The problem of national prosperity is, however, by no means so simple as it may seem from this general way of stating it. It is infinitely complicated, so much so that when the student begins to study it he is in danger of being bewildered by a vast number of details. There are certain general principles which help to avoid this bewilderment. It is necessary, therefore, to begin at the beginning and study some of these principles.

Economy. It is generally understood that economy has something to do with prosperity; but what is economy, and what does it mean to economize? In its original sense to economize meant to manage a household. The word "economics" is derived from two Greek words, oixos, "a house," and véμw, manage." Nowadays the study of the management of a national household is not inappropriately called national economy or, more generally, political economy. Its purpose is to find the answer to the question at the head of this chapterWhat makes a nation prosperous? It appears, therefore, that the words "economy," "economics," and "economize," as they are understood today, have a wider meaning than the management of a private household.

What it means to economize. In its simplest sense to economize is to choose among several different things which one would like to have, giving up the things for which one cares less in order to have those for which one cares more. Necessity forces this kind of choosing not only upon individuals but also upon communities and nations.

This choosing of what one will have takes on many and various forms and takes place many times every day in the life of every normal person. One may have to choose between play and work or between different kinds of work, different kinds of play, or different objects which one might purchase with one's limited money or purchasing power. The problem is always how to use one's time, one's working power, or one's wealth in such a way as to accomplish the most in the promotion of one's interest or the fulfillment of one's hopes and purposes. This is a problem, however, not for the individual alone but for the

community, the nation, and the world at large. The community and the nation, like the individual, have common interests which can be promoted only by common effort. How to use the energy of the community and of the nation economically (that is, in such a way as to accomplish the largest and best possible results) is a problem of the greatest possible importance. In a democracy especially it is fully as important that the citizen should understand how the community and the nation may economize their energies and achieve the utmost in the way of civilization and well-being as it is that he should understand how he may economize his own individual energy and accomplish the utmost in the promotion of his own interest and the fulfillment of his own hopes. Moreover, the former is a vastly greater and more difficult problem than the latter. It will require a broad, careful, and systematic study of economic principles instead of a narrow, piecemeal, haphazard study of individual problems in economy.

When you are asked to do a certain thing and you reply that you have not time, you are sometimes merely trying to be polite. You may really mean that there is something else which you would rather be doing with your time or which you feel to be more important than the thing you are asked to do. In other words, you have not time and energy enough to do everything you would like to do or that others would like to have you do. You must leave many things undone, and you must, therefore, choose rather carefully the few things that you think most important or that would cause you the most inconvenience or pain if left undone. In order that you may do these few and important things you must refuse to do anything else that would interfere. That is what it means to economize time and energy. It is choosing to do the more important things, leaving the less important things undone. Economizing in the use of money is only one special form of economizing time and energy, since money represents the products of time and energy.

Why we have to economize. In saying that you do not have time to do a certain thing you are stating one of the most funda

mental facts of life; namely, the great and ever-present fact of scarcity. It is this fact which compels us to economize, which compels us to make our limited fund of energy and our limited time go as far as they will. To waste time or energy is to fail to supply ourselves with some of the things we want. To waste things that have already been produced is no worse than to waste the time and energy that might have produced more of the same things.

Wasting time and energy does not necessarily mean remaining idle, though it may mean that. It may mean also the doing of less important things when there are more important things to be done. If one had unlimited time and energy, or if one had the time and energy necessary to do everything one would like to do, so that the doing of one thing never prevented the doing of anything else worth doing, economy would be unnecessary. If that were true, human life and human history would be very different from anything we now know, and this world would be so unlike the present world that none of us would recognize it.

By the use of time and energy we find or produce goods and commodities; that is, the material things which are the means of satisfying our desires. Therefore, when we say that we cannot afford a certain article we mean very much the same thing, fundamentally, as when we say that we have not time to do a certain thing. In both cases we are merely stating the great fact that it is necessary to economize, to choose what we will do with our limited energy or our limited money to the exclusion of other things. The fact that time and energy are insufficient to enable us to do everything that we might like to do makes it certain that we cannot produce everything that we should like to have and that, if we could, we should not have time to do something else. If we were to work all the time, we should have no time to play; and everybody likes to play—that is, everybody worth mentioning. We must, therefore, choose whether to deprive ourselves of the opportunity to play in order to get certain goods that we want, or to reduce somewhat the number of goods we consume in order to have more time to

play. Again, if one works too long on one kind of goods one has less time and energy left to produce others. At every step in the life of every normal human being, therefore, he is confronted with some problem in economy.

As already stated, the necessity for economy grows out of the scarcity of something or other,—either the goods which are necessary to the satisfaction of our desires, or the time and energy necessary to produce those goods. Find an individual who experiences no lack or scarcity of anything and I will show you an individual who has no need for economy; but you will look a long time before you find him.

Getting and spending. In the practical, everyday life of the average person problems of economy are mainly focused on the problems of getting and spending,-of income and expenditure, or of business and the household. If one's income is less than one would like to have it, it means that one's desires run beyond one's income. Such an individual, therefore, tries, first, to increase his income and, second, to get as much good out of it as he can: that is, to spend it as wisely as he knows how. This is true not only of every individual and every family but also of every organization, even the state itself, and it is even true of all the people as distinct from their government. The greater part of the time and energy of the people in this world is spent on these matters, but it is spent in a great variety of ways.

A glance at the diagram at the beginning of this chapter will give one a general idea of all the forms in which the problem of income and expenditure presents itself. The reader will get, at the same time, an idea of the principal branches of the great science of economics, for economics is, in one aspect, simply the study of the problem of income and expenditure, both of which are fundamentally problems in economy. In order to increase one's income one must economize one's time and working energy. In order to make one's income go as far as possible one must economize it, buying only the most important things and making them go as far as they can be made to go in the satisfaction of one's wants. In brief, economy of goods con

sists in trying to make things that are scarce go as far and accomplish as much as possible.

Economics and household management. It was stated above that historically economics meant the management of a household and that when the word was first used a household was a simple, self-sufficing household. In such a household the problems of getting and spending, of income and expenditure, of business and home life, were not very distinct. The income was made up of the products of the farm and not of the money for which those products could be sold, because they were not sold, as a rule. There was practically no expenditure of money; but the household used the things that were produced within it, since the farm was considered a part of the household. In this simple household, however, the fundamental problems of economy had to be worked out very much as they are in the modern business or the modern household. The working power of the household had to be very carefully economized. The economizing of the working power consisted, first, in keeping it active instead of allowing it to go to waste in idleness; second, in directing it efficiently, so that as little effort as possible should be wasted by lost motion, poor tools, or inefficient and haphazard ways of doing things; third, and quite as important as either of the others, in directing it wisely, or directing it toward the production of things of vital importance to the well-being of the household and not wasting it in the production of trivialities.

Household management and national economy. In some respects the problems of the self-sufficing household more nearly resemble those of the modern nation than those of the modern business or the modern household. The prosperity of the nation requires the same forms of economy in production. The nation that wastes its time and working energy in idleness or leisure will, of course, fail to achieve its maximum prosperity. Likewise the nation whose people do things in inefficient ways, by slipshod methods, or with inadequate tools and equipment will fail to become as prosperous as it might become. In these two respects the private business of today and the nation's busi