第1章

Thegoodsandservicesthatconstituteournationalincomearevaluedseverallyandcollectivelywithafairamountofaccuracyintermsofmoney。

Foragoldstandard，thoughbynomeansperfectfortheworkofmonetarymeasurement，isstableandhasasingledefinitemeaningtoallmen。Bymeansofitwecanestimatetheratesofgrowthordeclineinourindustry，asanaggregateorinitsseveraldepartments，andthequantitiesofoutputandconsumptionofthevariousproducts。Wecancomparethegrowthofournationalwealthwiththatofothernations。

Buthowfarcanthesemeasurementsofconcretewealthfurnishreliableinformationregardingthevitalvalues，thehumanwelfare，whichalleconomicprocessesaredesignedtoyield？Thoughitwillbegenerallyadmittedthateveryincreaseofeconomicwealthisinsomemeasureconducivetowelfare，everydecreasetoillfare，nobodywillpretendevenapproximatelytodeclarewhatthatmeasureis，ortolaydownanyexplicitrulesrelatingwealthtowelfare，eitherforanindividualoranation。Indeed，eventhegeneralassumptionthateverygrowthofwealthenhanceswelfarecannotbeadmittedwithoutqualification。Aninjuriousexcessofincomeispossibleforanindividual，perhapsforanation，andthenationalwelfarewhichanincreasedvolumeofwealthseemscapableofyieldingmightbemorethancancelledbyadistributionwhichbestoweduponafewanincreasedshareofthelargerwealth，orbyanaggravationofthetoiloftheproducers。

Suchobviousconsiderationsdriveustoseeksomeintelligibleandconsistentmethodofhumanvaluationforeconomicgoodsandprocesses。

Tofindastandardofhumanwelfareasstableandasgenerallyacceptableasthemonetarystandardismanifestlyimpossible。Indeed，thedifficultiesattendinganysortofcalculusofvitalvaluesmightappearinsuperable，wereitnotforonereflection。Everystatesman，socialreformer，philanthropist，everypublic-spiritedcitizen，doespossessandapplytotheconductofaffairssomesuchstandardorcriterionasweareseeking。Somenotionoridea，moreorlessclearandexplicit，ofthegeneralwelfare，crossedandblurrednodoubtbyotherinterestsandpassions，isanoperativeanddirectiveinfluenceinhispolicy。Moreover，thoughidiosyncrasieswilleverywhereaffectthisoperativeideal，therewillbefoundamongpersonsofwidelydifferentmindsanddispositionsasubstantialbodyofagreementintheirmeaningofhumanwelfare。

Thecommonsocialenvironmentpartlyevokes，partlyimposes，thisagreement。Infact，allco-operativeworkforsocialprogressimpliestheexistenceofsomesuchstandardasweareseeking。Thecompleximageofhumanvalueswhichitcontainsisalwaysslowlychanging，andvariessomewhatamongdifferentsortsandconditionsofmen。Butfortheinterpretationofeconomicgoodsandprocessesithas，atanytime，arealvalidity。Foritisanchoredtocertainsolidfoundationsofhumannature，theneedsandfunctionstowhich，alikeintheindividualandinthesociety，wegivetheterm"organic。"Onlybyconsideringtheorganicnatureofmanandofhumansocietycanwetraceanintelligibleorderintheevolutionofindustry。Thewantsofman，andthereforetheeconomicoperationsservingthemmustbetreatedasorganicprocesses。

Thisterm，borrowedfrombiology，mustbeextendedsoastocovertheentirephysicalandspiritualstructureofhumansociety，fornoothertermissowellfittedtodescribethenatureofthefederalunitywhichsocietypresents。Thestandardofvaluesthussetupisthecurrentestimateof"organicwelfare。"

Thejustificationofthesetermsandofthismodeofhumanvaluationistobefoundintheirapplicationtothetaskbeforeus。Thesetoolswillbefoundtodotheworkbetterthananyothersthatareavailable。

Inseekingtotranslateeconomicvaluesintohumanbyreferencetosuchastandardoforganicwelfare，ItakeastheaptestmaterialforexperimenttheaggregateofgoodsandservicesthatconstitutetherealincomeoftheBritishnation。Inordertoreducethatincometotermsofhumanwelfare，Ifirstexamineseparatelytheeconomiccostsofproductionandtheeconomicutilitiesofconsumptionwhichmeetinthisconcretewealth，analysingthemintohumancostandhumanutility，thedebitandcreditsidesoftheaccountofwelfare。Analysisoftheproductiveprocesseswill，ofcourse，disclosethefactthatnotall"economic"costshavehumancostsattachedtothem，butthathumanutilitiesofvaryingvalueinhereinmanysortsofproductivework。

Surveyingthedifferentordersofproductiveenergy，fromthefinestartstothelowestmodesofroutinetoil，wediscoverthatanytwobodiesofeconomicwealth，possessingthesamepecuniaryvalue，maydifferenormouslyinthequantityofhumancosttheycarry。Forthatcostwilldependuponthenatureofthework，thenatureoftheworkers，andthedistributionoftheworkamongtheworkers。Thislineofenquiryopensout，informatanyrate，acompletecriticismofcurrentEnglishindustry，fromthehumaniststandpoint。Asimilaranalysisappliedontheconsumptionsideresolvestheeconomicutilityofthegoodsandservicesintohumanutility。Hereagainoutofeconomicutilitiesmuchhumancostemerges，justasoutofeconomiccostsmuchhumanutility。Equalquantitiesofincomeyieldintheirconsumptionwidelydiversequantitiesofhumanutilityorwelfare。

Piecingtogetherthetwosidesofourenquiryintotheproductionandconsumptionoftheincome，weperceive，asmightbeexpected，thatasoundhumaneconomyconformstotheorganiclawofdistribution，"fromeachaccordingtohispower，toeachaccordingtohisneeds，"andthat，preciselysofarasthecurrentprocessesofeconomicdistributionofworkandofitsproductcontravenethisorganiclaw，wasteaccruesandillfaredisplaceswelfare。

Theeconomicdistinctionbetweencostsandunearnedsurplus1furnishesineffectafaithfulmeasureoftheextentandformsofdivergencebetweentheeconomicandthehuman"law"ofdistribution。Forwhenthissurplusincomeistraced，backwardtothehumancostsinvolvedinitsproduction，forwardtothehumaninjuriesinflictedbytheexcessiveandbadconsumptionitsustains，itisseentobethedirectefficientcauseofallthehumandefectsinoureconomicsystem。Growinginmagnitudewiththedevelopmentofthemodernartsofindustryandcommerce，itistheconcreteembodimentofthesocial-economicproblem。Theabsorptionandutilisationofthesurplusforthebettermentoftheworking-classesandtheenrichmentofpubliclifeareessentialconditionsforthehumanisationofindustry。Thefirsthalfofthebookisoccupiedwiththegeneralexpositionandillustrationofthismethodofhumanvaluation。Thesecondpartappliesthehumanistprinciplesthusestablished，tothediscussionofsomeofthegreatpracticalissuesofsocial-economicreconstructioninthefieldsofbusinessandpolitics。Themedleyofoverlappingconflictsbetweencapitalandlabour，producerandconsumer，competitionandcombination，theindividualandsociety，issiftedsoastodiscoverlinesofindustrialreformationbaseduponaconceptionoforganicharmony。Thereconstructionofthebusiness，soasadequatelytorepresentinitsoperationtherespectiveinterestsofcapital，ability，labourandtheconsumer，isseentobethefirstdesideratumofreform。Here，asinthewideroppositionsbetweenbusinessandbusiness，tradeandtrade，nationandnation(misconceivedaseconomicunits)，themorerationalstandpointofahumanistvaluationsuggestsmodesofreconcilementfollowinganevolutionofeconomicstructureinwhichthecorporateorco-operativespiritfindsclearerandstrongerexpression。Themostdebatedquestion，howfarordinaryhumannaturecanyieldeconomicmotivestosocialservicestrongandreliableenoughtoenablesocietytodispensewithsomeoftheincentivesofcompetitivegreed，hithertodeemedindispensablesupportstoindustry，isdiscussedinseveralofthelaterchapters。Thepracticablelimitsofindustrialreformationarefoundtodependupontherealityandimportanceassignedto"thesocialwill"asapoweroperativeforindustrialpurposes，inotherwordsuponthestrengthofthespiritualunityofsociety。

Afinalchapterisgiventoadiscussionofthelimitationsofthescientificandquantitativemethodsintheinterpretationanddirectionofsocial-economiclife。Itiscontendedthattheartofsocialasofindividualconductmustalwaysdefyexactscientificguidance，themethodsofsciencebeingincompetentcloselytopredictordirectthecreativeelementinorganicprocesses。

Theprocessesofhumanvaluationandjudgment，therefore，whetherappliedtoindustryortootheractivitiesandachievements，mustultimatelybelongtotheartratherthantothescienceofsociety，thestatesmanandthecitizenabsorbingandassimilatingthehistoryofthepastwhichsciencepresentsinitsfactsandlaws，butusinghisfreeconstructivefacultytomakethehistoryofthefuture。Thefailuresoftheindividualstatesmanorcitizenintheperformanceofthisartisticworkareduetothefactthatalargerartist，whoseperformancethemostenlightenedindividualcanbutslightlyapprehend，viz。，societyitself，takesanover-rulingpartintheprocess。

Thisbriefpresentationoftheargument，dwellingunavoidablyuponintellectualmethod，maypossiblyhavefailedtoconveytheintenselypracticalpurposewhichIhavekeptinmindthroughoutthepreparationofthebook。

Thatpurposeistopresentafullandformalexposureoftheinhumanityandvitalwasteofmodernindustrybythecloseapplicationofthebest-approvedformulasofindividualandsocialwelfare，andtoindicatethemosthopefulmeasuresofremedyforasocietysufficientlyintelligent，courageousandself-governingtoapplythem。

Suchaworkevidentlypresentsalargefrontforhostilecriticism。

Itsscopehasoftencompelledarigorouscompressioninthediscussionofimportantcontroversialtopics，andhasprecludedallentranceuponthemoredetailedissuesinthepolicyofreconstruction。ButIventuretohopethatmanyreaders，whomaydisagreewiththeparticularvaluationsandinterpretationsofferedinthesechapters，willbeledtoacceptthebroaderoutlinesofthemethodofhumanvaluationhereproposed，andwillrecognizetheimportanceofabetterapplicationofthismethodinthesolutionsofthepracticalproblemsofeconomicreform。J。A。HOBSON。HAMPSTEAD，January，1914。

