iods　of　time；　in　bringing　them　into　existence；　or　if　you　like　the　sacrifices　necessary　to　reproduce　them；　the　list　of　the　historical　production　sacrifices　would　be　greatly　simplified。　It　would　include　two；　or　at　most　three；　elements。　First　of　all　come　labor；　which　without　doubt　is　the　most　important　of　these　elements。　Then　come　a　second　to　which　many　economists　have　given　the　name；　abstinence。　Perhaps　a　third　might　be　added；　namely；　valuable　original　natural　power；　though　many　might　decline　to　regard　this　last　as　a　sacrifice。　　　　　　For　our　present　purse；　the　extension　of　the　discussion　to　the　last　two　elements；　about　which　there　may　be　some　question；　is　not　at　all　necessary。　We　may　indeed　leave　them　entirely　out　of　the　discussion；　and　take　the　most　important　of　the　above　elements　　labor　　as　the　representative　of　the　elementary　production　sacrifices。　Of　course　we　do　not　mean　that　we　would　either　deny　or　overlook　the　co…operation　of　the　other　elements；　but；　in　the　question　which　here　interests　us；　these　elements　play　a　part　in　no　way　different　from　that　played　by　labor；　so　that　the　result　obtained　for　the　latter　may　in　a　general　way　be　regarded　as　true　of　the　other　elementary　production　sacrifices。　It　is　therefore　hardly　necessary　to　repeat　the　same　argument　for　the　other　elements。　　　　　　As　I　have　already　remarked；　the　historical　mode　of　viewing　cost　is　regarded　by　Professor　Macvane　as　the　only　correct　method；（11*）　whether　or　not　he　is　right　we　have　yet　to　inquire。　It　is　employed　by　Professor　Marshall　in　the　statement　of　his　conception；　of　〃the　real　cost　of　production。〃（12*）　In　numerous　instances　I　also　have　had　occasion　to　make　use　of　it；　as　when　I　endeavor　to　show　that　capital　does　not　possess　original　productive　power。　Again；　when　in　explaining　the　operation　of　the　law　of　cost；（13*）　say　in　the　iron　industry；　I　declare　in　a　brief　way；　that　the　necessary　means　of　production　are　mines；　direct；　and　indirect　labor。（14*）　　　　　According　to　this　historical　method　of　reckoning　cost；　labor　may　be　regarded　as　the　chief　representative　of　all　production　costs。　But　the　sacrifice　arising　from　the　expenditure　of　labor　may　itself　be　measured　by　different　standards　or　scale。　We　can　measure　it　either　according　to　the　amount　of　the　labor　（i。e。；　the　duration　of　the　labor）；　according　to　the　value　of　the　labor；　or；　finally　according　to　the　amount　of　the　pain　or　disutility；　which　is　associated　with　the　labor。　　　　　　Obviously；　through　the　use　of　these　different　standards　of　measurements；　one　will　arrive　at　very　different　formulas　for　expressing　the　amount　of　the　costs。　If；　for　instance；　one　were　asked：　What　is　the　cost　of　production　of　a　certain　piece　of　cloth？　he　would　answer　according　to　the　first　scale　or　standard；　twenty　days'　labor；　according　to　the　second　（if　a　day's　labor　cost　say　eighty　cents）；　labor　to　the　value　of　sixteen　dollars；　and　according　to　the　third；　a　certain　sum　of　pain　or　disutility；　which　the　laborer　must　endure。　　　　　　But　it　is　important　that　we　should　here　see　clearly；　that　this　involve　more　than　a　mere　difference　in　the　terms　employed。　For　according　as　we　employ　one　or　the　other　of　these　scales　or　standards；　our　estimate　of　the　actual　amount　of　the　cost　of　any　commodity　will　vary。　They　will　not　only　be　different；　but　may　even　positively　contradict　each　other。　Suppose；　for　instance；　that　a　certain　commodity　A　require　for　its　production　twenty　days'　labor；　which　is　paid　for　at　the　rate　of　eighty　cents　per　day；　again　let　us　assume　that　a　certain　other　commodity；　B；　require　thirty　days'　labor；　which　is　paid　for　at　the　rate　of　forty　cents　per　day。　Now　if　we　employed　the　first　scale　or　standard；　we　would　reach　the　conclusion　that　the　cost　of　A　was　less　than　the　cost　of　B；　（twenty　against　thirty　days'　labor）。　By　the　application　of　the　second；　we　reach　the　directly　opposite　conclusion；　that　the　cost　of　A　is　greater　than　the　cost　of　B　（labor　to　the　value　of　sixteen　dollars　against　labor　to　the　value　of　twelve　dollars）。　It　is　also　clear　that　even　though　we　assume　that　the　labor　in　these　case　is　equal；　either　in　amount　or　in　value；　this　does　not　necessitate　the　conclusion　that　the　amounts　of　pain　or　disutility　are　equal。　The　labor　of　a　great　artist；　which　perhaps　is　paid　the　highest　of　any　form　of　labor；　may　not　only　not　cause　him　any　pain；　but　may　even　yield　him；　quite　independent　of　all　economical　considerations；　a　large　measure　of　pleasure。　It　might　therefore　very　readily　happen　that　by　the　application　of　the　third　standard；　the　cost　of　a　commodity　would　seem　very　small；　while　its　cost；　according　to　the　other　two　standards；　would　seem　very　large；　and　conversely。　　　　　　