More accurately, perhaps, we should say that the only things we try to produce are the things of which we do not have enough. It may sound a little queer at first for one to say that his income consists of things that are scarce, or things of which he does not have enough. It will, therefore, be necessary to spend some time in making this point absolutely clear, otherwise we shall never be free from error and confusion. As a matter of fact, the very first step toward a true understanding of the nature of wealth is a clear perception that wealth in the economic sense consists of things that are scarce and for that reason need to be economized. When it is said that the necessity for economy grows out of scarcity and that we try to produce only the things that are scarce, we do not imply that everything is scarce. Some very useful things are very abundant so abundant that everyone can have all he wants; and when he gets all he wants no one else is deprived of anything that he wants. Such things do not have to be economized, hence they are not economic goods. In fact, so long as they are sufficiently abundant they give us no concern, but when they become scarce we spend our time in trying to get more. Only those things are economic goods which have to be economized; that is, which are scarce, or of which we do not have as much as we should like.

Two meanings of "wealth." Now the word "wealth" has two meanings. In the first place, it is the collective name for all economic goods, or for all goods that have to be economized; that is, for goods that are scarce. In the second place, it is the name of a condition or state of being. It comes from the older word "weal," which means very much the same as "well-being." These two meanings, while apparently different, are yet very closely related. The condition of well-being which we call wealth depends upon the possession of an adequate supply of those things which we call wealth; that is, the things which are ordinarily scarce and which have to be economized. He who lacks an adequate supply is poor; he who possesses an adequate

supply is rich or in a state of wealth. In short, those economic goods called wealth are the goods upon which weal, or wellbeing, depends. Well-being is increased when these goods are increased or economized; well-being is decreased when these goods are decreased or wasted.

How well-being depends upon wealth. It could not be said of anything which is not scarce that our well-being increases when we have more of it and decreases when we have less of it. There is such an abundance of air, for example, under ordinary circumstances, that no one would be any better off than he is now if the supply of air could be increased, nor would anyone be any worse off if the supply of air were slightly decreased. In other words, no one's well-being depends upon more air, even if it could be produced. If, however, air were so scarce that there was not enough to go around, then not only would it need to be economized very carefully but there would be some advantage in producing more of it. The weal, or well-being, of mankind would be improved in proportion as more air could be produced; mankind would be injured in proportion as air was wasted or destroyed. While, therefore, we can say that air is a necessity in a certain absolute sense, yet in a practical economic sense we cannot say that anyone would be better off if more air were produced or if it were even wisely economized; nor can we say that anyone would be worse off if a little air were destroyed or wasted. There would still be enough to satisfy everybody. That is why air, though an absolute necessity, is not an economic good. We should gain nothing by trying to increase the supply or to economize in the use of the existing supply. Since we do not gain anything by economizing it, it is not an economic good. Where abnormal circumstances arise, in which there is not enough air, then it has to be economized and becomes at that particular time and place an economic good. If such circumstances could last, air would become wealth in the same sense that food, clothing, fuel, and certain other things are now wealth. It would then be true of

air, as of these other things, that well-being could be increased by producing or economizing air and decreased by destroying it, wasting it, or otherwise making it scarcer.

The question of having more or having less. Water is another illustration; perhaps a better one, because there are many places where water is so abundant that it does not have to be economized at all, while there are other places where it is so scarce that it has to be economized very carefully indeed. In the former places water is not wealth; in the latter it is. In the former no one labors to secure any more; in the latter they do. In the former no one would be better off if there were more water; in the latter some people would be better off. In the former well-being does not depend upon a little more or a little less water; in the latter it does. In the former there is no occasion for economizing water; in the latter it is very important that it be economized and made to go as far as possible. In the former the formula "more water, greater wellbeing; less water, less well-being" is not true; in the latter it is true. This is the test in every time and place as to whether water is wealth or not. All that has been said of water may be said of anything else. The same test must be applied to determine whether it is wealth or not. As a matter of fact, water, like a great many other things, is sometimes too abundant,so abundant that men find it to their advantage to go to considerable pains in order to get rid of some of it or to lessen the supply. In such cases it may be called illth.

Relation of value to economic goods. We have gone to considerable pains to point out that one characteristic of economic. goods is that they are always scarce. It is this which gives them the power to induce men to work and to economize. Another characteristic is that they all have value or power in exchange. The power to command other desirable things in peaceful and voluntary exchange-that is, value-is very much the same as the power to induce men to work. That is to say, the thing which possesses one kind of power will always possess the other, if indeed it be not incorrect to speak of them as different kinds

of power. The object which possesses this power to appeal to human motives in such a way as to induce men either to give up some desirable object in exchange for it or to labor in order to produce it is always said to be valuable. This power depends in all cases upon the scarcity or insufficiency of the existing supply of the object in question. This simply amounts to the truism that a thing would not possess this power unless someone could be found who wanted more of it than he had. If a person or a considerable number of persons can be found who want more than they have, there will be someone who will give up something in order to get more or who will work in order to produce more. These things, again, are economic goods, or wealth. Since, as we have just shown, they all possess value, it amounts to the same thing to say that wealth consists of things that have value. In short, such words as "wealth," "value," "economic goods," and "economy" all center around the one great fact of scarcity; that is, the insufficiency of certain things at certain times and places to satisfy desires. Out of this great fact grow also such ideas as property, industry, and foresight. No one wants to secure property rights, for example, in anything of which everybody has enough. But when anyone fears that there may not be enough of a certain thing to go around, and that he may, therefore, be left out, he naturally wants to guard against that calamity by getting possession of a supply. He will try to get possession of a supply either by producing it himself or by buying it of someone else, and he will try to guard his treasure carefully. When the state steps in and undertakes to protect him in his possession, he has then secured a property right in the thing in question. Again, productive industry, as already shown, is directed toward alleviating scarcity or increasing the supply of something of which the supply would otherwise be insufficient. Frugality and foresight are exercised to provide against scarcity.

Meaning of scarcity. Now scarcity means nothing except insufficiency in a given time and place to satisfy the desires which exist in that time and place. It does not mean rarity,

because, no matter how rare a thing may be, if there is as much as is wanted it is not scarce; and no matter how great the total quantity, if there is less than is wanted it is insufficient, or scarce. And it is always well to bear in mind that a thing is scarce, if at all, because the available quantity in a given time and place is insufficient. No matter how much water there may be in the Mississippi River, it does not alter the fact that water is scarce a few hundred miles to the westward; no matter how much copper there may be in the bowels of the earth, it does not alter the fact that there is less copper in available form than is needed on the surface. It is this fact which induces men to labor to move things from one place to another.

Mistaken valuations. Before proceeding farther it is necessary to make one important qualification-men do not always know upon what their weal, or well-being, depends. If they are mistaken on any phase of this question, they will be placing a high value upon some things that are not good for them and a low value or no value at all upon some things that are good for them. They are poor economizers who do this, but there are many poor economizers in the world. This is the same as saying that they will sometimes desire more of a thing than they have when they really have too much already, or less than they have when they really have too little already. With this qualification in view, all we can say is that men will regard as wealth everything upon which they think their well-being depends in the practical economic sense described above. That is, if they think they need more than they have, they will strive to get more, either by offering something for it, thus giving it a market value, or by trying to produce it, thus creating an industry. This explains why it is that the student of economics is sometimes compelled to include among economic goods, or wealth, articles which he himself would not use or which he regards as deleterious, such as opium, alcoholic drinks, or tobacco.

Importance of desiring the right things. Teaching or persuading people to want the right things has commonly been regarded as the work of the educator and the preacher rather