NOTES:

1。Thisdistinctioniselaboratedinmywork，TheIndustrialSystem。CHAPTERI:THEHUMANSTANDARDOFVALUE

§；I。Inanagewhenhumanproblemsofadistinctivelyeconomiccharacter，relatingtowages，hoursoflabour，housing，employment，taxation，insuranceandkindredsubjects，arepressingforseparateconsiderationandsolution，itisparticularlyimportanttoenforcetheneedofageneralsurveyofoureconomicsystemfromthestandpointofhumanvalues。Socialstudents，ofcourse，arejustifiedbyconsiderationsofintellectualeconomyinisolatingtheseseveralproblemsforcertainpurposesofdetailedenquiry。Butthebroaderhumansetting，demandedforthejudgmentorthepolicyofastatesmanorreformer，canneverbeobtainedbythisseparatisttreatment。Fortheinteractionswhichrelatetheseissuestooneanotherarenumerousandintimate。Takingasthemostfamiliarexamplethegroupsofquestionsrelatingtotheworking-classes，werecogniseatoncehowthewages，hours，regularityofemploymentandotherconsiderationsoflabour，overlapandintertwine，

while，again，thequestionsrelatingtoconditionsofliving，suchashousing，food，drink，education，recreation，facilitiesoftransit，havesimilarinterrelationsasfactorsinastandardofcomfort。Norisitlessevidentthatconditionsoflabourandconditionsofliving，takenseverallyandintheaggregate，interactinwaysthataffecttheefficiencyandwell-beingofthepeople。

Thespecialandseparatestudiesofthesevariousproblemsmustthen，inordertobesociallyserviceable，besubjecttotheguidanceanddirectionofsomegeneralconceptionwhichshallhaveregardtoallsortsofeconomicfactorsandoperations，assessingthembyreferencetosomesinglestandardofthehumanlydesirable。Thisgeneralsurveyandtheapplicationofthissinglestandardofvaluationarenecessaryaliketoascientificinterpretationoftheeconomicorindustrialworldandtoaconsciousartofsocial-economicprogress。Theymustexertacontroloverthedivisionofintellectuallabourontheonehand，andovertheutilisationofsuchlabourforsocialpolicyupontheother。Thenotionthat，bysettinggroupsofstudentstoworkatgathering，testing，measuringandtabulatingcrudefacts，relating，say，toinfantmortality，expenditureondrink，orwagesinwomen"sindustries，valuabletruthsofwideapplicationwillsomehowbespontaneouslygenerated，andthatbyapurelyinductiveprocesstherewillcometolightgenerallawsauthoritativeforsocialpolicy，isentirelydestituteoffoundation。

Thehumblestgrubberamong"facts"mustapproachthemwithsomeequipmentofquestions，hypotheses，andmethodsofclassification，allofwhichimplytheacceptanceofprinciplesderivedfromawiderfieldofthought。Thesameholdsagainofthenexthighergradeofstudents，theintellectualmiddlemenwhoutilisethe"facts"gotbythedetailedworkers"attheface。"

Theytoomustbringwiderprinciplestocorrelateandtointerprettheresultsgotbythehumblerworkers。Soateachstageoftheinductiveprocess，lawsandstandardsderivedfromahigherintellectualstagearebroughttobear。

Evenifsuchstudieswerepromptedentirelybyadisinteresteddesireforknowledge，itisevidentthattheirsuccessimpliestheinspirationandapplicationofsomegeneralideas，whichinrelationtothesestudiesareapriori。Butregardingthesestudiesasdesignedprimarilytoassisttheartofsocialpolicy，wemustrecognisethattheinnerpromptingmotiveofeveryquestionthatisputateachstageofsuchenquiries，theinnerregulativeprincipleofthedivisionoflabourandofthecorrelationoftheresults，isthedesiretorealisesomemoreorlessclearconceptionofgeneralhumanwell-being。Itmust，ofcourse，beadmittedthatthisprocedurerestsuponasortofparadox。Thegeneralconceptionofhumanwell-beingisitselfvagueandunsubstantial，untilithasacquiredandassimilatedtheverysortsofknowledgethecollection

ofwhichitishereassumedtobeabletodirect。Thisparadox，however，isfamiliartoallwhoreflectupontheprogressofknowledgeinanydepartmentandforanypurpose。Ionlynameithereinordertoanticipatetheobjectionofthosedisposedtoquestionthevalidityofassuminganysortofstandardofhumanwelfare，andtoinsistupontestingeacheconomicissueuponwhattheycall"itsownmerits。"Theapplicationofageneralsurveyandageneralstandardofvaluesisnonethelessalogicallyvalidandapracticallyusefulprocedure，becausethenewfactswhichitsapplicationdisclosesaffordmorefulnessandexactitudetothesurvey，whilethestandardisitselfmadeclearerandmoreeffectivethereby。

Assumingittobeadmitted，then，thatahumanvaluationofeconomicprocessesispossibleanddesirable，bothfortheenlargementofknowledgeandforpurposesofsocialpolicy，thequestionsnextarise，"Howshallweconceiveanddescribethestandardofhumanvaluation，andhowshallweapplyittotheinterpretationofthepresenteconomicsystem？"

§；2。Beforefacingthesequestions，however，itwillbewelltohavebeforeourmindsaclearoutlinepictureofthiseconomicsystemwhichweseektovalue。Itconsistsoftwocomplexoperations，constantlyinteracting，knownasProductionandConsumptionofwealth。Bywealthisunderstoodallsortsofvendiblegoodsandservices。Sofarasmaterialwealthisconcerned，itis"produced"byaseriesofprocesseswhichconvertrawmaterialsintofinishedgoodsofvarioussortsandsizesanddisposetheminsuchquantitiesasarerequired，forthesatisfactionofconsumersorasinstrumentsinsomefurtherprocessofproduction。Similarly，inthecaseofprofessional，official，domestic，industrial，commercial，andotherpersonalservices，whichalsorankaswealth，1avarietyofproductiveprocessesgotopreparethemandtoplacethematthedisposalofconsumers。

Theprocessesofproductionmaythusbeclassifiedasextractive，manufacturing，artistic，transport，commercial，professional，domestic。Thusitisseenthattheworkof"distribution"and"exchange，"2sometimesdistinguishedfromtheworkofproduction，ishereincludedinthatcategory。

Now，thefirstdifficultyconfrontingusinoursearchforahumanvaluationofthiseconomicsystemconsistsintheobscurityinwhichhalfthissystemlies。Forthoughthereiseverywhereaformalrecognitionthatconsumptionistheendorgoalofindustry，thereisnoadmissionthattheartsofconsumptionareequallyimportantwiththeartsofproductionandaredeservingofasmuchattentionbystudentsorreformersofour"economicsystem。"Onthecontrary，soabsorbingaretheproductiveprocessesintheirclaimsuponthephysicalandmentalenergiesofmankind，thattheeconomicsystem，alikeforpractitionersandtheorists，hasalmostcometobeidentifiedwiththeseprocesses。Thisdepreciationandneglectofconsumptionnodoubthasbeennaturalenough。Somuchmoreconsciousenergyofthoughtandfeeling，andsomuchmoreexpenditureoftimeandefforthavegoneintothediscovery，developmentandpracticeoftheproductivearts。Theirpracticehasinvolvedsomuchmorepublicity，somuchwiderandmorevariedintercourse，andthereforesomuchmoreorganisation。Consumption，ontheotherhand，hasbeensomuchmorepassiveinitscharacter，soprivateandindividualintheactswhichcompriseit，solittleassociatedwithsequencesofthoughtorpurpose，thatithashardlycometoberegardedasanart。Hence，eveninthemoreelaboratecivilisationswheremuchdetailedskillandattentionaredevotedtotheuseandenjoymentofgoodsandservices，theneglectofconsumptiveprocessesbyeconomicscienceremainsalmostunimpaired。Theartsofproductionremainsomuchmoreexactingintheirdemandsuponourattention。

Theearlyinfluenceofthisdominanceoftheproductivestandpointineconomicsciencehashadeffectsupontheterminologyandstructureofthatsciencewhichareseriousobstaclestothehumaninterpretationofindustry。unconsciously，butconsistently，theearlystructureofthesciencewasbuiltwithexclusiveregardtotheindustrialorproductiveprocesses。Theartoutofwhichthesciencegrewwasconcernedwiththeprogressofagriculture，manufacture，andcommerce，orwithproblemsofmoney，taxation，andpopulation，regardedmainlyorwhollyfromtheproductivestandpoint。Theunderlyingassumptioneverywherewasthequestion，"Howwillthisorthatpolicyaffectthequantityofwealthproducedinthecountry？"alwayswithanimportantcorollarytotheeffect，"Howwillitaffectthequantityofwealth，passingasrents，profits，interest，orwagestotheseveralclassesofthenation？"Butnowherewasthereanydirectconsiderationoftheartsofconsumption，withoneparticularlyinstructiveexception。Theonlybitofattentionpaidbyourearlyclassicaleconomiststoprocessesofconsumptionwastodistinguish"productive"

from"unproductive"consumption，thatis，tosuggestavaluationofconsumptionbasedentirelyuponitssubordinationtofuturepurposesofproduction。

Theircondemnationofluxuriousexpenditureandwaste，alikeinthewealthyandtheworking-classes，wasnotprimarilydirectedagainstthelossofrealenjoyment，orhumanwell-being，orthemoraldegradationinvolvedinsuchabuseofspendingpower，butagainstthedamagetothefurtherprocessesofmakingwealthbyreducingtherateofsavingorbyimpairingtheworkingefficiencyoflabour。Thoughoccasionalconsiderationsofamoredistinctivelyhumaneormoralcharacterenteredintothetiradesagainstluxury，orthedieteticadviceofferedbytheseeconomicteachers，themaintrendoftheirreflectionsontheuseofwealthwasquiteevidentlydominatedbyconsiderationsofincreasedproduction。Thistendencyfurtherimpresseditselfuponthecentralconceptofeconomicscience，thatofvalue，whichwastreatedbytheseearlymakersofPoliticalEconomyexclusivelyfromtheproductivestandpointof"costs。"When，however，latertheorists，beginningwithJevonsinthiscountry，soughttoconverttheformalgoalofconsumptionintotherealgoal，bysubstituting"utility"for"cost"

asthedeterminantofvalue，itmighthavebeensupposedthattheywouldhavebeenimpelled，passingthroughthegatewayofutilityintoconsumption，toopenupthathithertoneglectedcountry。Butnosuchthinghashappened。

