Kansas agitator. [volume] (Garnett, Kan.) 1890-1905, 1898-08-26

not make clear what is meant by the
term ratio. Some, after defining value
correctly, follow 1t up with many con-
fusing and contradictory statements.
Value has been variously defined as fol-
lows: 1.-THE value of anything is Its
purchasing power"
The value of a commodity is the
amount Of materials for which 1t VIII
exchange in open market.
Value is stored-up labor.
Value is a result of the equation OF
supply and demand.
| Value is the result of decree or gov
ernmental fiat.
Value is ratio.
When the "sound-money" men talk
about intrinsic value they certainly
mean the same as the Socialists DO
when they speak of "stored-up labor"
Since these two views have substan-
TALLY the same foundation they must
stand or fall together. Labor cannot
be made the universal basis of value.
1t may affect value indirectly by in
creasing or diminishing supply OF com
modities, but the value Of all articles
Of production depends ultimately more
upon use than upon labor-cost of pro-
duction. A diamond, carelessly picked
up out of the gravel, might be more
valuable than one of the Egyptian py-
ramids that has cost the labor of thous-
ands of human beings. Suppose the
government, at infinite pains and ire
mendous cost, should tunnel the ROCKY
Mountains, and then no one would use
the tunnel, would it have any value?
Changes in customs, fashions, and tast-
es are constantly rendering labor ut
terly useless. II we accept the state
ment that value is the amount OF COM
modities for which thing will ex-
change, then value becomes material
something, which can be shown to be
absurd. The supply and demand the
ory is intimately related to the labor
view of value. The correct view seems
to be that value is nothing but ratio.
1t is my purpose now to attempt
fuller explanation Of this view.
A ratio results from comparison. The
comparison always involves two terms
which are invariably of the same de-
nomination. In arithmetic the first
term is called the antecedent and the
second term the consequent. The ra-
ito is the relation of these two terms
expressed in the form Of division.
This ratio is always abstract.
Let us demonstrate:
s25-:-s5=5. $25=dividend; So
divisor; 5=quotient.
Proof: $5xS5=$25.
Let us suppose that IS is contained in
s25 five dollars times. Then substitute
ing in proof we have 5xSx5x$=5'x$'=
$25a.
Now this would involve an absurd
ity, because mathematical conceptions
arise only as result of the limitation
Of quantity, and since denomination is
not quantity but the name Of quantity,
it cannot properly be made the subject
of mathematical processes. Hence the
relation in a ratio is always an abstract
one. Value then is not labor, not
material thing, not the keystone of an
arch upon one side of which presses
supply and upon the other demand,
but is an abstract ratio. Before dis
cussing exchange value there are some
principles of political economy that
must be we'll understood. They are as
follows:
The greater the number Of units of
commodity, the smaller is the marginal
utility of each unit. Thus one dollar
has more utility to clerk whose sal
ary is only $500 than to millionaire.
Second, the amounts of two commodi-
ties that are exchanged will be in an
inverse ratio to their respective utili-
ties
Thus one ounce of gold equals six
teen ounces Of silver
Sixteen times utility of one ounce Of
silver equals utility Of one ounce of
gold.
Expressed as proportion
Utility of gold utility Of silver 4:
Sixteen ounces of silver : one ounce
Of gold.
That is: Utility Of gold equals six
teen ounces of silver or metal; utility
of silver equals one ounce Of gold or
metal.
Hence, utility utility metal
metal or as quantity quantity.
From the above we see that exchange
value is not ratio; it is proportion
compounded Of two ratios, and since
the ratios are abstract the proportion
must express an abstraction. 1t ap-
pears then that every exchange in
wolves three comparisons; two that are
simple and one that is compound, and
that in every case the terms Of the COM
parison are the same in denomination.
No matter how complex the act Of ex-
change may become these same prin-
ciples will hold. The value of all kinds
of money will conform to the principles
laid down.
Money is nothing more than an ex-