producing it, and the amount of good it does him when he
consumes it; and there is always to be found a point where the two
amounts are equal. It is the point at which gains are smallest and
sacrifices greatest. It is at this point that men measure values in
primitive life and in civilized life. How in the intricate life of a
modern society the measuring is done we shall in due time see; for the
present it is enough that we perceive the universality of the law
according to which value is best measured by the disutility of the
labor which is most costly to the worker. Organized societies do
something which is tantamount to this. It is as though the whole
social organism were an individual counting the sacrifices of his most
costly labor and getting therefrom a unit for comparing the effective
utilities of different goods.

_How Primitive Man tests Value._--It is a mistake to suppose that what
is essential in value depends on the existence of an actual market in
which things are exchanged for each other. In a market, it is true,
values are established and their amounts are expressed in ways that
cannot be adopted in primitive life. When we buy a thing, we help to
fix the value of it and of other things which are like it. The mere
ratios in which things exchange for each other in a market are,
however, by no means the essence of value itself. That is something
deeper and is one of the universal phenomena of wealth. Value, as we
have said, is the measure of the effective utility of things, a kind
of measure that every one is frequently compelled to employ, whether
he is making goods for himself or buying them from others. A producer
who has the option of making different things for himself needs to
know what variety of goods can be increased in supply with the
greatest advantage to himself as a consumer. Adding to the supply of
any one of them is getting a "final" or "marginal" unit of consumers'
wealth. It is something that is needed less than the things that were
already on hand. Without making such a comparison of the importance of
marginal units of different commodities he cannot use his resources in
the way that will do him the most good.[3]

[3] [Illustration]

The terms _marginal_ and _final_ mean essentially the same
thing, but the modes of conceiving it differ. When utilities
are thought of as supplied one after another, the last is the
least important. We may represent a man's enlarging