The Valuation of a Single Commodity Goods are valued either individually and by themselves, or in connection with other goods. The latter form of valuation takes place chiefly in one of three ways. A good may be valued in connection with other similar goods belonging to one and the same stock or supply; or in connection with goods from which it can be produced; or in connection with goods which can be added to it by purchase. Of these three cases the first is the elementary one, to which both of the others may be traced back. It is with this first alone, therefore, that we shall deal in the elementary theory of value.
It is extremely seldom that goods are valued singly. It may be some chance or other which has isolated them, or it may be a consequence of some peculiar character which allows of them being obtained only individually. In the first case, they are irreplaceable during the period of their isolation; in the second, they are altogether so; and, in both cases, they must, on any reasonable valuation, have ascribed to them the full value of the utility which is expected from them. The means without which an end cannot be reached must be valued as highly as the end itself. If the good is by nature fitted for several purposes which, however, mutually exclude each other, so that it can actually serve only one of them, that employment to which the greatest importance belongs decides its value. Only a barbarian could value the Venus de Milo by the utility of the material of which it is made. A starving man will value his last bite at its full life-saving value, -- supposing the saving of his life to be of consequence to him.
Now and then, too, considerable supplies of goods are valued as one indivisible whole, and, consequently, as one good. Avendor may, for instance, lay down as a condition of selling some large supply of goods, that it be bought entire or not at all. If circumstances force the buyer to consent to this condition, he on his part must estimate the value of the supply as a whole. He has to reckon up the whole sum of useful services which he may expect, from the highest utility which the goods composing the stock are capable of rendering, down to the marginal utility fixed by the amount of the stock and of the demand for it; and the sum of all those services gives him the value. Value here reflects the whole utility aimed at in employing the goods.
Suppose a community were forced to buy the grain it requires from some foreign country and in one lot, if the conditions just described were laid down, the government would have to make a valuation which would be almost infinite. It would require to consider that, without the purchase, a great part of the community might die of hunger, and to calculate all that would be gained by the prevention of this most extreme misfortune, and by securing the health and vigour of the people.
Besides that would have to be reckoned all the less important useful results, which really are obtained although their marginal effects are inappreciable. It is obvious that the valuation of the harvest which is actually made stands far behind any such valuation as this. And what is the reason of it, seeing that the actual effects of the harvest are no less important, -- that it does in truth keep away hunger and misery, and maintain the strength of the citizens? Why does its full use not enter into the valuation? The reason is, obviously, that we are not forced to obtain and value the harvest in one lot. It comes through thousands of busy hands, by a thousand different means of transport, from thousands of storehouses; and it passes through thousands of purchases to those who need it, and is by them consumed in thousands of different acts. The question as to the effect on the whole is never put; the only thing we have ever to do with is the effect of individual parts, which, compared with the whole, are vanishingly small. And this brings us to a law of valuation by which an amount of value is ascribed to the single part, and, therefore, finally, to the sum of all the parts, which is as far removed from the amount of value that would otherwise pertain to the united whole, as the resisting power of all the single rods in a bundle is from that of the whole bundle.
This law we have now to trace. It might be described as the General Law of Value, since it holds in almost every case. Almost all supplies which we possess and employ, which are bought and sold, which are used up and produced, are acquired and used in parts. Seldom only is a supply of goods the object of economic use and valuation as a whole -- a whole of which nothing can be lost without everything being lost. As a rule every supply or stock of goods comes to us as a sum of parts, each of which has its separate destiny, and can be individually disposed of.
