Introduction to economics

Preface

A cursory examination of the contents of this book will probably give the impression that the theoretical aspects of the science receive in it greater emphasis than present opinion among economics teachers can approve. The writer may be permitted to urge, in his own defense, that the method which he has employed was chosen not without careful consideration of the existing situation in the field of economics instruction. In the present stage of university evolution, economics is almost everywhere taught by men who have been trained in the science; a text-book writer is therefore justified in relying upon the teacher for the supplying of many of the concrete facts which in a given situation are most effective for purposes of instruction. An efficient teacher can base a highly practical course upon a text-book which is fundamentally theoretical.

Moreover, in most corteges and universities the general course in economics is usually followed by special courses, and these, in order to attract any considerable number of students, must be practical. It is not too much to say that, for a majority of students, theoretical study begins and ends with the introductory course. Such a course ought, therefore, to present a reasonably thorough study of the general principles of the science.

The arrangement of material in this book will perhaps require a few words of explanation. Every one recognizes that the fundamental problem of economics is the problem of value. It is only when treated from the view-point of value that much of the material usually included in works of economics under the head " Production," deserves a place in the science. The student cannot too early familiarize himself with the true point of view of economics ; I have, therefore, placed the exposition of value in the forefront of my work. " Production " I have treated not independently, but chiefly in its relation to cost, and consequently iv PREFACE

have placed Chapters VI-IX immediately after the chapter on Cost of Production. No pretense is made of treating production exhaustively : the writer is persuaded that this can be done much more satisfactorily through courses in economic history, economic geography, or industrial economics, than through an introductory work in general economics.

In a philosophical exposition of the principles of economics, it would perhaps not be permissible to insert a study of labor organization between the theory of wages and the theory of interest, as has been done in this work. In a practical introduction to economics, on the other hand, this seems to the writer \ not only permissible, but advisable. No useful end is attained by relegating labor organization to a limbo of " applied economics " months distant from the general discussion of wages. When this method is adopted, the student is almost certain to feel that the theoretical discussion leaves no place for the most prominent factor in the field of labor ; and " so much the worse for theory." I have placed Chapters X and XI in juxtaposition, in order that, with the teacher's aid, the student may adjust the theory to the facts, and interpret the facts in the light of the theory.

The greatest difficulty that the writer has encountered lies in the problem of capital and interest. An elementary text-book offers no proper place for the treatment of opposing theories. The writer would have found nothing more to his liking than to balance the arguments of the agio and the productivity schools, reconciling them so far as this is possible ; in his experience as a teacher, however, he has found that such a plan is inevitably destructive of the student's interest in economic science. The productivity theory is employed merely as more teachable than the agio theory, and as presenting a better approach to practical problems, such as stock-watering, public determination of rates and charges, etc. An attempt has been made, however, to familiarize the student with the method of thought of the opposing school in the treatment of the phenomenon of capitalization. Land is treated as a form of capital, chiefly because it appears to the writer that this method of treating the subject is destined

PREFACE v

to gain wide acceptance, although it is his personal conviction that economics has gained little and lost much through the abandonment of the old-fashioned distinction between land and capital.

It is perhaps superfluous for the writer to mention the names of the economists to whom he is especially indebted. The theory of value presented is in large part derived from the works of von Wieser, Bohm-Bawerk, and Clark; the theories of wages and interest follow closely those of Professor Clark ; the treatment of rent and capitalization is influenced by the writings of Professors Fetter, Fisher, and Seligman. In his discussion of profit, the author is chiefly indebted to Clark, Landry, and Hawley ; in his discussion of monopoly value, he has made free use of the writings of Professors Marshall, Ely, and Clark. In the chapter on diminishing returns, the reader will recognize the influence of Professors Marshall and Carver. Among other modern economists from whom he has borrowed are Adams and Sumner, Jenks and Meade.

The University of Texas, June 6, 1909.

