Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_Place Utility._--Carrying things to places where they become more
useful creates place utilities. In primitive life men do their own
carrying; but in civilized states the common carrier does most of it,
and so imparts place utility to matter on the most extensive scale.
All useful transportation creates this quality, which is a general
attribute of wealth; and the operation of so moving matter as to
create place utility is one of the general functions of labor.[5]
[5] In a way all kinds of production may be analyzed into the
moving of matter. In cutting up raw materials a manufacturer
moves waste portions away from those that are to be utilized,
while combining materials, of course, moves them toward each
other. Neither of these operations creates place utility.
This quality consists in a relation, not between some
materials and others, but between goods and the persons who
are to use them. Bringing things to us from a distance
changes their local relation to us, and in this is the
essence of place utility, and every article that we use must
have acquired this quality. The service-rendering power which
it possesses is only potential until it reaches a place where
the power can be exercised.
_Time Utility._--There is, moreover, a kind of utility which depends
on the existence of a good at the time when it is needed. Ice in the
warm season, a plow in the spring or the fall, a pleasure boat in
summer, and anything which, by the aid of capital, is presented to a
user when he needs it, illustrate this quality. We may call it time
utility, and creating it is a function of capital. We shall see how
capital assists in the production of the other utilities; but the
creation of time utility it accomplishes without assistance.
_Executive and Directive Labor._--Labor involves the whole man,
physical, mental, and moral. No labor is so simple that it is not
better done when intelligence is used in the performance of it. The
savage's hut, his canoe, his bows and arrows, etc., vary in their
efficiency and value, not merely according to the time and muscular
effort spent in making them, but also according to the efficiency of
the thought by which those efforts are guided. There is here the germ
of the difference between the executive labor of the modern employee
and the directive labor of the manager. Yet no manager directs in more
than a general way the muscular movements of his subordinates, and
their own intelligence must still be trusted to do much of the
directing. The mental labor that guides and controls the physical is
universal in industry, but becomes more and more a distinct and
dominant factor as civilization increases.
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