Economic gain

“ Has the progress of wealth and industry no effect in regard to cost of production, but to diminish it? Are no causes of an opposite character brought into operation by the same progress, sufficient in some cases not only to neutralize, but to overcome the former, and convert the descending movement of cost of production into an ascending movement? ”

“ The great end of legislation in matters of national wealth, according to the prevalent opinion, was to create consumers. A great and rapid consumption was what the producers, of all classes and denominations, wanted, to enrich themselves and the country. This object, under the varying names of an extensive demand, a brisk circulation, a great expenditure of money, and sometimes totidem verbis a large consumption, was conceived to be the great condition of prosperity. ”

“ The increase of capital, the introduction of machinery, the diversion of labour from other less profitable pursuits, the acquisition of skill, and, above all, the confidence of the people in the protection of the government, have vastly augmented the means of production. It now promises an ample supply for the consumption of the country, and a steady but moderate profit. They are in a course of experiment, that will in a short period establish this great interest upon a scale adequate to the wants of the people. ”

“ The efficiency of the new manufacturing processes has provided a large surplus of goods that must be taken somewhere, exchanged for food and raw materials, which must, in turn, be brought to the producers of manufactured goods. In the course of these transactions, a generous share of the values produced goes, in the form of profit, to the owners of the industry, another considerable portion goes into reinvestment, thus swelling the volume of productive capital.
The increased wealth, the larger capital and the greater amount of surplus all make possible the maintenance of a larger population. ”

“ Aiming at greater production, economy and efficiency, through their large means and modern improvements, than had been possible with small concerns, they marked a forward step in that progressive industrial, commercial and financial march which has created our vast national wealth and made this country the Wonder of the World. ”

“ With general growth of population and wealth the increased consumption of cloth calls, in the end, for more capital in the form of the looms themselves.
General Consumption as affected by a Specific Increase of Productive Power.—Consumption in the generic—the use of consumers' goods of every kind—grows as the power to make the good increases; but a point that is of great importance is that any specific increase of productive power brings about a general increase of consumption. It brings about a greater all-round creating and using of commodity. ”

“ Economy no more means saving money than it means spending money. It means, the administration of a house; its stewardship; spending or saving, that is, whether money or time, or anything else, to the best possible advantage. In the simplest and clearest definition of it, economy, whether public or private, means the wise management of labour; and it means this mainly in three senses: namely, first, applying your labour rationally; secondly, preserving its produce carefully; lastly, distributing its produce seasonably. ”

“ Industry, commerce, shipping, and banking concentrated in the narrow area of less than 200,000 square miles, earned yearly returns equal as a rule to the total of the capital invested. Money changed hands rapidly, credits did the work of capital, and the rapid growth of population added large unearned increments to the fortunes of those who owned land or had established themselves in trade. ”

“ If the market price rises high above the cost of production, producers make a profit greater than the average profit made in the country. This induces them, by the appropriation of new land and the employment of new labor and capital, to increase their business. ”

“ The labourer may obtain greater comforts; wages in kind real wages may rise. Or the progress of population may force down cultivation to inferior soils, and more costly processes; thus raising the cost of production, the value, and the price, of the chief articles of the labourer's consumption. On either of these suppositions, the rate of profit will fall. ”

“ Trade had developed under the new rule, and had expanded with improved means of communication. Capital had begun to accumulate, and the moneyed classes were in favour of a government that would support public credit and refrain from extortion. The mass of the people were contented, prices being cheap, wages on the rise and employment brisk. ”

“ The man who has a dollar in his pocket knows that speculators and gold-gamblers cannot, by some juggle, take five cents or ten cents from its value, in twenty-four hours, as they could a few years ago. The public burdens have been largely reduced. Our exports far exceed our imports, and our balance-sheet with the world shows an immense sum in our favor. The boom of business is heard in the land. The preachers of calamity are out of date. Commerce, industry, enterprise, capital, labor, all feel the impulse of substantial prosperity running through every artery of public and private activities. ”

“ Trade, finance and commerce, by producing a regular flow of abundant income, brought into existence a new field of occupations and a new class--business and the businessmen. Herdsmen and farmers depended for their livelihood on nature, her niggardliness or generosity. The businessmen required only the presence of a group large enough to purchase goods and services, pay rent and interest, work for wages and leave the profits to the enterpriser. Each profit beyond the subsistence level enabled the businessmen to expand, buying more goods, hiring more labor, making still greater profits. ”

“ The natural price of all commodities excepting raw produce and labour has a tendency to fall, in the progress of wealth and population; for though, on one hand, they are enhanced in real value, from the rise in the natural price of the raw material of which they are made, this is more than counterbalanced92 by the improvements in machinery, by the better division and distribution of labour, and by the increasing skill, both in science and art, of the producers. ”

“ If money is scarce in a country, the price of labor will be low, and consequently the produce of that country will be cheap at home, and a great profit will be made on the exportation. This profit will be returned, partly in goods and partly in money, and the country is enriched. ”

“ To any advance in the arts of industry or the comforts of life, a rate of production exceeding the rate of consumption, with consequent accumulation of resources, or in other words, the formation of capital, is indispensable. ”

