that is
measured by the money costs of a commodity at the margin of
production.

This conception of ultimate costs encounters an instinctive
repugnance, arising from a mistaken sense of logical symmetry, which
it will be well to examine. Cost, it is objected, so interpreted
loses its character as an independent entity. It is merely something
derived from utility. Now in the earlier chapters of this volume, we
found reason to be impressed with the general symmetry which pervades
the relations of demand and supply. Moreover, when we considered the
case of ordinary commodities we found that at the back of demand and
giving rise to it was utility; at the back of supply, and limiting it,
was cost. The general symmetry between demand and supply thus seemed
almost to imply a fundamental symmetry between utility and cost. If,
then, cost in the last analysis is derived from utility, does not this
make nonsense of the symmetry between demand and supply, or, if we
cling to this last symmetry as a demonstrable truth, must we not
refuse to admit that cost can be derived from utility?

This is one of those false dilemmas which supply the wiseacres of the
world with a plausible case for distrusting the logical faculty. If we
have good reason for believing that both of two apparently
inconsistent things are true, the explanation is seldom that one of
them is really false; it is more usually that they are not really
inconsistent. So it is here. The symmetry between demand and supply is
very great, and we should always look to see if it holds good, but it
is by no means perfect, and it is in the last analysis that it most
notably fails. It is most important to distinguish clearly between the
utility and the cost of a commodity as two separate and independent
things. In Chapter V, it will be remembered, we did not permit
ourselves to derive the costs of producing cotton lint from the
utility of cotton-seed. The refusal to do so was essential to clear
thought; it led to some very useful practical corollaries. But to
derive the cost of a commodity from the utility of something which is
produced _with_ it, as part of the same productive process; and to
derive the cost from the utilities which the agents, which help to
produce it, possess for other purposes, are two entirely different
things. In works on International Trade, the reader will discover that
the comparative nature of real costs is so unmistakable that a
Doctrine of Comparative