Whileanelaboratedivisionofintellectuallabourhasbeenapplied，bothtothestudyoftheobjectivestructureofindustryandtothepsychologyofthevariousagentsofproduction，nocorrespondingstudiesofconsumptionhavebeenmade。Whentheproductsofindustrypassovertheretailcounter，economicsciencealmostentirelylosescountofthem。Theypassfromsightintothemysteriousmawof"theConsumer。"ithasneveroccurredtotheeconomistthatitisjustasimportanttohaveaclearandcloseknowledgeofwhathappenstoproductswhentheyhavebecomeconsumer"sgoods，asitistotracetheirhistoryintheproductivestages。Itwould，ofcourse，beuntruetosaythatmoderneconomistscompletelyignoremethodsandmotivesofconsumption。TheirstudiesofvalueandofmarketscompelthemtodirectequalattentiontoforcesregulatingSupplyandDemand，andmanyofthemassignaformalsuperioritytothedemandforfinalcommoditieswhichissues

fromConsumers，astheregulatorofthewholeindustrialsystem。Butwhilethishasevokedsomeinterestingenquiriesintoquantitiesandmodesofconsumption，themaininterestoftheseenquirieshaslain，notinthelighttheyshedupontheuseandenjoymentgotfromconsumption，butintheeffectsofthatconsumptionupondemandasafactorinproblemsofpriceandofproduction。Inaword，theeconomicartsofconsumptionstillruninsubordinationtotheartsofproduction，andtheverynatureoftheinteresttakeninthematteststheirsecondaryplace。Halfofthefieldofeconomicsurveyimportantfromthestandpointofhumanwelfarethusstandsunexploredorill-explored。

§；3。Anecessaryresultofthisidentificationofeconomicsubject-matterwiththeproductiveapparatus，hasbeentoimposeuponthestudyofeconomicsadistinctivelymechanicalcharacter。Thenetworkofbusinessesandtradesandprocesses，whichconstitutesindustry，mayindeed，byaninterpretativeeffortofimagination，beresolvedintothemyriadsofthoughts，desiresandrelationswhichareitsspiritualtexture。Everybusiness，withitsvariedmachineryandplant，itsbuildings，materials，etc。，istheembodimentofconscioushumaneffort，andthepersonnelofmanagementandoperativesrepresentalivecurrentofvolitionandintelligence，directingandcooperatingwithit。Abusiness，thusregarded，isadistinctivelyspiritualfabric。

Noristhistrueonlyofthoseindustriesemployedinfashioningmaterialgoods。Thecomplicatedarrangementsofcommunicationsandofcommercewiththeirgangliaofmarkets，bywhichgoodspassfromoneprocesstoanotherandaregathered，sortedanddistributedinregulatedchannelsthroughouttheworldofworkersandconsumers，representanevenmoredelicateadjustmentofpsychicalactivities。Economicsciencetends，undoubtedly，tobecomelessmaterialinitsoutlookandtreatment，andtogivemoreattentiontothepsychologicalsupportsoftheindustrialsystem。Notonlyhavewemanyspecialstudiesofsucheconomicquestionsassavingandinvestment，businessadministrationandothercriticaloperationsofwillandjudgment，butinsuchworksasthoseofM。TardeinFrance，andMr。Wicksteedinthiscountry，wefindattemptsatasystematicpsychologicalinterpretationofindustry。Economics，indeed，accordingtothelatterwriter，isabranchofthescienceof"preferences，"theapplicationofintelligenthumanvolitiontothesatisfactionofeconomicwants。

Andyetthescienceremainsdistinctivelymechanicalandunfittedforthe

performanceofanyhumaninterpretationofindustry。ThisisduetothefailureofourpsychologicaleconomiststotearthemselvesfreefromthetraditionsofaPoliticalEconomywhichinitsverystructurehasmademansubservienttomarketablewealth。TheacceptedconceptionoftheArtofPoliticalEconomyisthatitisdirectedtotheproductionofwealthwhosevalueisattestedbythepurelyquantitativecalculusofmoney"andtheScienceofPoliticalEconomyisvirtuallyconfinedtodiscoveringandformulatingthelawsfortheproductionofsuchwealth。ThebasicconceptsofValue，Cost，andUtility，aresubjectedtothisgoverningpresupposition。

Theirprimarysignificanceisamonetaryone。Thevalueofanystockofwealthissignifiedinmoney，thecostofitsproduction，theutilityofitsconsumption，areregisteredinmonetaryterms。Thepsychologicalresearcheswhichtakeplaceintoprocessesofthoughtanddesirearenotregardedashavingsignificanceontheirownaccount，butmerelyasmeansorinstrumentsintheworkingofindustrialprocesses。Thestudyofmotives，interests，andideasintheprocessofinvention，orintheorganisationandoperationofsomeproductivework，treatsthesethoughtsandfeelingsnotintheirfullbearinguponhumanlife，itsprogressorhappiness，butinexclusiverelationtothemonetaryendtowhichtheyaredirected。

§；4。Itisnoconcernofourstocriticisethisattitudeinthesenseofcondemnation。Butitisimportanttorealisethatnoprogressofpsychologicalanalysiswillenableeconomicsciencetosupplyahumanvaluationofindustrysolongasallthehumanfunctionsinvolvedineconomicprocessesaremeasured，assessed，andvalued，accordingtotheirbearingupontheproductionofa"wealth"whichhasnodirectlyassignablerelationtohumanwelfare，

butisestimatedbyapurelymonetarymeasure。Theneteffectofthisconceptionoftheeconomicsystemasanelaboratearrangementofmaterialandspiritualfactors，contributingtotheproductionanddistributionofastreamofvariousgoodsvaluedbyamonetarystandard，istoleaveuponthemindtheimpressofadistinctivelymechanicalapparatus。Noone，forexample，canreadthemasterlyworkofMr。Wicksteed3withoutrecognisingthathisdelicate，elaboratemeasurementsandbalancesofmotivesandpreferences，whileinvolvingandimplyingactionsthatnoonebutmancanperform，treatnotonlyindustry，buthumanityitselfasapsychologicalmechanism。

Thisdistinctivelymechanicalcharacterisinherentinthestructureofaneconomicsciencebaseduponthesubserviencyofallhumanactivitiestoapurelyquantitativeconceptionofwealth，andapurelymonetarystandardofvalue。Thischaracterofeconomicscienceis，ofcourse，bynomeansdisablingforallpurposes。Onthecontrary，itfurnishesvalidinstrumentsfortheinterpretationofmanyimportantgroupsofphenomenainthebusinessworld，andforthesolutionofcertainproblemswherepurelyquantitativestandardsandmethodsareapplicable。Indeed，theincreasingdevotionofeconomiststoproblemsofmoney，price，andotherdefinitelymonetaryquestions，maybetakenasahalf-instinctiverecognitionoftherealinadequacyofcurrenteconomicsforanyveryusefulsolutionofthosemorevitalproblemsintowhichcloselyhumanconsiderationsenterasgoverningfactors。Asweproceed，weshallrealiseinmoredetailthenatureoftheincapacityofcurrenteconomicstofurnishanyrulesforsettlingissuesthatrelatetowages，hoursoflabour，Stateinterferencewithprivateindustry，privateproperty，andotherhumanproblemswhichareinfirstappearance"economic。"

Threedefectsappear，then，todisqualifycurrenteconomicsciencefortheworkofhumanvaluation。First，anexaggeratedstressuponproduction，reflectedintheterminologyandmethodofthescience，withacorrespondingneglectofconsumption。Secondly，astandardofvalueswhichhasnoconsistentrelationtohumanwelfare。Thirdly，amechanicalconceptionoftheeconomicsystem，duetothetreatmentofeveryhumanactionasameanstotheproductionofnon-humanlyvaluedwealth。

§；5。Thesewarning-postsmayhelpustodiscoverandtoformulateanintellectualproceduremoresuitedtoourneeds。AhumanvaluationofindustrywillgiveequalattentiontoProductionandConsumption，willexpressCostandUtilityintermsofhumaneffortandsatisfaction，andwillsubstituteforthemonetarystandardofwealthastandardofhumanwell-being。Thisassertionofvitalvalueasthestandardandcriterionis，ofcourse，nonovelty。Ithasunderlainallthemorecomprehensivecriticismsoforthodoxpoliticaleconomybymoralistsandsocialreformers。

Byfarthemostbrilliantandeffectiveofthesecriticisms，thatofJohnRuskin，wasexpresslyformulatedintermsofvitalvalue。Thedefectswhichhefoundinthecurrenteconomicscienceweresubstantiallythesameasthosewhichwehavenoted。Hisfamousdeclarationthat"Thereisnowealthbutlife，"andhisinsistencethatallconcretewealthormoneyincomemustbeestimatedinrelationtothevitalcostofitsproductionandthevitalutilityofitsconsumption，istheevidentlyaccuratestandpointforahumanvaluationofindustry。Thisvitalcriterionhebroughttobearwithgreatskill，alikeupontheprocessesofproductionandconsumption，disposingtheimmensediscrepanciesbetweenmonetarycostsandhumancosts，monetarywealthandvitalwealth。Nooneeverhadamorevividandcomprehensiveviewoftheessentially

organicnatureoftheharmonyofvariousproductiveactivitiesneededforawholesomelife，andoftherelatedharmonyofusesandsatisfactionsontheconsumptiveside。Hismindseizedwithincomparableforceofvisionthecardinaltruthofhumaneconomics，viz。，thateverypieceofconcretewealthmustbevaluedintermsofthevitalcostsofitsproductionandthevitalusesofitsconsumption，andhismosteffectiveassaultuponcurrenteconomictheorywasbaseduponitscompleteinadequacytoaffordsuchinformation。But，thoughmostofhislaterwritingsweresuffusedwiththisconceptionofwealthandwiththedoubleprocessofanalysiswhichitinvolved，nowherewasthatanalysissystematicallyapplied。

Therewerebrilliantexcursionsintothedomainoflabour，distinguishingthenoblerandthebasersorts，thosewhicharetruly"recreative"andthosewhichdegradeandimpoverishlife。Therewasthefamousdistinctionbetween"wealth"and"illth，"accordingtotheessentialqualitiesofthegoodsandthesortsofpersonsintowhosehandstheypassforconsumption。

