to the market tend to do likewise under such circumstances, there can be no equilibrium except when things equal in value to the market are equal also in value to the persons composing the market.

The word "normally" demands explanation. By normally I mean, here and everywhere in this book, on the hypothesis that, excepting only the cause implied in the fifth paragraph of § 41 and referred to in § 68, no imperfections of the market or other causes prevent men's acting according to their best economic interests. The word normal I use in a corresponding sense. I may add that for the formulation of the foundation of my theory of interest I shall assume normal conditions, not because they are the conditions of actual life, for that they are not, but because they furnish the best basis for our thinking. Of the divergencies of actual conditions from the normal I shall take due account before bringing this outline of my theory to a close.1

§ 19. Going back to our equations of personal value and market value, we must not fail to note that although AB equals A'B', and AB" equals A'B''', it must not be inferred that A'B' equals A'B'. Of the relation between A'B' and A'B''' we know, indeed, nothing; for whereas A'B' is an absolute amount of pleasure, A'B''' is a relative amount of pleasure. The personal values of different things correspond, it is true, to their market value; but that is all we know. If a bushel of wheat stands at $1 in the market, and shoes of a certain sort I use at $4, I regulate my consumption of wheat and shoes so that the four bushels of wheat that equal one pair of

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1 See Chapter VI, § 72 and following sections.

shoes in market value equal one pair to me also; and in so doing I affect the market value of both wheat and shoes infinitesimally myself. But to compare the absolute value to me of a pair of shoes with their market value (represented by the price $4), which is not an absolute value at all but a relation between absolute values, is meaningless.

§ 20. I cannot forbear to digress a moment to emphasize the fact, doubtless obvious enough to many of my readers, that some of the great social reforms of this century must take their departure from the principle summarized in the last paragraph. At present there is nothing to prevent the indefinite production of goods and services which the market, indeed, demands, but whose cost to their producers is incomparably greater, absolutely, than their value to their consumers; and on the other hand there is nothing to insure the production of goods and services which, though not, indeed, demanded by the market, would have a value to their consumers far greater than their cost to their producers. This is only another way, of course, of saying that the aggregate happiness is greatly reduced by uneconomical distribution. That distribution is economical, so far as the principle we are now considering is concerned, which unites each objective factor of pleasure, each concrete good or service or other valuable thing, with the greatest possible subjective factor or capacity for enjoyment. I need hardly add that I do not mean to suggest here any specific reform: I mean only to emphasize in its economic aspect a principle that confronts workers for the social welfare at every turn.

21. To return to our definitions and fundamental conceptions, the reader has been struck, no doubt, by my frequent use of the words "depend" and "dependent,' my scant use of the words "margin" and "marginal,” and my definition of value without recourse to the phrase "marginal utility" at all. Such abandonment of accepted terminology demands explanation.

If I have a barrel of apples and lose two apples, my pleasure is reduced more than if I lost but one. Another way of saying this is that the amount of my pleasure dependent on the two apples is greater than that dependent on one. Moreover my pleasure is reduced more by losing an apple when I have only half a barrel than by losing it when I have a whole barrel. Another way of saying this is that the amount of my pleasure dependent on an apple in the one case is greater than that dependent on it in the other. It is clear from these examples that the phrase "dependent on" covers fully the subjective as well as the objective factor of any pleasure or any pain, and therefore that it may be used to cover both factors when we want to define value and cost. Thus the phrase "marginal utility" becomes unnecessary for the definition of value. And that is most fortunate, for the word utility is so associated in men's minds with the delusion, explained in § 13, that the amount of pleasure dependent on a thing is determined solely by attributes inherent in the thing itself, as to be well-nigh ruined for scientific usage. The very expression “marginal utility” implies that there is such a thing as a non-marginal utility that is distinct from value, whereas in fact there is no such thing: non-marginal

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utility means nothing unless the subjective factor be specified; and when the subjective factor is specified, the so-called non-marginal utility becomes simply a non-normal value. This unfortunate implication of 'marginal utility" rises up to trouble us when we come to drawing the two curves 1 required to illustrate graphically the theory of normal prices. It leads to the designation of the two curves as that of cost and that of utility. The theory of normal prices is greatly clarified, however, especially the theory of that normal price which we shall find interest to be, by designating the two curves as that of cost and that of value. This will all be made more clear in § 25, where the diagram of normal prices is drawn and explained.

To show that my conception of dependence covers fully the conception usually covered by utility terminològy, I venture to quote at length a classic passage from Böhm-Bawerk's Positive Theory of Capital.2 The italics in the passage are Böhm-Bawerk's. The words "depend" and "dependent" I have had printed in capitals.

§ 22. "Turning now to the second question suggested in last chapter we ask, Of several or many wants which one is it that actually DEPENDS on a particular good?

"This question would not be put at all if the circumstances of economic life were so simple that single wants always stood over against single goods. If a good were adapted to satisfy a single concrete want, and if it were

1 See § 25.

2 Macmillan & Co., London, 1891. Book III, Chapter IV, pp. 146-149.

at the same time the only one of its kind, or, at least, the only one of its kind available, it would be quite clear without further consideration that the satisfaction of the single want DEPENDED on our command over the single good. But in practical life the matter is scarcely ever so simple as this; on the contrary, it is usually complicated simultaneously from two sides. First, one and the same good is usually adapted to satisfy various concrete wants, which wants again possess various degrees of importance; and, second, several goods of one and the same kind are frequently available, thus leaving it to caprice which good will be used for the satisfaction of an important, and which for an unimportant want.... I have been shooting for a few days on the mountains, and by some accident I miss my companions. I am far from any house or village, and the only food I have for myself and my dog is two entirely similar baker's rolls. It is clear that the satisfaction of my hunger is of infinitely more importance to me than the satisfaction of the dog's hunger and it is just as clear that it lies with me which of the two rolls I shall consume and which I shall give to the dog. And now the question arises, Which of the two wants here is DEPENDENT on the bread?

"One is tempted to answer, That want to which the bread was actually devoted. But it is evident at once that this is an erroneous conclusion. It would amount to saying that the two rolls, devoted as they are to the satisfaction of wants of different importance, must possess different values; while it does not admit of question that two similar goods, available under similar conditions, must be entirely equal in value.