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practise become general, the public interest will require all issues of increased stock to be advertised and sold at public auction, and not otherwise.


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To one who has long been accustomed to follow with pleasure and confidence the careful footsteps of Professor Carver as he leads the way through difficult mazes of economic material or as he makes straighter the old and badly made paths, it comes with a distinct shock of surprise that in his article on The Concept of an Economic Quantity: the customary leading is no longer vouchsafed.

Professor Carver begins with a discussion of what he believes to be a fallacy in Walker's contention that money is rather a denominator than a measure of value; that "a measure, a relation, a ratio, cannot be measured. You do not measure the relation of a mile to a furlong: you express it as 8:1. You use a common language for the two quantities. You take a common term or denominator for the two distances, and thus set them in immediate comparison with each other"; that money serves "merely to name the relation between the values of things rather than to measure their value.” And Professor Carver thinks that "an examination of Walker's argument will serve as a good introduction to the general question of the meaning and significance of an economic quantity.”

A careful reading and rereading of the "examination” leaves me convinced that the fallacy is with Carver rather than with Walker. As I understand the Walker thesis, it is substantially as follows: The use of the phrase "measure of value” is misleading, since the word "measure” is so com

1 Quarterly Journal of Economics, May, 1907.

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monly used to describe quantitative reference to a fixed and, for practical purposes, absolute, known standard: whereas value, being a relation rather than a property, is subject to constant variation, and indeed depends upon the very comparison which is by error regarded as a measurement. I take a yardstick, representing a degree of exten

. sion known to all men, and, applying it to the side of my barn, find that the barn is thirty-five yards long. I already had knowledge by perception of the length of the barn and of the yardstick. My measurement gave me the conception of the mathematical ratio between the two lengths. I sell my horse for $100 in an open horse market with active bidding of competing buyers. I had no perception of his value: I had no perception of the value of a dollar. In making the sale, I did not compare the objective value of the horse with the objective value of a dollar: rather I established the objective value of both. I do not know what the horse was worth yesterday nor what he will be worth to-morrow. I do know that a dollar was worth more ten years ago than now, and suspect that it will be worth less five years hence than now. The difference between the two cases makes me object to the use of the same word, “measure,” to describe the two processes indicated in these illustrations.

Professor Carver suggests that it is impossible even to name the ratio between two concrete material things “without first measuring them.” I submit that in the ordinary case of measurement the ratio is in the relation, and is not preceded by it. In the case of my illustration, as I go alongside the barn, yardstick in hand, you will hear me muttering, “1, 2, 3,” and so on up to “35.” And when I reach the 35, I have both done my measuring and named the ratio.

Again, immediately after, Professor Carver says, “Obviously, one must first ascertain their respective quantities before he can state the relations between those quantities." This is distinctly the case with value comparisons, not at all so with quantitative comparisons of measurement.

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Hand me a stick or a string three feet long, and, without knowing its length by "first ascertaining” it, I can at once measure barn or fence, and, giving the ratio, give the measure. Hand me a United States coin containing 25.8 grains of standard gold,-a dollar,—and ask me to measure with it the value of something seen and known for the first time, and I shall be quite at sea in any attempt at measuring the value of the one by the other. But, if you tell me that one thing exchanges regularly for one hundred of the other, I can at once name the value of either in terms of the other.

The weakness of Professor Carver's logic is most striking in the same paragraph when he attributes to Walker a probable confusion between “a mile" and "a fence a mile long," and goes on to say that “if one were asked to name the ratio between the fences, he would first have to take some other concrete material thing,” and “find by actual tests the ratio between the fence and the unit of measurement in the matter of length.” It would be hard to find elsewhere in Professor Carver's work such careless thinking. Why must we take the case of material concrete things that are more or less firmly attached to the earth? Why not compare a long timber with a short timber? But even in the case of the fence it may be proper to suggest "in sober earnest" that some fences are of wire, not too securely fixed, and that with reel, hammer, staples, and stretcher, we can, at some expense, apply the less directly to the greater, and find the ratio and hence the measure, provided we know the measure of either in terms of some standard unit. “Only after he had ascertained, by measurement, that one fence was a mile and the other a furlong in length, could he even express this ratio as 8:1." This may be true for Professor Carver, but I protest against any such arbitrary limitation of my mental processes. I feel certain that, should I discover that one fence “ went into the other" eight times, I could declare their length ratio to be 8:1, and that, too, without knowing whether either was a mile or a furlong in length.

But enough for Professor Carver's introduction. We have criticised as yet less than two of his pages, and must hurry on to his more careful argument:

That value is a quantitative concept is demonstrated by the fact that it takes such modifiers as 'more' or 'less,' and that the question, how much? when asked with respect to the value of a thing is intelligible,-quite as intelligible as when asked with respect to its length or its weight. Moreover, the question, how much? when asked with respect to

ny property of any thing, can only be answered by means of a comparison." Perhaps, except that it may well be questioned (1) whether the answer to the first of these questions is as definitely intelligible as if asked regarding length or weight; and (2) whether there is not an important scientific distinction between the properties, length and weight, on the one hand, and value, on the other. For myself, I should withhold the name “property” from “value,” giving it instead the name “relation,” since to use the word “property” suggests to me the older economic idea of value as something intrinsic.

As Professor Carver has already suggested that Walker confused the abstract mile with the concrete mile-longfence, he is temporarily on guard against falling into the same confusion, with what a result! “To say, for example, that a certain reservoir contains a million gallons of water means simply that it contains as much water as would fill a certain receptacle with certain dimensions-a gallon measure—one million times. Of course, it is not necessary to dip the water out with a gallon measure (sic), but some actual comparison must be made. It would probably be done by measuring the three dimensions of the reservoir, and comparing their product with that of the three dimensions of a gallon measure." But suppose you were to tell me the contents in cubic feet, which would be quite as comprehensible to me. Professor Carver has not told us whether a cubic foot is more concrete than an abstract mile, but I do not remember to have seen a container having


each dimension precisely one foot. Possibly, the manufacturers somewhere are now engaged in converting abstract cubic feet into concrete ones.

The fallacy, if I am right, reaches a climax in the following statement: “Similarly, there is absolutely no way of expressing the quantity of value, or power in exchange, in a thing except by means of a comparison, tho it is not necessary actually to go through the form of an exchange, any more than it is necessary actually to dip the water out of the reservoir with a gallon measure" (italics everywhere mine). It seems to me that no man knows or can know valueobjective exchange value--except through exchange. If there have recently been exchanges, on a considerable scale, of physical commodities or services closely like the one that we have under consideration, we may safely conclude that the particular commodity or service will exchange at about the same ratio,-would have about the same value. It is only approximation, and it is only probability: whereas in the case of the reservoir, subject only to limitations of accuracy in the instruments by which we measure its dimensions, we know definitely and exactly what its content is, without any thought whatever of actual dipping with gallon measure or cubic foot, abstract or concrete.

I fully agree with Professor Carver in one-half of the sentence with which he begins the next paragraph: “All this seems simple enough, and the reader may well be impatient.” My reasons for dissenting from the other half I have tried very briefly to indicate. To guard against similar impatience with this “note,” I shall pass at once to Carver's application of his fundamental analysis of concepts to the two topics with which his article is chiefly concerned, -Clark's concept of capital, and the supply and demand theory of the value of money.

I cannot see that Carver's analysis of the term “value” is essential to his discussion of the Capital Concept. With his general method and his general result in this part of his article I have no quarrel, tho meticulous criticism, such as I have offered above, and such as that with which he

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