Contents

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Chapter L The Nature of Economic Science . . i

i. Significance of the desire for wealth, i. — 2. The desire for wealth not altogether a selfish motive, 3. — 3 Definition of wealth, 4. — 4. Human services as wealth, 4. — 5. Objects of desire that are not wealth, 5. — 6. Present and future wants in their relation to wealth, 6. — 7. Value the common characteristic of all forms of wealth, 6. — 8. Definition of economics, 7. — 9. Economic significance of the laws governing human wants, 8. — 10. The production of wealth, 8. — 11. The distribution of wealth, 9 — 12. The practical objects of economic science,

Chapter II. Utility, Value, and Price . . . .21

1. Significance of the development of wants, 21. — 2. Elasticity of wants, 22.

— 3. Law of diminishing intensity of wants, 23. — 4. Utility, 23. — 5. Law of diminishing utility, 25.-6. Marginal utility, 26. — 7. Effective utility, 27. — 8. Economic function of comparison of utilities, 28. — 9. Personal value, 29. —

10. Socialization of personal values through imitation, 30. — 11. Socialization of personal values through exchange, 32. — 12. Personal exchange value, 34. — 13. Price, 35. — 14. The determination of price in a market, 36. — 15. Demand and supply, 39. — 16. Qualification of the principle that marginal buyers and sellers control prices, 40. — 17. Summary.

Chapter III. Normal Competitive Price . . . . 43

1. Fluctuations in market prices, 43. — 2. Fluctuations in the prices of perishable commodities contrasted with fluctuations in prices of imperishable ones, 44. — 3. Effect of extension of the market upon price fluctuations, 44. — 4. The normal price level, 45. — 5. Influences determining the normal price level, 47. — 6. Relation of cost of production to normal price, 48. — 7. Conflict of interest of the individual producers, 50. — 8. Conditions upon which adjustment of prices to the normal level depends, 52. — 9. Deviations from the normal price level in agricultural productions, 52. — 10. Relation of large antecedent costs to price deviations, 53. — 11. Joint products, 54. — 12. Forces determining the short-period normal price level, 55. — 13. The long-period normal price level, 58. — 14. Summary, 59.

Chapter IV. Monopoly Price 60

1. Price control dependent upon control of supply, 60. — 2. Definition of monopoly, 61. — 3. Monopolies established through combinations of producers, 61.

— 4. Monopolies established through control of an essential element in production, 62. — 5. Intimidation as a means of monopoly control, 64. — 6. Influence — of competition upon partial monopolies, 65. — 7. Law of monopoly price, 66. —

8. Influence of elasticity of demand upon monopoly price, 68. — 9. Permanent and temporary monopolies compared, 69. — 10. Classification of consumers for purposes of monopoly exploitation, 71. — 11. Monopolistic price discriminations viii CONTENTS

PAGE in favor of foreign consumers, 73. — 12. Charging what the traffic will bear, 74.

— 13. Limits upon monopolistic exploitation, 75. — 14. Summary, 76.

Chapter V. The Cost of Production ... 77

1. Prices dependent upon cost of production, 77.. — 2. Laws governing the prices of the materials of production, 78. — 3. Fluctuations in the price of finished products are reflected in fluctuations in the prices of producers' goods, 79. — 4. The benefits of a rise in price of a finished product may rest permanently with the pro- , ducers of the crudest material entering into that product, 80. — 5. The rent of

land suitable for one use only fluctuates with the price of its product, 81. — 6. The wages of labor are sometimes directly dependent upon the price of the product of labor, 82. — 7. Relatiun to wages of the cost of other elements in production, 84.

— 8. Alternative uses of producer's goods as affecting their relation to the price of a particular product, 86. — 9. Competition of producing districts, 87. — 10. Price-determining and price-determined costs, 89. — 11. Summary, 90.

Chapter VI. The Law of Diminishing Returns . . 91

1. Increase in the output of an industry is limited by increase in cost of some factor or factors, 91. — 2. Increase in the business of a single establishment usually limited by the difficulty of increasing one or more factors, 92. — 3. In most cases the output of an establishment can be increased only at more than proportionate increase in cost, 94. — 4. Diminishing returns in agriculture, 95. — 5. Diminishing returns operate more severely in some forms of agriculture than in others, 96. — 6. Diminishing returns in urban improvements, 97. — 7. Diminishing returns in transportation, 99. — 8. When the amount of labor increases while the amount of capital remains fixed, the law of diminishing returns becomes operative, 100. — 9. Universal application of the law of diminishing returns, 101. — 10. The test of economy in production, 101. — n. Influences which counteract the tendency toward diminishing returns, 103. — 12. Summary, 104.

Chapter VII. The Specialization of Economic Functions . 106

1. Economic functions undifferentiated under primitive conditions, 106. — 2. Exchange as the original force making for differentiation of economic functions, 107. — 3. Effect of production for a general market, 108. — 4. Dependence of economic differentiation upon the form of commercial organization, 109. — 5. Effect of improvements in transportation upon economic differentiation, no. — 6. Effect of increasing density of population, in. — 7. Relation of the form of economic organization to economic differentiation, 112. — 8. Business advantages arising from the division of labor, 113. — 9. Social advantages arising from the division of labor, 115. — 10. Disadvantages of the division of labor, 117. — n. Division of labor as a force counteracting diminishing returns, 118. — 12. Summary, 120.

