No one can work his way through Das Kapital without etching on his mind forever the knowledge that profit must come from loss —the lost energy of one human being paying for the comfort of another; if the process has become ten times more subtle, complex, and untraceable in the modern economy, and conceivably a hundred times more resistant to the careful analysis of the isolated radical, it is perhaps now necessary that some of us be so brash as to cut a trail of speculation across subjects as vast as the title of this piece.
Let me start with a trivial discrepancy. Today one can buy a can of frozen orange juice sufficient to make a quart for 30 cents. A carton of prepared orange juice, equal in quality, costs 45 cents. The difference in price is certainly not to be found by the value of the container, nor in the additional cost of labor and machinery which is required to squeeze the oranges, since the process which produces frozen orange juice is if anything more complex—the oranges must first be squeezed and then frozen. Of course orange juice which comes in quart cartons is more expensive to ship, but it is doubtful if this added cost could account for more than 2 or 3 cents in the price. (The factors are complex, but may reduce themselves as follows: The distributors for cartons of prepared orange juice are generally the milk companies who are saved most of the costs of local distribution by delivering the orange juice on their milk routes. While the cost of shipping whole oranges is greater, because of their bulk, than cans of frozen juice, it must be remembered that the largest expense in freight charges are loading and unloading, and the majority of freshly picked oranges have in any case to be shipped by freight to a freezer plant, converted, and shipped again.)
What is most likely is that the price is arrived at by some kind of developed if more or less unconscious estimation by the entrepreneur of what it is worth to the consumer not to be bothered with opening a can, mixing the frozen muddle with three cans of water, and shaking. It is probable that the additional 12 or 13 cents of unnecessary price rise has been calculated in some such ratio as this: the consumer’s private productive time is worth much more to him than his social working time, because his private productive time, that is the time necessary to perform his household functions, is time taken away from his leisure. If he earns $3.00 an hour by his labor, it is probable that he values his leisure time as worth ideally two or three times as much, let us say arbitrarily $6.00 an hour, or 10 cents a minute. Since it would take three or four minutes to turn frozen orange juice into drinkable orange juice, it may well be that a covert set of values in the consumer equates the saving of 3 or 4 minutes to a saving of thirty or forty ideal cents of his pleasure time. To pay an extra 12 actual cents in order to save this forty ideal cents seems fitting to...
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