Note 151 — Chapter XI

Even Professor H. J. Davenport finds a quantitative value concept necessary in places. For example, on page 573 of his Value and Distribution, he speaks of capital, considered as a cost concept, as standing "for the total invested fund of value, inclusive of all instrumental values, and of all the general purchasing power devoted to the gain-seeking enterprise." It might be unkind to remind him of his definition of value on page 569, and ask him what a "fund" of "ratio of exchange" might mean! And the notion of value as a quantity, instead of a ratio, is involved, as indicated in the text, in the term, "purchasing power," which he also uses in the passage quoted. This term, "purchasing power," as apparently a substitute for value, Professor Davenport uses in several instances, where the ratio notion clearly will not work: on page 561, "distribution of purchasing power," page 562, "redistribution of purchasing power," and page 571. I say "apparently," for I do not think Professor Davenport anywhere in the volume gives a formal definition of "purchasing power."