“ In urging a course of strict economy we admit that it is hard, embarrassing, perplexing, onerous, but it is by no means impracticable. A cool survey of one's expenditures, compared with his income; a wise balancing of ends to be gained; a firm and calm determination to break with custom wherever it is opposed to good sense, and a patience that does not chafe at small and gradual results, will do much towards establishing the principle of economy and securing its benefits. Economy has, however, deeper roots than even this—in the desires. It is there, after all, that we control our expenditures. ”

“ Before the individual will expend his maximum energy upon the economic process, he must see tangible results such as bread, shoes, schools, and holidays. One of the strongest arguments that the present economic system advances in favor of its continuance is the showing of large tangible returns in the form of economic goods. ”

“ All this capital is now lent at interest, and made available for production. Capital thus circumstanced forms a large portion of the productive resources of any commercial country; and is naturally attracted to those producers or traders who, being in the greatest business, have the means of employing it to most advantage; because such are both the most desirous to obtain it, and able to give the best security. Although, therefore, the productive funds of the country are not increased by credit, they are called into a more complete state of productive activity. ”

“ Increase this surplus, and he will naturally increase the number of his journeymen.
The demand for those who live by wages, therefore, necessarily increases with the increase of the revenue and stock of every country, and cannot possibly increase without it. The increase of revenue and stock is the increase of national wealth. The demand for those who live by wages, therefore, naturally increases with the increase of national wealth, and cannot possibly increase without it. ”

“ During all periods in which there has been a generous increase in the money-volume of a country or of the world, activity and prosperity have been its accompaniment. I challenge the citation of an instance to the contrary.
With a volume of money increasing at a rate sufficient to meet the demands of a growing population, and especially if the money be such as will not leave the country, but, under all circumstances, will remain in it, to sustain prices, preserve equities, and reward labor, no country with a proper coördination of its industries can be otherwise than prosperous. ”

“ The use of capital consists in its advance. It goes before all operations of labour and trade. It is the power that sets labour and trade in motion; just as the power of wind, or water, or steam, gives movement to wheels and pistons.
Let us briefly see how capital operates upon the three great branches of human industry, namely, upon agriculture, manufactures, and commerce.
A farmer having acquired capital, either by the former savings of himself or his fathers, or by borrowing from the savings of others, takes a certain number of acres of land. ”

“ It will be seen that the quantity of capital which will, or even which can, be accumulated in any country, and the amount of gross produce which will, or even which can, be raised, bear a proportion to the state of the arts of production there existing; and that every improvement, even if for the time it diminish the circulating capital and the gross produce, ultimately makes room for a larger amount of both than could possibly have existed otherwise. ”

“ In the case of a more complicated manufacturing establishment, it should also be perfectly clear that the greatest permanent prosperity for the workman, coupled with the greatest prosperity for the employer, can be brought about only when the work of the establishment is done with the smallest combined expenditure of human effort, plus nature's resources, plus the cost for the use of capital in the shape of machines, buildings, etc. ”

“ But now the other opportunities for the investment of capital were so profitable and alluring, and the need of it so great, that all the available labor and capital of the American people began to be devoted to the development of their internal resources. A nation cannot do everything with equal advantage at the same time any more than an individual can. Accordingly we began to withdraw our capital from shipping and devote it to agriculture, mining, manufacturing, transportation, and similar more profitable enterprises. ”

“ The gradual introduction of an improvement is important, since it affords time for an increase in the social demand for the product which is thus cheapened and for introducing at many other points improvements which neutralize, in a large degree, the labor-expelling effect of the first improvement.
(4) Technical gains are the largest source of additions to the total amount of the social capital. The constant influx of new capital facilitates the placing of laborers at the points where they are needed. ”

“ It caused the establishment of great new industries and the expansion of others; the maintenance of good wages for American workingmen; the supplying of the American market with American-made goods in place of foreign, often of better quality and at lower prices than the foreign; and at the same time an abundant revenue to be applied not only to the current expenses of government but also to the extinguishment of the public debt. ”

“ Saving up and borrowing were both more practicable. More capital was now in existence and more persons could obtain the use of it. As a result, manufacturing, trade, and even agriculture could now be conducted on a more extensive scale, changes could be introduced, and production was apt to be profitable, as prices were increasing and returns would be greater even than those calculated upon. ”

“ Wages and interest rise and fall together. Labor moves for higher wages where capital flows for higher interest. Wages are high in new countries where capital is scarce, and low in old ones where it is abundant. This fact is generally noted by economists, but it is explained by them as due to the relatively greater production of wealth in new than in old countries. ”

“ When the progress of accumulation has reduced profits either to the ultimate or to the practical minimum,—to the rate, less than which would either put a stop to the increase of capital, or send the whole of the new accumulations abroad ”

“ These intervals of advancing prices, when not succeeded by retrograde movements, most powerfully contribute to the progress of national wealth. And practically I should say, that when once a character of industry and economy has been established, temporary high profits are a more frequent and powerful source of accumulation, than either an increased spirit of saving, or any other cause that can be named. ”