Value
In the first edition of the Traite, Say developed his view of value from the Wealth of Nations. There were of course some nuances: the word “value” disappeared, but the main development relied on the gravitation of the market price around the natural price.
In the second edition (1814), the analysis is modified. Utility is now “the first base of the value of things” (1803 [2006]: 592), and the cost of production the second. The link between the two is supply and demand. Say first studies the role of the individuals’ choices and the distribution of income in the relation between the price of a good and the demand for it. Individuals have different needs they rank according to their degree of importance for them, they satisfy first the most urgent ones, then those that are less so, and so on. However, to derive the total demand from individuals, the distribution of income must be taken into account. Say describes it as a pyramid: only a few consumers are rich, many are poor. When the price is high, only a few persons can afford the good; when it is low, almost all can. On the other hand, Say (1826a [2006]: 619) stresses that, when the demand for a good increases, the demand for the productive services that are necessary to produce it and their prices increase too. He concludes that, while some economists like Ricardo wrote thatthe cost of production regulate the price of products, they were right in this sense that products are never sold for a long time at a price lower than their cost of production; but when they said that demand does not influence their value, they were wrong...: demand influences the value of the productive services, increases the cost of production and rises the value of products while not exceeding the cost. (Ibid.).