3. Importance of money and the pres ent time almost all goods are made to be sold. Spe cialization and the subdivision of labor have been car ried so far that few men produce the things which they themselves consume. Old people recall the days when farmers had little need for cash, for they bought little at the stores. Their own farms produced most of their food and the material for some of their cloth ing. Today the average farmer in the United States devotes his energies to the raising of a few crops. Ile sells these for money and buys his food and clothes very much as does the city dweller.
So it happens that money and prices have become very important matters. What men really want are goods or commodities, things which possess what we call value. To get these is the ultimate object of work, but under modern conditions the immediate re ward of work is money, for with money the things wanted can be purchased. By the price of a thing is meant the amount of money it sells for. Evidently the subject of money and its purchasing power is of great importance to all people.
Since business men must figure their profits in money and cannot make a profit unless they sell at a price higher than they bought, it is evident that the forces which control the purchasing power of money must not be ig,nored by the wide-awake business man. That is the reason why the subjects of money and prices and credit are fully treated in the Modern Busi ness Texts.
4. Business must satisfy human wants.—Altho the business man is seeking to make a profit for himself, he must nevertheless think more of others than of himself. He can earn his profit only tlum his ability to please others. If he is a trader he must buy and sell things that people want. He is not a dictator and cannot make people buy his goods merely because lie himself thinks they are better than the goods peo ple call for. So the business man must study,human wants and caprices. He may not approve of their tastes or of their judgment, but if he wishes to make a profit, he must be ruled by them. He may be a manufacturer of shoes and Imow very well that high heels make walking painful, but he will not let what he knows about physiology and anatomy shape the model of any woman's shoe—unless possibly his wife's.
P. D. Armour once said that he chose to deal in pork because it was an article of food that nearly every body wanted in some form or other. A business, deal
ing in a commodity that is in universal demand, stich as wheat, flour, or cotton cloth, is capable of tremendous development. The profit on each ham or each barrel of flour or each gallon of oil may be small, yet the gross profits may run into the millions because of the large sales.
5. New wants constantly every body knows, the last twenty-five years of the nine teenth century were characterized by a remarkable development of machine production. Invention after invention lowered costs of production and made pos sible a great increase in the output of commodities. One man with the aid of modern machinery is able to produce one hundredfold more than his grandfather could have produced fifty or sixty years ago.
While this industrial progress was taking place, especially between 1880 and 1896, the general level of prices was falling, and as goods became cheaper one often heard the prediction that the time was fast ap proaching when all the goods that man needed could be produced by two or three hours of labor a day. The increasing efficiency of the machine seemed des tined to reduce the demand for hired labor to a, mini mum, and in consequence dire prophecies, especially among persons of socialistic or radical tendencies, were heard with, regard to the future of the laboring classes.
The radicals held that the machine, called capital by the economists, was bound to absorb an increasing pro portion of the world's wealth and that less and less would be left for the poor working man.
Happily this gloomy prophecy has not come true. It was based. upon a fallacy, namely, the assumption that man has a definite number of wants and tbat when these are satisfied he is content. As a matter of fact, man is a bundle of an infinite number of po tential wants. This is one of the important charac teristics which disting,uish man from all other ani mals. A certain amount of food and drink, a little play and a chance to run and climb a tree, and now and then to "lay" for a mouse or a chipmunk, will bring complete content to the most high-bred tabby in any cat show. The wants of all the lower animals are fixed in number, and when these are gratified the ani mal is ready for rest and sleep.