The Organization of Industry

capital, money, land, forces, production, increase, energy, materials and conditions

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as the origin of anything. Nor is it true that industry is limited by capital in any sense which is inconsistent with the proposi tion that sufficient capital is always forthcom ing when the natural forces and human energy are directed into more productive channels. The limitations are imposed by the lack of such energy and non-utilization of such forces. It cannot be too strongly insisted upon that under normal conditions, i.e., when the quan tities of the various kinds of capital are pro duced in the right proportion, the increase of capital involves no reduction in the quanti ties of present goods produced, that there is no diminution of enjoyment, that there is no necessary privation or sacrifice other than that connected with the labor involved in the production. Looking upon the industrial or ganization from a social and purely objective standpoint, we may recognize clearly enough that these advantages from the use of capital are not purchased at the cost of any reduction of enjoyment. At every stage, capital—that is to say, machinery, raw materials, unfinished goods, improvement on land, increased abilities T in men—these are produced by the cooperation of the human and the natural forces. They do not add to man's satisfactions directly, but neither do they subtract from them. In directly but continuously they do aid in satis fying desires. Contemporaneously with their own production they are changing into pres ent goods, or are increasing the quantities of present goods, at man's disposal. Since the very beginning of this process there has been no necessity for saving as an act of production.

Saving is the means by which the individual may increase the amount of his own income, the means by which he may influence the distribu tion of wealth. It deserves attention, therefore, in the study of distribution. Unfortunately there is a large class made up of those who are unwilling or unable to save for themselves, who do not adapt themselves to the more efficient methods of production in vogue, but steadily exchange their share in the future goods which they help to produce for such as are able to sat isfy immediate wants. While society consists thus of two classes, those who save and those who do not, the distribution of wealth will be greatly in favor of the former class. This income which they receive, because of the failure of the latter class to act in conformity with the newer conditions, is so much deducted from the total product of industry before any division among those who have actively cooperated in produc tion can take place.

Money is circulating capital of a unique kind. In any particular production the money em ployed fulfils the whole of its office by a single use, yet the money itself may exist in a durable shape, and its entire service to society may be spread over a period of longer duration than that of almost any form of fixed capital. In the popular mind the significance of money in the industrial mechanism is usually grossly exagger ated. Its total quantity does not measure in

any sense the aggregate wealth of the country, nor does it stand in any fixed relation to its stock of capital. The importance of the money of a country is somewhat greater than that of the weights and measures in general use, but its function does not differ materially from theirs. Money is used in exchanging goods, as railway cars are used in transporting them.

Both money and cars are capital, but neither has any exclusive or peculiar claim to the title. When it is said that money is needed to de velop the resources of a particular section of the country, it is almost always capital of other kinds than money that is really lacking. If the supply of money is really short, it will be attracted from other countries as soon as pre vailing high prices show that there is a deficiency. But there is no automatic method by which the supply of capital may be increased, since a high rate of interest does not necessarily accompany a deficiency of capital. If the deficiency makes itself felt as an obstacle to the development of some industry, then the rate of interest will rise in such a way as to attract the necessary capital. The need of future goods is recognized only gradually and on the actual initiation of new enterprises. That they are provided is an indication of the healthy growth of industry. The increase of capital augurs well for further development. An increase of money beyond that amount which the law of international prices allows is a disadvantage, and brings its own remedy. Society should be much more ready, therefore, to bring about the conditions that call for an increase of capital than to in crease artificially the money supply.

We may now turn our attention to the second of the productive energies enumerated at the beginning of this chapter. Physical energy is supplied by nature in an inexhaustible amount. No economist thinks, therefore, of attaching any importance to it as a productive agency. But it so happens that most of its available forms are dependent upon one of nature's gifts, viz., land. Industry can be carried on only upon land, and its products all find their origin in land, for by the term we include so much of the crust of the earth as furnishes to industry any of its original materials. There is no get ting access to the natural forces under our social institutions except through land ownership or rental. Figuratively speaking, therefore, land is the economic form of physical energy. It is nature's contribution to industry. It includes rocks and soils, timber, grass, and running streams, — all the forces of nature utilized by man in any branch of human industry. The materials of industry are• drawn from land, the possibility of industry depends upon the con tinued utilization of those forces which are em bodied in land and its products.

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