Chapter VIII. The Concentration of Industry . .121

1. Increase in size of the business establishment, 121. — 2. Concentration dependent upon the facilities for assembling materials, 122. — 3. Concentration limited by the extent of the market, 123. — 4. Effect upon concentration of improvements in transportation, 123. — 5. Effect upon concentration of the growth of large fortunes, 124. — 6. The corporation, 125. — 7. The large establishment can make the fullest use of division of labor, 126. — 8. It can avail itself of the most effective machinery, 127. — 9. It enjoys cheaper power, 128. — 10. It wastes less material, 129. — 11. It can develop valuable by-products from waste, 129. — 12. It buys more cheaply and sells at better prices, 130. — 13. It secures lower rates of transportation, 131. — 14. It pays exceptionally low rates of interest, 132. — 15. The advantages of concentration vary from industry to industry, i3 2 - — 16. The gains from concentration are subject to a law of diminishing returns, 134. — 17. Summary, 136.

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Chapter IX. Business Combinations 137

1. Present tendency toward combination, 137. — 2. Combination of competing business units, 138. — 3. Industrial integration, 138. — 4. Temporary combinations, 139. — 5. Partial combinations, 140. — 6. Consolidation, 141. — 7. Pooling, 141. — 8. The trust, 143. — 9. The holding company, 143. — 10. Consolidation increases productive efficiency, 144. — 11. It encourages specialization, 145. —

12. It reduces costs of shipment, 145. — 13. It makes possible a better adjustment of supply and demand, 146. — 14. It reduces costs of marketing, 147. — 15. It reduces interest charges on borrowed capital, 148. — 16. Within limits, consolidation makes possible the control of prices, 149. — 17. Summary, 149.

Chapter X. Competitive Wages 151

1. Definition of labor, 151. — 2. Definition of wages, 152. — 3. The importance of the problem of contract wages, 153. — 4. Wages vary according to the conditions under which labor is employed, 154. — 5. Equal wages for equal tasks, 154. — 6. Wages cannot exceed the marginal productivity of labor, 156. — 7. Under competition wages cannot long be less than the marginal product of labor, 157.— 8. Effect upon wages of increase in the efficiency of labor, 159. — 9. Effect upon wages of increase in the number of laborers, 159. — 10. Effect upon wages of improvements in production, 160. — ■ n. A reduction in the rate of interest raises wages, 161.— 12. Non-competing classes of laborers, 162. —

13. Effect upon wages of the apportionment of new laborers, 163. — 14. Permanent influences affecting the distribution of labor, 164. — 15. The standard of living, 169. — 16. Summary, 172.

Chapter XI. Wages as affected by Labor Organization 173

1. Inferiority of the laborer in bargaining power, 173. — 2. Labor organization as a means of increasing the bargaining power of labor, 173. — 3. The trade union, 174. — 4. The closed shop, 175. — 5. Apprenticeship regulations, 176. — 6. The importance of trade-union funds, 178. — 7. Alliances between trade unions, 178. — 8. National labor organizations, 179. — 9. The American Federation of Labor, 181. — 10. The strike, 181. — n. The boycott, 182. — 12. The relation of trade unionism to the strike and boycott, 183. — 13. Collective bargaining, 184. — 14. Voluntary arbitration, 185. — - 15. Public opinion and arbitration, 186. — 16. Compulsory arbitration, 187. — 17. Labor organization and the competitive law of wages, 188. — 18. Restriction of output as a cause of reduced wages, 189. — 19. Summary, 190.

Chapter XII. The Productivity of Capital . . .192

1. Capital goods, 192. — 2. Capitala fund of productive wealth, 193. — 3. Thepermanence of capital, 194. — 4. Acquisitive and productive capital, 196. — 5. Artificial and natural capital, 197. — 6. Saving, 197. — 7. The growth of natural capital, 199. — 8. The productivity of capital goods, 199. — 9. The productivity of capital, 200. — 10. The productivity of capital determined at the margin, 201. — n. Effects of an increase in capital, 204. — 12. Law of diminishing productivity of capital, 205. — 13. Influences counteracting the law of diminishing productivity of capital, 207. — 14. Effect upon the productivity of natural capital of increase in artificial capital, 207. — 15. Equalization of returns to capital through revaluation, 208. — 16. Equalization of returns to capital through mobility of capital, 209. — 17. Barrier preventing the free flow of capital from industry to industry, 211. — 18. Summary, 213.

