OPTIMA Every legitimate business transaction aims to change the position or condition of some product so that the product becomes more desirable and hence more valuable. In order to carry on such transactions intelligently the business man should know what kind of products are characteristic of the regions with which he deals, how abundant they are, and of what quality. The differences in these respects arc enor mous. France, for example, is a small country, but it provides a great variety of products. An equal area in northern Siberia, the Sahara, or the Amazon region may supply only one kind of goods where France supplies a hundred. Or again, a million people located in central China or southern India may produce scarcely a tenth as much as a million in France, and in quality their products are much inferior to the corre sponding French goods. In this chapter and others an attempt is made to explain such differences.
The Five Great Classes of are many ways of classifying the products that enter into commerce and industry, or into business as we may equally well say. The most common is (1) food stuffs, (2) raw materials, and (3) manufactured goods. This is good as far as it goes, but raw materials consist of at least three types so distinct that they ought to be considered separately. These are (A) non-metallic raw materials, (B) fuels, and (C) metallic raw materi als, or metals. Hence in this book we shall frequently refer to five classes of products, namely, (1) foodstuffs, (2) non-metallic raw materi als which will sometimes be called simply raw materials, (3) fuels, (4) metals, and (5) manufactured goods. Foodstuffs are usually the most important. In a well-regtllated family of moderate means in the United States from 20 to 40 per cent of the total expenditure is for food, the figure rising among poor people and falling among the well to-do. In less advanced countries like Egypt this figure rises to perhaps 75; in other words, three-fourths of the work of the inhabitants is devoted to getting enough to eat. Naturally then, the business con
nected with foodstuffs is commonly of the first importance.
Among the many non-metallic raw materials the chief are the fibers, such as cotton and wool from which clothing is made, and build ing materials, such as wood, clay, and stone. The ordinary family spends from 10 to 20 per cent of its income on clothing, and about 25 per cent on rent, or shelter, although recently this figure has risen higher. Hence the materials used for these purposes stand second only to food in importance.
The fuels and the sources of power include not only coal, oil, and minor fuels, but water and wind. We might also acid horses and other draft animals, for these supply power just as does the coal in an engine. The metals, the fourth great class of products, differ from such non metallic raw materials as building stone and clay because as a rule they must be considerably changed by smelting before they can be used. They are primarily the material of tools and machines.
Finally, manufactured goods form the fifth great class of products. In one sense almost everything that enters into commerce is at least very slightly manufactured, for the wheat has been threshed, the wood sawed, and the coal broken into usable sizes before it is sold. Manu facturing, however, usually means that a raw material is changed so much that its form and use are distinctly different from what they were in a state of nature, Food, to a large extent, comes to the ultimate consumer either unmanufactured, or only slightly manufactured, as in the case of flour which is merely ground. The materials for clothing, machinery, and even shelter, on the other hand, are usually of little use to the final consumer until altered by manufacture. Many articles, indeed, such as lighting fixtures, fine dress goods, and clocks, are so greatly altered in manufacturing that they show little connection with any kind of raw material.