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has himself made us all familiar, might lead to modifications of some of his non-essential statements.

When, however, he passes to a consideration of the concept of an economic quantity as applied to the value of money, I cannot accept either method or result as valid. In the first place, in attempting to show why money is sui generis among commodities, he insists that, whereas other things get their value through serving some useful function, money serves its function because it has value. Historically, it is unquestionably true that gold and silver were, more or less unconsciously, selected as money because, among other things that were valuable, they were for various reasons especially fitted to serve as a medium of exchange. I believe that here is a distinction and a difference, and that in it lies the explanation of Professor Carver's fallacy. Gold and silver were not chosen because they had value, altho they would not have been chosen originally if they had not had value. We must seek the reason for selection in the "variation,”-the differential. They were chosen because of certain physical properties that made them unusually good media of exchange. As this new use of the metals developed, the demand for the physical commodity increased, and a new value, assuming equal stocks, was added to the old. If this view is correct, then Professor Carver's own reasoning elsewhere in the article would require that we treat the supply of money not as a supply of value, but as a “physical supply."

It is a mistake to say that money is used as a medium of exchange to-day because it (i.e., money, not metal) has value. Rather we should say that, of the total existing supply of gold, a certain part has its value because it serves a certain marginal human desire for ornament, a second part has its value because it serves a certain marginal human desire for certain technical industrial results, and a third part has its value because it serves a certain marginal human desire for a medium of exchange. Let us assume, without regard to the statistical guides, that there is an annual “flow" of 5,000,000 ounces of gold into ornamenta


tion, of 10,000,000 ounces into industry, and of 100,000,000 ounces into money. Each of these flows has a marginal utility that is entirely distinct, except as it is conditioned by the fact that the flow is there rather than somewhere else. The 5,000,000 ounces have a marginal utility x as a medium of ostentation; the 10,000,000 ounces have a marginal utility x as a medium of industry; and the 100,000,000 ounces have a marginal utility x as a medium of exchange. The 5,000,000 ounces do not have their marginal utility because another 100,000,000 are used as a medium of exchange. No more do the 100,000,000 have their marginal utility because 5,000,000 are used as a medium of ostentation. The three flows have the same marginal utility because the physical thing, gold, can enter into one or the other of the flows; but, when the particular flow is given, the marginal utility is fixed by the conditions of the particular demand.

Inasmuch as Professor Carver's whole remaining argument is informed by this fundamental idea, it is unnecessary further to show why I cannot accept his conclusions. Just one more illustration, therefore, and I am done.

Professor Carver says that we cannot, without absurdity, treat the utility of a piece of money as consisting of the utility of the things for which it will exchange. “To say that a piece of money is worth a barrel of flour because the final utility of the money to the marginal consumer is equal to the utility of the barrel of flour, and then to define the final utility of the money as consisting of the utility of that which it will purchase,-namely, the barrel of flour,—would be another crude case of reasoning in a circle.” Obviously, if people would only mean to say what Professor Carver says they mean. Were I to speak in terms of the above illustration, I should say, speaking for myself, that the marginal utility of the money stood to me as representative of the marginal utilities of other things than flour which I had reason to believe I could purchase with the piece of money. I usually try to keep these marginal utilities as even as possible. I should compare this generalized marginal utility with the marginal utility of the flour, and, if I found that the second stood higher than the first, I should be bound by economy to swap the piece of money for the barrel of flour, and the objective value of the two would then be named, for the time being, in terms depending upon the weight ratio between the “piece of money” and the unit coin of the nation to which the swappers belonged.



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pp. 518.

Balch (T. W.). The Law of

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der Wertlehre. Munich: G. Franz. 1908. pp. 84.

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mie der Wissenschaften.] BULLOCK (C. J.). Introduction to

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degli Econ., May. EMMINGHAUS (A.). Zur Würdigung

des Manchestertums. Zeitschr.

f. Socialw., April.
JOHNSON (A. S.). Protection and

Capital. Pol. Sci. Quart., June.
[Protection benefits capitalis-
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cause them to accumulate more
and to increase the net equip-

ment of capital goods.).
LANDRY (A.). Le problème du

profit. Rev. d'Écon. Pol., April. Pigou (A. C.). Equilibrium under

Bilateral Monopoly. Econ. Journ., June. (An elaborate theoretical paper.]

de Juillet. Paris: Cornély. 1908.

pp. 359.

[Preface by Dr. V. Adler.) FESTY

(O.). Le mouvement ouvrier au début de la monarchie

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tween 1830 and 1834.] GÜNTHER (Ad.). Der Tarifvertrag

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[Prepared in the Munich Statistical Bureau.] GÜNTHER (E.). Die Entlöhnungs

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pp. 343.

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