Inthemostsystematicofhisworks，MuneraPulveris，he，indeed，appearsattheoutsettohavehismindcloselysetupontheexactperformanceoftherequiredanalysis。For，definingthescopeofhiswork，hesays，"Theessentialworkofthepoliticaleconomististodeterminewhatareinrealityusefulorlife-givingthings，andbywhatdegreesandkindoflabourtheyareattainableanddistributable。"4Thenfollowsaclearandlogicaldistinctionbetweenvalueandcost。

Valueisthelife-givingpowerofanything；costthequantityoflabourrequiredtoproduceit。"Hadheproceededtoestimate"Wealth"withequalregardtoitsvalueanditslabour-cost，thelatterexpressedinvitalterms，thescientificcharacterofhisanalysiswouldhavebeenpreserved。Butunfortunatelyheallowedhimselftobeoverweightedbyasenseofvaluewhichstresses"humanutility"ofconsumption，sothat，whilethe"utility"sideoftheequationisworkedoutwithadmirableskill，the"cost"orlaboursideisslighted，andtheorganicrelationbetweenthetwoislostsightof。TheconfusionwroughtinthemindsofreadersbythefailuretofindinanyofhisworksafullapplicationofhisprinciplehasbeenresponsibleforanunjustdisparagementofthetrulyscientificservicerenderedbyRuskintowardsthefoundationofsocial-economics。

FromaPisgahheighthismind"seyesweptinquickpenetrativeglancesoverthepromisedland，buthedidnotoccupyit，orfurnishanyclearsurvey。

§；6。OurpurposehereisinparttoperformthetaskindicatedbyRuskin，viz。toapplytoindustrythevitalstandardofvaluation，oratanyratetoimprovetheinstrumentsofvitalsurvey。Butonly，inpart。

ForourtaskisinscopelesscomprehensivethanthattowhichRuskinappliedhimself。Thoughhisteachingsprangoriginallyfromtworelatedrootsofemotionalvaluationdistinctivelyeconomicintheirbearings，theloveofthefinersortsofhumanworkcalledArt，andthereprobationofthedegradingconditionsoftheworkmostofhiscountrymenwerecalledupontodo，itexpandedintoawidermeaningof"economy"whichincludednotmerelyeconomicactivitiesandeconomicgoods，butallsortsofvitalactivitiesandgoods。AcriticismofcurrentPoliticalEconomy，onthegroundthatitdidnottreatitsacceptedsubject-matterinavitalmanner，thusdevelopedintoaconstructivePoliticalEconomywhichnotmerelyhumanisedthemethodbutexpandedtheareaofthescienceandart，soastomakeitineffectacomprehensivescienceandartofhumanwelfare。

NowithasalwaysbeenanopenquestionwhetherthemakersofPoliticalEconomywereintellectuallyjustifiedinseveringmarketablefromnon-marketablegoodsandservices，andframingaseparatescienceuponstudiesoftheformer。Thatmarketablegoodsarenotalwaysseparablefromnon-marketable，andthattheeconomicactivitiesofmanarealwaysinter-relatedwithnon-economicactivities，areacceptedtruths。Ruskin"sperceptionoftheintimacyoftheserelationsbetweencommercialandnon-commercialfunctionsandproductsledhimtobreakdown。thebarrierssetupbyEconomicScience，inthefurtheranceofanartwhichshouldsetupasitsgoal"themultiplicationofhumanlifeatitshigheststandard。"

Nowthisenlargementmaybequitelegitimate。ButitwasevidentlyresponsibleinlargemeasureforthefailureofRuskintodrivehomethecriticismdirectedagainstthecurrenteconomicteaching。ItwasonethingtoattackPoliticalEconomistsforfailingtotakedueaccountofhumanvaluesintheirtreatmentofprocessesrelatingtomarketablewealth。Itwas，however，quiteanothertoinsistthatthebarrierbetweenPoliticalEconomyandothersocialsciencesandartsshouldbetorndown，andthatallphenomenaofvitalimportshouldbecometheobjectsofitsstudy。HadRuskinbeenabletokeeptothenarrowerscope，doubtlesshewouldnothavebeenRuskin，buthisattackoncurrenteconomictheoryandpracticewouldhavebeenvastlymoreeffective。

ThisbriefexcursionintoRuskin"sworkhasbeennecessary，firstinordertomakeproperacknowledgementofthesoundscientificinstinctofthisgreatpioneerofsocialthought，and，secondly，tomakeitclearthat，whileacceptinghisstandardofvaluation，wedonotproposeapplyingitoutsidetherangeofeconomicphenomenaintheordinaryacceptationofthatterm。Whileadmittingtheoverlappingandinteractionofeconomicandotherhumanfunctions，weshallaccepttheordinarydefinitionoftheboundariesofeconomicstudies，andshallseektomakeourhumansurveyandapplyourhumanvaluationwithintheselimits。Theextra-economicimplicationswhichtheunityoflifewilldisclosecannot，indeed，beignored，buttheywillbetreatedassupplementarytothemainpurpose，thatofvaluingtheprocessesdirectlyconnectedwiththegettingandspendingofmoneyincomes。

§；7。Insettingupavitalstandardofvaluation，wearelikelytobemetwiththeobjectionsthatlifeistoovague，toochanging，tooincomprehensibleforanystandard，andthatlifeisnotvaluableinitselfbutbecauseofcertainqualitieswhichitmaypossess。Ourstandardmustbeconceivedintermsofalifethatisgoodordesirable。Thisconsiderationmightevidentlyleadusfarafield。Ifwearetoundertakeavaluationoflifeasapreliminarytovaluingindustry，itislikelythatwemayneverapproachthesecondundertaking。Thebestescapefromthispredicamentistostartfromsomegenerallyacceptedconceptwhichindicates，evenifitdoesnotexpressfully，thedesirableinlife。SuchatermItaketobe"organicwelfare。"Thoughinformameresynonymforgoodlife，itisbyusagebothmorerestrictedandmoreprecise。Itperhapsappearstothrustintotheforefrontofconsiderationthephysicalbasisoflife。

Buttheorganicconcept，whenliberallyinterpretedandapplied，carriesnosuchrestrictiveimplication，anditsdistinctivelybiologicalassociationshouldnotruleitoutfromtheworkofwidervaluationhererequired。

Asaprovisionalstatementofourstandardofvaluation，"organicwelfare"

hastwoadvantages。Inthefirstplace，itsuppliesanadmittedlysoundmethodofestimatingthosephysicalcostsandutilitieswithwhichthemajorpartofindustryandofitsproductisassociated。Eveninthemostadvancedcivilisationofto-day，economicprocessesareprimarilyphysicalintheeffortstheyevokeandintheneedstheysatisfy；theexpenditureandrecoupmentofphysicalenergyconstitutethefirstandmostprominentaspectofindustry。Intracingtheoriginsofhumanindustry，weshallfindthisrootedinwhatappearashalf-instinctiveanimalfunctionsforthesatisfactionof"organic"needs，individualorracial。Theprimitivedirectionofproductiveeffortisevidently"organic。"

Again，the"organic"pointofviewavoidstwograveerrorscommontothemoremechanicaltreatmentofaneconomicsciencewhichhassubordinatedmantocommercialwealth。Itinsistsuponregardingtheproductiveeffortwhichgoesintoanyworkofproductionandthesatisfactionwhichproceedsfromtheconsumptionofanyproduct，notasaseparatecostandaseparateutility，butintheirtotalbearinguponthelifeoftheproducerorconsumer。

Themechanicalseparatismoftheordinaryeconomicviewfollowsfromatreatmentinwhichthelabourbestowedonaproductisonlya"cost"inthesamesenseastherawmaterialsandtoolsemployedinmakingit，allalikepurchasedasseparatecommoditiesatamarketinwhichtheyfigureasfractionsofaSupply。Similarlywiththeordinaryeconomictreatmentofconsumption。Eachconsumableisregardedasyieldingaqualityofutilityorsatisfactionvaluedonitsownaccount，whereasinrealityitsconsumablevaluedependsuponthewaysinwhichitaffectstheentireorganicprocessofconsumption。Everyspeeding-upofamachine-process，oreveryreductionofthehoursoflabour，affectsforgoodorevilboththeeconomicandthehumanefficiencyofthewholeman:everyriseorfallofremunerationforhislaboursimilarlyreactsuponthestandardoflife。Noristhisall。Currenteconomicsciencehasnotonlytreatedeachcostandeachutilityasaseparateitemorunitofeconomicpower，ithastreatedeachmanastwomen

producerandconsumer。Theacquiescenceintheeconomictendencytowardsaconstantlyincreasingspecialisationofmanasproducer，aconstantlyincreasinggeneralisationofmanasconsumer，isonlyintelligibleuponthesuppositionthattheartsofproductionandconsumptionhavenorelationtooneanother。5Thestandpointoforganicwelfarereducestoitsnaturallimitsthisusefuldistinctionofproducerandconsumer，andenablesustotracethetrueinteractionsofthetwoprocesses。Inaword，itobligesustovalueeveryactofproductionorconsumptionwithregardtoitsaggregateeffectuponthelifeandcharacteroftheagent。

§；8。Finally，a"social"interpretationofindustryisnotpossibleexceptbytreatingsocietyasanorganicstructure。Whethersocietyberegardedasan"organism"withalifeconceivedascomprisingandregulatingthelifeofitsindividuals，inthesamemannerasabiologicalorganismthatofitscells，orasan"organisation"contrivedbyindividualsentirelyforthefurtheranceoftheirprivateends，itmustbetreatedasavitalstructurecapableofworkingwellorworkingill。Isayvitalstructure，notspiritualstructure，forIholdthetendencytointerpretsocialorganisationexclusivelyintermsofethicalends，andasexistingsimplyfor"therealisationofanethicalorder，"tobeunwarranted。ThemenwhoformorconstituteaSociety，orwhoenteranysortofsocialorganisation，enterbodyandsoul，theycarryintoittheinseparablecharacteroftheorganiclife，withallthephysicalandspiritualactivitiesandpurposesitcontains。

Particularmodesofsocialorganisation，as，forexample，aChurch，maybetreatedasdirectedprimarilytospiritualends，thougheventheretheseparationisnotfinallyvalid。Butsocietyinthebroadersense，eventhoughconceivednotasan"organism"butmerelyasanorganisation，mustberegardedasexistingforvarioussortsofhumanpurposes。Fortheimpulsestoformsocietiesarerootedinbroadinstinctsofgregariousnessandofsexualandracialfeeling，whicharebestdescribedasorganic，and，thoughtheseinstinctsbecomespiritualisedandrationalisedwiththeprogressofthehumanmind，theyneverceasetocarryabiologicalimport。

