CHAPTER I: ON DISTRIBUTION.

...tive agency original: "productive agency"; the combined effort of labor, capital, and land used to create a good exerted in creating the one, for that exerted in the creation of the other. *

Therefore, there is a prevailing market value or price established for productive services as well as for the products themselves. If the effort put into producing 15 kilograms original: "kilogr." of wheat can earn as its reward through exchange either 15 kilograms of wheat or 1 kilogram of coffee interchangeably, what is to stop it from obtaining any other equivalent product in the same way? This could be a yard of cotton cloth, five yards of ribbon, a dozen plates, or anything else.

If 15 kilograms of wheat were to be exchanged for a smaller amount of any of these other goods, the productive effort put into creating wheat would be less rewarded than the effort put into creating those specific items. Consequently, a portion of the resources and labor from wheat production would be drawn toward the more profitable branch of production. This shift would continue until the compensation for labor in each department reached a fair and equal level.

Each class of productive agency has a current—

• It is hardly necessary to mention that when goods are exchanged for money instead of for each other, the situation is not changed in any way. No seller ever accepts money to consume it themselves, or for any purpose other than to use it for a second exchange. Therefore, in reality, the product sold is exchanged for the product eventually bought with that price. When 15 kilograms of wheat have been sold for 4 francs original: "fr."; the currency of France, and 1 kilogram of coffee is bought with those 4 francs, the wheat has actually been bartered for the coffee. The money that intervened has removed itself from the situation as completely as if it had never appeared in the transaction at all. Therefore, it is perfectly correct to say that relative value is determined by the relationship of goods to one another, and not solely by the relationship of each good to money.