VALPY. 807 VALUE. at tliis school for fifty years, aiul upon rotiring was succeeded by his youngest son, Francis Edward Jackson. He was the author of Greek and Latin grammars very widely used in their day. VALTELLINA,v:il'tel-le'na. The uppervalley of the Adda lliver, in the I'rovinoe of Somlrio, Italy, extending from the Stilfser .Joch (Stelvio Pass) to Lake Como. Jlore particularly, how- ever, it designates only the lower portion (some 5.1 miles long). This is a luxuriant, charm- ing little district, opening toward the west be- tween the Bergamese and the Bernina Alps. The valley is famed for its wines. Grain and fruit are also produced. Sondrio and Tirano are in this valley. In mediaeval times the Valtellina was a part of Lombardy. It was wrested from the Duke of Milan by the people of Orisons in 1512. In 1020 the Catholics sought through the murder of the adherents of the Reformed faith to free the district from the rule of the Swiss Confederation. The Confederates, how- ever, were able ultimately to maintain pos- session of the valley with the help of Spain and Austria. In 1797 Xapoleon united it to the Cisalpine Republic. In 1814 it passed to Austria and in 1S59 to Italy. VALUE (OF. value, value, fem. sg. of p.p. of valoir, from Lat. valere, to be strong, able). In political economy, a word that is most com- monly used to designate the power of a com- modity to command other commodities in ex- change. The terra is applied, however, to several other conceptions. The potential capacity of an object to meet human needs is sometimes called value — 'value in use,' in the terminology of the classical economists. In modern scientific economics, the term 'utility' has for the most part supplanted this use of the word value. An- other meaning which the term value conveys is the significance of an object to an individual as the indispensable condition of a certain satisfac- tion. Value in this sense of the term is frequent- ly called 'subjective value,' to distinguish it from 'objective' or 'exchange' value (the first con- ception noted above). Subjective value is of two kinds, 'subjective use value,' where the import- ance of an object is gauged by the direct satisfac- tion to be obtained through its consumption, and 'subjective exchange value,' where the importance of an object is gauged by the satisfaction it will yield indirectly, through exchange. A distinction is usually made between 'market value' and 'normal' or 'natural value.' Market value is the purchasing power of a commodity in the open market on a given day: normal or natural value is the value which would prevail if competitive forces worked without friction. Market values fluctuate widely from day to day; normal values change, if at all, only with changes in the fundamental conditions of production and consumption. The word 'price' is often used as synonymous with 'exchange value.' Economists define price as the power of a commodity to command money in exchange; value ('exchange' or 'objective') is the power of a commodity to command in exchange commodities in general. In order to have value, an object must satisfy some human want, and it must exist in a quanti- ty which is insufficient wholly to satisfy all de- sire for it. It must possess 'utility' and 'scarcity.' in the case of most commodities, limitation in supply is due to the necessity for elfort or sacri- fice in winning such conunodities from nature. In explaining value, economists have been in- clined to emphasize one or the other of these two essential conditions. On the one hand, we have the cost theories of value: on the other, the i//i7- ity theories. As representative of the cost theories we may take that known as the classical theory, derived from Adam Smith, logically developed by Ricardo, and substantially completed by Senior, Carey, .John Stuart Mill, and Cairnes. Accord- ing to this theory, market value is determined by demand and supply, being fixed at the point where the former just equals the latter. Value increases directly with increase in demand, in- versely with increase in supply (other conditions remaining the .same) . In the case of conunodities that may be freely reproduce<l without increase in cost, cost of prodvu'tion determines normal value. If market value is not high enough to cover cost of production some producers will turn to other industries, with the result that value will rise through decrease in supply. If, on the other hand, market value exceeds cost of pro- duction, producers will secure a profit which will lure other producers into the field, whose compe- tition will reduce prices to the cost levcd. In the case of commodities produced at varying costs (e.g. the products of agrictilture) values will tend to equal cost to the producer in the least favorable situation whose product is neverthe- less necessary to meet the demand. The classical economists recognized a third class of conunodi- ties, consisting of those which could not he re- produced (e.g. paintings by the old masters), and of those whose production is controlled by a monopoly. The value of such commodities, in their theory, is derived from their utility and scarcity. Such conunodities were regarded as relatively unimportant: accordingly, the law that value is controlled in the long run by cost of pro- duction was held to be nearly universal. During the second and third quarters of the nineteenth century the classical theory of value was almost imiversally held by economists: it serves as the basis of much of the economic thought of the present day. A second theory of much historical importance is the labor theory of value, Adam Smith ar- gues that in a primitive society the respective amounts of labor spent on commodities nnist have served as a basis for their exchange value; Ricardo in many passages speaks as though he regarded labor as the basis of exchange value, although a general examination of his work loaves no doubt that he admits the determining influence of other elements in value besides labor. The theory was adopted by Karl Marx and his followers as a theoretical basis for socialism. Whatever part of the value of n commodity falls to the landlord or the capitalist Karl Marx re- garded as a deduction from the fruits of labor, since labor alone created value. The difficulty in accounting for the value of goods produced at a varying expense in labor, of goods which are not reproducible, and of those which are freely given by nature, but in quantities not adequate to the demand, deprives this theory of scientific value. Vtilitif theories of valm were unsuccessful in explaining the facts of value, until the second