Eventhoughonetakes，therefore，theextremelyindividualisticviewofSociety，regardingitasnothingmorethanasetofarrangementsforfurtheringthelifeofindividualmenandwomen，entirelyameansorinstrumentforachievingtheendsof"personality，"ourhumanvaluationofindustrywillrequireconsiderationofitsreactionsuponthestructureandworkingofthesesocialarrangements。

ButthisorganictreatmentofSocietyis，ofcourse，stillmoreessential，ifweconsidersocietynotmerelyasanumberofmenandwomenwithsocialinstinctsandsocialaspectsoftheirindividuallives，butasagroup-lifewithacollectivebody，acollectiveconsciousnessandwill，andcapableofrealisingacollectivevitalend。Thedispositiontoconvertsociologyintoastudy，ontheonehand，ofsocialfeelingsintheindividualman，ontheotherofsocialinstitutionsthatareonlyformsthroughwhichthesefeelingsexpressthemselves，istomymindawhollyinadequateconceptionofthescienceofSociety。Thestudyofthesocialvalueofindividualmennomoreconstitutessociologythanthestudyofcelllifeconstituteshumanphysiology。ArecognitionoftheindependentvalueofthegoodlifeofasocietyisessentialtoanyscienceorartofSociety。

ToaGreekoraRoman，theideathatthecityexistedmerelyfortheproductionofgoodcitizens，andwithoutanendorself

ofitsown，wouldneverhaveseemedplausible。

NortoanyChristian，familiarwiththeideaandthesentimentoftheChurchasasocietyofreligiousmenandwomen，woulditoccurthatsuchSocietyhadnolifeorpurposeotherthanthatcontainedinitsindividualmembers。Societymustthenbeconceived，notasasetofsocialrelations，butasacollectiveorganism，withlife，will，purpose，meaningofitsown，asdistinguishedfromthelife，will，purpose，meaning，oftheindividualmembersofit。Tothosewhoboggleattheextensionofthebiologicalterm"organism"tosociety，askingawkwardquestionsastothewhereaboutsofthesocialsensorium，andtheintegumentofasociety，Orwhetherapolitical，areligious，anindustrialSocietydonotconflictandoverlap，Iwouldreplythatthesedifficultiesaresuchasarisewheneveranextensionofboundariesoccursintheintellectualworld。Theconcept"organism"asappliedtothelifeofanimalsandvegetables，isnotwhollyappropriatetodescribethelifeofasociety，butitismoreappropriatethananyotherconcept，andsomeconceptmustbeapplied。

Ifsomequalificationisdesired，noobjectioncanberaisedagainstthetermsuper-organismexceptitslength。Whatisnecessaryisthatsometermshouldbeusedtoassistthemindinrealisingclearlythatalllifeproceedsbythecooperationofunitsworking，noteachforitsseparateself，butforawhole，andattainingtheirseparatewell-beingintheproperfunctioningofthatwhole。Asthestructureoftheorganiccell，theorgan，andtheorganismillustratethiscooperativeandcompositelife，sowiththelargergroupingswhichwecallsocieties。Ananimalorganismisasocietyofcells。

§；9。Sofarasthedifficultyarisingfromthenarrowlybiologicaluseofthetermorganismisconcerned，thatisrapidlydisappearingbeforetheadvanceofpsychology。Formodernbiologyiscomingmoreandmoretorealiseitsearlyerrorinseekingtoconfineitselftothestudyoflifeasamerelyphysicalphenomenon。Biologyandpsychologyareconstantlydrawingintocloserrelations，withtheresultthatanewscienceofpsycho-biologyisalreadycomingintobeing。Inbuilding，thusfar，uponafoundationoforganicconcepts，oneisnolongerproperlyexposedtothesuspicionofignoringordisparagingthepsychicalphenomenawhichconstituteman"sspiritualnature。

Asbiology，thustreatingtheentireorganicnatureofman，becomesanindividualpsycho-physics，somustsociology，treatingthewiderorganicnatureofman，becomeacollectivepsychophysics。Whilethentherespectiveimportanceofthewelfareoftheindividualandofsocietymaystillbedifficulttodefine，theadmissionofsocietyasapsycho-physicalstructure，withhumanendsofitsown，willinvolveitsproperrecognitionintheappraisementofeverysortofhumanvalue。Ourtask，thatofdevisingamethodofvaluationofindustry，willevidentlydemandthateconomicprocessesshallbeconsidered，notonlyintheirbearinguponindividuallives，butintheirbearinguponthewelfareofsociety。Indeed，itisdifficulttoseehowanyreasonablepersoncanconfrontthegravepracticalproblemspresentedbytheindustrialsocietiesofto-day，suchasthosecontainedinindividual，class，sex，nationaldifferentiationofeconomicfunctions，withoutrealisingthatthehypothesisofhumanityasitselfacollectiveorganismcanalonefurnishanyhopeoftheirrationalsolution。

Thesignificanceoftheorganicconceptioninanyhumanvaluationofindustrialactsorproductsisevident。Itrequiresustovalueeachactorproductbothfromthestandpointoftheindividualandofthesocietytowhichhebelongs，anditfurnishesaharmonyofthetwoareasofinterest。

Thebafflingproblemseverywherepresentedtothoughtbytheapparentcontradictionoftheunityandthediversityofnature，thewholeandtheparts，thegeneralandtheparticular，findtheirclearestpracticalsolutioninthefactandconsciousnessofman"ssocialnature，hisrecognitionthatinfeelingandinactionheisbothanindividualandamemberofanumberofsocialgroups，expandinginaseriesofconcentriccirclesfromfamilyandcitytohumanity，andindimmeroutlinetosomelargercosmicorganism。

Foroureconomicvaluation，theharmonyofthisnarrowerandwidertreatmentofhumannatureisofprofoundandobviousimportance。Itwillrequireus，inconsideringthevitalcostsandsatisfactionsinvolvedintheproductionandconsumptionofgoods，tohaveregardtotheireffects，notonlyupontheindividualswhoproduceandconsumethegoods，butuponthecity，nation，orothersocietytowhichtheybelong。Humanwelfarewillbenotmerelythewelfareofhumanbeingstakenasanaggregate，butofsocietyregardedasanorganicunity。

Themostdelicateeconomicandspiritualissuesofadjustmentwillbefoundtorelatetotheprovisionsforharmonisingtheorderandthegrowthofthenarrowerandthewiderorganisms。While，then，biologyhasinthepastbeentooarrogantinpressingdistinctivelyphysicalimplicationsoftheterm"organism"intothedawningscienceofsociology，andindistortingthetrueconceptionofsocialevolutionbyenforcingnarrowinterpretationsofselectionandsurvival，thisisnogroundforrefusingtoutilisetheterminologywhich，betterthananyother，expressestherelationsofpartstowholesineverysortoflivingsubstance。

ThecontradictionsofProductionandConsumption，CostandUtility，PhysicalandSpiritualWelfare，IndividualandSocialWelfare，allfindtheirlikeliestmodeofreconcilementandofharmonyinthetreatmentofsocietyasanorganism。

NOTES:

1。Labouremployedinproductiveworkofindustryisusuallyexcludedfromthecategoryofnational"wealth，"thoughitissometimesregardedas"personalwealth"。

Butthereisnosufficientreasonforthisexclusion。Anyincreaseoftheefficiencyofthelabourofanationisevidentlyasmuchanincreaseofitstotalvendibleresourcesasanincreaseinitsinstrumentalcapitalwouldbe。

2。Exchangeissimplyanordinarybranchofproduction，mainlyconsistingofwholesaleandretailtrade。Distributionhas，ofcourse，anotherandanimportanteconomicsignification，beingappliedtothelawsdeterminingtheapportionmentoftheproduct。

3。TheCommon-senseofPoliticalEconomy。

4。MuneraPulveris，§；XL。

5。Howpotentasourceofintellectualconfusionthisseparationofproducerandconsumeris，maybebestillustratedfromthecommonlyacceptedtreatmentofthetheoryoftaxation，whichregards"consumers"asadifferentclassofbeingsfrom"producers"forpurposesofincidenceoftaxes。

NOTE。Therearedoubtlessthosewhowillremaindissatisfiedwiththisinsistenceupontheextensionoforganismandtheconceptionofthehumanlydesirableintermsof"organic"welfare。Theywouldinsistthattheconsciouspersonalityofanindividualorofasocietytranscendsorganism，asthelatterdoesmechanism，andthatourstandardandmeasureofwelfareshouldbeexpressedinpsychicaltermsofpersonality。ThispointofviewhasrecentlybeenconciselyandpowerfullyrestatedbyDr。Haldane(Mechanism，LifeandPersonality)。Butthoughthereismuchtosayfortreatingpersonalityastheintrinsicqualityofourhumaniststandard，Idecidedagainstthecourseonabalanceofintellectualexpediency，preferringtoretaintheclearnessandforceoftheorganicconceptwhilespiritualisingittomeettherequirementsofascendinglife。CHAPTERII:THEHUMANORIGINSOF

INDUSTRY

§；1。Althoughitisnopartofmypurposetoendeavourtosetforththefactsandlawsofthehistoricalevolutionofmodernindustry，itwillbeusefultomakesomebriefallusiontotheoriginsofindustryandproperty，soastogiveconcretemeaningtothestresslaiduponorganicprocessesinourinterpretation。Forjustinproportionasitisrealisedthatindustryhasallitsearliestrootsintheprimaryorganicneedsofman，willassentmoreeasilybegiventotheproposaltoadheretotheorganicconceptionofwelfareinvaluingmoderneconomicprocesses。

Itisnoteasytoascertainwheretheactivitieswhichwetermindustrialfirstemergeintheevolutionoforganiclife。Everyorganismselects，appropriates，andassimilatesmatterfromitsenvironment，inordertoprovideforgrowthorwasteoftissueandenergygivenoutinthegeneralcourseofitsvitalprocesses，includingtheactivitiesofprocuringfood，protectionagainstorganicorinorganicdangers，andthegeneration，rearing，andprotectionofoffspring。Nutritionandfunctionarethetermsusuallyappliedtodescribetheprimarybalanceofthevitalprocessesofintakingandoutputtingenergy。Theorganismfeedsitselfinordertowork。Itseemsatfirstasifwehadherelaiddownintheoriginsoforganiclifeanaturaleconomyofproductionandconsumption。Butdotheorganicprocessesoffeeding，choosing，appropriating，andassimilatingfood，constituteconsumption，anddotheotheractivitiesforwhichfoodisutilisedconstituteproduction？

