Scarcely a farmer in our country is beyond the effect of any extensive commerce throughout the world. The crops of South America and of the Russian plains are now as important to a farmer of Dakota as his own, since all must find a common market in the manufacturing countries of Europe. Speculation on the Chicago Board of Trade is likely to be as interesting to a farmer in Nebraska as to members of the Board. He is even tempted to try his hand at speculation, either directly through a commission house or indirectly through the marketing of his grain. In either case he is caught by the dangerous motion of modern commerce. The chief remedy for these tendencies must be found in a wider acquaintance with the facts of commercial life and a clearer perception of what is genuine commerce.
Every farmer needs to distinguish, and distinguish carefully, the actual, necessary machinery of trade and the principles underlying it, that he may appreciate the genuine and oppose the false. On this account several chapters are given to questions of exchange, with an effort to bring into more prominent light the ways in which all commerce affects the farmer's life.
Chapter IX. Value The Basis Of Exchange.
The nature of value.—Perhaps no question in the discussion of wealth is of greater importance than the nature of value. Certainly the measurement of value in all our property is the basis of all exchanges, of all book accounts, and of all inventories. The worth of any piece of property in such estimates always involves some comparison, either of things possessed or of exertion required or of satisfaction yielded. In comparing an apple and a peach, both equally attainable, we may value the peach most highly because it gratifies desires in higher degree. Thinking of future uses, we may value the apple more highly because it will keep longer, and so be available for future wants. In considering all the kinds of satisfaction to be provided for, we may think of the peach as desired by more people who are likely to render us service, and therefore more readily exchangeable, and so of higher value. Again, the peach may be at the top of the tree and the apple within reach, in which case we may think whether the peach will give enough greater satisfaction to make it worth the greater exertion to get it. In this way a single individual, who has wants to be gratified only by exertion, forms an idea of value as founded upon some relation between his [pg 064] wants and his powers, between the desires to be gratified and the qualities of the object expected to give satisfaction.
Since wealth always implies an accumulated store of good things, every one comes to think of the worth of his accumulation as estimated by what it will do at any time, in any place, in satisfying any need. So, most naturally, we associate our ideas of value with trade. An exchange of horses brings in not only the present qualities of each horse for present service, but all the qualities and circumstances affecting the possibilities of disposing of the horse whenever something else is needed more. An expert judge of horses not only knows when the horse is sound in wind and limb, and what are the signs of docility, speed, etc., but also what the rest of the world considers the qualities of a satisfactory horse. In all experience peculiar circumstances, varying the relation between wants and satisfaction, affect immensely our estimate of value. When an ancient king shouted, “My kingdom for a horse!” he was doubtless moved by the uselessness of a kingdom to one about to lose his life in battle for want of a horse and also by the difficulty at that particular moment of gaining a horse.
In ordinary experience everybody estimates value by some comparison with what he can obtain in exchange. A picture of a friend may be priceless in two senses: first, of so great importance to its owner that nothing can buy it; second, of so little importance to anybody else that nobody will give anything for it. In any inventory of wealth the picture could not be counted; [pg 065] it is valueless. But in any judgment of personal welfare it may be beyond price. So, in the universal experience, the term value has come to be used as essentially connected with exchanges and with property as stored to meet all kinds of wants.
Value in services.—In a similar way experience has developed the idea of value with reference to services. A service may be invaluable, as when a physician saves the life of his patient, but the value of that service is estimated by the return expected in the community where the physician and his patient live. Many services of highest usefulness and most important in welfare cannot be valued in terms of wealth, because no wealth can secure them. Love and patriotism and philanthropy cannot be had for wealth. But in comparison of two services rendered for hire, both are measured by their general utility, either directly or indirectly, and even this estimate is modified by the readiness with which either service can be secured. One who seeks the service of an artist who stands alone among ten thousand people, may be willing to give the services of a thousand other men, which can be had for a trifle, because they are everywhere abounding.
Essentials of value.—Experience seems, therefore, to settle upon three conditions for value in any article of wealth or any service rendered. First, the article or service must have utility—that is, it must be useful in satisfying somebody's wants, either present or future. Second, those wants must be of such a nature that effort on the part of some human being will be necessary to gratify them. Nothing which can be had at all [pg 066] times by mere desire of it can have value. Third, the object must be of such a nature as to command other services or exchange of other wealth. For this reason it must be transferable from one owner to another.