when they are lessened, consumption suffers. If, with comparatively little effort, society finds itself able to satisfy very completely all its lower as well as its higher desires, the economic statement of that fact is that there is a large surplus of utilities over costs. It is immaterial to society as a whole whether these utilities have " values " or not. If they are produced with so much ease and in so great quantities that they become free goods, they do not on that account contribute less to the comfort and happiness of man. The theory of consumption, therefore, entirely disregards alike " market " and " normal " and even " subjective " values, concerning itself with an investigation of the pleasure-giving entities which we call utilities.
This distinction is one which should be clearly seen. No commodity can have a value unless it can be appropriated. But many goods which are not appropriated have great utility. In the theory of value it is of prime importance that the commodities be fitted for ownership, that the ownership be transferable from one person to another. But the theory of con sumption and of prosperity and of progress must take account of goods not thus suited to private or even public ownership. Free goods, non-appropriated goods, are consumed, and they must be taken account of when a general estimate of the prosperity of a commu nity is to be formed.
The true starting-point in the construction of any complete theory of economics lies in consumption rather than in production. Pleas ures and pains, rather than physical forces, are the initial and fundamental economic facts. Wants precede satisfactions. The study of human wants, not merely in the abstract man ner so common in theories of morals, but in the concrete manner made possible by the introduction of economic measurements, may be carried on independently of and prior to the study of the productive agencies. This
order of development is not only possible, it is the more logical and fruitful. The one who looks upon every step forward in social prog-• ress as a " development of new activities giving rise to new wants," 1 who sees the obstacles to progress mainly in certain physi Marshall, Principles of Economics, Vol. I., p. 147, 2d ed.
cal hindrances to the development of industrial activity, will, if he construct a theory of prog ress and of economics, base it upon different premises and formulate it in different terms from those employed by the economist who holds that the environment which men find " de pends upon their mental characteristics," 1 who looks upon every step forward primarily as a modification of men's desires and ideals, who in sists that economic activity at any particular point will always be determined by the ideals to which man has already attained, the initial step in further development being an advance in man's ideals, a modification of the psychical con ditions of wealth production which have their origin in the prevailing consumption. The re sults of progress from this latter standpoint will be sought mainly in man himself, in the devel opment, for example, of new tastes which allow a fuller exploitation of the natural resources. All social progress and activity may thus be viewed from the industrial standpoint of production or from the economic standpoint of consumption.
1 Patten, Dynamic Economics, p. 38.