clear enough. We may indeed sometimes grumble that the price of this
or that commodity is unconscionably high in comparison with its cost;
but this only goes to show that we conceive a relation between price
and cost as the normal, governing rule. If one commodity cost only a
half as much to produce as another, we should think that something had
gone very wrong indeed, if the former commodity were sold for the
higher price. But, when we turn to the usefulness of commodities, the
case is not so clear. Usefulness has some connection with price, so
much is certain; for an entirely useless thing, fit only for the
dust-bin (and known to be such, it may be well to add) will fetch no
price at all, however costly it may be to produce. But it is not easy
to express the connection in quantitative terms. It seems reasonable
enough to say that the prices of commodities are roughly proportionate
to their costs of production. But directly we contemplate saying a
similar thing of their usefulness, we are pulled up short. As we look
round the world, and enumerate the commodities which by common consent
are the most useful, salt, water, bread, and so forth, the striking
paradox presents itself that these are among the cheapest of all
commodities; far cheaper than champagne, motor-cars or ball-dresses,
which we could very well get on without. As things are, of course, a
ball-dress, or a motor-car costs more to produce than a loaf of bread
or a packet of salt; and the common-sense explanation of the paradox
seems, therefore, to be that the cost of production is a more weighty
influence than the usefulness, or utility, as we will henceforth call
it (so as to include the satisfaction we derive from not strictly
useful things). We are thus tempted to conclude that, provided a
commodity possesses some utility, its price will be determined by the
cost of production, the degree of utility being unimportant. This was
exactly how the position was gummed up for many years in systematic
treatises upon Political Economy; and it was not until fully half a