The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
Inventions often shift demand, and value follows. The invention of the
bicycle with pneumatic tires, coincident with the adoption of electric
traction for street cars, reduced the price of horses between 1890 and
1895. This doubtless was a factor in agricultural land values at that
time. This change was sudden, extreme, and temporary, and there has
since been a gradual adjustment and a return to the former values.
[Sidenote: Consumers' choice as affecting productive forces]
3. _The production of the next period may be radically affected by the
use now made of agents._ Some consumption takes the form of using up and
reducing the stock of wealth. The demand for lumber causes the
disappearance of the forests, whereas the demand for oranges stimulates
the planting of orange trees. The reckless exploitation of natural
resources leaves society poorer. Great herds of buffalo were slaughtered
to get the hides, which were of comparatively slight value. Rich land
has been exhausted to get a few harvests.
War is a use of wealth for ends believed at the time to be necessary and
believed to forward social welfare better in the long run than would
dishonorable submission; but it causes misery and leaves industry
prostrate. The forms taken by saving are affected by the choice of
expenditure. In war the savings of individuals are given to the
government and used for destructive purposes. The lender parts with his
wealth and society uses it up. While the lender has a claim on the
industry and on the remaining property of the community, society as a
whole is the poorer. If the savings had taken the form of public
buildings, libraries, railroads, and factories, the wealth and income of
society as a whole would have been enhanced.
[Sidenote: Consumers' choice as affecting wages]
4. _The kind of consumption affects the wages of the various classes of
labor._ That an increase in the supply of a given grade of labor reduces
its wages and encourages its use, and vice versa, is a truth that became
familiar in the study of wages. An influence also is exerted from the
side of goods upon the price of labor. A shift of demand from one kind
of goods to another depresses the wage of the one kind of labor and
raises that of the other. A low grade of labor that performs only simple
tasks, and those but badly, is injured if demand shifts to better
products. Back of the sweat-shop shirt is the problem of the inefficient
worker. Progress takes place by the effort of labor to increase its
efficiency and to move into higher paid callings, and at the same time
by the desire of the purchaser to buy as good a quality as he can.
[Sidenote: The consumer's responsibility]
Public-domain text, read in full here on John Shaqi.
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