The basic facts of economics : $b A common-sense primer for advanced studentsPost, Louis F. (Louis Freeland)
General
The basic facts of economics : $b A common-sense primer for advanced students
Post, Louis F. (Louis Freeland)
Economics
Trade is an essential part of the Productive Process in Economics.
It is inseparable from Labor specialization. If some Labor be
devoted to the Production of one kind of Artificial Objects, one
kind of Wealth--food, for instance--the producers of such Wealth
must satisfy their desires by trading with other kinds of Labor
specialists--clothing producers, for instance--for what the latter make
and the former do not make. Evidently, then, the more minutely Labor
takes on specialized activities, the more extensive and intensive must
Trade become. And when, as in our civilization, Labor is so minutely
specialized that nobody can satisfy his Economic desires by his own
productive activities directly, Trade is an indispensable part of the
Productive Process.
In form it is an interchange of commodities; but in essence it is, as
already explained, an interchange of Labor functions--of human services.
Springing out of a manifestation of natural law which is rightly
distinguished in Economics as “division of labor,” and thus inspiring
and facilitating specialization in the Production of Wealth, Trade is a
natural phenomenon. Within manifest limits and without extra exertion
two producers can produce more than twice as much as one, four more
than twice as much as two, and so on, subject only to the limitations
of Natural Resources. By exchanging products they therefore naturally
multiply their productive powers.
For a crude illustration, is it not plain that two frontiersmen working
cooperatively can build a habitation for each quicker and better than
either could build one for himself? Or two messengers, each charged
with one errand a mile away in one direction from a central point
and another a mile away in the opposite direction, can they not do
the four errands twice as quickly and easily, even if not more than
twice, if they divide their functions? By such division each messenger
would walk one mile out and one back, two for each and four in all,
delivering four messages; whereas, without such division, each would
travel two miles out (one in each direction) and two miles back, four
for each and eight in all. In addition to the saving of time and
energy, each will have saved productive capabilities too subtle for
specific enumeration.
The principle of those illustrations applies to the whole Productive
Process. By division of Labor, that is to say, by Labor specialization,
Economic accomplishment is multiplied beyond all the possibilities of
isolated individual production.
Public-domain text, read in full here on John Shaqi.
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