Reflectionwillshowthatthereisverylittleintellectualserviceinpressingsharplythisdistinction。Theactivelifeofanorganismconsistsinaroundofnutritive，protective，generativeprocesses，eachofwhich，fromthestandpointofindividualandspecies，mayberegardedalikeasproductiveandconsumptive。Aplantdrivesitssuckersintothesoilinsearchofthefoodsitneeds，disposesitsleavestoutilisethelightandairorforprotectionagainstthewind，assimilatesitsorganicfoodbytheuseofitsstockofchlorophyl，distributesitthroughoutitssystemformaintenanceandgrowth，anddirectsthatgrowthsoastosafeguarditsownexistenceandtoprovideitselfwithfavourableopportunitiesoffertilisationbyinsectorotheragencies。Ifdueaccountbetakenbothofthecellularlifewithintheindividualandofthespecificlifeofthisplantorganism，thewholeoftheprocessesoractivitiesappearstobenutritive，eachactofnutritionbeingassociatedwithsomeotherfunctionintheevolutionofthecell，theorganism，thespecies。Itwouldbeasplausibletoassertthateveryotherfunction，protective，generative，orother，wasundertakenforthenutritionoftheindividualorthespecies，astoasserttheopposite。But，withoutenteringintothedelicatemetaphysicsofthisquestion，wemayconfidentlyaffirmthatinthiselementaryorganiclifenutritionandfunctioncannotberegardedasmutuallyexclusiveprocesses，whiletheeconomiccontrastsofproductionandconsumption，workandenjoyment，costandutility，havenoclearapplication。Ifweapproachastagenearertohumanlife，webegintofind，inthelifeofeitherthelowerorhigheranimals，someorganicactivitiestowhichthetermindustryappearsapplicable。

Thelong，arduous，complexandpainfuloutputofenergy，consciouslyputforthbymanyanimalsinthesearchforfood，sometimesinthestorageoffood，intheprovisionofshelter，insomeinstancesintheuseoftoolsorweapons，inprocessesofcooperationanddivisionoflabourformigration，protection，orcombat，certainlyapproacheswhatwerecogniseasindustry。

Itinvolvesapainstakinginterferencewiththematerialenvironmentforthepurposiveattainmentofsomedistinctobjectconsciouslyregardedasdesirable，whichisoftheessenceofindustry。Itmay，however，beobjectedthatsuchprocesses，thoughresemblinghumanindustryintheintricacyandtechnicalskillinvolved，arenotreallypurposiveintherationalsense，butaremerelyinstinctive，andthat，assuch，theyoughttobedistinguishedfromtherationalconductofhumanindustry。Thus，itiscontendedthat，thoughtheeffortsgivenoutbymanyanimalsinprocuringfood，protectionagainstenemies，orprovisionofshelter，formallycorrespondwithfamiliarprocessesofhumanindustry，thedirectionofinstinctmakestheapplicationofthistermimproper。But，asweproceedfurtherintoourpsychologicalanalysisofhumanwork，weshallfindsolargeanelementofadmittedinstinctinmanyformsofitastoprecludeusfromadmittingthat"rational"directionisessentialtoindustry。Itis，therefore，permissibleforustogiveaprovisionalrecognitiontosuchanimalactivitiesascontainingsome，atanyrate，oftheessentialcharacteristicsof"work"or"industry"。

Indeed，theevidentresemblanceoftheseregularactivitiesofanimalsinseekingfood，shelterandprotection，totheactivitiesofprimitivemanappliedtothesamedefinitelyorganicsatisfactions，wouldprecludeusfromdenyingtotheloweranimalswhatwemustadmitinthecaseofmen。For，eveninprimitivemen，possessingacertainuseoftoolsandweapons，andahigherdegreeofcunningindealingwiththeirenvironment，thedriveanddirectionoforganicinstinctsandimpulses，asdistinguishedfromreflectionandreason，appeartobehardlylessdominantthanintheiranimalkindred。Unlesswearbitrarilyreservetheconceptsworkandindustryforahigherstageofsocialevolution，inwhichsomemeasureofsettledlifewithtribalandpersonalpropertyandcalculatedprovisionforfuturewantshaveemerged，itwillbewelltoseektherootsoftheelaboratedindustrialsystemwhichwewishtointerpretintheserudimentaryandmainlyinstinctiveactivitiesofanimalsandsavagemen。

§；2。Inexaminingtheseorganicactivitieslyingatthebasisofhumanindustry，weshalllightattheoutsetupononefactofextremesignificance，viz。thattoeachoftheseorganicallyusefuleffortsNaturehasattachedsomedefinitephysical，orpsycho-physical，enjoyment。Hunting，fighting，mating，thecareandprotectionoftheyoung，indeedallactionswhichpossesswhatiscalled"survivalvalue"orbiologicalutility，areendowedwithapleasurebonusasabribefortheirperformance。Natureendowsmostorganicallyusefuleffortswithconcurrentenjoyment。

But，thoughinthese"organicfunctions"manyanimalsgiveoutagreatdealof"laborious"effort，commingledwithelementsofplayorofincipientart，asinthedancing，singinganddecorativeoperationsofbirds，tononeofthemistheword"industry"fullyapplicable。Wedonotseemtoenterthedefinitelyeconomicsphereuntilwefindanimalssufficientlyreasonabletointerfereinaconsciouswaywiththeirenvironment，fortolerablydistantends。For，thoughmuchindustrialproductionandconsumptionwillcontinuetobeeitherinstinctiveorautomaticintheiroperation，agrowingelementofconsciouspurposewillbecomeessentialtotheorderedconductofallindustrialprocesses。Theconsciousconceptionofmoredistantendsandthegrowingwillingnesstomakepresentsacrificesfortheirattainmentaretheplainestbadgesofthisindustrialprogress。Whenabeingisawareofthesepurposeshehasenteredarationaleconomy。

Asthismorerationaleconomyproceeds，themarkswhichdistinguishitfromapurelyinstinctiveorganiceconomybecomeevident。Theinstinctiveeconomyallowslittlescopeforindividualityoflife，thedominantdriveofits"implicit"purposeisspecific，i。e。，subservingthemaintenanceandevolutionofthespecies。Thespiritofthehiveinbee-lifeisthefullestexpressionofthissubservienceoftheindividuallifetothecorporatelifeandofthepresentgenerationtotheseriesofgenerationsconstitutingthespecificlife。Buteverywherethedominionofinstinctimpliestheabsorptionoftheindividuallifeinpromotingtheendsofthespecies:

successfulparenthoodistheprimaryworkoftheindividual。

Itmightalmostbesaidthatthedawnofreasonisthedawnofselfishness。

Forrationaleconomyinvolvesaconsciousrealisationoftheindividualself，withendsofitsowntobesecuredandwithopportunitiesforsecuringthem。Theearliestconceptionofthisseparateselfanditsendswillnaturallytendtobeintermsofmerelyormainlyphysicalsatisfaction。Thusthedisplacementoftheinstinctivebytherationaleconomyisevidentlyacriticalera，attendedwithgraverisksduetothetendencytowardsanover-assertionoftheindividualselfandaconsequentweakeningoftheforcesmakingforspecificlife。Man，thenewlyconsciousindividual，mayperverselychoosetosquanderorganicresources"intended"bynaturefortheraceuponhisownpersonalpleasuresandneeds。Hemayrefusetomakeasamatterofrationalchoicethosepersonaleffortsandsacrificesforfamilyandracewhichnoanimal，subjecttothedriveofinstinct，isableto"think"ofrefusing。Suchmaybeaneffectofthereleasefromthelifeoforganicinstincts。Theincreasingsupplyoffoodsandothersourcesofphysicalsatisfactionhemayapplytobuildupforhimselfalifeofsuper-brutalhedonism。1For，whenreasonfirstbeginstoassertsupremacy，itisapttobecomethralltothepurelyanimalself。Onlyasthisanimalselfbecomesspiritualisedandsocialised，doesthesocialrace-lifereassertitsswayuponthehigherplaneofhumanconsciousness。

§；3。Butitisofimportancetorealisethatafirsteffectofreason，operatingtodirectthepurposiveactivities，istoliberatethe"self"fromthedominionofthespecificlife，andtoenableittoseekandobtainseparatepersonalsatisfactions。Forwiththispowercomesthefactandthesenseof"personalproperty"whichplaysolargeapartinindustry。

Earlyindustryandearlypropertyarelargelydirectedbytherequirementsofthisdawningsenseofpersonality。Thoughtheoriginsofindustryaredoubtlessfoundinthepromptingsoforganicutility，theyarenotofanarrowly"utilitarian"character。Wedonotfindtheearliestindustriesofmancloselyconfinedtothesatisfactionofwhatmightseemthemosturgentofhisorganicneeds，food，shelter，protectionagainstenemies。

Theelementsofplayandornamentaresoprevalentinearlyindustriesastosuggestthetheory，whichsomeanthropologistspressfar，thatadornmentforpersonalgloryisthedominantoriginofindustryandproperty。So，forexample，Bü；cher2contendsthattheearliestreallyindustrialactivitieswereapaintingandtatooingofthebody，andamanufactureofclothingandofotherpersonalapparatusforpurelyornamentalpurposes。

Eventhetamingofdomesticanimalswas，heheld，firstundertakenforamusementorfortheworshipofthegods。Thestrongattractionofmostsavageorbackwardpeoplesinourdaytowardsarticlesofornamentandplaywhichaffordexpressiontonaivepersonalpride，appearstosupportthisview。Primitivemancertainlydoesnotevolvetowardsindustrialcivilisationbyalogicallysaneeconomyofsatisfyingfirsthismostvitallyimportantmaterialneeds，andthenbuildingonthisfoundationasuperstructureofconveniences，comfortsandluxuries，withthevariousindustriesappertainingthereto。Thiseconomicmanisnowherefound。Actualman，asmanyanthropologistsdepicthim，appearstobeginwiththeluxuriesanddispenseswiththeconveniences。

