PRINCIPLES OF VALUE AND PRICE 415 



of the market upon a level of profitableness to himself. If all farmers 

 reduce their acreage of a given crop or if some of them go out of that 

 line of production altogether, the supply is reduced, and this lessened 

 amount equated against the higher-priced portion of the whole 

 demand. Undoubtedly such rational control of market supply is 

 hindered by the farmer's lack of accurate knowledge of his costs of 

 production, by the vagaries of the weather, and by the lack of harmony 

 of action among many individual producers. Undoubtedly, too, the 

 first and last of these difficulties are being gradually removed. Also 

 the work of the Office of Markets of the United States Department of 

 Agriculture is doing much to give producers of many of the less staple 

 commodities a much broader and more accurate view of the actual 

 conditions of demand in all markets and the supply available in com- 

 petitive producing sections. All these influences tend to increase the 

 farmer's control over the forces under whose influence his prices are 

 made. 



It is evident, however, that the farmer does not deal directly with 

 those who are the ultimate demanders of his goods. He comes into 

 direct contact, instead, with the dealers, who are the deputies, more 

 or less remotely removed from the actual consumer of the goods. 

 And since the ultimate parties to the contract come together only 

 through the mechanism of the market, it becomes a matter of much 

 concern whether this market mechanism be well designed and working 

 smoothly; whether, in a word, it performs its task efficiently. Sec- 

 tion F calls attention to the part played by markets, and chap, ix 

 takes up a discussion of some phases of their work. 



A. Theoretical Foundations 



132. OF VALUE AND PRICE 1 

 BY JOHN STUART MILL 



The words "value" and "price" were used as synonymous by the 

 early political economists. But the most accurate modern writers, 

 to avoid the wasteful expenditure of two good scientific terms on a 

 single idea, have employed "price" to express the value of a thing in 

 relation to money; the quantity of money for which it will exchange. 

 By the price of a thing, therefore, we shall henceforth understand its 



1 Adapted from Principles of Political Economy, Vol. I, Book III, chaps, i 

 ii, iii, and vi. 



