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The Economic Environment

energy, knowledge, physical, mans, conditions, welfare, particular and nature

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THE ECONOMIC ENVIRONMENT Like geography and some other sciences, economics requires a knowledge of man's sur roundings. Those surroundings are partly physical and partly social. What economics demands of physical science is a knowledge of the particular facts concerning the surface of the earth and the atmosphere which have any direct bearing upon man's welfare. If it were our task to account for those facts, it would be necessary to bring into our study all the teachings of astronomy concerning the past and present of the solar system, all the teachings of geology concerning the formation of the crust of the earth, and the teachings of biology con cerning the natural history of plants and ani mals. If, on the other hand, we were to attempt an examination of all those branches of human knowledge which indirectly contrib ute to the welfare of man by furnishing to 16 mechanic, farmer, or physician, the necessary equipment of his calling, we should speedily get beyond the proper boundaries of any sin gle science. Our inquiry is much less exten sive and may be stated in this way : Of what general conditions must account be taken in man's struggle with nature for a living ? Or, in other words, what are the facts which de termine the character of his economic life ? It is evident that we cannot borrow indis criminately from geography, geology, or other sciences. There are innumerable facts which are essential to a well-ordered description of the earth's surface which are not essential in a statement of man's economic surroundings, because they have a very remote bearing, if any, upon the welfare of society. Such, for example, are the descriptions of many of the natural wonders of the Arctic regions and of the luxuriant vegetation of tropical swamps. The increase of knowledge or a shifting of conditions, such as the discovery of gold in the Klondike, or the transfer of tropical islands to a more efficient government, occasionally increases the relative importance of such facts, giving them a new significance. By such means the environment, to adopt a more appropriate term for all these surroundings which have an in fluence upon man's welfare, is continually chang ing, certain conditions which were once of conse quence ceasing to be so, and others rising to a prominent place. But the environment, as we shall use the term, never includes more than a comparatively small fragment of the universe, or, for that matter, more than a small portion of the facts and relations to be found on our own globe.

In searching for those conditions of physi cal nature which are the primary requisites of human activity, we encounter, first, what seems to be fundamental and universal, the existence of physical energy. The forces of nature are to a large extent placed under man's will. If this were not the case, man would not be able to exert any influence over his own well-being, and there would be no occasion for the study of economic laws. This physical energy ap pears in various forms, as heat, light, magnet ism, gravitation, and muscular force. In any of its forms it is convertible into others. In this process, if intelligently directed, it trans forms useless matter into useful goods, and thus contributes to the end of all economic ac tivity.

Physical energy is often totally misdirected with the effect that goods which might have been of use to men are destroyed, i.e., given a form which renders them unfit for the use to which they would have been put. Perhaps it is never so directed as to be fully utilized. All human progress may be looked upon as an increase in the economy of physical energy. The new machine which utilizes a larger pro portion of the force released by the burning of coal or the falling of water thus becomes a type of the progress of society.

The student of physics learns that whether man succeeds or fails in his attempt to utilize a particular form of energy for his own pur poses, the energy itself is not lost. The physi cist measures it, in its earlier and later forms, and finds that none has been destroyed. But such measurements do not concern the econ omist. The success or failure to utilize the energy in the particular form in which it was embodied is, from his standpoint, a final fail ure or success. If the coal in the engine does not drive the wheels successfully, it is of little consequence that the temperature of the sur rounding air is slightly raised, and that gases are produced by the combustion. Infinite knowledge would be necessary for a complete utilization of the available natural forces. The amount of knowledge which we do possess is the slow product of experiment and research. Years may be spent upon the simplifying of processes of which we are already in posses sion. Hence the saying among machinists that anybody can make a machine to do a given kind of work, but only a genius can make a simple machine that will do the work cheaply and well.

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