Front Page Titles (by Subject) 2: The Basis of the Price of Things - Commerce and Government Considered in their Mutual Relationship
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2: The Basis of the Price of Things - Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship 
Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008).
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The Basis of the Price of Things
I have a surplus of corn and I am without wine: you, on the other hand, have a surplus of wine and are without corn. The surplus corn, which is useless to me, is thus needed by you; and I myself should need the wine which is surplus and useless for you. In this position we think of making an exchange: I offer you corn for wine, and you offer me wine for corn.
If my surplus is what is needed for your consumption, and yours is what is needed for mine, by exchanging one for the other, we both make an advantageous exchange, because we both give up something that is useless to us for something which we need. In this case, I reckon that my corn has the same value for you as your wine has for me, and you reckon that your wine has the same value for me as my corn has for you.
But if my surplus meets your consumption, and your surplus is inadequate for mine, then I will not give all my surplus for yours: because what I would yield to you would be worth more to you than what you would yield to me would be worth to me.
I would not give you all my surplus corn therefore; I would want to hold some of it back, so as to obtain for myself elsewhere the quantity of wine which you cannot yield to me, and which I need.
You, on your side, have to be sure to get all the corn necessary for your consumption with your wine surplus. You will therefore refuse to leave me all that surplus, if the corn I can yield to you is not sufficient.
In this haggling, you will offer me as little wine as you can for a lot of corn; and as for me, I will offer you as little corn as I can for a lot of wine.
However, necessity will force us to strike a bargain; because you need corn, and I need wine.
So, as you neither want nor are able to give me all the wine I need, I shall resolve to consume less of it; and you, on your side, will take the road of cutting back on the consumption of corn you had counted on making. That way our paths will come closer. I shall offer you a little more corn, you will offer me a little more wine; and, after several reciprocal offers, we shall settle. We shall agree for example to exchange a cask of wine for a septier of corn.
When we make each other reciprocal offers, we are dealing: when we agree, the deal is made. So we reckon that to you a septier of corn is worth what a cask of wine is worth to me.
This reckoning that we make of the corn vis-à-vis the wine, and of the wine vis-à-vis the corn, is what we call price. Thus your cask of wine is for me the price of my septier of corn, and my septier of corn is for you the price of your cask of wine.
So we know what the value of the corn and the wine is between you and me, because we have calculated the values which follow from the need we have of each; a need which is known to us. We know too that both have a value for other people, because we know that other people need them. But, because this need can be greater or less than we think, we cannot judge exactly the value which other people give them, until they themselves have informed us. Now that is what they will teach us by the exchanges they make with us or between themselves. When everyone in general is agreed to give so much wine for so much corn, then the corn vis-à-vis the wine and the wine vis-à-vis the corn will each have a value, which will be generally known by all. Now, this relative value, widely known in exchanges, is the basis of the price of things. Price is therefore only the estimated value of a good vis-à-vis the estimated value of another; estimated, I say, in general by all those who exchange the goods.
In exchange, goods do not have an absolute price; they only have a price in relation to the estimation we make of them when we conclude a deal, and they are the reciprocal prices of each other.
In the first place, the price of things is relative to the estimation we make of them; or rather it is only the estimation we make of one vis-à-vis another. And that is not surprising, since, in their origin, price and estimation are perfect synonyms, and the idea which the first originally signified is identical with the idea which the second expresses today.
In the second place, they make each other’s prices reciprocally. My corn is the price of your wine, and your wine is the price of my corn; because the deal concluded between us is an agreement by which we estimate that my corn has the same value for you as your wine has for me.
We must not confuse these words price and value and use them indiscriminately for each other.
As soon as we need a good, it has a value; it has a value by virtue of that need alone, and before there is any question of making an exchange.
On the other hand, it is only in our exchanges that it has a price, because we only estimate it in comparison with another good, in so far as we need to exchange it; and its price, as I have said, is the estimation we make of its value, when, in exchange, we compare it with the value of another good.
Price therefore assumes value; that is why one is so strongly driven to confuse these two words. It is true that there are occasions when one can use them indifferently for each other. However, they express two ideas which it is important not to confuse, if we do not want to obscure the remaining development of the argument.