Economic system

“ 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. ”

“ Continuing the inquiry into the nature of the economical changes taking place in a society which is in a state of industrial progress, we shall next consider what is the effect of that progress on the distribution of the produce among the various classes who share in it. We may confine our attention to the system of distribution which is the most complex, and which virtually includes all others—that in which the produce of manufactures is shared between two classes, laborers and capitalists, and the produce of agriculture among three, laborers, capitalists, and landlords. ”

“ 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. ”

“ This is specially true of the domain of economic production; for it is mainly on account of its connection with the production and distribution of wealth that political government excites so much popular interest and forms the subject of so much vehement controversy. And in every other domain of human activity equally, we shall find that the interests, the endeavours, and the disputes of men have an economic process as their basis, or economic progress as their object. The processes of production and commerce are, in fact, the central processes of every nation’s life. ”

“ Throughout the book economic principles are discussed with special reference to American conditions, and their workings are illustrated by frequent allusions to American experience. The subjects of wealth, its consumption, production, and distribution, exchange, money, credit, bimetallism, monopolies, international trade, wages, land nationalization and socialism, and the economic functions of Government are thus treated ”

“ 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. ”

“ Capital and the Administrative Staff—Capital and the Manual Workers—The Manual Workers inter se—The Administrative Staff and the Manual Workers—Industry and the Consuming Community—Industry and the Nation.
Before we can construct any scheme of reform of our industrial system we must have a clear idea of what is industry. In the prosaic language of economics it is a purposive production of commodities and services, the immediate object of those engaged in it being to provide, through the result of their work, the material means of satisfying their wants and desires. ”

“ 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. ”

“ Political economy requires farther expansion in order to include all the elements of this great social problem.
It is a true doctrine that demand and supply regulate the price of all things, labour included. ”

“ We have surveyed the field of economical facts, and have examined how they stand related to one another as causes and effects; what circumstances determine the amount of production, of employment for labour, of capital and population; what laws regulate rent, profits, and wages; under what conditions and in what proportions commodities are interchanged between individuals and between countries. We have thus obtained a collective view of the economical phenomena of society, considered as existing simultaneously. ”

“ 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. ”

“ What capital does for production is, to afford the shelter, protection, tools, and materials which the work requires, and to feed and otherwise maintain the laborers during the process. These are the services which present labor requires from past, and from the produce of past, labor. Whatever things are destined for this use—destined to supply productive labor with these various prerequisites—are Capital. ”

“ 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. ”

“ 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 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. ”

“ If the additional demand could continue to be supplied from the superior lands, by applying additional labour and capital, at no greater proportional cost than that at which they yield the quantity first demanded of them, the owners or farmers of those lands could undersell all others, and engross the whole market. ”

“ The possibility of substituting the large system of production for the small, depends, of course, in the first place, on the extent of the market. The large system can only be advantageous when a large amount of business is to be done: it implies, therefore, either a populous and flourishing community, or a great opening for exportation. ”

“ Her economy was not the mean, penny-wise, pound foolish policy which many mistake for true economy. It was the art of calculation joined to the habit of order, and the power of proportioning our wishes to the means of gratifying them. ”

“ We propose to show what Labour can effect, and how it is to be encouraged and economized and rewarded: to treat of Capital, its nature and operation, and the proportions of its increase; and to exhibit the union of these two mighty agents of Production. Under the second head, Distribution, occur the great questions of Rent, Profits, Wages, and Population, the various modes of Interchange at home and abroad, including the consideration of all Monopolies, domestic and foreign. Under the third head, Consumption, are considered the modes of Demand and Supply, and of Taxation. ”

“ Economically it extended from peasant proprietorship and a use economy to a market-money economy; from a society of working peasant farmers to an economy resting upon war captives reduced to slavery; from an economy based on production for trade and profit to an economy based on power-grabbing, special privilege, speculation and corruption; from an austerity economy based on primary production to an economy based on affluence, exploitation, and gluttony. ”

“ It will be seen that all questions of finance and commerce are intimately connected, while those of labor and capital grow out of the conditions they make possible and inevitable. To properly understand the relations of capital and labor, and to harmonize them, demands a correct comprehension of the basic principles of economy which relate to finance and commerce. ”

“ Capital does not limit industry, the only limit to industry being the access to natural material. But capital may limit the form of industry and the productiveness of industry, by limiting the use of tools and the division of labour. ”

“ The use of capital in production is, therefore, but a mode of labor. As capital can be used only by being consumed, its use is the expenditure of labor, and for the maintenance of capital, its production by labor must be commensurate with its consumption in aid of labor. Hence the principle that, under circumstances which permit free competition, operates to bring wages to a common standard199 and profits to a substantial equality—the principle that men will seek to gratify their desires with the least exertion—operates to establish and maintain this equilibrium between wages and interest. ”

“ Of such cases, the argument to show that Demand for Commodities is not Demand for Labor, the Doctrine of International Values, and the Effect of the Progress of Society on wages, profits, and rent, are examples. ”

“ By such means society might obtain from its existing resources a greater quantity of produce: and to such means it has been driven, when the sudden destruction of some large portion of its capital rendered the employment of the remainder with the greatest possible effect, a matter of paramount consideration for the time. ”

“ 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. ”

“ Therefore society as a whole must take possession of industrial capital, production for use must be substituted for production for profit, work at a good wage must be guaranteed to every one who asks for it, and the fair distribution of wealth among the workers must be regarded as of more primary importance than the quantity which is produced. ”

“ They would fall, because a less quantity of labour was necessary to their production, and would therefore exchange for a smaller quantity of those things in which no such abridgement of labour had been made.
"Economy in the use of labour never fails to reduce the relative value of a commodity, whether the saving be in the labour necessary to the manufacture of the commodity itself, or in that necessary to the formation of the capital, by the aid of which it is produced. ”

“ That capital may limit the form of industry is clear. Without the factory, there could be no factory operatives; without the sewing machine, no machine sewing; without the plough, no ploughman; and without a great capital engaged in exchange, industry could not take the many special forms that are concerned with exchanges. ”

“ 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. ”

“ But in this very union of functions there is, in a great proportion of cases, a want of economy. The principal in the concern is either wasting, in the routine of a business, qualities suitable for the direction of it, or he is only fit for the former, and then the latter will be ill done. I must observe, however, that I do not attach, to this saving of labour, the importance often ascribed to it. There is undoubtedly much more labour expended in the superintendence of many small capitals than in that of one large capital. ”

“ But mercantile economy, the economy of "merces" or of "pay," signifies the accumulation, in the hands of individuals, of legal, or moral claim upon, or power over, the labour of others; every such claim implying precisely as much poverty or debt on one side, as it implies riches or right on the other. ”

“ 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. ”

“ 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. ”

“ In each of these three modes of production capital may aid labor—or, to speak more precisely, in the first mode capital may aid labor, but is not absolutely necessary; in the others capital must aid labor, or is necessary.
Now, while by adapting capital in proper forms we may increase the effective power of labor to impress upon matter the character of wealth, as when we adapt wood and iron to the form and use of a plane ”