Imágenes de páginas
PDF
EPUB

PART I

INTRODUCTION

CHAPTER VII

ELEMENTARY CONCEPTS

IN political economy many of the technical terms employed are often misunderstood because the same words are used in ordinary speech with inconsistency and confusion. We have often to choose between the alternatives of being inconsistent and of violating current usage. The present chapter is devoted to a definition of some of the fundamental notions in political economy.

The statement is sometimes made that economics is a mere bread-and-butter science, and this charge is not without some foundation, since the science studies men in their endeavor to make a living, but it would be an error to suppose that we are concerned with only the sordid aspects of human nature. This is apparent if we enumerate the motives which impel men to acquire wealth.

Motives in Economic Activity. (1) There is, in the first place, the endeavor to satisfy one's strictly personal wants, giving rise to the struggle for food, shelter, comforts, amusement, etc. These things are wanted for their own sake, because of the pleasurable effect which they produce upon the individual acquiring them. We have here, in short, the motive of self-maintenance and development. (2) But every normal individual feels such a degree of affection for certain other people that he is also anxious for their maintenance and development. Striving for the welfare of others is a second motive which impels men to labor for the acquisition of material things, and in many cases is more effective as a spur to endeavor than the first. A man will hold himself to the daily grind more persistently when he feels some one

is dependent upon him than when he is standing alone. (3) A third motive is the desire to gain the esteem of one's fellows. This motive may take the form of an endeavor to do one's part and to be deserving of the companionship of the class of people whom we admire. But much of our wealth acquisition is motived by the hope of impressing our fellows with a sense of our own importance, to show that we are successful, admirable, enviable. When the income permits, old coats are discarded, not because they cease to give protection, nor because they have become æsthetically objectionable, but because the wearers wish to make a favorable impression upon other people. Half the pleasure of owning fine houses comes from the fact that most people do not have them. This motive is not always a conscious one, since our standards of beauty or propriety may themselves have been the result in part of this desire for distinction. Now that bicycles are within the means of workingmen, it is no longer fashionable to ride these machines.

Somewhat similar to the desire for distinction is (4) the desire for power. Men like to dominate and command their fellows, and this want may be satisfied by means of the dollar as well as with the sword; hence our Napoleons of Finance, Captains of Industry, and Railway Kings.

(5) Again, the desire for activity for its own sake may be mentioned. Enforced idleness is as painful as prolonged labor, except to the degenerate. This desire may result in the production of goods, but more commonly it requires the use of goods that have been produced, as, for example, the implements of athletic exercise. Finally, (6) religion or the ethical impulse may be an important factor in controlling the economic activity of the individual. Observe, for instance, the difference in the history of communistic experiments in which religious feeling has been strong and those in which it has been weak.

In this discussion the use of the word "motive" must not be taken to mean that all of the economic life of the individual is a consciously rational one, in which pleasures are balanced against pains in such a way as to secure the maximum surplus of satisfactions. Man is, it is true, a rational being, and as such pursues

definite lines of action under the influence of conscious motives; but he is also a creature of instincts and habits, and much of the economic activity of the individual has to be interpreted as the working out of instinct and habit. We speak, for example, of such things as the "instinct of workmanship," the "habit of industry," the "habit of saving," and the like. The foregoing analysis of the motives in economic activity is, however, broad enough if we remember that "pleasure" is something that is not always consciously sought, but is often to be understood as the result of the functioning of inherited instincts and acquired habits.

Utility. As a result of these motives, human beings are striving for the possession of certain things. These we call goods or utilities. To understand the meaning of the term "utility" in economics, we must recall the central fact of our science, that economics is a science of man. Goods may be of interest to chemistry and physics merely as things, but they have no significance whatever in economics until they come into relation with man. That fact in man which reflects upon things a new character and makes them goods is the fact of human wants. Anything that is capable of satisfying a human want is a good or a utility.

We need here to guard against a misunderstanding which the word "utility" sometimes suggests. There is a tendency to confound it with the idea of benefit, and to suppose that articles are useful just in proportion as they are beneficial. But in economics these two ideas cannot be taken as identical. Utility is the power to satisfy wants, not the power to confer benefits. Cigars are as useful in the economic sense as bread or books, for all three satisfy wants. Economic wants may be serious, frivolous, or even positively pernicious, but the objects of these wants are all alike "utilities" in the economic sense.

