100 ECONOMIC THEORY OF LEISURE CLASS
modities is lessened by the purchasers is in the present in-
stance nothing more nor less than a certain correction of the
price, produced by the larger quantity of production com-
modities thrown on the market. Such is the true psychology
of the agents of commodities production. The value of the
means of production is in truth fixed more or less independently,
and the alteration in the value of the means of production occurs
sooner than the alteration in the value of the articles of con-
sumption. In consequence, the analysis must begin with the
alterations in the value in the sphere of the production of
means of production.
We must again point out a very grave logical fallacy. We
saw above that the value of the means of production, accord-
ing to Bohm-Bawerk, is determined by the value of the prod-
uct: “In the last instance” the marginal utility of the mar-
ginal product is the decisive factor. But what determines the
amount of this marginal utility? We already know that the
amount of the marginal utility is in inverse ratio to the quantity
of the product to be evaluated; the more the units that are
available of a certain class of commodities, the lower will go
the estimate for each unit in the “supply”, and vice versa.
The question naturally arises, how is this quantity in turn
determined? Our professor tells us: “The total quantity of
commodities available in a market region (is) in turn de-
termined . . . in particularly great measure by the height of
the production costs. For, the higher the production costs
of a commodity go, the lower remains, relatively, the number
of specimens furnished by production to the demand”. (Ibid,
p. 521.) This “explanation” may be paraphrased thus: the
value of the productive commodities (production costs) is
determined by the value of the product; the value of the
product depends on its quantity; the quantity of the product
is determined by the costs of production, or, in other words,
the costs of production are determined by the costs of produc-
tion. This is another one of the spurious explanations in
which the theory of the Austrians is so prolific. Bohm-
Bawerk is thus trapped in the same vicious circle in which he
rightly observes that the old theory of production is still in-
volved. .'**
