Economic institution

“ Those who are concerned with the establishment of a working basis for economic society must bear constantly in mind the purpose of economic organization—to provide livelihood on the most effective possible terms. The economic system is not called on to perform any other function. ”

“ Economic conditions require readjustment, important matters of trade must be regulated, vital questions of finance and taxation must be handled, in fact, the whole country must settle down to production, manufacture, distribution of merchandise, and the transaction of the nation’s regular business. ”

“ The Economic Function.—The nation has an economic function. It is its business to encourage trade by means that seem most likely to help, whether by subsidies, tariffs, or expert advice; to protect all producers, distributers, and consumers by just laws and tribunals, so that unfair privileges shall not be enjoyed by the few at the expense of the many, and to provide in every legitimate way for the spread of information and for experimentation that agriculture, mining, and manufacturing may be improved. ”

“ The essential economic decisions, however, are still made by the owners of private wealth. If there is to be an organization of economic society that will function successfully and autonomously, the knowledge on which the decisions affecting economic policy are made must be public property. Until that step is taken the economic life of society will be directed by the chance desires of those who own the machinery of production. ”

“ Large corporations, which can afford the best machinery; which control abundant capital, and which can plan with scrupulous economy all the details of producing and selling an important product or service, are actually able to reduce the cost of production to a minimum; and in the cases of certain American corporations such results have actually been achieved. The new organization of American industry has created an economic mechanism which is capable of being wonderfully and indefinitely serviceable to the American people. ”

“ Economists argue against government restrictions on trade and manufacture.
The economists wrote treatises on taxation, scattered pamphlets about, and conducted a magazine or two. They not only brought the existing economic evils home to the intelligent reader, but suggested remedies for them. ”

“ Every governmental unit, large or small, may be viewed not only as a political body, but as an economic enterprise. Each has its economic aspects, such as receipts and expenditures, employer and employee, borrowing and lending, etc. Each political unit is in this sense "an economy." The study of the public economy, of the economic aspects of government as distinguished from its political aspects, constitutes the science of public finance, an important division, tho not the whole, of political economy. ”

“ Economic society consists of unit groups or organs which are established for the performance of certain functions. Mines and other extractive units take nature's stores from their age-old resting place and prepare them for the railroad, the factory or the home; the transport units convey goods and people; the merchandising units bring together many varieties of goods, and act as a distributing agency for those who will consume the products of mine and factory. The existence of a unit of economic organization is therefore a proof of the presence of some economic function. ”

“ To the degree that governments faithfully exercise their legitimate public functions and refrain from interfering with legitimate private functions, they contribute to the Productive Process. This is demonstrated by observable Economic results. Wherever Government approximates a realization of its functions, Economic conditions are manifestly better than where it neglects or abuses them. Evidently, then, Government is a form of human service which, like all other human service forms, belongs as an Economic factor in the Labor category. ”

“ While political life has been thus organized about the administration of certain public affairs, economic life has remained disorganized, or has been organized largely with an eye to owners' profits. The producers society will be organized in economic terms very much as the present society is organized in political terms. ”

“ In studying the law which would govern economic society if no essential economic changes were taking place,—in reducing society, as it were, to a static state,—we find that there is a certain set of characteristics which land shares with those capital goods which are the products of human industry. ”

“ The fundamental basis for the maintenance of national standards of living is adequate production, economical distribution, and fair apportionment among the various economic groups which constitute our society. ”

“ In the social production which men carry on they enter into definite relations that are indispensable and independent of their will; these relations of production correspond to a definite stage of development of their material powers of production. The sum total of these relations of production constitutes the economic structure of society—the real foundation, on which rise legal and political superstructures and to which correspond definite forms of social consciousness. ”

“ The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? ”

“ Their very movement constantly reallocates resources to the production of a variety of goods and services in just the proportion which the consumers demand. In this theory the institutions which comprise the framework of the economic order are taken for granted. ”

“ The re-orientation of the national economic program, putting aside lies and deceptions, and favoring the most dispossessed sectors in the country, the workers and the peasants, who are the principal producers of the wealth that others appropriate. ”

“ For catering to the general market and producing staple goods the large establishment has a decisive advantage, and this insures the centralization which is the marked feature of recent industrial life. ”

“ Economic growth has liberated societies from the natural pressures that forced them into an immediate struggle for survival; but they have not yet been liberated from their liberator. The commodity’s independence has spread to the entire economy it now dominates. This economy has transformed the world, but it has merely transformed it into a world dominated by the economy. ”

