The Principle of Solution (continued). Imputation and the Marginal Law In the case of production goods which are available, not individually but in stocks, imputation of the productive contribution follows the marginal law. To each single item or quantity is imputed the smallest contribution which, under the circumstances, can be economically aimed at by the employment of this particular item or quantity -- the "Marginal Contribution"as I have already called it (Ursprung des Werthes, p. 177), or, looking at it from a different point of view, the "Marginal Product." Bohm-Bawerk has drawn attention (Werth, p. 502) to the fact that this law of exchange value has long been recognised in the case of certain production goods: -- "Thunen, and all the body of economic doctrine after him, have taught that the rate of interest is decided by the productiveness of the last applied dose of capital, and the rate of wages by the return of the last labourer employed in the undertaking." Now what is here conceded to a limited extent holds generally of all production goods, and for every form of value, as a law of natural valuation.
It is self-evident that the marginal law which holds as regards produced consumption goods, holds also as regards the goods which produce them. We know that, in every stock of consumption goods, every unit receives its value from the marginal utility; thus the value which the products are expected to have is already adjusted to the marginal level, and the value of the production goods, as derived from this, is consequently placed, from the beginning, on the basis of the marginal value.
if the communistic state wish to produce a million new rifles to one pattern, it will, in the calculations previous to production, reckon every individual rifle as equal in value; and thus it is, from the first, impossible that one quantity of metal destined to make these rifles should obtain a value different from any other quantity of like amount and quality. If from 1000 productive units 10,000 units of product are produced, each with a marginal value of 5 (the total value being exposed by the formula 10,000 x 5 = 50,000), the entire productive stock receives a value of 50,000, and each individual unit will be valued equally at 50.
While this application of the marginal law to production goods results indirectly, through the medium of products, we have to consider a second and direct application. Production goods which are capable of being employed in many different ways, are used to create products of various kinds. In each kind, taken by itself, the value of the product is adjusted to the level of its particular marginal utility, but we need not expect -- and, in fact, it would be essentially a mere chance -- that the marginal amounts of all the different kinds should, when compared with each other, entirely agree. We have already shown (in Book I.
chap, iv) that only in a limited sense can one speak of a common level of household economy; and it is only in the same limited sense that we can speak of a common level of production.
Production stocks must always be employed in such a way as to bring forward those products which will secure the greatest possible satisfaction of want. In particular, the destination of production goods to individual branches of production, -- or, what is the same thing, the choice of the kind and amount of goods to be produced, and the investment of labour and capital in the individual classes and branches of production, -- must always be weighed and decided with a view to prodding the greatest possible satisfaction of wants. This does not, however, in the least imply that products must everywhere have the same marginal utility. Many products satisfy wants of trifling extent, where the satiation point is reached very speedily: others again satisfy wants whose receptive capacity is very great, and where the scale of satisfaction shows the finest shades of transition from the stronger intensities of desire downwards. To take as drastic an example as possible, compare the employment of gold in the filling of teeth with its employment for purposes of luxury.
