than the economist. The latter has not generally undertaken to pass judgment on the wants of the people. He has assumed, rather, that his work was done when he had shown how such wants as the people happen to have are satisfied and may be satisfied more and more fully. But no one who really has at heart the welfare of the people can be indifferent to the quality of their wants or desires. What men want most they will try hardest to get; the character of their wants or desires, rather than their real needs, will therefore determine the character of their industries and their government. But, more important than that, if their desires are opposed to their needs (that is, if they desire things that are harmful to them, then the more efficient their system of production becomes the more harm they will do themselves. In that case an efficient industrial system promotes national deterioration rather than national well-being. If one were to make a study of the wreckage of nations, one would probably find that more had gone to pieces because their wants were wrong than because they were not able to supply their wants. That is one reason why, as stated earlier in this chapter, the subject of consumption is of such tremendous importance.

Necessity of economizing means of production. Thus far in discussing the necessity for economy we have been considering the means of satisfying our wants directly. But we must consider also the necessity of economizing the indirect means of satisfying wants. In the effort to overcome scarcity (that is, in the production of goods) it is necessary to make use of various factors of production, such as labor, tools, raw materials, etc. These also are scarce and have to be economized. To be sure, many things that are essential to production are not scarce. These are not considered as factors of production; that is, they are not economic factors of production at all. Carbon dioxide is just as essential to the growing of plants as nitrogen, phosphorus, or potash, but there is plenty of carbon dioxide in the air, whereas in most soils nitrogen, phosphorus, and potash are scarce or tending to become scarce. Therefore these three substances are considered as factors (that is, economic factors) in

plant growth. Applying the same formula here as we did to other things earlier in this discussion, the average farmer can say, and say truly, "More nitrogen, more plant growth; less nitrogen, less plant growth." Therefore agricultural produc'tion is increased by increasing the nitrogen in the soil. The same may be said of phosphorus and potash, but the formula does not apply to carbon dioxide. This is a principle of the very greatest importance, as will be seen later. Some of the greatest problems in economics and social justice depend upon this formula and are incapable of solution without it.

Why a thing has value. The fact that desirability and scarcity, and these alone, give value to a thing is perhaps clearly enough established by this time. Few will care to question the statement that not only must men desire a thing, but they must desire more than they have before they will strive to get more either by purchasing it or by producing it. Moreover, this is as true of a factor used in production, such as tools, as of an article of direct consumption, such as bread. It may not be quite so obvious, but it is none the less true, that this is also one of the great sources of that conflict of human interests which gives rise to most of our problems of justice and equity. This will be discussed in the next chapter.

TEN CHARACTERISTICS OF ECONOMIC GOODS, OR WEALTH
1. They are scarce; that is, there is less of them than is wanted.
2. They have to be economized.

3. Well-being is thought to increase as they increase and to decrease as they decrease.

4. Men labor to produce them; that is, to make them less scarce.

5. Men try to secure them by purchase.

6. They have value, or power in exchange.

7. They become the subject of property rights.

8. Wise men exercise frugality and foresight with respect to them. 9. There is a conflict of interests among men with regard to them, because there is not enough of them to go around and satisfy everybody.

10. They give rise to questions of justice and equity.

CHAPTER IV

ECONOMIC ACTIVITIES

The purpose of our economic activities is to satisfy our economic desires. In Chapter II the chief of these were classified as (1) desire for action, (2) desire for esteem, and (3) desire for material goods. Our economic activities may be classified correspondingly as (1) pleasurable activities, (2) activities designed to win the esteem of other beings, and (3) acquisitive activities.

Play. Pleasurable activities might be said to include the whole field of play, sport, and recreation, but we should be careful to exclude those forms of amusement or entertainment in which most of us remain as idle spectators while others are paid to amuse or entertain us. We should then include only those activities which the participants themselves enjoy so much as to require no other reward or incentive than the pleasure of participation.

Activities designed to win the esteem of other beings include a great deal of our polite social intercourse and some of our religious ceremonialism. Acquisitive activities, however, include most of our industrial and business life. There is usually, however, a mixture of motives, as indicated in our discussion of economic desires in Chapter II.

Pleasurable activities play a large part in the economic life of most nations, especially of those which are distinguished for their energy and strenuosity. Hunting and fishing for sport, gardening, poultry-raising for pleasure, much literary and artistic work, and a number of other avocations are carried on by persons whose chief or sole motive is in the pleasure of action. Besides, larger numbers of people spend considerable time in games and sports which have no productive end beyond the

pleasure of action. They derive a considerable part of the joy of living from these exercises rather than from the consumption of material goods. As material wealth increases, through improved and easier methods of production, more and more time is spent in pleasurable activities and less in activities that are purely acquisitive.

If we could all make a living by playing! If we could imagine a condition under which all that heart could desire in the way of material goods was freely provided, men would not have to do anything except what they liked to do. There would doubtless be much strenuous action, but it would take the form of play. However, so long as any class or classes of material goods are scarce, it will be necessary that work be done the chief motive of which is the desire for material goods rather than the pleasure of action. This contrast between doing what we enjoy and doing what is necessary to provide the material necessaries of life is well brought out in the old fable of the grasshopper and the ant. The grasshopper, it will be remembered, had spent the summer in pleasurable, the ant in acquisitive, activity. When winter came the grasshopper learned that these acquisitive activities had their compensations even though they may not be so very pleasant.

Acquisitive activities. Though acquisitive activities all have the common motive of the desire for material wealth, they are, nevertheless, of many kinds, some being predatory, some merely acquisitive, and some productive or useful. It is obvious that it makes a great deal of difference to the prosperity of the nation how its citizens generally acquire their wealth. The following outline attempts to classify the acquisitive activities of individuals according as they subtract from or add to the national prosperity.

Ways of acquiring wealth. In the diagram on the following page the ways of acquiring wealth are divided into two main classes, the uneconomical and the economical. From the social or national point of view it is uneconomical to have men acquiring wealth by methods which do not add to the total

wealth or well-being of the society or the nation. When one man gains something by plundering, swindling, counterfeiting, or monopolizing, someone else loses a like amount and nothing is added to the total. In fact, if these harmful methods become general they are likely to discourage honest industry and actually to diminish the total production of wealth. Even the neutral methods may become harmful if they result in wasted lives; that is, if they enable men and women who would otherwise be productive and useful to live in idleness and luxury. The smaller the proportion of the people who live by means of