Value being a ratio, it is impossible for all values to rise or fall simultaneously. The sum of subjective values may increase or decrease,--indeed it is one of the great objects of human endeavour to increase the sum of want-satisfying power,--but the sum of the ratios between these subjective values is constant. As one term of any ratio rises relative to the other, the second necessarily falls as regards the first.
This principle is so universally recognized that quotations might be given from almost every work on political economy in support of it. The following will be sufficient, however, as regards both the definition of value and this principle.
John Stuart Mill says, in his "Principles of Political Economy":--
"Value is a relative term. The value of a thing means the quantity of some other thing, or of things in general, which it exchanges for. The values of all things can never, therefore, rise or fall simultaneously. There is no such thing as a general rise or a general fall of values. Every rise of value supposes a fall, and every fall a rise."
"Things which are exchanged for one another can no more all fall, or all rise, than a dozen runners can each outstrip all the rest, or a hundred trees all overtop one another."
Prof. S. N. Patten says, in "Dynamic Economics," p. 64: "Objective values, however, are never a sum, but only a relation between subjective values. There can never be high or low objective values of commodities as a whole. It is therefore impossible to add to or subtract from them."
This latter quotation, as well as the preceding one from von Böhm-Bawerk,--both exponents of the marginal utility theory,--may help to correct a quite prevalent impression that this later theory does not distinguish between the two conceptions of value, and that because the sum of subjective values may increase, the sum of objective or exchange values can increase also.
All economists recognize the fact that the immediate determiner of value is the relation between supply and demand. These terms in their economic sense mean something more than mere desire and mere quantity. _Supply_ means the amount offered in exchange, and _demand_ means not only a desire, but a desire coupled with the ability and willingness to give other commodities in exchange for the one wanted.
