makes specialization possible, for it is the means by which the abundance produced by the specialist, of things that do not directly cater to his desire, is translated into things that do. And no matter how large the population grows, how varied the specializations engaged in, how intricate the technique of trade, the market place is simply the means by which one gives up what one wants less to obtain what one wants more.
What one wants less for what one wants more! Every trade, therefore, originates in desire, the desire of the seller and the desire of the buyer. Each is conscious of a greater urge for the thing offered than for the thing he must give up as a condition for possession, and when the trade is made, these purely subjective experiences find a meeting point, something we call price.[1] But, preceding price, preceding trade, is the human capacity of setting store on desires. It is a psychological process to which we give the name of value.
Speculation on the nature of value often takes the turn of trying to harness it in a formula of utility: how much more useful is the thing given up than the thing acquired, to each party of the trade. But mathematics is incapable of measuring the elusive variable of human desire. The wealth of a nation is measured in billions; how much value does the starving citizen put on the wealth of the nation? To the owner of bonds and mortgages these papers are valuable because they enable him to satisfy his desires; but to the debtor class they represent hardship. Figures cannot express
- ↑ If this were a book on economics, it would be necessary here to enter into a discussion of money. But that would be outside the scope of this inquiry. Nor is the subject of value, to which this chapter is devoted, fully exploited, as a student of economics might expect, but is treated only as an explanatory note on social and political institutions.