Chapter XIII. Rent, Interest, and Capitalization . .215

1. Popular meaning of the term rent, 215. — 2. The traditional scientific use of the term, 215. — 3. Rent as the product of a capital good, 216. — 4. Rent restricted to the product of durable capital goods, 216. — 5. Rent and interest, 217. —

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6. Rent as a residue, 218. — 7. The determination of the rent of one of several goods entering into a permanent combination, 221. — 8. The rent of a reproducible capital good tends to equal interest on the cost of replacing the good, 221. —

9. The relation of ground rent to wages and interest on artificial capital, 222. —

10. The relation of the prices of the products of land to the rent of the land, 225. — 11. The tendency of ground rents to rise, 227. — 12. Capitalization, 228. —

13. Method of ascertaining the amount of capital in reproducible and irreproducible goods, 228. — 14. Effect of an increase of artificial capital upon the volume of land, 231. — 15. Summary, 231.

Chapter XIV. Enterprise and Business Profits . . 233

1. Business opportunities, 233. — 2. Enterprise, 234. — 3. The relation between economic changes and the opportunities for enterprise, 236. — 4. Enterprise a risk, 236. — 5. Enterprise and imperfect competition, 237. — 6. Definition of profit, 238. — 7. The nature of profits, 238. — 8. Profits due to abnormally low wages and interest, 240. — 9. Profits due to the transfer of labor and capital from one environment to another, 241. — 10. Profits due to the transfer of an industry from one environment to another, 243. — 11. Conditions under which all enterprises gain profits, 244. — 12. Profit a temporary income, 245. — 13. Monopoly profits may have permanence, 246. — 14. Monopoly may be capitalized, 248. — 15. Function of competitive profit, 249. — 16. The evil effect of monopoly profits, 250. — 17. Summary, 251.

Chapter XV. Money 253

1. Definition of money, 253.-2. Origin of money, 254. — 3. Functions of money, 255. — 4. Qualities that money should have, 256. — 5. Lack of uniformity in money without government control, 257. — 6. Functions of government relative to the monetary system, 258. — 7. Methods of maintaining parity, 260. — 8. Gresham's law, 261. — 9. The value of money, 262. — 10. Measurement of fluctuations in the value of money, 263. — 11. Effects of changes in the quantity of money, 263. — 12. Effect on prices of the issue of paper money, 266. — 13. Effect on prices of the introduction of substitutes for money, 266. —

14. Effect of changes in the volume of business upon the value of money, 267. —

15. The effects of an increase in the supply of money not capable of exact measurement, 268. — 16. Importance of changes in the price level, 269. — 17. Government regulation of the money supply, 271. — 18. The silver movement, 272. — 19. Probable effects of free silver, 273. — 20. International bimetallism, 273. — 21. Decline of the silver party, 274. — 22. Paper money, 274. — 23. Forces regulating the value of gold, 277. — 24. Summary, 277.

Chapter XVI. Financial Institutions: The Bank . . 280

1. Finance as the placing of capital, 280. — 2. Forms of capital placement, 281. — 3. The loan, 281. — 4. Disguised loans, 282. — 5 Credit, 283. — 6. Credit instruments, 283. — 7. Demand for a supply of loanable capital, 284. — 8. Functions of the bank, 286. — 9. Bank loans regarded as the purchase of credit instruments, 289. — 10. Kinds of investments suitable for banking purposes, 290. — 11. De T posits arising out of loans, 291. — 12 The clearing system, 293. — 13. Bank reserves, 294. — 14. Risks incurred by bank depositors, 296. — 15. Bank notes, 297. — 16. Restrictions upon note issue, 298. — 17. Notes and deposits as currency, 300. — 18. Summary, 300.

Chapter XVII. Other Financial Institutions . . 303

1. Permanent investment of free capital, 303. — 2. Demand for long-term investment funds, 303—3. Supply of long-term funds, 305. — 4. Instruments of long-term investments, 306—5. Variation in security of investments, 307.— 6. Variation in transferability of investments, 308. — The productiveness of

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an investment, 308. — 8. Effect of risk upon productiveness, 309. — 9. Effect of difficulty of transfer upon productiveness, 310. — 10. Machinery for placing capital, 310 . — 11. Stock Exchange, 312. — 12. Speculation, 312. — 13. Economic function of speculation, 313. — 14. Underwriting syndicates, 315. — 15. The investment company, 316. — 16. The savings bank, 317. — 17. The building and loan association, 319. — 18. The life insurance company, 320. — 19. Complexity of the financial mechanism, 321. — 20. Summary, 322.

