MARKETING FRUITS 
at once have a market value, and the 
value or price of any given unit would 
be determined, first, by how badly folks 
wanted air, and, second, by how much 
there was of air to supply the want; i. e., 
when the amount is unlimited there is 
no market value, but when the amount 
is limited there is a market value, pro- 
vided, of course, that the need of it still 
exists. 
One other factor which affects value 
but in a more indirect way, is the cost 
or labor which is necessary to produce 
a thing. Manifestly, that which is hard 
to get will be relatively scarce as com- 
pared with that which costs little labor. 
Therefore, the cost of a thing may affect 
the supply and in this way affect its 
value. The effect which labor may have 
is always in proportion to the _ effect 
which it may have on the _ supply. 
Labor alone cannot determine the value 
of a thing. For example, it might cost 
an enormous amount of effort to produce 
a barrel of air, and yet when produced 
the merest child can see that it would 
have no value whatever on the market, 
simply because the quantity on hand was 
already so enormous that every one could 
have all he wanted for the breathing. Or 
again, I may find a diamond. The labor 
is nothing. The value is great, simply be- 
cause the desire on the part of people 
for diamonds is great, while the supply is 
limited. Thus it appears that labor af- 
fects value only when it has an influence 
in affecting the supply in such a way as 
to affect the value. It is true that in the 
case of the staple commodities for which 
there is a universal demand the labor 
cost fixes the point below which price 
does not ordinarily fall. 
Hence, in order to have market value 
we must always have cost, or whatever 
goes to determine quantity or supply, bal- 
anced by utility, or whatever goes to de- 
termine the strength of our wants. The 
balance of these two factors (utility and 
labor, or want and cost) is, in the final 
analysis, the cause of market value. The 
so-called law of supply and demand is, 
therefore, the final explanation of econo- 
1257 
mic value and includes all factors which 
enter into the problem. 
The above conclusion is disputed in 
some quarters but the disagreement 
arises, like most disputes, out of misun- 
derstanding of the use to which the terms 
“value,” “market,” “supply” and “de- 
mand” are put. 
At the outset it should be understood 
that the term “value” as here used ap- 
plies to “exchange” or “market” values 
only. ‘Value in exchange” is perhaps a 
better term to use since it carries the 
full notion along with it. If no exchange 
can be made for goods then there is no 
market, and no price or value can be 
placed upon them. A “market” is simply 
the point at which an exchange takes 
place. Here again we should be careful 
to avoid misconceptions. We do not mean 
by the market for peaches, for example, 
the particular warehouse where we un- 
load our orchard wagon. The market 
for peaches may be world-wide, in which 
case the peach market embraces all the 
varied conditions under which peaches 
were being sold at a given time; never- 
theless, though there may be 1,000 places 
where peaches are selling, the market is 
the “exchange” and there can never be a 
peach market where peaches are not sell- 
ing or where there is no possibility for 
an exchange to take place, either because 
there are no peaches there or because no 
one will or can buy them. Peaches have 
no value or price where there is no mar- 
ket for peaches. 
By “supply” is meant “effective supply.” 
That is, supply which actually offers itself 
for sale or which it is known will be 
offered for sale at a given price The 
mere existence of a supply of peaches at 
Wenatchee in the orchards does not affect 
the price of peaches in New York unless 
the supply gets to New York or is known 
to be on the way. In other words, unless 
in some form it is offered for sale in New 
York. There is no market for Wenatchee 
peaches in Mars. Consequently there is 
no price set or value fixed upon We- 
natchee peaches by the Martians. 
In the same sense “demand” is not 
