[38] Cf. Veblen, T. B., Theory of the Leisure Class, and Carlile, W. W., Evolution of Modern Money.
[39] Social Value, chs. 3-7, esp. ch. 5.
[40] But land does often have value which it is impossible to explain on the basis of any income which may reasonably be expected from it, even in the remote future.
[41] P. 174.
[42] Cf. the discussion of Wieser, Schumpeter and von Mises in the chapter on "Marginal Utility," infra.
[43] Flux, W. A., Economic Principles, London, 1904, pp. 4, 27, 29; Taussig, F. W., Principles of Economics, New York, 1911, vol. I, pp. 141-143. Cf. my Social Value, ch. 5.
[44] Cf. the present writer's Social Value, chs. 3-6, inclusive.
[45] I am here abstracting from an important factor, namely, that not all prices are affected equally by changes in the value of money. Some prices are fixed by law and custom, and some incomes are tied by long time contracts. Thus, it will happen, in many cases, that supply and demand for a given good will be unequally affected by a change in the value of money. This means that certain values are tied to the value of money, rising and falling with it, so that the amount of power which some elements in the economic situation are able to exert through supply-price-offer and demand-price-offer are at the mercy of changes in the value of money. But this is an element which is incalculable, on the basis of the supply and demand concepts, and must be abstracted from if we are to make any definite assertions as to the effect of increase or decrease of demand in the active sense on supply in the passive sense, or vice versa. Unless we make this abstraction, and unless we assume a fixed value of money, we might find increase of demand in the active sense (nominal) leading sometimes to an increase, and sometimes to a decrease of supply in the passive sense, or rather, being accompanied by either increase or decrease of supply in the passive sense. No law would be possible. In practice, both of these abstractions are more or less consciously assumed.
[46] I think that it is a feeling that Mill has left out the psychological factors in supply and demand which led Cairnes to the effort to give definiteness to other and vaguer notions on the subject.
[47] Cf. Social Value, ch. 2; "The Concept of Value Further Considered," Quart. Jour. of Economics, Aug. 1915. For the doctrine that supply and demand, and other elements of current price theory, assume a fixed absolute value of money, see Social Value, p. 166, n., and ch. 17.