“ Let it practice true and conscientious economy, not only in the expenditure and application of public moneys, but also in the method of levying them, so as to be equally just to all classes and all economical interests. ”

“ The state shall coordinate and regulate state-owned economy, co-operative economy, the individual economy of peasants and handicraftsmen, private capitalist economy and state capitalist economy, in their spheres of operations, supply of raw materials, marketing, labour conditions, technical equipment, policies of public and general finance, etc. ”

“ The corporation employing thousands of men and supplying millions of people with some necessary service or commodity may reduce the cost of production only for its own profit. The state may use its great authority chiefly for the benefit of special interests. ”

“ As domestic economy regulates the acts and habits of a household, Political Economy regulates those of a society or State, with reference to the means of its maintenance.
Political economy is neither an art nor a science ”

“ Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects; first, to provide a plentiful revenue or subsistence for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. ”

“ In our endeavors to sustain labor, and equalize its opportunities with capital, we have gone much further than this. We hold that all public necessities of general demand, in the supplying of which large expenditures are required in fixed capital, and which are not strictly in the line of production, should be provided for by the government. ”

“ As the State formerly played a most important part in the revolutions which abolished the old economic systems, so it must again be the State which should abolish capitalism. ”

“ This view of the development challenge underlines in each and every case our basic economy policies, particularly those governing the role of private enterprise in the economy. There have been questions raised as to the role of private enterprise. ”

“ It goes little farther than to collect and arrange some elements upon the most interesting branches of modern policy, such as population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxes. ”

“ The essential difference between the various economic forms of society, between, for instance, a society based on slave labour, and one based on wage labour, lies only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer. ”

“ The world has progressed, or retrogressed, as the most powerful interests at any time adjusted the institutions and customs governing wealth production to their own advantage. As the controlling interests in our present scheme are the business interests, it is the business man, not the workman, who directs industry and determines its policy as well as the general policy of the nation in which it operates. ”

“ No longer must industry be thought of as a mere revenue-producing process, in which Capital, Labor, Management, and the Community meet like so many rival and contending factions, each to appropriate to itself by force or might the largest possible share of the fruits of industry. Industry must be thought of, as in reality it is, as in the nature of social service, and participation in industry, whether in the form of labor or capital investment, as social service of the highest kind, since upon its successful accomplishment rest all other forms of human service. ”

“ There is no purpose to which public money can be more beneficially applied than to the acquisition of a new and useful branch of industry, no consideration more valuable than a permanent addition to the general stock of productive labor. ”

“ While the political economists were busy promulgating the doctrine that it was not the province of Government to embark in any enterprise other than that of purely governing—a doctrine precisely suiting the traders and borrowed from their demands—the commercial classes, early in the nineteenth century, suddenly discovered that there was an exception. ”

“ As a civilization grows in wealth and population the political apparatus becomes a major employer, a major producer of goods and services, a major purchaser of producer and consumer goods, a major agency for borrowing, lending, insuring, in short a major factor in the multitudinous activities of a commercial, industrial community. ”

“ A previous application of labour to produce the capital required for consumption during the work, is no less essential than the application of labour to the work itself. Of capital, again, one, and by far the largest, portion, conduces to production only by sustaining in existence the labour which produces: the remainder, namely the instruments and materials, contribute to it directly, in the same manner with natural agents, and the materials supplied by nature.
We now advance to the second great question in political economy; on what the degree of productiveness of these agents depends. ”

“ 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. ”

“ Without any government supervision, therefore, but simply through the choice of enterprisers seeking the best investment of capital, industries are developed in which the country is either most markedly superior or least inferior to its neighbors. ”

“ With the founders of this Republic we hold that the true theory of politics is that the machinery of government must be owned and controlled by the whole people; but in the light of our industrial development we hold, furthermore, that the true theory of economics is that the machinery of production must likewise belong to the people in common. ”

“ It must always be remembered that in the working of a [Pg 218] monopoly by the State, the interest of the public as a whole is the paramount consideration, and every economy consistent with efficiency must be adopted. ”

“ Every government, considered as a corporate body, has needs of its own apart from those of the people whom it governs. Whether it be a city, a state, or a smaller governing unit, it must solve the problems of revenue and expenditure just as a private household. Later writers applied the term economics mainly to this group of problems to which we now apply the name public finance, rather than to that group which in the diagram above are included under Private Economics. ”