In the first place, it is clear that the exchange of activities and abilities which takes place in the sphere of production falls directly within the latter and constitutes one of its essential elements. In the second place, the same is true of the exchange of products, in so far as it is a means of completing a certain product, designed for immediate consumption. To that extent exchange constitutes an act included in production. Thirdly, the so-called exchange between dealers and dealers[163] is by virtue of its organization determined by production, and is itself a species of productive activity. Exchange appears to be independent of and indifferent to production only in the last stage when products are exchanged directly for consumption. But in the first place, there is no exchange without a division of labor, whether natural or as a result of historical development; secondly, private exchange implies the existence of private production; thirdly, the intensity of exchange, as well as its extent and character are determined by the degree of development and organization of production, as e. g. exchange between city and country, exchange in the country, in the city, etc. Exchange thus appears in all its aspects to be directly included in or determined by production. The result we arrive at is not that production, distribution, exchange, and consumption are identical, but that they are all members of one entity, different sides of one unit. Production predominates not only over production itself in the opposite sense of that term, but over the other elements as well. With it the process constantly starts over again. That exchange and consumption can not be the predominating elements is self evident. The same is true of distribution in the narrow sense of distribution of products; as for distribution in the sense of distribution of the agents of production, it is itself but a factor of production. A definite [form of] production thus determines the [forms of] consumption, distribution, exchange, and _also the mutual relations between these various elements_. Of course, production _in its one-sided form_ is in its turn influenced by other elements; e. g. with the expansion of the market, i. e. of the sphere of exchange, production grows in volume and is subdivided to a greater extent. With a change in distribution, production undergoes a change; as e. g. in the case of concentration of capital, of a change in the distribution of population in city and country, etc. Finally, the demands of consumption also influence production. A mutual interaction takes place between the various elements. Such is the case with every organic body. 3. THE METHOD OF POLITICAL ECONOMY.