Financial Legislation and its Limitations. 



77 



possible. But the question of theory is itself entirely independent 

 of political motives, and must be looked upon as any other piece 

 of abstract reasoning. The principle of the return of equal 

 values has already been sufficiently extended. In opposition, 

 appeared the theory of the return of equal utilities, by which 

 was meant total utility and not marginal utility. 



Three points were made by Professor Edward A. Ross in his 

 clever presentation of the theory of total utility. ^° First, the 

 marginal theory applies to a case of imputed value alone. The 

 ordinary case of the market is one of imputed value. The whole 

 of a stock of goods is valued according to the price obtained by 

 the last amount sold ; that price is " imputed " to the whole. But 

 where the whole of the stock itself is parted with in one sale, 

 according to Ross, the case is not one of imputed value; but the 

 whole utility of the stock must be compensated. Undoubtedly 

 this statement is correct : it may be intelligently interpreted. The 

 application alone is disputed. The Dakota farmer would charge 

 more per cord for his whole wood pile than for a single cord sold 

 out of it. The owner of a well would be glad to give away a 

 cup of water, but perhaps would not sell the well for all the 

 money in the world, and so on. The second point was that the 

 utility to the consumer is different from that to the buyer: that 

 will be shown to be practically the first point in another guise. 

 The third was that legislation calculated to remedy a mistaken 

 level of prices should be founded upon the supposition that 

 society was parting with its goods as a whole. 



In the first point, illustrated by the sale of cord-wood, the ques- 

 tion really raised is as to whether the marginal principle applies 

 to all cases of sale. The question of deferred payments is un- 

 doubtedly one of sale. In the extreme case put of parting with 

 the whole stock at once, it is true that the sale would not be 

 made for less than the total utility of the article sold, but this 

 is not a denial of the application of the marginal theory. That 

 theory states that the valuation of the total amount of goods is 

 set by the marginal quantity or " dose." In the illustrations 



^^ " Total-Utility Standard of Deferred Payments," Annals of the Ameri- 

 can Academy, vol. IV. 



191 



The case for 

 the total utility 

 standard is 

 defended by a 

 denial of 

 imputation of 

 value, by an 

 emphasis on 

 consumer's 

 rent, and by 

 the assumption 

 that society 

 sells its goods 

 in a lump. 



As to impu- 

 tation; there 

 can be none in 

 absence of 

 division; but 

 the case is still 

 marginal. 



