his “The Character and Logical Method of Political Economy,” Macmillan, London, 1857; and Raymond T. Bye, “The Nature and Fundamental Elements of Costs,” Quarterly Journal of Economies, November, 1926, p. 32.
18 Charles W. MacFarlane, “Value and Distribution,” Lippincott, Philadelphia, 1911, pp. xix-xxi, 19–20, 30–41; also Eugen von Böhm-Bawerk, “The Positive Theory of Capital,” trans. by Smart, Macmillan, London, 1891, Ch. IV, pp. 146–153. The marginal argument is based upon the alleged operation of the ‘law of diminishing utility.’ However, with respect to the paradoxes of value, the diminishing-utility reasoning fails to take into account an important distinction between possessive and consumptive interests, mentioned in a quotation from Taussig, infra, footnote ‘40.’ Cf., also, footnote ‘25.’
J. B. Clark and Franklin H. Giddings, “The Modern Distributive Process,” Ginn, Boston, 1888, p. 20; and Frank A. Fetter, “Price Economics vs. Welfare Economics,” American Economic Review, September, 1920, pp. 467–487 (479–480); “Price Economics vs. Welfare Economics: Contemporary Opinion,” American Economic Review, December, 1920, pp. 719–737; “Value and the Larger Economics,” Journal of Political Economy, October, 1923, pp. 587–605, December, 1923, pp. 790–803. Cf., also, Fetter's “Definition of Price,” American Economic Review, December, 1912, pp. 783–813.
19 S. M. Macvane, “The Austrian Theory of Value,” Annals of the American Academy of Political and Social Science, November, 1893, pp. 16–18, 28–29, 36; H. R. Seager, “The Impatience Theory of Interest,” American Economic Review, December, 1912, pp. 834–851.
Macvane, “Marginal Utility and Value,” Quarterly Journal of Economics, April, 1893, p. 269.
20 Cf., Frederick von Wieser, “Theory of Value,” Annals of the American Academy of Political and Social Science, March, 1892, pp. 34–35; David I. Green, “Pain-Cost and Opportunity-Cost,” Quarterly Journal of Economics, January, 1894, pp. 219–220; J. E. Cairnes, “Political Economy,” Macmillan, London, 1874, pp. 72–75; Eugen von Böhm-Bawerk, “The Ultimate Standard of Value,” Annals of the American Academy of Political and Social Science, September, 1894, p. 56; his “Capital and Interest,” trans. by William Smart, Macmillan, London, 1890; and C. W. Macfarlane, “Value and Distribution,” Lippincott, Philadelphia, 1899, p. 29.
21 Wieser, op. cit., p. 30; Macvane, “The Austrian Theory of Value,” Annals, November, 1893, pp. 19, 26–27.
22 S. N. Patten, “Dynamic Economics,” University of Pennsylvania, Philadelphia, 1892, pp. 13–27. Among Patten's numerous writings, see also: “The Premises of Political Economy,” Lippincott, Philadelphia, 1885; “The Development of English Thought,” Macmillan, New York, 1899; “The Theory of Prosperity,” Macmillan, New York, 1902; “Essays in Economic Theory,” Knopf, New York, 1923.
23 Mayer, “Pseudo-Scientific Method in Economics,” op. cit., pp. 421–425. Cf., also, Macvane, “The Austrian Theory of Value,” op. cit., pp. 19–20, 25–26; and “Marginal Utility and Value,” op. cit., p. 258. Patten (“Dynamic Economics,” op. cit., pp. 27–28) accused Smith and Ricardo of falling into the same error; although his accusation would seem to be too sweeping, it is undoubtedly applicable to those lapses in the Smith-Ricardo reasoning where labor cost is confused with money cost. J. S. Mill also perpetuated this confusion, “Principles of Political Economy,” Ashley Edition, Longmans Green, London, 1920, p. 583.
