But in the meantime his announcement gives us a hint of the second reason why he should have persisted in so strange and patent a fallacy as that Value depends solely on 'final' or 'marginal ' utility. It lies in his confounding a theory of the exchange of different things, with a theory of the value of particular tilings. "Articles," he says with real truth, "will exchange in quantities inversely as the cost of production of the most costly portion, i.e., the last portion added;" or, in other words, they will exchange, not according to the rich capabilities of the best lands, or the productivity of the best machines, etc., but according to the difficulties of the worst that are in use in supplying the market; the most fertile lands, the richest and most easily worked mines, the most productive machines, etc., getting as a free gift the excess of their product over that of the poorest and worst in competition with them; just in the same way as if a man happened to own a field where gold or diamonds lay strewn on the surface, he might sit still and grow rich on the 'unearned increment' which would flow in to him from the high price he would get for them, and which would be fixed by the labour of those who had to get them at great cost, and by expensive machinery, from the bowels of the earth.

But although articles of different kinds - as wheat and coal - will exchange with each other in the inverse ratio of the cost of bringing to market the most expensive portions of the supply of each, and not of the cost of the least expensive portions, - or, in other words, will exchange in quantities inversely as the respective values of each, - still this does not bring us any nearer to our problem, which is; - what determines the value of each article separately 1 It is easy to know how the things will exchange, when once you know their respective values: but the problem is, what is the cause of the particular value of each? Jevons, at any rate, cannot affirm that it lies in the Labour-cost of the most expensive portion; for his whole theory is, that Value does not depend on labour-cost at all, as its 'cause,' but solely, as he says, on Utility. Leaving him, then, in the muddle of his own creating, whereby he makes the Exchange-value of two different things depend on their relative Labour-costs, but the value of each to depend, not on Labour-cost at all, but only on Utility; we may now turn to the other academical Economists, and see how they propose to solve this problem of Value, and of Market-price.

And first let us consider Bohm-Bawerk's solution. Now of him it may be said, that instead of extricating his master, Jevons, from his confusion and one-sidedness, he has only succeeded, by the uncompromising definiteness and dogmatism with which he defends him, in making them more conspicuous. Jevons himself evidently had qualms in ruling out cost of production as a 'cause' of price, for, as we have seen, he hesitatingly tried to bring it back as a 'determining circumstance.' But Bohm-Bawerk ruled out this concession as a mere weakness, and boldly declared that "the measure in which a want is satisfied, is actually and everywhere the measure of value of the commodity that satisfies it, and not the difficulty or cost of making the article; the costs of the different factors in the production of a commodity, being-represented by the satisfaction given by the finished product, and not the value of the product by the costs incurred at the different stages of its manufacture." Here you have the Utility theory of Value in its full flowering; - and it is only another instance of the tendency of all specialisms in their decadence to lose all sense of measure, proportion, and qualification, until they end in downright absurdity.

For here, like Jevons, it is evident that Bohm-Bawerk confounds Value in the abstract, with a particular market price; and because the sole cause of Value in general is Utility, thinks that the particular value of a particular thing, or its market price, is that people in general desire it, or get satisfaction out of it. Like Jevons, too, with his old coins and old china, Bohm-Bawerk draws his proofs from the fancy prices that are paid for articles like rare vintages of wine, which are desired chiefly for purposes of ostentation by those to whom price is a matter of indifference, instead of from commodities which are more or less freely producible on demand, and which minister to normal economic wants. And it is the same with commodities necessary for Production, as for articles of Consumption; for he contends that the market price of every stage of a product from the time the raw material is taken from the field or the mine, until the finished article finds its way into the retailer's shop, is regulated by the degree of enjoyment got out of the finished product; but how the prices at each stage are to be apportioned, unless the costs of each are estimated, is a mystery which no man can solve.

Indeed, this introduction of matters of individual psychology, personal caprice, etc., into market price, - which is, after all, only a matter of the movements of economic quantities, and the obstructions they encounter in their progress round the wheel, - is as much an affectation and excess of analytic subtlety, as it would be to reduce the issue of a prize-fight to an elaborate analysis and calculation of the particular muscles and nerves involved in the respective combatants, instead of into their relative strength and skill as men merely, by whatever elaborate internal mechanism these are brought about, - like that economist, whom Marshall mentions, who proposed to construct a system of Political Economy on the relations between the nerves of sensation and the nerves of motion; - and is to be wise above what is written. In spite of its array of mathematical formulae, curves, and diagrams, - like the apothecary's shop in 'Romeo and Juliet' with its old dried fish-skins, empty boxes, bladders, and stuffed alligators, 'thinly scattered to make up a show,' - and the consequent appearance it has of deep and recondite scientific analysis, it exhibits a want of penetration and insight as to how to focus the subject-matter of the Science in the way best calculated to bring out its essential relations and harmonies; and is a disease and retrogression, rather than an advance.