Chapter XVIII. International Trade and Foreign Exchange 324

I. The basis of permanent trade, 324. — 2. Local and interregional trade, 326. — 3. Interregional trade based upon absolute differences in productive powers, 327. — 4. Interregional trade based upon relative differences, 327. — 5. Internanational trade may originate in differences in character of population, 328. —

6. It may originate in differences in relative supply of natural agents, 329. —

7. It may originate in differences in the supply of capital, 330. — 8. It may originate in differences in traditions of workmanship, 331. — 9. The foreign trade of a modern nation is based upon a variety of conditions, 332. — 10. Relative, not absolute advantages in production give rise to exportation, 333. —

II. Relative advantages are reflected in money cost of production, 334. —

12. Application of the principles of distribution to foreign trade, 335. —

13. Trade between countries is essentially barter, 337. — 14. Bills of exchange, 338. — 15. Fluctuations in the price of bills of exchange, 339. — 16. Conditions determining the price of bills, 340. — 17. Exchange on all foreign points tends to fluctuate uniformly, 342.— 18. Effect of increase in exports or in imports upon the price of foreign bills, 344. — 19. Effect upon exports and imports of fluctuations in foreign bills, 344. — 20. Exportation and importation of gold, 345. — 21. Summary, 347.

Chapter XIX. The Regulation of Foreign Trade . . 348

1. Foreign trade regulated by taxation, 348 — 2. Revenue and protective duties, 349. — 3. Popularity of revenue duties on imports, 350. — 4. Import duties borne by the consumer, 352. — 5. Protective duties as a means of maintaining the money supply, 352. — 6. Fallacy of discouraging importation from countries which do not take commodities in exchange, 353. — 7. Fallacy of patronizing home industry, 354. — 8. General protection an impossibility, 356. — 9. Wages not dependent upon protection, 357. — 10. Protection may reduce real wages, 359. — 11. Some of the effects of protection are seen, while others are unseen, 361. — 12. Protection may increase the product of industry if the government has better business ability than the body of private enterprisers, 362. — 13. Protection may aid productive industries in overcoming the hardships of infancy, 363. — 14. Protection should be withdrawn from an established industry, 364. — 15. Difficulty of determining when protection becomes unnecessary, 365. — 16. Inadvisability of establishing industries requiring permanent protection, 365. — 17. Protection as a means of preserving natural resources, 367. — 18. Protection as a means of preserving the vigor of the working population, 368. — 19. Protection as a means of making a country independent in time of war, 369. — 20. Inadvisability of seeking complete self-sufficiency, 370. — 21. Retaliatory duties, 371. — 22. Summary, 373.

Chapter XX. The Relations of Government to the Economic Organization .... . . 374

1. Interdependence of law and economics, 374. — 2. Free enterprise, 375. — 3. Criticism of the system of free enterprise, 376. — 4. The question of productive efficiency, 377. — 5. The question of distribution, 377. — 6. Distribution as between recipients of profits, 378. — 7. As between laborers, 379. — 8. No standxii CONTENTS ard of justice ascertainable in distribution between different classes, 379. — 9. Inequalities in bargaining powers vitiate the results of free contract, 380. — 10. Free enterprise approaches justice only when competition rules, 380. — it. Need for governmental interference, 381. — 12. Regulation of qualities of goods and services, 383. — 13. Regulation of the prices of goods or services, 384. — 14. Regulation of the conditions of employment, 386. — 15. Regulation of wages, 388. — 16. Regulation of relations of landlord and tenant, creditor and borrower, director and stockholder, 38Q. — 17. Governmental regulation not incompatible with free enterprise, 391. — 18. Government ownership for revenue, 392. — 19. Government ownership for purposes of regulation, 393. — 20. Industries producing inappropriable utilities, 395. — 21. Conditions under which public replaces private enterprise, 398. — 22. Summary, 399.