24 Cf., Raymond T. Bye, “The Nature and Fundamental Elements of Costs,” Quarterly Journal of Economics, November, 1926, pp. 30–62; H. G. Brown, “Economic Science and the Common Welfare,” Missouri Book Co., Columbia, Mo., 1923, Part II, Ch. II, sec. 3; T. N. Carver, “Principles of National Economy,” Ginn, Boston, 1921, Ch. 26; Gustav Cassel, “Theory of Social Economy,” trans. by Joseph McCabe, Harcourt Brace, New York, 1923, Ch. III, Sec. 12; H. D. Henderson, “Supply and Demand,” Harcourt Brace, New York, 1922, Ch. 10; A. C. Pigou, “Economics of Welfare,” 4th ed., Macmillan, London, 1932.
Cf., also H. J. Davenport, “The Formula of Sacrifice,” Journal of Political Economy, September, 1894, pp. 561–573.
25 Bye, op. cit., pp. 30–41, 47, 60–61.
26 Edward S. Mason, “The Doctrine of Comparative Cost,” Quarterly Journal of Economics, Nov. 1926, pp. 65–67, 71, 92.
Regarding the shortcomings of classical and neo-classical cost theories from the point of view of modern accounting practice, see: John B. Canning, “Cost of Production and Market Price,” Accounting Review, September, 1931, pp. 161–164.
27 For further data on the present status of cost theory see: Edwin Cannan, “A Review of Economic Theory,” King, London, 1929, Chs. IV and VII; J. M. Clark, “Studies in the Economics of Overhead Costs,” University of Chicago Press, Chicago, 1923; H. J. Davenport, “Cost and Its Significance,” American Economic Review, December, 1911, pp. 724–752; F. Y. Edgeworth, “The Laws of Increasing and Diminishing Returns,” in his “Papers Relating to Political Economy,” 3 vols., Macmillan, London, 1925, vol. I, pp. 61–99; D. H. Robertson, G. F. Shove, and P. Sraffa, “Increasing Returns and the Representative Firm, A Symposium,” Economic Journal, March, 1930, pp. 79–116; Henry Schultz, “Statistical Laws of Demand and Supply,” University of Chicago Press, Chicago, 1928, Ch. IV, and “Marginal Productivity and the General Pricing Process,” Journal of Political Economy, October, 1929, pp. 505–551; Jacob Viner, “Cost,” Encyclopedia of the Social Sciences, New York, 1931, Vol. IV, pp. 466–475.
28 Mayer, “The Techniques, Basic Concepts, and Preconceptions of Science and Their Relation to Social Study,” op. cit., pp. 475–481.
29 For the historical background of the utility school, in addition to works by Gide, Haney, and Ingram cited in footnote ‘15,’ supra, see: Eugen von Böhm-Bawerk, “Capital and Interest, a Critical History of Economic Theory,” trans. by William Smart, Macmillan, London, 1890, “The Positive Theory of Capital,” trans. by William Smart, Macmillan, London, 1891, “Die Österreichische Schule,” in “Gesammelte Schriften,” Hölder, Vienna, 1924, pp. 205–229; Nikolai I. Bukharin, “The Economic Theory of the Leisure Class,” tr. from the Russian, International Publishing Co., New York, 1927; H. J. Davenport, “Value and Distribution,” University of Chicago Press, Chicago, 1908; Oskar Engländer, “Karl Menger's Grundsätze,” Schmollers Jahrbuch, Vol. li, 1927, pp. 371–401; Siegmund Feilbogen, “L’École Austrichienne d’Économie Politique,” Journal des Économistes, 6th ser., number of articles, written in 1911, 1912, and 1913; Frank A. Fetter, “Value and the Larger Economics,” Journal of Political Economy, Oct. and Dec., 1923, pp. 587–605, 790–803; Jacob H. Hollander (ed.), “Economic Essays Contributed in Honor of John Bates Clark,” Macmillan, New York, 1927; W. S. Jevons, “The Theory of Political Economy,” Macmillan, London, 4th ed., 1911; Karl Menger, “Zur Kritik der Politischen Ökonomie,” Hölder, Vienna, 1887; Wesley C. Mitchell, “Wieser's Theory of Social Economics,” Political Science Quarterly, March, 1917, pp. 