2--TRADE 60 3--UTILITY, VALUE, MONEY, PRICE, BANKS 63 4--BALANCES OF TRADE 67 V. AN ILLUSTRATION OF THE PRODUCTIVE PROCESS 70 SIXTH LESSON--DISTRIBUTION 74 I. WAGES FOR LABOR 75 II. RENT FOR LANDOWNERSHIP 83 III. TRADE 91 IV. MONEY 94 SEVENTH LESSON--REVIEW 97 QUESTIONS FOR SELF-EXAMINATION 101 PERSONAL ACKNOWLEDGMENTS 103 PREFACE The purpose of this common-sense explanation of Economic phenomena is to disclose and emphasize those comprehensive and familiar primary facts which embody the myriads of secondary facts that are involved in Economic science. To avoid confusing those complicated details is to promote the clear thinking which every Economic problem demands, be the problem one of collegiate study, of political policy, or of business importance. The following pages aim, therefore, at encouraging all thoughtful citizens so to classify the details of the general subject in their own minds as to enable them to avoid centering their mental vision upon Economic trees so intently that they cannot see the Economic forest as a whole. It aims also at discouraging the opposite inclination to view the Economic forest so exclusively as a whole that the Economic trees of which it is composed cannot be distinguished. L. F. P. The Basic Facts of Economics A COMMON-SENSE PRIMER FOR ADVANCED STUDENTS FIRST LESSON ECONOMICS On the surface, Economics appears to be the science of making money. This appearance is due, however, to a careless recognition and erroneous application of the fact that Economic accomplishments are measured by money standards and expressed in money terms. When, for example, a builder builds, he builds to make money. Money measures the Economic extent of what he is doing, and money terms express its Economic desirability. They also express and measure his motive, which is the compensation he can command in the currents of trade. A merchant makes money when he manages a profitable business. So does a manufacturer. Farmers make money when they sell their produce profitably. Nor only when they sell it, but also while they cultivate it; for every day’s growth adds to the money measurement of a crop.