Natural Value (1889)

by Friedrich von Wieser (1851-1926)

Book III: The Natural Imputation of the Return from Production

Chapter XIII
The Individual Factors of Imputations (continued). V. – The Imputation to Productive Factors of Preferable Quality

NV-III-13.1 Of two production goods of the same kind, that one possesses the better quality which shows the greater “rentability” – to use a clumsy but convenient German expression. In other words, it is that good which, when co-operating with the same amount of complementary goods, gives a return of higher value; – whether it be that the higher value of the return arises from more being produced, or from what is produced being of a better or preferable quality. In what follows, for brevity’s sake, we shall consider only the former case.
NV-III-13.2 If we possessed several production goods which, in this specially limited sense, were of different qualities, we should undoubtedly, in the production, employ the goods of poorer quality only when the supply of better ones was not sufficient for the demand; and the share of return which fell to the better goods would, of course, be higher than that which fell to the poorer ones, by an exactly ascertainable quota. According as the better means of production, when working along with an equal addition of complementary goods, produce a greater total return, the value equation becomes more favourable to them by the whole amount of the surplus return. Their productive contribution is equal to that of the poorer quality plus this surplus return. Should the poorer goods be present in superfluous amount and so have no contribution imputed to them, the contribution of the better goods alone will be credited with the surplus return. Experience confirms these propositions in thousands of ways; they answer to the economic observation of everybody.
NV-III-13.3 Some economists who have paid very little attention to the laws of complementarity in general, have shown extraordinary earnestness in discussing this particular case. Ricardo, in his theory of land rent, deals with the advantage obtained from greater natural fertility in the case of agricultural lands, or the greater productiveness of mines. Then he goes on to the advantage, as regards return, which industrial capital first expended has, as against the increments of capital which follow. His theory of land rent was amplified by pointing out that rent of land is influenced also by its situation, i.e. by its distance from the market for its product. Finally it has been shown that the “rentability” of land in towns, and also that of capital and labour, is graduated in the same way as that of agricultural land, and that the opportunity of obtaining for the better quality a greater rent – a surplus return and a surplus value – occurs as often in the one case as in the other.
NV-III-13.4 These theoretic statements all relate to price, but they hold equally as regards the theory of value. The more fertile land, the land which lies nearer to the sphere of demand, the more skilled labourer, the more capable machine, are not only more highly paid, but have imputed to them as well, on account of their better quality, a comparatively greater share in the return, – which, indeed, is the cause of their being more highly paid. In the communistic state, too, calculation will be made in the same way. The more fertile or more conveniently situated land will be cultivated before any other land, and, should other and poorer land require to be cultivated, the better qualities will be more highly valued in exact proportion to their surplus return.

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