95–118; Simon N. Patten, “The Premises of Political Economy,” Lippincott, Philadelphia, 1885, and “Essays in Economic Theory,” Knopf, New York, 1923; Joseph Schumpeter, “Eugen von Böhm-Bawerk,” in “Neue Österreichische Biographie, 1815–1918,” vol. ii, Amalthea, Vienna, 1925, pp. 63–80; William Smart, “An Introduction to the Theory of Value on the Lines of Menger, Wieser, and Böhm-Bawerk,” 4th ed., Macmillan, London, 1914, and “Second Thoughts of an Economist,” Macmillan, London, 1916; Thorstein Veblen, “Professor Clark's Economics,” and “The Limitations of Marginal Utility,” in his “The Place of Science in Modern Civilization,” Huebsch, New York, 1919, pp. 180–251; Wilhelm Vleugels, “Das Ende der Grenznutzentheorie?,” C. E. Poeschel, Stuttgart, 1925; Otto Weinberger, “Die Grenznutzenschule,” Meyer, Halberstadt, 1926; Friedrich von Wieser, “The Austrian School and the Theory of Value,” Economic Journal, March, 1891, pp. 108–121, “Natural Value,” tr. by C. A. Malloch, Macmillan, London, 1893, “Über den Ursprung und Hauptgesetze des Wirtschaftlichen Werthes,” Hölder, Vienna, 1884; Allyn A. Young, “Jevon's Theory of Political Economy,” in his “Economic Problems, New and Old,” Houghton Mifflin, Boston, 1927, pp. 213–231.
30 Cf., writings of the Austrians referred to in footnotes ‘20’ and ‘22’, supra; also Jacob Viner, “The Utility Concept in Value Theory and Its Critics,” Journal of Political Economy, August, 1925, pp. 369–387. Viner's references to Marshall, Wicksteed, and Walras in these pages add nothing with respect to the questions at issue.
Cf., also, F. S. Deibler, “Principles of Economics,” McGraw-Hill, New York, 1929, pp. 188–189; and Frank Knight, “Marginal Utility Economics,” Encyclopedia of the Social Sciences, New York, 1931, Vol. V, pp. 357–363.
31 Viner, op. cit., pp. 378–380. It is well to point out here that in this present analysis no attempt is made to differentiate between diminishing ‘utility’ and diminishing ‘desire,’ since the utility advocates use these concepts more or less synonymously for the purposes of the present argument, ‘desire’ being used in a very general way to cover ‘interest,’ ‘want,’ ‘need,’ etc. Cf, R. B. Perry, “General Theory of Value,” Longmans Green, New York, 1926, pp. 550–551, and his “Economic Value and Moral Value,” Quarterly Journal of Economics, May, 1916, pp. 447–449. What Perry says about value applies with equal force to utility. Cf., also, H. J. Davenport, “The Economics of Enterprise,” Macmillan, New York, 1913, p. 86. He says, “Utility is the mere fact that a thing is desired.”
32 Viner, op. cit., p. 378.
33 Cf., H. E. Miller, “Utility Curves, Total Utility, and Consumer's Surplus,” Quarterly Journal of Economics, February, 1927, pp. 292–316.
Cf., also, L. M. Keasbey's analysis of “Prestige Value,” Quarterly Journal of Economics, May, 1903, pp. 456–475, especially p. 472.
34 Cf., H. J. Davenport, “The Economics of Enterprise,” op. cit., p. 90.
35 Cf., Alfred Marshall, “Principles of Economics,” Macmillan, London, 4th ed., 1898, Vol. I, p. 592; also Viner, op. cit., pp. 371, 385; and Davenport, “Economics of Enterprise,” op. cit., p. 94.
36 W. W. Carlile, “The Language of Economics,” Journal of Political Economy, July, 1909, pp. 434–447; and his “Economic Method and Economic Fallacies,” Arnold, London, 1904.
Cf., also, Davenport, “Economics of Enterprise,” op. cit., p. 94, and his frequently repeated statement that it is at the margin, not by the margin, that price is fixed.
37 Viner, op. cit., p. 378, 381; also, his “Some Problems in Logical Method in Political Economy,” Journal of Political Economy, March, 1917, pp. 236–260.
