PART I PRODUCTION AND CONSUMPTION CHAPTER VII ELEMENTARY CONCEPTS IN political economy many of the technical terms employed are often misunderstood because the same words are used in ordinary speech with inconsistency and confusion. Frequently we have to choose between the alternatives of being inconsistent and of violating current usage. The present chapter is devoted to a preliminary survey of some of the fundamental notions in political economy. The statement is sometimes made that economics is a mere bread-and-butter science, and this charge is not without some foundation, since the science studies men in their endeavor to make a living, but it would be an error to suppose that we are concerned with only the sordid aspects of human nature. This is apparent if we enumerate the motives which impel men to acquire wealth. Motives in Economic Activity.—(1) There is, in the first place, the endeavor to satisfy one's strictly personal wants, giving rise to the struggle for food, shelter, comforts, amusement, etc. These things are wanted for their own sake, because of the effect which they produce upon the individual acquiring them. We have here, in short, the motive of self-maintenance and self-development. (2) But every normal individual feels such a degree of affection for certain other people that he is also anxious for their maintenance and development. Striving for the welfare of others is a second motive which impels men to labor for the acquisition of material things, and in many cases is more effective as a spur to endeavor than the first. A man will hold himself to the daily grind more persistently when he feels some one is dependent upon him than when he is standing alone. Another motive is (3) the desire to gain the esteem of one's fellows. This motive may take the form of an endeavor to do one's part and to be deserving of the companionship of the class of people whom we admire. But much of our wealth acquisition is motivated by the hope of impressing our fellows with a sense of our own importance, to show that we are successful, admirable, enviable. When the income permits, old coats are discarded, not because they cease to give protection, nor because they have become æsthetically objectionable, but because the wearers wish to make a favorable impression upon other people. Part of the pleasure of owning fine houses may come from the fact that most people do not have them. This motive is not always a conscious one, since our standards of beauty or propriety may themselves have been the result in part of this desire for distinction. Somewhat similar to the desire for distinction is (4) the desire for power. Men like to dominate and command their fellows, and this want may be satisfied by means of the dollar as well as with the sword; hence our "Napoleons of Finance," "Captains of Industry," and "Railway Kings." Again, (5) the desire for activity for its own sake may be mentioned. Enforced idleness is as painful as prolonged labor, except to the degenerate. This desire may result in the production of goods, but almost always it requires the use of goods that have been produced; as, for example, the implements of athletic exercise. Finally, (6) religion and the ethical sense may be important factors in controlling the economic activity of the individual. Observe, for instance, the difference in the history of the communistic experiments in which religious feeling has been strong and those in which it has been weak. In this discussion the use of the word "motive" must not be taken to mean that all of the economic life of the individual is a consciously rational one, in which pleasures are balanced against pains in such a way as to secure the maximum surplus |