Note 458 — Chapter XXI

This is stated by Schumpeter, so far as land is concerned. Vide Quarterly Journal of Economics, Aug. 1915, p. 704. It is due Menger to point out that he does not make the distinction between value and exchangeability which I have just made. His theory rests in an analysis of the saleability or exchangeability of goods. But Menger's conception of value is essentially different from my own. He commonly means by "Wert" merely subjective value, or marginal utility. He objects to the notion that one good measures the value of another, or that goods, when exchanged, are equivalent in value, on the ground that there must be a surplus in value (subjective value) for each exchanger, or exchange would not take place. He has, as a primary concept, no absolute social value. "Tauschwert" is for him a relative value, though he is finally driven to constructing what is virtually an absolute value notion, by distinguishing "äusserer Tauschwert" from "innerer Tauschwert" in the case of money, the latter being concerned exclusively with the causes affecting prices from the side of money, ignoring changes in prices due to causes affecting goods. (Cf. art. "Geld," in Handwörterbuch der Staatswissenschaften, 3d ed., pp. 592-593. He does not make this distinction in developing the theory of saleability of goods, however. Cf. the chapter, supra, on "Marginal Utility and the Value of Money." It is absolute social value which I am here distinguishing from exchangeability. It is equally true, however, that subjective value and exchangeability have no necessary correlation.)