mate measurable limits, we must, before we can make any sane adjustments or valid calculations, construct a unit of value in the constitution of which cognisance is taken of these limits, since this unit has to express the compound value arising from their relationship. The measurable, physical limits are area and time: the dynamic limit is the sum-total of human beings in normal relationship within the definite area under consideration,—whether men, women or children,—since their need of immediate physical freedom from hunger and cold, and their desire of ever-ampler freedom, gives rise to never-ending motion.
As already stated, the conception and measurement of value are the beginning and the end of the economic problem. The primary political task, popularly supposed to have been accomplished by democracy, is the liberation of human effort. The task for the economist is to show where democracy has failed: to put forward a rational conception of the economic value arising from liberated human effort in a region of order; and to put forward also a scientific means of measuring this value.
In any system designed to develop dynamic value there are always three vital points to be considered; and these are so definitely interdependent that no alteration can be made in one without affecting the resulting value.
| These are | (a) Supply, | determining potential flow. |
| (b) Demand, | ||
(c) The connecting medium (determining effective
flow).
| ||
To expand to the utmost both supply and demand, if they are well-balanced, is obviously advantageous: to improve the connecting medium—that is to facilitate flow, or diminish resistance—is still more advantageous.
Leaving on one side for the present the fact that available supply and effective demand are now conspicuously ill-balanced, as we can see from our periodic booms and slumps, the first duty of the economist is the just measurement of value, and the provision of a trustworthy medium of exchange, since this