Thisnon-utilitarianviewoftheoriginsofindustryhas，however，beendriventoexcess。Thereremainsalargeelementoftruthintheproverb"Necessityisthemotherofinvention。"Theearliestweaponsandtools，adaptedfromsticksandstonesandotherrawmaterial，wereprobablyforcedonthedawningintelligenceofmanbythehardfactsofhisstrugglewithhostilenatureandhissearchforfood。Fighting，hunting，mating，werepresumablyhisfirstpursuitsandtheearlyartsorindustries，atanyrateonthemaleside，wouldbesubsidiarytothesepursuits。Anyorganisedprocessorhandlingofmatterwhichwouldmakehimabetterfighter，hunter，suitor，wouldbelikelytoemergeasacraftorindustry。Thisexplainstheapparentblendofutilitarianandnon-utilitarianorigins。Inpointoffact，mostoftheso-calledornamentalactivitiesandproductshavetheirevidentbiologicaluses。Theyarenotmereplaythings。Theadornmentofthehumanbody，theuseoftatoosandmasks，drumsandgongsandotherplay-products，arepartly，nodoubt，formeregloryofself-assertion，itselfaninstinctivecraving，butalsoforcourtship，forrecognitionandforfrighteningenemies。While，then，itremainstruethatthesportiveandartisticimpulsesareconspicuousintheearlycrafts，itisamistaketodisparagetheorganicutilityoftheseprocesses。Aftermanhasmadeprovisionforthepresentnecessitiesofthebody，hissuperfluousenergynaturallytends，eithertopreparatoryplay，thepracticeorimitationofbiologicallyusefulactions，orelsetoexplorative，constructive，anddecorativeworkinhandlingsuchmaterialsaspresentthemselves。Thiscuriosityabouthissurroundings，andtheinstinctivedesiretoconstructandarrangethemforhisconvenience，orforthedawningaestheticsatisfactionofhissenses，ortoimpressthefemaleofhisrace，theseinstinctsundeniablycoalescewiththedriveofphysicalnecessitytoforcemantoapplyhismindtothediscoveryandpracticeoftheearlyartsandcrafts。

But，thoughthesedistinctivelymalemodesofmanipulatingtheenvironmentthuspossessautilitarianaspect，theydonotfurnishthebeginningsofthechiefindustrieswhichfigureincivilisedlife。Thebeginningsofmanufactureandofagriculture，asregularoccupations，arecommonlyascribedtowomenandtoslaves。Thosewhoconceiveoftheearliesthumansocietiesasmatriarchalorgynaecocentric，thewomenformingfixedcentresoforderinthehomeandvillage，owningthechildrenandthepropertyattachedtothehome，regardwomenbothastheinventorsandthepractitionersoftheearlyhandicrafts，includingthecultivationofthesoil。Thebeginningsoftheartsofpottery，basket-making，building，clothes-making，aswellasdigging，planting，millingandotherprocessesofpreparingfood，weredoubtlesswomen"sworkinthefirstinstance，thoughtheywereprobablyraisedtothepositionofregularindustrieswhenslaverybecamecommon。

Itis，however，noteworthythat，eveninthoseearlyhandicraftsdevotedtothemostpracticalneedsoflife，thedecorativeinstinctgenerallyfindsexpression。Notonlytheweaponsofthemen，butthepotsandpansandotherdomesticutensilsofthewomen，carrycarvingsormouldings，whichtestifytotheplayorartimpulses。Leisureandpleasurethusappearasingredientsintheearliestindustries。

Towhateversource，then，wetracetheoriginsofindustry，totheuseofweapons，snaresandothermaleapparatusforthefightandhunt，totheinstinctsofplay，imitationandadornmentasmodesofself-expressionandofpride，ortothemoredistinctivelyutilitarianworkofwomenandofslavesaroundthehome，wefindplayorpleasuremingledwiththework。

Thisprofoundlyinterestingtruthisattestedbythelongsurvivingpresenceofthesongandotherrhythmicactivitiesinmanyformsofassociatedlabour，aswellasinthedancingwhichinprimitivesocietieswasanalmostinvariableaccompanimentofallimportantenterprises，war，huntingandharvesting，andwhichstillsurvivesamongusintheHarvesthome。Thoughinslaveindustriesthislighterelementdoubtlessdwindledverylow，itseldomdiedoutentirely，asthesongofthegalley-rowers，oroftheSouthernnegroesinthecotton-fields，testifies。WherethehandicraftsthroveamongfreemeninEurope，everywherethemotivesofplay，personalprideandprowess，findliberalexpressioninindustry。

§；4。Thisslightandnecessarilyspeculativesketchoftheoriginofindustryisdesignedtoenforcetwofacts。Inthefirstplace，wecantraceineveryrudimentaryindustrythepromptingsofvitalutility，layingthefoundationsofaneconomyofeffortsandsatisfactionswhichfurtherstheorganicdevelopmentoftheindividualandtherace。Inthesecondplace，weeverywherefindwhatwecalldistinctivelyeconomicmotivesandactivitiesalmostinextricablyintertwined，orevenfused，withothermotivesandactivities，sportive，artistic，religious，socialandpolitical。Totracethehistoryoftheprocessbywhichinmoderncivilisationeconomicorindustrialactivitieshaveseparatedthemselvesfromotheractivities，assumingmoreandmoredominance，untiltheindustrialSystemandtheBusinessManhavebecomethemostpotentfactsoflife，wouldliebeyondourscope。

Norisitatallnecessary。Whatisimportantforustorealise，however，isthatthisprocessofindustrialisation，throughwhichthecivilisedpeopleshavebeenpassing，isbeyondallquestionthemostpowerfulinstrumentofeducation。Itappearstohavedonemoretorationaliseandtosocialisementhanallthehigherandmorespiritualinstitutionsofman，sofarassuchcomparisonsarepossible。Ithasrationalisedmanchieflybycompellinghimtoexerciseforesightandforethought，tosubduehiswillandtrainhisactivefacultiestotheperformanceoflongandintrinsicallydisagreeabletasks，inordertorealisesomemoreandmoredistantobjectofdesire，andbyobliginghimtorecognisetherigorouslawsofcausationinhiscalculations。Ithassocialisedhimbyweavinganevermoreelaboratetissueofcommoninterestsbetweenhimandagrowingnumberofhisfellowmen，andbycompellinghimtoengageincloserco-operationwiththemfortheattainmentofhisends。Thoughthissocialisationisfarmoreadvancedinobjectivefactthaninthoughtandfeeling，itremainstruethatthedirectandindirectassociationoflargerandmorevariousbodiesormeninmodernindustryandcommerceisthefirstconditionandthestrongeststimulustotheexpansionandintensificationofthesocialwill。

Itisthisorderlyrationalsystemofindustry，employing，asitdoes，theorganicpowersofmanforthesatisfactionofhisorganicneeds，thatweseektosubmittovaluation。

Theimmensevarietyandcomplexityoftheartsandcraftsofwhichsuchasystemofhumanindustryconsists，thelongintervaloftimewhichoftenintervenesbetweenactsofproductionandofconsumption，thedifferencesofpersonalitybetweenthosewhoperformtheeffortsofproductionandthosewhoutiliseorenjoythefruitsofthoseeffortsinconsumption，immenselyremoteastheyappearfromthesimpleorganiceconomyofprimitiveman，donotescapeanultimatedependenceuponorganiclawsandconditions。

Ahumanvaluation，therefore，mustinsistuponexpressingthemintermsoforganicwelfare，individualandsocial。Ashumanactivitiesandenjoymentsascendintheprocesswetermcivilisation，weshallexpecttofindthisorganiclifebecomingmorepsychical，inthesensethattheirmodesaremore"reasonable"andtheemotionsthatattachtothemaremorespiritual，i。e。，lessdirectlydrivenbyanimalinstincts。Sotooweshallexpectindustrialprogresstocontributetoagrowingadjustmentbetweentheindividualandthesocialeconomy，restoringundertheformofreasonablesocialservicetothemorehighlyindividualisedmembersofamodernsocietyanincreasingmeasureofthatsubserviencetotheorganicwelfareofmankindwhichinstinctwasabletosecureuponalowerplaneofconsciouslife。

NOTES:

1。"Einwenigbesserwü；rderlebenHä；ttstduihmnichtdenScheindesHimmelsLichtgegebenErnennt"sVernunftundbraucht"salleinNurthierischeralsjedesThierzusein。"

2。IndustrialEvolution(Bell&；Co。)。CHAPTERIII:REALINCOME:COSTANDUTILITY

§；1。Approachingonitsconcretesidetheeconomicsystemthehumanvaluesofwhichweseektoascertain，wefindittoconsistinaseriesofproductiveprocessesbringingvariousgoodsandservicesintomarketableshape，accompaniedbyaseriesofconsumptiveprocessesinwhichthesegoodsandservicesareused，wasted，orotherwisedisposedofbythosewhobuythemforpersonaluses。Theformersetofprocesses，aswehaverecognised，occupyaplaceofsomuchgreaterprominenceandpublicityasvirtuallytoabsorbthescienceofindustryor"economics"，leavingtotheprocessesofconsumptionanobscureandentirelysubordinateposition。

Ourorganicorhumanvaluationstartswithaprotestagainstthisassumptionofinequalityintheartsofproductionandconsumption。Itsinterpretationofeconomicprocesseswillbedisposedtolayasmuchstressuponthehistoryofthevariouscommoditiesaftertheyleavetheshop-counterandpassintothepossessionofconsumersasbefore。Thehumangoodandevilassociatedwitheconomic"wealth"must，viewedfromtheorganicstandpoint，dependasmuchuponthenatureofitsconsumptionasuponthenatureofitsproduction。

Thisconsiderationwilldetermineourmethodofapplyingthehumanstandardofvalues。Acceptingattheoutsettheconvenientdistinctionbetweentheprocessesofproductionandconsumption，weshallapproachtheeconomicsystematthepointwherethetwoprocessesmeet，thatistosaywherewealthemergesfromtheproductiveprocessesasincome，inordertopassassuchintothepossessionofpersonsentitledtoconsumeit。

Tomaketheenquirysimplerandmoreeasilyintelligible，wewillignoreforthepresentalltheextra-nationalorcosmopolitanconditionsofmodernindustry，andassumethatwearedealingwithaclosednationalsystemproducing，distributing，andconsumingthetwothousandmillionpounds"

worthofgoodsandservicesroughlyestimatedtoconstitutethecurrentannualincomeoftheBritishnation。

§；2。Nowthehabitofregardingwealthandincomeintermsofmoneyissodeep-seatedandpersistentastomakeitdifficultforordinary"business"

mentorealisethesewordsinanyotherthanamonetarysense。Theordinarymindhastobreakthroughacertainbarrierofthoughtandfeelinginordereventopresenttoitselfthesignificanceof"real"wagesor"real"income，asdistinguishedfrommoneywagesandmoneyincome。Thisdominionofthemonetarystandardisillustratedbythealmostinstinctivethrillofelationthatisfeltwhenweareinformedthattheincomeofthenationhasrisenfromabout£；1，200，000，000in1870to£；2，000，000，000in1912。1