Chapter I

1. The desire for wealth has in all ages been one of the principal motives of Jiuman action.

From the earliest time of which we have record a great part of the activity of man has been occupied with the production or acquisition of wealth — material objects and personal services upon the control of which human welfare depends, or seems to depend. In the long ages of savagery and barbarism primitive man was engaged in a ceaseless struggle with nature for the bare means of existence — food, clothing, and shelter. Limited as were the supplies afforded by nature, a savage tribe never long enjoyed them in peace; other tribes coveted the hunting grounds, or the bays where shellfish abounded; the rich pastures, or the groves of fruit-bearing trees. Hence the difficulty of obtaining from nature the means of subsistence was aggravated by constant warfare between tribe and tribe. A struggle for mere existence against nature and against hostile tribes — such was the life of primitive man.

From century to century man learned to equip himself better for the struggle for existence. Tools, at first rudely wrought from stone, later from the metals, greatly increased his productive power. A yet greater step in advance was made when animals were domesticated, and a certain and steady food supply took the place of the precarious products of the chase. The cultivation of roots

i and grains that had in their wild state yielded scanty returns to the gatherer marked another stage of progress. Methods were crude, and the tasks of pastoral and agricultural life exceedingly laborious — a condition which gave rise to the enslaving of captives taken in war. With the increase in productive power, limited classes were freed from the economic struggle and were enabled to devote their energy to ends less intimately connected with the pursuit of wealth — politics, literature, art, religious organization. Every advance in the productive power of society has increased the relative number of those who are free to engage in activities that add nothing to the social wealth.

It remains true, nevertheless, that the great majority of men are mainly occupied with the pursuit of wealth. This is in large measure due to the fact that a man's desire for material welfare is capable of indefinite expansion. Merely to possess food sufficient to satisfy hunger does not content him ; the food must be pleasing to the palate as well as nutritious. Warm clothing is an excellent thing; but civilized man demands that his clothes be of good appearance as well as comfortable. A sod house on the prairie is constructed with no great amount of labor and almost no expense ; in such a house one may defy the worst storms of winter and the hottest winds of summer. Yet the modern dweller on the plains would scorn to live in such an abode ; his home must present an appearance of comfort and prosperity. To stand well with one's fellows is to most men hardly less important than life itself, and in all human history a chief factor in winning and retaining the esteem of others has been the possession of proper attire and other personal appointments. There is a standard of wealth consumption which each little group of associates in society is under some sort of compulsion to attain. If my neighbors and friends all have fine houses, I cannot enter my humble dwelling without a sense of inferiority. If they are well dressed, I desire to be equally well dressed. If they are wise or learned or cultured, I naturally strive to emulate them in this respect also. But-one cannot be well clad or well housed, one cannot without great difficulty be wise or learned or cultured, unless one can command a fair amount of wealth, an amount far in excess of the bare needs of existence. Under modern conditions wealth has become a means — though, of course, not the only means — to most of the things which one can desire. And as it is not in the nature of man to be content for any long time with what he possesses and what he has attained, it is inevitable that his desire for wealth, which is so potent a means for further attainment, should continue unabated.

2. A man desires wealth not only for the satisfaction that it may give himself, but also for the satisfaction it may give those whose interests he regards as his own.

Nothing is more common than to stigmatize the desire for wealth as a narrowly selfish motive. As a fact there are comparatively few men who desire wealth merely for the sake of the personal gratification that they expect to derive from it. It is not too much to say that the normal man is more desirous that his wife and children should enjoy the comforts of wealth than that he should enjoy them himself. There are some persons whose desire for wealth is animated chiefly by the needs of a group of persons in no way connected with them by ties of kinship. The founders of free hospitals, orphan asylums, sailors' homes, and the like are types of this class. Some persons have sympathies so broad as to include all the citizens of a country within the group for whom they desire the benefits of wealth. The greatness of Pericles consisted partly in his ardor for advancing the material prosperity of the Athenians, even through the exploitation of allied states.

We may therefore say that the desire for wealth animates the purest and most unselfish of men as well as the most sordid. The desire for wealth is a desire for means to ends, and these may be good or evil. The philanthropist who wishes to found a home for invalid children must have wealth, just as the voluptuary who desires a palace of all delights to please his jaded senses. The economic motive animates both ; very likely the philanthropist desires wealth the more ardently. What differentiates the two is the end which the wealth is meant to subserve. To assert, then, that all men are in great measure actuated by economic motives is not to assert that all men are selfish or sordid. It is merely to assert that wealth has been placed between man and the satisfaction of most of his desires ; that as he seeks to attain any end whatsoever, he will seek to possess the means to that end.