Note 60 — THE PHASES OF THE ECONOMIC INTEREST

The case against the Austrian explanation of market-price in terms of marginal utility has been well summed up and re-enforced by B. M. Anderson in his monograph, Social Value (Boston, 1911). Anderson finds the fatal flaw in the Austrian account to consist in the psychological particularism of the marginal utility theory. The only way, he holds, to provide an adequate foundation for a non-circular theory of price is to understand the marginal estimates people put upon goods as resultants of the entire moral, legal, institutional, scientific, æsthetical, and religious state of society at the time. This total and therefore absolute state of affairs, if I understand the argument, is to be regarded as focussed to a unique point in the estimate each man puts upon a commodity. Thus, presumably, the values which come together, summed up in the total demand and supply schedules for a commodity in the market, are "social values" and the resultant market-price is a "social price." This cross-sectional social totality of conditions is strongly suggestive of an idealistic Absolute. The individual is a mere focussing of impersonal strains and stresses in the Absolute. But the real society is a radically temporal process. The real centers of initiation in it are creatively intelligent individuals whose economic character as such expresses itself not in "absolute" marginal registrations but in price estimates.

On the priority of price to value I venture to claim the support of A. A. Young, "Some Limitations of the Value Concept," Quart. Journ. Econ., Vol. XXV, p. 409 (esp. pp. 417-19). Incidentally, I suspect the attempt to reconstruct ethical theory as a branch of what is called Werttheorie to be a mistake and likely to result only in useless and misleading terminology.