Soaccustomedarewetoregardmoneyasthemeasureofthedesirable，thatwefeelthatthisriseofmoneyincomemustimplyacorrespondingriseinnationalwelfare。Itrequiressomeeffortofmindtorealiseeventhetwoobviouslyimportantfactorsoftheincreaseofpopulationandtheshiftofprices，which，whenoncerealised，soevidentlyaffectthebearingofthemoneyincomeuponthenationalwelfare。Yearafteryeartradereportsandotherofficialdocuments，incomparingtherelativeeconomicpositionofthevariousnationsorthefluctuationsoftradewithinasinglenation，habituallyencouragethismisleadinginfluenceofthefinancialstandardbypublishingcrude，uncorrectedmonetaryvaluesasiftheywereindicativeofindustrialfacts，andstatesmentakesuchfiguresasvalidevidenceonwhichtobaseapolicy。

Asregardstheparticularobjectofourenquiry，thisobsessionofthegeneralindbythemonetarystandardmakesitimpossibleforuseventoassumethatallourleadersattachaclearandconsistentmeaningtotheterm"real"income。Itisnotquiteeasyatfirsttograspthecentralandessentialfactthateveryreceiptofanysortofincome，whetheraswages，rent，salary，interest，profit，feesorotherwise，involvesthecomingintobeingofabitof"real"incomeintheshapeofsomematerialgoodsorsomesaleableservice。2Thisfactoncegrasped，however，itbecomesevidentthatthe£；2，000，000，000，saidtobethenation"sincome，ismerelythemonetaryrepresentativeofgoodsandserviceswhicharethenetproductoftheeconomicactivityoftheyear，thequantityofwealthproducedoverandabovethatwhichhasgonetomaintaintheexistingmaterialfabricofindustry。Theaggregateamountof"wealthproduced"is，ofcourse，considerablygreater，foralargequantityoftheproductivepowermustcontinuallybeemployedinrepairingthewearandtearsustainedbythematerialinstrumentsofproduction，theland，buildings，machineryandtoolsandotherformsof"fixed"capital，andinreplacingtherawmaterialsandotherformsof"circulating"capitalwhichhavepassedoutoftheproductiveprocessesintoconsumablegoods。Thenet"real"incomeconsistsofthegoodsandservicesproducedoverandabovethisprovisionforthemaintenanceofthematerialstructureofthesystem。

Thereis，however，animportantqualificationtothismodeofreckoningthenetrealincomeofthenationwhichneedsmention。Whiletheportionofthecurrentproductwhichgoestoreplacethiswearandtearoflandandcapitalisnotincludedinthegoodsandservicesrepresentedbythe£；2，000，000，000andclassedasrealnetincome，thewearandtearormaintenancefundoflabourisincludedinit。Whenconsiderationistakenofthedistributionofwhatisoftentermedthenationaldividendbetweentherespectiveownersofthefactorsofproduction，thisanomalyisseldomborneinmind。Inestimatingtheincomeoflabourthereplacementfundiscounted；inestimatingtheincomeoflandandcapitalitisnotcounted。But，illogicalasthisdiscriminationis，usagehassouniversallyaccepteditthatitwillbebestforusinaworknotchieflyconcernedwiththeproblemsofobjectivedistributiontogiveaprovisionalacceptancetoit。

Therealnetincome，ornationaldividend，correspondingtothe£；2，000，000，000，consistsofthegoodsandservicesatthedisposaloftherecipientsofthismoneyincome。Byapplyingeachsovereignastheyreceiveditinrent，wages，interest，profit，fees，etc。，topurchaseconsumablegoodsorservices，theymightconsumethewholeofitduringthecurrentyear。Inthatevent，thoughprovisionwouldhavebeenmadeforthebareupkeepofcapital，noprovisionwouldhavebeenmadeforitsenlargementorimprovementwithaviewtothefutureincreaseofproduction。Inpointoffact，thatprovisionismadebyapplyingaconsiderableportionofthenetmoneyincome，say£；300，000，000，todemand，notconsumablegoodsorservices，butmoreinstrumentsandmaterialsofproduction。Asthisprocessgoesoncontinuously，itimpliesthatsome3/20ofthetotalindustrialactivityofthenationisengagedinmakingnotconsumablebutnewcapitalgoods。3Thissavingprocesshasanimportantpsychologyofitsowntowhichweshallgivesomeattentionlateron。Atpresentitneedonlybeconsideredasareductioninthenetincomeofconsumablegoodsandservicesatthedisposalofaprogressivecommunityforcurrentuseandenjoyment。Thiswealth，actuallyavailableforcurrentuse，thefood，clothing，shelterandotherdomesticnecessariesandconveniences，thetravel，information，education，recreation，professional，officialanddomesticservices，thevarioussortsofmaterialandnon-materialcomfortsandluxuries，constitutingthecurrentnetrealincomeofconsumer"sgoods，istheprimaryobjectofourvaluation。Thenewmachines，tools，buildings，materialsandotherformsofcapital，expressingthe£；300，000，000ofsavings，thoughenteringouranalysisuponthecostssideequallywithgoodsusedforimmediateconsumption，donotfiguredirectlyontheconsumptionside，butonlyindirectlyinthefutureconsumableswhichtheyassisttoproduce。

§；3。Butasregardstheapplicationofouranalysis，itmakesnorealdifferencewhetherwetakethenarrowerconnotationofthenationaldividendwhichincludesonlyconsumablegoods，orthebroaderonewhichincludessavings。Itwillnodoubteasilybeadmittedthatamerelypecuniarystatementofthe"value"ofthisdividendconveysnoreliableinformationastothehumanorvitalwelfareitinvolves。Makingdueallowanceforalltemporalorlocalvariationsofprice，thestatementthatthenationalincomehasdoubledinthelastcentury，oreventhattheincomeperheadofthepopulationhasdoubled，affordsnopositiveproofthatanyincreasehasbeenmadeinthenationalwelfare，muchlesshowmuchincrease。Unless，however，weadoptanattitudeofgeneralscepticismtowardstheeconomicstructureof"civilisation"，wemayadmit，withProfessorPigou，4apresumptionthatagrowthofthenationaldividendfasterthanthegrowthofpopulationimpliessomeincreaseofwelfare。Buteventhatpresumptionmustbequalifiedbythereflectionthatitreallyrestsuponaviewofmarketablewealthwhichhasexclusiveregardtoitssupposedutilityinconsumptionwithoutanycorrespondingconsiderationofthecostofitsproduction。Apecuniarystatementofthenationaldividendwhichcontainednoinformationastothenatureofthegoodsandservicescomprisingit，mayberepudiatedoutofhandasuselessforourpurpose。Foruponsuchastatement£；1

"worth"of"tradegin"haspreciselythesamevalueas£；1"worth"

of"bestbooks"orofwholesomebread，£；1worthofhandmadelacesweatedoutofpeasantwomenatthecostoftheireyesighthaspreciselythesameweightinthemoneyincomeofthenationas£；1worthofcarpentryorofmedicalattendance。

§；4。Ifwearetoestimatethehumanvalueofagivennationalincome，itisevidentthatwemustsecureanswerstothreequestions。Wemustfirstlearnwhattheconcretegoodsandservicesarewhichconstitutethe"real"income，andthenwemusttracetheseconcretegoodsandservicesbackwardsthroughtheprocessesoftheirproductionandforwardthroughtheprocessesoftheirconsumption，inordertolearnthehumancostsandutilitieswhichattachtoeach。Theamountofhumanwealthor"illth"whicheachoftheseconcrete"goods"containshas，strictlyspeaking，noassignablerelationtothemoneyticketputuponitwhenitissold。Thatsumofhumanvaluecanonlybeworkedoutintermsoftheactualprocessesofproductionandconsumptionthroughwhichthe"goods"pass。Somestudentsofcurrentpoliticaleconomymayperhapsbedisposedtocavilatthiscriticism，insistingthatontheaveragethingsmustbesoldinproportiontothepainfulorotherwisedistastefuleffortsofproducingthem，orinproportiontothepleasantorotherwiseserviceablemodesoftheirconsumption。Ontheaverage，theywillcontend，arationalcalculusofpleasureandpainunderliestheoperationsoftheeconomicsystem。Thisposition，however，Iclaimtounderminebyshowing，firstthatthis"rational"calculusrestsuponassumptionsoffreechoiceandcompetitionwhichareunwarrantable，andsecondly，thatthisrationalcalculusofcurrentpleasuresandpains，sofarasitisoperative，isnotavalidcriterionofhumanwelfareasconceivedinthetermsoforganicwelfare。Ourtask，itmustberealised，isnotthatofreducingmonetaryvalues，ortheconcretegoodstowhichtheyrefer，totermsofaveragecurrentdesirability，buttotermsofthatdesirabilitycorrectedsoastoconformtothebest-approvedstandardofthedesirable。

Inaword，thedefectsofaveragecurrentestimatesanddesires，inpartcauses，inparteffectsofadefectiveindustrialeconomy，mustthemselvesbevaluedanddiscountedintermsofourhumanidealsofindividualandsociallife。

§；5。Withthisorganicstandard，thenatureandvalidityofwhichwillbecomeclearerwithuse，letussetaboutourtaskoffindingmethodsforassessingintermsofhumanvaluethestocksofconcretegoodsandserviceswhicharetherealnetincomeofthenation。Thehuman，asdistinguishedfromthemoneyandthe"real"dividend，willconsistoftheamountofvitalororganicwelfareconveyedintheproducingandconsumingprocessesforwhichthisconcreteincomestands。Whatwerequirethenistoapplysomesortofcalculusofhumancostandhumanutilitytotheseprocesses。Nowweareconfrontedattheoutsetbythepositionofaneconomicsciencewhichconceivesproductionentirelyintermsof"cost"，consumptionentirelyintermsof"utility"。Indeed，theeconomicdoctrineofvaluehingesalmostentirelyuponthisantithesis。Foritismainlyowingtoits"costs"thatalimitofscarcityissetoneach"supply，"whileitisthe"utility"

accordedbyconsumersthatgiveseconomicforceandmeaningto"demand"。

Henceproductionisconceivedasaprocesswhichrollsupcostsintocommodities，consumptionasaprocessthatunrollsthemintoutilities。