Knowledge that Transforms

If the present high level of the prices of agricultural products continues, the new generation will need to have explained to them what was meant by the expression "the poor farmer." The figures given by Secretary Wilson are truly beyond comprehension: $8,760,000,000x is said to be the value of the products of the farm for 1909. The value of the annual crop, of course, depends upon the number of units produced and the price per unit. In the case of a few crops the number of units produced in 1909 was not quite so large as it had been in some previous year, yet gen? erally, because of the higher price per unit, the value of each crop was greater than ever before. To the consumer, however, the price per unit, not the total value, is the significant thing. An effort will here be made to trace the price of the various food products at three different levels, at the farm, at wholesale, and at retail.

reasonable being who always intelligently seeks his own good or is guided in all his activities by enlightened self-interest." The truth is, Mr. McDougall asserts that "mankind is only a little bit reasonable and to a great extent very unintelligently moved in quite unreasonable ways."32 That is, the economists have committed "the intellectualist fallacy." In considering whether this criticism is just with reference to contemporary economics, it is necessary to summarize the psy? chological assumptions commonly made. The statement which follows is intended to apply primarily to economic theory of the eclectic type. An element of psychological unreality is clearly present in most expositions of the theory of value. Bargainers are usually represented as exchanging two consumption goods?say nuts and apples. They come to market with definitely formulated ideas of how many units of the good in their possession they will give to get each successive unit of the other good. These demand schedules rest upon equally definite ideas concerning the varying marginal utilities which each good has for them as the supply is increased or diminished. The artificiality of the whole picture is further enhanced by using diagrams to show the vary? ing marginal utilities of goods, and the varying disutility of successive hours of labor.