be at one time a tool of his profession, and therefore capital, and at another time a pleasure vehicle, and therefore a consumers' good. Many other objects may be so close to the dividing line as to puzzle us at times, but the great mass of the objects with which we are concerned are easily classified. Capital, like consumers' goods, comes into existence through the application of labor, ingenuity, and forethought to natural objects. But there is one thing which enters into the production of a piece of capital which does not enter to the same degree into the production of a consumers' good, — that is, waiting, or abstinence. If you labor to make a tool for your own use, you do not reap the reward of your labor until the tool has been completed and has been used for a time in adding to your production. You have postponed your consumption. If you sell the tool to someone else, you may at once spend the money you receive for it and avoid waiting. But the one who bought it of you now has to wait, since he has given up the opportunity to spend the money for consumers' goods and must now abstain until the tool begins to bring him in an income. When production exceeds consumption, capital is increased. From the foregoing it will appear that the accumulation of capital depends in a very direct manner upon the character of the people. Unless the nation consumes less than it produces, it is impossible that capital should increase at all. Even if accumulation should take the form of saving money, it would still be necessary for all the people to live on the consumers' goods produced by a part of them in order that the rest of them might devote their time to the making of tools and other producers' goods. That would be necessary even in a communistic society. In our present economic system any individual who can live on less than his income may spend the balance of it on tools and other producers' goods. That which he spends for consumers' goods virtually hires men to produce that class of goods, while that which he spends for producers' goods virtually hires men to produce that class of goods. The more money there is spent for producers' goods, the more rapidly they will accumulate. This means that the more thrifty the people are, and the more inclined they are to live on less than their incomes and to spend the balance for tools, the better equipped with tools they will be. We now see how definitely the prosperity, power, and greatness of a nation depend upon the three factors, labor, land, and capital. A nation whose people are possessed of high average natural ability, whose educational system trains that ability (especially for those fields of work where ability is most needed), which has an abundance of rich land, and which accumulates capital rapidly, so as to supply itself with the best of tools and other equipment, has all that is needed on the physical side to make it prosperous. But much remains to be said in detail about each of these factors and the ways in which they are to be combined. CHAPTER IX THE QUALITY OF THE PEOPLE Why man rules over the rest of the animal creation. In attempting to discuss the quality of the people, we are not necessarily entering upon a discussion of the whole field of physiology, psychology, and morals. There are certain outstanding qualities which man possesses in greater degree than the brutes, which civilized man possesses in greater degree than the savage, and which, in any civilized community, the more successful classes possess in greater degree than the less successful. There are other qualities, such as muscular strength, which the brutes, many of them at least, possess in greater degree than man. If these were the important qualities, man could scarcely claim superiority over the brutes. There are other qualities, such as the sense of smell and the ability to endure pain, which certain savages seem to possess in greater degree than civilized man. If these were the important qualities, civilized man could scarcely claim superiority over the savage. Some savage races seem even to possess certain moral qualities in greater degree than civilized men. Travelers have frequently praised the honesty of certain tribes, their fidelity to their friends, their courage, and their fortitude. Civilized nations are each possessed of certain characteristic vices which can scarcely be apologized for, much less defended. One who thinks that the peculiar virtues of the savage and the peculiar vices of the civilized man are the important virtues and vices will certainly reach the conclusion that the savage is really superior morally to the civilized man. But it is very easy to be mistaken in one's emphasis. We need to consider carefully what qualities really give superiority to a people. ΙΟΙ Our present problem is to form some sort of intelligent opinion as to the qualities which a people need in order to become prosperous, powerful, and great in an economic and worldly sense. The following outline is suggested as expressing a tentative opinion on this subject. Whatever may be said on purely religious or moral grounds, a nation whose people are possessed of these qualities in superior degree will have an economic advantage, other things equal, over a nation whose people possess them in less degree.. THE CHARACTERISTICS OF A CAPABLE RACE 1. Knowledge of a. The physical environment b. The social environment 2. Forethought, as shown by b. Thrift 3. Dependableness, made up of a. Honesty b. Sobriety c. Courage d. Fidelity 4. Reasonableness, as shown by a. Eagerness to learn b. Obedience to law c. Willingness to coöperate ९९ Man has achieved dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth" by reason of certain powers or qualities which he possesses in higher degree than they. These are, first, his greater knowledge of and control over the forces of nature; second, his greater forethought in making provision for the future and working for distinct ends; third, his greater power of organization, or teamwork. This power of organization is the result mainly of two factors, his dependability and his reasonableness. The same powers, or qualities, have given the civilized man dominion over the savage, and the intellectual man dominion over the ignorant man. In the future, as in the past, we must expect that the world will be ruled by the nations which possess these qualities in the highest degree. Physical advantages over the brutes. Man's erect posture, leaving his hands free to be used for other purposes than for locomotion, must be counted as a great advantage over the brute creation. A thumb which opposes the fingers and gives him a better grasp adds greatly to this advantage. These advantages, however, would not count for much if he did not have a mind which enabled him to devise tools to be grasped and used with his thumbed hands. So far as the upright posture and the thumb are concerned, while they give him an advantage over the brutes, they alone do not give the civilized man any advantage over the savage. The posture of the savage is as upright, and his thumb as handy, as the civilized man's. In seeking, therefore, the advantages which have given the civilized man dominion over the savage we must look at the mental and moral qualities. These are not necessarily physiological in their nature; they may be mainly the results of accumulated history, tradition, and training. Intellectual advantages of civilized men over savages. Knowledge of the forces of nature may almost be said to include control over them, though the erect posture and the thumb assist in that control. Our physical environment includes not only the physical objects which surround us but their properties and the forces which govern them as well. To know our physical environment, therefore, means to know the properties of matter and the forces which operate in and through it. In short, this is scientific knowledge. It is this which underlies all our mechanical improvements. Our social environment includes human beings and all their powers, characteristics, habits, emotions, etc. A knowledge of one's social environment includes such a knowledge of man and his ways as to enable one to work with other men comfortably, |