Value, Difference, and Exchange: Writing Between the Lines of Saussure’s Economic Analogy

A paradoxical principle. AI image

 

Introduction: Why Saussure Turns to Economics

Among the many examples deployed by Ferdinand de Saussure, few are as frequently cited—and as frequently misunderstood—as his comparison between linguistic value and economic value. The image seems simple: a coin can be exchanged for bread and compared to other coins; likewise, a word relates both to an idea and to other words.

Yet this analogy is anything but superficial. It condenses, in a remarkably compact form, Saussure’s entire theory of linguistic value. The difficulty lies precisely in this compression: what was likely unfolded slowly in the classroom appears in the Course in General Linguistics as a dense and rapid conceptual leap.

This article aims to slow that movement down. By reconstructing the implicit logic of the analogy, we can clarify a central distinction in Saussure’s thought: that between signification (the relation between signifier and signified) and value (the relation between signs within a system).

The Economic Model: Two Conditions of Value

Saussure frames his analogy through what he calls a “paradoxical principle” governing all values:

“Values always involve: (1) something dissimilar which can be exchanged for the item whose value is under consideration, and (2) similar things which can be compared with the item whose value is under consideration. These two features are necessary for the existence of any value.”

The example of money clarifies this structure:

“To determine the value of a five-franc coin… it must be known (1) that the coin can be exchanged for a certain quantity of something different… and (2) that its value can be compared with another value in the same system…”

These two dimensions—exchange and comparison—are not optional. Together, they constitute value.

At this point, however, a crucial shift occurs when Saussure moves from economics to language. This shift requires a methodological clarification.

First Axis: Exchange (Signifié/Signifiant)

Before proceeding, a clarification is necessary. Throughout this discussion, Saussure uses “word” at times as a proxy for the signifier, and at other times for the sign as a whole. As he himself notes, this is a deliberate simplification for didactic purposes:

“Since we cannot have direct access to concrete entities or linguistic units… we shall take words as examples… [they] will be adequate to give a rough idea” [CGL] [158].

With this clarification in place, Saussure’s transposition becomes clearer:

“Similarly, a word can be substituted for something dissimilar: an idea.”

This is the most intuitive aspect of language: a word “stands for” something. Here we encounter what is commonly called meaning or signification—the association between a sound pattern and a concept.

However, Saussure immediately introduces a limitation:

“Its value is therefore not determined merely by that concept or meaning for which it is a token.”

In other words, knowing that tree refers to a certain concept does not yet tell us its value within the language.

This is the first decisive step: signification is necessary, but not sufficient.

Second Axis: Comparison (Signe ↔ Signe)

The second condition completes the structure:

“It must also be assessed against comparable values, by contrast with other words.”

Here we move from the vertical relation (word ↔ idea) to a horizontal one (word ↔ word). A linguistic unit acquires value only through its position relative to other units.

Saussure sharpens this insight further:

“The content of a word is determined in the final analysis not by what it contains but by what exists outside it.”

This formulation marks a decisive break with the idea that meaning resides within the word itself. Instead, identity emerges from a network of contrasts.

The familiar example of sheep and mouton illustrates this point: although they may share a similar signification, their values differ because English distinguishes sheep (animal) from mutton (meat), whereas French does not.

Thus, the second axis—comparison—reveals what the first alone cannot: a word is defined not by what it represents, but by what distinguishes it from others.

Signification and Value: Two Irreducible Dimensions

We are now in a position to articulate the distinction that structures Saussure’s entire argument:

• Signification: the relation between a signifier and a signified
  → a word associated with an idea (exchange)
• Value: the relation between a sign and other signs
  → a word defined by its differences and oppositions (comparison)

Saussure’s conclusion follows directly:

“As an element in a system, the word has not only a meaning but also – above all – a value. And that is something quite different.”

The phrase “above all” is not rhetorical emphasis; it signals a theoretical priority. Value is not an additional layer—it is what makes linguistic identity possible in the first place.

From Difference to Opposition

At this point, the economic analogy can be connected to Saussure’s broader theoretical framework.

At the level of signifier and signified taken separately, everything is differential: there are no pre-existing sounds or ideas, only differences within amorphous continua.

Once these differences are articulated into signs, however, a new structure emerges: opposition.

• Difference operates at the level of conditions (before units)
• Opposition operates at the level of units (between signs)

The economic analogy mirrors this transition:

• Exchange (word ↔ idea) corresponds to the coupling of heterogeneous elements
• Comparison (word ↔ word) corresponds to the system of oppositions that defines value

What initially appears as a simple pedagogical illustration thus encodes a deeper theoretical movement—from undifferentiated differences to structured oppositions.

The Role of the System (Langue)

A final clarification is necessary to avoid a persistent misunderstanding. One might be tempted to think that, just as gold once functioned as a standard in economics, language must rely on some external measure.

But for Saussure, this is precisely what does not exist.

There is no external standard—no “linguistic gold.” The system itself provides the only framework of evaluation. Value is entirely internal:

• no intrinsic meaning
• no fixed reference
• no external measure

Instead, what exists is a system of interdependent relations—what Saussure calls la langue.

Crucially, this system is not consciously constructed. Unlike economic conventions, which may be explicitly negotiated, linguistic conventions are inherited and largely unconscious. No speaker has ever witnessed the moment when a sound became linked to an idea.

Conclusion: Why the Analogy Matters

Saussure’s economic analogy is not merely illustrative—it is structural. It allows us to grasp, in a single conceptual gesture, the dual constitution of linguistic value:

• a word relates to something different (an idea)
• but it is defined by what is similar (other words)

To stop at the first relation is to reduce language to a nomenclature. To include the second is to understand language as a system.

What the analogy ultimately reveals is that meaning does not reside inside words. It emerges from a network of relations—differences that become oppositions, and oppositions that constitute value.

To read Saussure carefully, then, is to move beyond the intuition that words name things, and toward a more demanding insight: language is not a collection of terms, but a structure of relations in which every unit exists only through the others.

Bibliography

Saussure, Ferdinand de. 1916. Cours de linguistique générale. Edited by Charles Bally and Albert Sechehaye, with Albert Riedlinger. Libraire Payot.

Saussure, Ferdinand de. Course in General Linguistics. Translated and annotated by Roy Harris. With a new introduction by Roy Harris. Bloomsbury, 2013.