Aloney may be defined as an economic good which is universally desired in, any coinmunity and which is universally acceptable as a means of payment for goods or services.
12. modern business is conducted in most civilized countries, actual money is verv little used. Alen are satisfied to accept in lieu of it a mere promise to pay money. This promise is known as credit and it is founded on the rock of confidence.
If business men of the United States should lose confidence in one another, or in the govermnent, or in the courts of law, the great credit system bv which gigantic totals of wealth are daily exchanged would collapse, business would be at a standstill and great distress would ensue, the rich suffering as well as the poor. Just how money and credit do their work we shall discuss in later chapters.
13. Price.—The universal use of money and credit in modern business gives great importance to the word price. Popularly this word • is confused with value. Vet they have different meanings. The price of a thing is the amount of money it exchanges for or that is asked for it. The price of wheat shows the value of a bushel of wheat with respect to money. It gives us no idea of the value of wheat unless we know the prices of many other articles and thus can make com parison.
14. Distribution of income.—The subject matter to be touched on in this section is usually called "distribu tion of wealth," but that phrase is misleading, for the problem before us relates, not to the distribution of all of the country's wealth, but solely to the distribution or sharing of the new wealth daily created.
Into a nation's markets there is constantly pouring a stream of new commodities and out of the proceeds of their sale various people who have aided in their production must get their compensation, the laborer his wage, the landlord his rent, the capitalist his inter est, the business man or entrepreneur his profit. Roughly speaking the total of new wealth produced in the country in any year, sometimes called the national dividend, is divided among those four classes of society.
What determines the amount that each class shall c,et ? Does the landlord arbitrarily fix the rent which bis tenants shall liay? Or is the amount determined by forces which the landlord cannot control? Is the rate of wages fixed by the will of employers or by the insistent demands of trade union's or by forces beyond the immediate control of both employer and employe? Why does the rate of interest on borrowed money fluctuate? Is it a product of unseen forces too pow erful to be overcome by conventions and agreements? Why do profits vary, some business men amassing fortunes while others go into bankruptcy? Important questions of this sort are all related to the distribution of income and are treated in the chapters on Wages, Interest, Rent and Profits..