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Value and the Trader 1

exchange, labor, modern, little, human, system and transportation

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VALUE AND THE TRADER 1. Importance of exchange.—Exchange is perhaps the most conspicuous phenomenon in modern indus trial and commercial civilization. If a visitor could come to the earth from a planet where there was no buying and selling, each person producing all that he consumed, he would be amazed and dazed by our complicated system of markets, railroads, telephone and telegraph lines. On his planet there would be no such things, for there would be no need for them.

People are so accustomed to exchange that they give little or no thought to its advantages. Some indeed are so foolish as to think that the mere trader, the merchant, is a parasite living on the labor of others. They do not realize that if they should eliminate the trader they would destroy the present demand for labor, make the division of labor impracticable, and bring on industrial chaos.

The first critics of exchange condemned it on the ground that only one of the two parties could make a profit, the other being cheated. They held that an exchange could be fair only in the supposedly rare cases where the articles exchanged were equal in value. Their error lay in the crude supposition that value is something inherent in an article and that, therefore, it must be the same to all men. We know that men's valuations of goods differ. I may have something which I value but little, tho you may value it highly ; and you may possess an article which I value much more than you do. Evidently here is an opportunity for an exchange in which both will make a profit.

But we need not take space to indulge in arguments to prove that the modern system of exchange is justi fied by its advantages. We need only call atten tion to the fact that without it there could be no divi sion of labor, no specialization in industry and no spe cialization in tbe development of human talents, and that the resources of a country could not be de veloped to advantage. Exchange has made Eng land rich and has made possible and profitable utiliza tion of her great resources in coal. Exchange per mits Italy and France to specialize in vineyards, Aus tralia in the pursuits of agriculture, and the United States and Canada in the numerous and various in dustries for which they are best fitted. The French

physiocrats who assumed that the trader was a bur den on society were certainly mistaken.

2. Transportation and communication.—The highly developed modern systems of transportation are the outgrowth of exchange. They are its neces sary agents. Without the aid of the railroad and the steamship, the production of wealth could not possi bly go on as at present, for the goods produced could not find consumers. We must, therefore, think of them as productive agencies and of all their employes as being actively engaged in the prOduction of wealth.

The reader must get rid of the popular notion that only that labor is productive which is engaged in the manufacture of tangible commodities or in the ex traction of desired articles from the soil. Railroad managers are open to criticism if they are wasteful of capital or human energy, but so are the farmer and the manufacturer. They are all equally liable to be inefficient, and any one of them by inefficiency injures himself and causes a social loss.

The development of the exchange system or ex change civilization has in all its stages kept pace with improvements in means of communication and trans portation. In the beginning there was only the human voice and the human back—usually. the woman's back—and trade was necessarily small in volume and scope; the trained dog, the ox, the donkey, and perhaps the horse followed; dugout canoes and rowboats came next, and then the first professional trader appeared, but he could not travel far or deal with many customers. 'The sailing vessel gave birth to foreign trade; but its movement was slow and its cargoes possessed little variety, for the people of different parts of the earth knew little about one another's wants and tastes. The steam engine, the railroad and steamship, furnishing quicker meth ods of communication and transportation and bring ing the different peoples into closer relationship, broadened the field of exchange and started the evolu tion of modern industry with all its specialization.

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