and not a fragment of it, should be regarded as a unit. The consumption of a child exceeds his production, but this does not condemn him. So, likewise, during the declining years of those who reach a good old age consumption may exceed production, but this does not condemn the life. If the life as a whole produces more than it consumes, it leaves the world richer by that difference.

Again, production should be given a very wide interpretation. One may produce without handling material goods of any kind, but by inspiring the productive virtues in others, by teaching productive skill to other people, by scientific investigation, by transmitting knowledge, and in various other ways. If, after making all allowance for these different forms of productivity, the mature individual in sound health finds that he is producing less than he is consuming, it is time for him to begin to consider his ways and to experience a change of heart. He needs to be converted from a waster into a producer.

Boarders at the national table. Dairymen sometimes use the term "boarder" to describe a cow whose feed and care cost more than her milk is worth. Every wise dairyman tries to get rid of his boarders and keep only those cows whose production exceeds their consumption. The formula V=P-C applies very clearly to the value of the cow. A wise farmer would not keep a horse whose production did not exceed his consumption. A manufacturer would discard a machine which required so much power, care, oil, repairs, etc. as to exceed the value of its product. It would seem that men ought to be held to at least as high a standard as that to which cows, horses, and machines are held. A man who falls below that standard is as much of a drain upon his country as is the cow, horse, or machine.

The class of boarders includes not simply the tramps and beggars but everyone else who is not usefully engaged, even though he or she lives upon his wife's or her husband's earnings, his wife's or her husband's fortune, or upon inherited wealth. The class includes even others. Even those who are usefully

engaged may be consuming such expensive products and may require so many servants to wait upon them as to use up more man power than they replace by their own work. It would be an interesting exercise in patriotism if every mature person should ask himself seriously whether the country is the gainer or the loser by reason of his existence, whether the man power required to produce for him and take care of him is greater or less than the man power which he contributes to the nation's fund of productive energy by his own work.

The conservation of man power. The importance of this consideration is peculiarly clear in a time of great national crisis, such as the World War of 1914-1918, when all the liberal nations were at death grips with a military autocracy. The necessity of conserving every ounce of man power was upon every nation. We saw clearly then that anyone who was not usefully engaged was a menace rather than a help to us in our struggle. The food alone which such a person consumed was acutely needed, to say nothing of the man power which was used up in other ways by his wasteful habits of consumption. Even those who were usefully engaged should have understood that luxurious consumption on their part was an interference with the plans and purposes of their country. To consume unnecessary luxuries is to require an unnecessary quantity of man power to produce for one, and necessarily reduces the quantity left for fighting the nation's battles or producing necessary supplies. The same principle applies in time of peace, though the results of wasteful consumption are not then so dangerous nor so tragic as in time of war.

CHAPTER XLII

RATIONAL CONSUMPTION

Difference between a high and a rational standard of living. Economists have generally classified standards of living on the basis of their cost or expense. A high standard of living has meant merely an expensive standard; a low standard of living has meant simply a cheap standard. Very little attention has been given to the difference between a rational and an irrational standard. By a rational standard of living is meant one which increases the margin between one's production and one's consumption. In the formula V=P-C, as given in the preceding chapter, the most valuable man is the one in whom P exceeds C by the greatest margin. The purpose of the present chapter is to contend that the most rational standard of living is the one which produces the most valuable man.

This margin of difference between P and C would be increased, of course, either by decreasing C, by increasing P, or by doing both at the same time; that is, if, without reducing in any degree his efficiency as a producer, a man were to reduce his cost of living, he would thereby be adding to his value from the standpoint of progress. To that extent he would enable the community to produce more than it consumed. He would thus be a factor in the accumulation of productive power or of the durable products of civilization. If, however, by reducing his cost of living he at the same time reduced his productive efficiency in the same proportion, there would, of course, be no gain, and there might be some loss involved. If, on the other hand, by spending more on himself, especially on books and other means of education, on tools, or on more nourishing food, he were able to increase his productive efficiency, his increase in consumption would justify itself.

From this point of view the problem for every individual who desires for any reason to add to rather than subtract from the strength and prosperity of his country is to adopt that standard of consumption which will leave the largest margin between production and consumption. From the same point of view it would frequently be necessary that one man should spend more on himself than another would be justified in doing. Take, for example, a great surgeon, whose time is exceedingly valuable, not only to himself but to the community he serves. He might very properly keep an automobile, a chauffeur, and other timesaving devices and agencies. He might even keep a valet to look after his clothes. If these forms of expenditure would enable him to give more people the benefit of his skill, it would be to their advantage for him to spend money in these ways. This applies to all others whose time and services are valuable to the community. For the same reason he might, by increasing his consumption in various ways, increase his production more than enough to pay the added cost of his living. But an inexperienced surgeon, whose time is not valuable to the community,-who, in fact, has time to spare, could not properly indulge in the same timesaving devices. For such a person to employ a valet or even a chauffeur would be ridiculous waste and ostentation.

Buying trinkets is not good for business. In opposition to this point of view there is a popular theory to the effect that lavish expenditure is somehow good for business. The difficulty with this argument is that it always assumes that if the individual is not consuming lavishly, he is not spending but hoarding his money. It is surely as good for business and labor that one should spend money on builders and architects as on milliners and confectioners. He who consumes lavishly spends his money on confectioners, milliners, and other producers of immediate and temporary satisfactions. He who consumes rationally spends as much money as he who consumes lavishly, but spends it on things which build and improve rather than on things which merely afford temporary gratification. A com

munity of lavish consumers would, of course, give actual employment to those whose work is to amuse and gratify, but little employment to builders and others producing for future generations. A community of rational consumers, on the other hand, would give more employment to those who build for future generations, and less to those whose work is to gratify the interests of the immediate present. There is no essential difference in the amount of money spent in the two cases, provided the two have equal quantities of money to spend. The difference is in the way they spend it and in the direction they give to enterprises and industry. The community that spends money in building for future generations will improve from generation to generation; each generation will inherit from the preceding one a larger fund of durable wealth and will add to this and bequeath a still larger fund to successive generations.

Buying durable goods is investing for the future. If we were to start these two communities side by side, with equal numbers and equal natural resources but with different habits of consumption, it would not be many generations before a marked difference could be seen between the two communities. The community which spent its income for immediate gratification would fall behind the one which spent a part in building for the future. It would not be many generations before the latter community would outstrip the former, and the people from the former would be emigrating to find employment and other advantages in the latter.

The miser and the spendthrift.

Instead of placing the miser and the spendthrift in opposite categories, we should really put them together. The miser is a lavish consumer in a most important sense. A consumer is defined as one who uses wealth for his immediate gratification. In a previous chapter consumers' goods were defined as goods used for direct and immediate satisfaction. Now a miser, instead of using his wealth productively, keeps it for his direct and personal enjoyment. With extreme gratification he counts his hoard. He loves to handle it, to see it glitter, and to hear it jingle.