§ 7. Usance-value and the margin of utilization. Usance-? value, let us here recall, is a summation of the values of the', separable uses contained in a good treated as durable (that is, kept in perfect repair). Its amount depends therefore on the values of the various, and perhaps numerous, separable uses, or products, some of them direct and others indirect. In this summation are the values both of actual and of expected uses. Merely potential uses that, in the existing conditions, are free do not increase the usance-value. ' et goods that were free may, however, become value . The poorer qual ities of fruit that have been allowed to decay on the ground may now be carefully gathered, while the better qualities are used for special purposes. The total usance-value of the dura tive agent (the orchard), the value-summation of all the sepa rable uses, would then be greater than it was before.
In the same way when the agents and their uses are indirect there is a point in the gradation from the better to the poorer agents where the materials and forces are left unused. Be yond or below that point the uses of machines, tools, and fields have no value, except for some prospective use. Outworn goods in manifold forms, old pictures, old clothing, having no longer charms even for a rummage sale, a great multitude of things unused and worthless, differing by only a shade from things that still are used and valued, form a valueless margin of wealth. Every rubbish-heap, rag-bag, junk-shop, and garret contains things once prized, now lingering on the margin of use or already become definitely useless.
Recall that there is an intensive margin of utilization, beyond which are certain potential uses in the things that we already have, which, however, in the existing conditions, lie outside the margin of utilization and of value. They may become valuable through any one of many changes in the economic situation. Their use now would involve an expendi ture of other agents (labor, materials, etc.) that have a greater value than the product would have. Economic choice - should go just far enough and not too far, either extensively or intensively, in the use of goods, if the maximum of usance value is to be attained.
§ 8. Usance-value of complementary agents. In the fore going discussion we have, for the sake of simplicity, spoken as if a single product were attributable to a single agent. In reality a situation as simple as this is rare, tho it may occur. Almost all products are the result of the uses of two or more complementary When two or more agents are each indispensable to the existence of a valuable product, the lack of one agent makes the other agents valueless for that one purpose. The product cannot in any case be physically di vided into fractions and the parts ascribed to the agents respectively. But the valuation imputable to each
under the existing conditions results from the demand and supply for each in all its uses together. This process of com parison is found even in the individual economy. Robinson Crusoe had to choose how he would apportion his labor (one good) and his limited stock of iron (another good) to make tools (the products). He would not apply all his agents to any one product (as hatchets), but he would, by the principle of substitution, apportion the agents among a number of prod ucts, hammers, knives, etc. There are thus, in this simple case, several series of evaluations. First, the successive units of the products from this process, as for example the hatchets, have a decreasing importance. Secondly, the successive units of labor applied to this one product would be limited by their value for other uses. Thirdly, the successive units of iron would have less value applied to this use and relatively greater T value applied to different products. E h use is chosen in relation to all the alternative uses prese ted to choice at the moment, and a scale of values results that represents the equilibrium of choice. The choices may be made in a very imperfect way, but somehow they must be made by every indi vidual working by himself, at whatever simple task. A large part of these choices are ade easy through habit, custom, and imitation, by which the general scale of living and the in dustrial process are largel ruled.
When men come together to trade in markets, the problem of evaluating complementary agents becomes in some respects 1 See above on complementary goods, ch. 4, sec. 5.
more complex, because of the variety of labor and of uses; but in some respects it is easier, because of the existence of cur rent prices for all things, serving to give more exact expres sion to the value of alternative uses. Flour and water are needed to make bread.' Assume that a loaf of bread has a value of 10. If the water is a free good, the flour has imputed to it the whole value of 10; but if the water needed is valued at 1 for some other purpose, as for sale at a price, then some readjustment of other values must take place. Either the value of the flour falls to 9, or that of the bread increases to 11, or an adjustment midway between these values is made. In this way occurs the adjustment of the value of comple mentary agents, each being valued in relation to all the other uses to which it could be applied. The tot price of the products evidently must closely conform to he total price (actual, or estimated) of all the agents en ring into the products. This measurement of money-costs a d their adjust ment to prices we shall have to study more fully later under "cost of production." 2 Ignoring here for the moment, labor, yeast, salt, fuel, etc.