This　short　resume　of　the　uses　that　have　been　made　of　the　term　〃cost　of　production〃　makes　it　clear；　that　if　we　would　avoid　idle　disputation；　all　further　discussion　of　this　subject　must　be　preceded　by　the　consideration　of　a　preliminary　question。　A　question　which；　for　the　most　part；　has　been　neglected　by　those　who　have　taken　part　in　the　general　discussion。　The　whole　controversy；　in　its　final　issue；　turns　upon　the　famous　〃law　of　cost；〃　which　holds　that　the　value　of　the　majority　of　goods；　namely；　those　which　may　be　regarded　as　freely　reproducible；　adjusts　itself　in　the　long　run　according　to　the　cost　of　production。　As　to　the　actual　manifestation　of　such　a　law；　there　can　be　no　question。　Its　existence　is　empirically　proven；　and　so　far　as　the　actual　fact　is　concerned　is　unanimously　acknowledged　by　all　parties　to　the　discussion。　The　real　question　is　as　to　the　deeper　meaning；　the　final　theoretical　conclusions；　which　may　be　deduced　from　this　empirically　established　law　of　cost。　But　before　we　can　enter　upon　any　inquiry　in　regard　to　this　deeper　meaning；　we　must　first　know　in　what　sense　the　term　〃cost〃　is　to　be　employed。　　　　　　That　it　cannot　at　one　and　the　same　time；　have　all　of　the　above　enumerated　meanings；　the　preceding　example　make　very　manifest。　If　the　cost　of　a　commodity　A；　taken　in　one　sense　is　higher；　and　taken　in　another　sense　is　lower；　than　the　cost　of　a　commodity　B；　it　is　manifest　that　the　price　cannot；　at　one　and　the　same　time；　be　adjusted　in　both　senses　according　to　the　cost。　In　that　event　the　price　of　the　commodity　A　would　at　one　and　the　same　time　be　higher　and　lower　than　the　price　of　the　commodity　B。　Our　most　pressing　problem；　therefore；　is　to　find　a　solution　for　that　preliminary　question；　to　which　we　have　referred；　a　question　which　finds　statement　in　the　title　of　the　following　chapter。
  III。　For　Which　of　the　Different　Meanings　of　the　Word　〃Cost〃　is　it　Really　True　That；　According　to　The　Experience　of　Industrial　Life；　Prices　Adjust　Themselves　According　to　Cost
  It　is　undoubtedly　true　for　the　value　sum　of　the　synchronously　reckoned　cost；　or　for　what　Professor　Marshall　calls　the　〃money　cost　of　production。〃　This　is　the　cost　from　which；　in　practical　life；　the　〃law　of　cost〃　receive　its　most　direct　and　effective　confirmation。　The　action　of　the　merchant　is　determined　by　the　amount　which　he　must　expend　for　all　the　necessaries　of　production。　If　the　price　of　the　ware　is　not　sufficient　to　cover　this　outlay；　he　cease　to　bring　the　ware　to　market；　conversely；　if　the　price　yields　a　fair　surplus　over　and　above　this　outlay；　the　producers　increase　the　supply　until　the　price；　in　the　above　sense；　is　adjusted　according　to　the　cost。　It　is　therefore；　from　the　standpoint　of　the　practical　man's　estimate　of　the　money　cost　of　production；　that　the　〃law　of　cost〃　is　always　demonstrated。　Even　such　writers　as　Professor　Marshall　have　recourse　in　the　first　instance；　to　this　method　of　proof。（15*）　　　　　We　do　not　mean　to　say　that　this　〃law　of　cost〃　is　only　true　for　the　synchronous　method　of　reckoning　money　cost。　On　the　contrary；　it　is　in　a　certain　sense　applicable　also　to　the　historically　reckoned　cost；　and　it　is　this　extension　of　it　which；　since　the　time　of　Adam　Smith；　has　excited　the　greatest　interest　among　writers　on　the　theory　of　value。　The　only　question　is；　to　which　of　the　different　conceptions　that　are　included　under　the　historical　method　of　reckoning　cost　may　this　be　applied。　　　　　　There　is　no　doubt　that　it　is　true　　in　that　approximate　way　in　which　any　〃law　of　cost〃　can　be　true　　of　the　primary　elements　of　cost；　labor　and　abstinence；　measured　according　to　their　value。　We　might　put　this　in　a　more　concrete　form　as　follows：　　　　　　In　those　goods　that　generally　obey　the　〃law　of　cost；〃　the　price　of　the　finished　product　tends　to　an　approximate　equality　with　the　total　sum；　that　must　be　expended　in　wages　and　interest　during　the　whole　course　of　its　production。　　　　　This　proposition；　I　believe；　is　common　to　all　theories　of　value　including　the　classical　（see　A。　Smith　and　J。S。　Mill）；　and　really　follows　as　a　logical　consequence　from　the　older　theories。　We　have　said　that　the　price；　say　of　cloth；　tends　to　adjust　itself　to　the　money　cost　of　producing　cloth。　This　consists　in　part　of　the　wages　and　interest；　which　are　paid　directly　in　this　industry　（the　wages　of　weavers）；　also；　in　part；　of　the　money　expended　for　the　consumption　and　durable　goods　sacrificed　in　its　production；　for　instance；　the　yarn　consumed。　But　here　again；　the　money　price　of　yarn；　according　to　our　proposition；　would　tend　to　adjust　itself　to　the　spinner's　money　cost。　This　again　consists；　in　part；　of　interest　and　wages　of　spinners；　and　in　part；　of　the　money　expended　upo