Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy — John Shaqi
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
_The Requisites of Production._--If we start with nothing but the
earth in its natural state, inhabited by empty-handed men, and seek to
know what is necessary in order that some wealth may be created, we
find that nothing is absolutely necessary except labor. By working for
a few minutes it is possible to get something that will minister
directly to wants. Yet if men begin operations in a state of such
poverty that they have only their bare hands to apply to the elements
about them, they do not commonly get the usable goods immediately. If
a savage wants fish and makes the rudest net with which to catch them,
he makes what is a _capital good_. This is wanted only for the sake of
the consumers' wealth which it will help to produce. The end in view
has all the while been fish; but the man works first on an instrument
for catching them. He makes the net by mere labor, but he catches the
fish by means of labor and the net. Without such instruments to aid in
production a dense population could not live at all, and a very sparse
one could live only in a meager and precarious way. If the instruments
are artificially made, or if they are furnished by nature in limited
amounts, they are forms of wealth, or goods; but as their function is
not to minister directly to consumers' wants, but to help in making
things which do this, we distinguish them by the name "producers'
goods" or "capital goods." In contrast with them those commodities
which directly minister to wants may be called "consumers' goods."
_The Production of Intermediate Goods._--All economic goods are means
to an end. Wealth is always mediate. It is usually a connecting link
between man's labor and the satisfaction of his wants. Man, the
worker, first spends himself on nature, and then nature in turn spends
itself on him. In production nature is the recipient, but in
consumption the recipient is man. This is saying that man serves
himself by means of some element in nature which, under his
manipulation, becomes a form of wealth. He thrusts a bit of natural
matter between himself as a producer and himself as a consumer. All
kinds of wealth, then, stand in an intermediate position between
original labor and the gratification that ultimately results from it.
Some goods, however, are means in the special sense of standing
between labor and other goods. Instruments help to make consumers'
goods and these add to man's pleasure. Using a tool is not generally
agreeable. The tool stands not only between the effort and the
gratification that will ultimately follow, but between the effort and
the further material good that will directly produce gratification.
The hatchet intervenes between the labor that makes it and the
firewood it will cut, while the wood acts directly on the man and
keeps him warm. Capital goods are in this special sense mediate. They
are not wanted for their own sake, but for the sake of something else
that is directly useful.[7]
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