Free and Economic Goods. But it is apparent that the wants we have mentioned are very unlike in character. Air and water, for instance, we seldom think of as things we want at all. We usually have them in abundance and without exertion, so that, though they satisfy wants as vital as any we know, we seldom spend any time thinking about them or our dependence upon them.

These are free goods, that is, goods that exist in quantities sufficient to supply all wants for them. Land in a new country is frequently a free good. But the list of things that are free is quickly exhausted. On the other hand, goods that are the objects of exchange are called economic. Economic goods are those which exist in quantities less than sufficient to satisfy all wants for them. Hence, we must economize in the use of them, are willing to undergo sacrifice to obtain them, and usually they are obtained only by exertion. It is, however, their scarcity and not the fact that they have cost labor that makes them economic goods. Land, for example, a free gift of nature, is one of our most important categories of economic goods at the present time. Effort. Fortunately, the supply of economic goods can, in most cases, be increased by human exertion applied to the materials of nature; but this exertion, if carried beyond a certain point, is irksome and has an important effect upon our economic life. If the labor force of the community were unlimited, a great many of the goods which we now use sparingly would be as free as air. Idealists have pictured for us a condition of the future where a few hours' work per day for each individual (an enjoyable means of working off surplus energy) will be sufficient to supply us with all of the goods that we have time to consume. At present, however, most of us find that our consumption is limited by the pain of additional effort. The end of our economic activity is, therefore, not only to get the greatest amount of satisfaction, but also to minimize the amount of painful labor.

Waiting. Another fact that persists in our economic life is the necessity for waiting. The people of the United States wish to have the Panama Canal, but they cannot get it without years of waiting. They must spend millions of days of labor with no benefit in return for a long time to come. This waiting has often been called abstinence; but that suggests that the waiting is always painful, which is not true, as we shall see later in discussing the subject of interest.

Services. Goods have been commonly divided into (1) material things, such as food, clothes, and books, and (2) personal services, such as the advice of a physician or lawyer.

The advisability of the distinction has been denied, Actors and singers, it has been urged, sell us perishable material things, i.e. light and sound waves of a peculiar kind. A recent writer also considers the distinction confusing because it obscures the fact that material things give off services just as human beings do. The piano yields services as does the singer. From this point of view persons are durable economic goods along with cattle and wheelbarrows. But, on whatever ground the distinction is made, it is important to recognize that among the things that contribute to our well-being personal services that are so perishable that they must be used with the direct coöperation of some other human being, while in other cases the services are, as it were, stored up in some inanimate material things, and the relation between the producer and consumer becomes an impersonal one. The service of a musician, for example, is personal and must be used the moment it is rendered; the purchase of a musical instrument, on the other hand, means the purchase in a lump of a long series of uses.

are some

[ocr errors]

Personal Qualities as Goods. The central point in our science is the conception of man in his relations to his environment, and hence it does not seem reasonable to include the personal qualities of men under the head of goods. Good health and technical skill make a man's services more valuable and assist him in the acquisition of wealth, but they are a part of him rather than of his possessions. It is his services that he sells, and it is these that we have placed under the head of goods. When we consider the importance of the priceless heritage which the present generation has received in the shape of knowledge and skill, we might make these a separate category as immaterial goods.

On this point Professor Marshall says: "German economists often lay stress on the non-material elements of national wealth; and it is right to do this in some problems relating to national wealth, but not in all. Scientific knowledge, indeed, wherever discovered, soon becomes the property of the whole civilized world, and may be considered as cosmopolitan rather than a specially national wealth. The same is true of mechanical inventions and of many other improvements in the arts of production; and it is true of music. But those kinds of literature which lose their force by translation may be regarded as in a special sense the wealth of those nations in whose language they are written. And the organization of a free and well-ordered State is to be regarded for some purposes as an important element of national wealth."

But knowledge does not exist in a disembodied state, and we shall omit nothing and avoid some confusion if we divide all goods into material things and personal services.

H

« AnteriorContinuar »