38 F. R. Fairchild, E. S. Furniss, and N. S. Buck, “Elementary Economics,” Macmillan, New York, 1926, Vol. 1, pp. 255–257.
39 Davenport, “Economics of Enterprise,” op. cit., p. 97.
40 Cf., Fairchild, Furniss, and Buck, op. cit., Vol. 1, pp. 300–304; also Davenport, “Economics of Enterprise,” op. cit., pp. 88–91.
F. W. Taussig, “Principles of Economics,” 3rd ed., Macmillan, New York, 1921, Vol. I, pp. 121–122. Taussig's implication, in these pages, that economic importance comes ‘to the same thing’ as marginal utility is not agreed to by the present writer. Cf., also, Perry, “Economic Value and Moral Value,” op. cit., pp. 451–453.
41 H. J. Davenport, “The Economics of Enterprise,” Macmillan, New York, 1913, pp. 92, 97. Jacob Viner, “The Utility Concept in Value Theory and its Critics,” Journal of Political Economy, August, 1925, p. 370.
42 Davenport, op. cit., pp. 84, 93, 104. Viner apparently has the same idea in mind, though he expresses it less clearly, when he says that price-offer is the result of contact' of two alternative desires in the individual.
43 Cf., Davenport, op. cit., pp. 100–101.
It is of course true that if we buy one thing we cannot with the same money buy something else, just as it is true that if we walk up one street we cannot at the same time travel on another. But that we cannot buy something does not imply necessarily that we desire it, any more than not being able to walk on another street implies necessarily that we desire to do so.
44 Of course, if the actual and the assumed desire were in fact precisely equal, no choice between them could ever be made and thus no purchase would result. As in the Greek legend, our desires would remain in a condition of eternal suspense. Cf., Davenport, op. cit., p. 101, Note.
45 Cf., Joseph Mayer, “Comparative Value and Human Behavior,” The Philosophical Review, forthcoming issue, 1936.
46 Cf., W. C. Mitchell, “Bentham's Felicific Calculus,” Political Science Quarterly, June, 1918, pp. 161–183; John Laird, “The Idea of Value,” University Press, Cambridge, England, 1929, pp. 25, 340–347, 359.
Davenport, op. cit., p. 97; and Mayer, “Comparative Value and Human Behavior, op. cit.
47 Cf., also, J. A. Hobson, “Work and Wealth,” Macmillan, London, 1914, p. 334: “Quantitative analysis, inherently incapable of comprehending qualitative unity or qualitative differences, can only pretend to reduce the latter to quantitative differences. What it actually does is to ignore alike the unity of the whole and the qualitativeness of the parts.” The whole of Hobson's last chapter is apropos in this connection.
48 Cf., Davenport, op. cit., p. 100.
49 Cf., H. W. Stuart, “Phases of the Economc Interest,” in “Creative Intelligence,” ed. by John Dewey, Henry Holt, New York, 1917, pp. 310–340; also, Mayer, on Preference, in “Comp. Value and Human Behavior,” op. cit., especially distinction between “more than” and “rather than” comparisons.
50 Cf., H. W. Stuart, op. cit., pp. 318–322; Mayer, “Comparative Value and Human Behavior,” op. cit., especially Hobson's illustration of an artist's painting; E. H. Downey, “The Futility of Marginal Utility,” The Journal of Political Economy, April, 1910, pp. 253–268; and C. H. Cooley, “The Institutional Character of Pecuniary Valuation,” American Journal of Sociology, January, 1913, pp. 543–555. Cooley says: “The influence of the market is not secondary either in time or importance to that of the person; it is a continuous institution in which the individual lives and which is ever forming hisideas. … The institution largely dictates the valuation which it afterwards equilibrates. … In pecuniary matters one accepts in a general way the current values” (p. 547).
51 In the light of the distinction already made between possessive and consumptive interests, it is unnecessary here to comment upon the specious reasoning which leads to the absurd conclusion that the utility of a free good is zero. Cf., also, L. M. Keasbey, “Prestige Value,” Quarterly Journal of Economics, May, 1903, p. 461.
51a Cf., Mayer, “Comparative Value and Human Behavior,” op. cit.