10. Name some occupations which the census bureau lists under the

general head of “ manufacturing and mechanical industries.” 11. What are some of the occupations which have to do with trans

portation? 12. What occupations does the term “professional service include? 13. What was the total number of persons ten years of age and over,

who in 1910 were engaged in gainful occupations in the United

States? 14. What is the relation of government to industry? 15. What are some of the functions of the Department of Agriculture? 16. Outline briefly those functions of the Department of the Interior

which are closely related to our industrial development. 17. What are the chief functions of the Department of Commerce? 18. What are some of the concerns of the Department of Labor? 19. Describe the method by which the National City Bank of New

York keeps track of industrial tendencies in the United States. 20. What factors have made the United States the wealthiest nation

in the world? 21. Summarize the increase in our national wealth between 1850 and

1912. 22. Name some of the forms of wealth which are recognized in the

enumerations of the Federal Census Bureau. 23. Compare the wealth of the United States with the wealth of the

British Empire. 24. Compare the United States with several other European countries

with respect to national wealth.

CHAPTER VII

WHAT IS MEANT BY PRODUCTION

37. Man's part in production No term is more commonly used in business circles than “pro- A definition duction," and yet the exact meaning and significance of this word of pro

duction. is often difficult to explain. As a working definition we may say that production is the manufacture of objects, or the performance of services, which will satisfy the wants of man. The part which man actually takes in the productive process has been described by the celebrated Austrian economist, Boehm-Bawerk, in the following language: To "produce”: what does this mean? It has been so often said To "pro

duce": by economists that the creation of goods is not the bringing into

what does existence of materials that hitherto have not existed is not “crea- this mean? tion" in the true sense of the word, but only a fashioning of imperishable matter into more advantageous shapes, that it is quite unnecessary to say it again. More accurate, but still exposed to misinterpretation, is the expression that in production natural powers are the servants of man, and are directed by him to his own advantage. If this proposition be taken to mean that man in any case can impose his sovereign will in place of natural laws, can at will “bully” natural law into making a single exception at his bidding, it is entirely erroneous. Whether the lord of creation will it or no, not an atom of matter can, for a single moment or by a hair's breadth, work otherwise than the unchangeable laws of nature demand.

Man's rôle in production is much more modest. It consists simply Man plays in this that he, himself a part of the natural world, combines a modest

part in prohis personal powers with the impersonal powers of nature, and duction.

Man moves things.

Significance of this statement.

The statement explained

combines them in such a way that under natural law the coöperation results in a definite, desired material form. Thus, notwithstanding the interference of man, the origin of goods remains purely a natural process. The natural process is not disturbed by man, but completed, inasmuch as, by apt intervention of his own natural powers, he supplies a condition which has hitherto been wanting to the origination of a material good.

If we look more closely at the way in which man assists natural processes, we find that his sole but ample contribution consists in the moving of things. “Putting objects in motion” is the idea which gives the key to all human production and its results; – to all man's mastery over nature and its powers.

And this is so simply because the powers reside in the objects. Now when man by his physical powers the power of moving things is able to dictate where the object shall be, he obtains a control over the place at which a natural power may become effective; and this means broadly a control over the way and over the time in which it may become effective. ...

Of course a pound weight acts as a pound weight and never in any other way. But just because the expression of one and the same natural power always remains the same, results that are extraordinarily different may be obtained by getting it to work in different combinations - just as by adding like to unlike a different sum may be got every time. And so our pound weight, while in itself constantly acting with perfect uniformity, will, according to the different surroundings in which we place it, sometimes hold together a heap of papers on a writing-table, sometimes indicate the weight of another object, sometimes regulate the pressure of steam in the boiler.

Again I say a control over the time in which a natural power may become effective. This proposition, also, must not be taken too literally. It must not be imagined that natural powers work intermittently; that man can sometimes bring them to a standstill, sometimes set them working again. On the contrary, natural powers are always at work; a natural power not active would be a contradiction in terms. But it is possible that several powers may be so combined that their activities may for a time mutually balance each other, and the resultant be rest. ... This suggests how man may get control of the point of time at which a definite resultant emerges. It is only necessary for him, by skilful use of his power to move objects, to provide the causes of the desired effect, all but one. So long as this one is not present the conditions are unfulfilled, and there cannot be the desired result. But when at the proper moment he adds the last condition, the movement hitherto held in leash, as it were, is suddenly set free, and the desired effect is obtained at the opportune time. Thus the sportsman moves powder and lead into the barrel of the The ex

ample of a gun; he shuts the breech; he raises the cock. Each of these things

sportsman has for long possessed and expressed its peculiar powers. In the firing

a gun. powder are present the molecular powers whose energy later on is to expel the shot from the barrel. The barrel now, as formerly, exerts its forces of cohesion and resistance. The trigger which is to let the cock smash down, strains and presses against the spring. Still the arrangement, the disposition of the collective powers, is such that the resultant of their mutual energies is rest. But the sportsman covers the wild fowl with the barrel: there is a slight pressure on the tongue, a little dislocation of the arrangements, and the shot flies. ...

.

38. The principle of the division of labor 1 Production is as old as the human race itself, for of course even There are

various the earliest peoples had to put forth some effort to satisfy their

methods of wants. Observation and experience have shown us that there are production. all sorts of methods of production, some laborious and inefficient, others increasingly effective. In an important sense, production is effective in proportion as it makes use of the principle of the division of labor. The nature and significance of this important principle have been described by Adam Smith, the “father” of modern economics, in the following language:

This division of labor, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees

Origin of
the princi-
ple of the
division
of labor.

The principle unknown among the lower animals.

The unique
position
occupied
by man.

and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; i.e. the propensity to truck, barter, and exchange one thing for another. ..

It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts.

. . Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that. When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favor of those whose service it requires. A puppy fawns upon its dam, and a spaniel endeavors by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him.

Man sometimes uses the same arts with his brethren, and when he has no other means of engaging them to act according to his inclinations, endeavors by every servile and fawning attention to obtain their good will. He has not time, however, to do this upon every occasion. In civilized society he stands at all times in need of the coöperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favor, and show them that it is for their own advantage to do for him what he requires of them.

Whoever offers to another a bargain of any kind, proposes to do this: Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,

.

How man generally attains his ends.