Economic Values

Dominion, Volume 29, Issue 150, 20 March 1936, Page 13

Economic Values

Sir, —Your correspondent, “P. B. FitzHerbert,” writing on the above subject, appears to have insufficiently studied the matter. Contrary to his statements, there is a very definite relation between cost and price, a scientific measure for economic values and no unbridgeable gap between cost and price.

The price of goods is the cost of all services put into them from inception to delivery into the consumers’ hands. Profits are usually the producers’ remuneration for services tendered. To take your correspondent's comprehensive illustration; his dictator-director conducting the business of the world —as large, sound businesses arc conducted ar present—would certainly not get back more money or cash than he had disbursed, but he would make a very decided profit as would bp shown by accumulated or surplus commodities in many forms, such as food, clothes, houses, buildings, etc.

Your correspondent fails to conceive that we work with the ultimate desire to obtain and accumulate commodities or goods, that trade is the exchange of goods and services for ultimate goods and services, that money is a medium to facilitate such exchange, that labour and not money is purchasing .power, and that, profit—whether in money or goods—is the employers’ or producers’ remuneration, whether such employers are private persons or companies.

The statement that the consumer determines whether the economic value shall live or die is badly put. The value will live if economic, if otherwise the consumer will reject it. Incidentally, this proves that normally the consumer is not exploited ns your correspondent would have us believe.—l am. etc., PROFESSOR OF ECONOMICS. Marlborough. March 19.