An Introduction to the Theory of Value by William Smart

Author:William Smart [William Smart]
Language: eng
Format: epub
ISBN: 978-1-61016-274-6
Publisher: Macmillan and Co., Limited
Published: 1931-11-06T16:00:00+00:00

CHAPTER IX

FROM SUBJECTIVE TO OBJECTIVE VALUE

THUS far we have considered each man’s wants as ranged on a scale; in correspondence with these wants, each man attaches degrees of importance to the goods that come within his knowledge and control, and ranges goods also on a similar scale. We have seen that, owing to the infinite subjective differences in men on the one hand, and the effect of provision on the dependence of want on the other, every man’s scale is different from every other man’s. That is to say, every man, subjectively, attaches his own valuation to goods. As no man, however, liveth to himself, these valuations come together and are compared in every act of barter and exchange. The reflex influence of the valuations that each man meets in any market, however simple, is very great; constant contact of man with man in exchange assimilates the valuations of all, till, unconsciously, we come very much to regard the average valuation made by the people we meet as our own valuation. For instance, in buying an article, if we looked solely and entirely to what that article represented in life, pleasure, satisfaction, self-realisation—however we name our subjective centre—we should, perhaps, value it at 100. But if we meet everywhere with people who value that article, say, from 50 to 60, it is inevitable that our estimate should be strongly affected thereby. And this explains how that, notwithstanding the enormous differences in temperament, culture, and conditions, the valuations which meet on a market do not diverge so widely as one would expect. If we consider that, of three men who bid for a horse, the value of it to A may depend on his being a country doctor, to B, on his being a hunting man, and to C, on his having a sluggish liver, we could scarcely understand how these different values come to be assessed within a few pounds or shillings of each other, if it were not for this kind of arbitrage.

When we say, then, that men who meet as exchangers of different goods put their own subjective valuations on the articles they bring to market, we must be understood to mean valuations that are not more subjective than man himself is. A man’s valuations can no more escape being to a great extent the valuations of other men, than he himself can escape being what other people “make” him.

How it comes that each man can compare the importance he attaches to a commodity, as conditioning the satisfaction of want, with the importance of a piece of metal or paper whose only “use” is to pass on, belongs to a department of our science on which, happily, we do not require to enter. It is sufficient for us to say that, in the modern community, we measure “goods in general” by one good, and we grow up so familiarised with the current money scale that no one sees anything strange in valuing, say, a Bible, at thirty pence,

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