Before entering upon the subject of Production, we must take up the questions of Wealth, Value, Price.

II. WEALTH

Definition of Wealth. First, then, what is wealth? (Cf. E. B. Andrews, Institutes of Economics, p. 1.) In ordinary language, a man is said to be wealthy when he possesses a sufficient quantity of the goods of this world to place him not only beyond the reach of necessity and want, but within the possibility of satisfying all his tastes and desires. Such a man is a man of wealth. This is the popular notion of wealth.

Wealth, in the economic sense, has a different meaning. Economic wealth consists of those things capable of satisfying the wants of men, procured by labor, and exchangeable.

The things to which reference is made when speaking of wealth may be of two kinds: things material and things immaterial. Material things are all the various objects that exist outside of man, are corporeal, and capable of transference from one person to another. Immaterial things are found in man himself, cannot be transferred to another, and consist of physical properties, as health; or mental or moral qualities, as knowledge, skill, business instinct, honesty, or docility.

Wealth, as defined, may be public or private. Public wealth is that which belongs to a whole community constituted as town, city, state, or nation. Private wealth is that which belongs to individuals or individual corporations.

The definition of economic wealth needs some explanation.

Wants. What is meant by wants of men? All men have wants. These wants it is difficult to classify, but in general they may be said to embrace the following things: Food, Clothing, Lodging, Luxuries.

Food, lodging, and clothing may be just sufficient to keep a person alive and protected in his life, or they may rise in varying degree beyond the absolutely necessary and thus constitute the comforts required by a customary and decent living. Hence

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the wants of men are classified as forming the Necessaries, the Comforts or Decencies, and the Luxuries of life. (Andrews, Institutes of Economics, p. 104.)

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Wants grow with civilization. Men have many more wants to-day than in past ages. Education, the taste for the beautiful, the need of social intercourse or of traveling from place to place, the desire for always knowing the latest news, or for amusement, nay, for fighting, which is more fashionable than ever - all these call into existence a number of important articles of wealth in the shape of libraries, telegraphs and telephones, carriages, tramways, omnibuses, newspapers, theatres, pictures, music, cannon, and ironclads." (Gide, Principles of Political Economy, 1900 edit., p. 37.)

The nature of these wants need not be considered. They may be as irrational and as frivolous as you please; still they are wants and as such enter into the subject of wealth. If any one were to pass through a large department store in one of our great cities, he would be at his wits' end to find a reason for a want for a quarter of the things he sees there. Necessity is the origin of many of the wants of men, but whim and fashion are often the sole reasons for many of them.

Objects Capable of Satisfying Wants. Now, the goods which constitute wealth must be capable of satisfying a want. Thus, a coat, a hat, an automobile, a diamond, satisfy certain wants of man. Men want Peruvian bark, sassafras, roses, lilies, and some hundreds of other members of the vegetable kingdom, because these satisfy their wants, but there are thousands of plants which they do not want, because as yet science has not revealed the manner in which they can be made useful.

The fact that things can satisfy a want of man and thus become the objects of desire on his part must enter into the adequate concept of wealth. Things that have no relation to man's wants cannot be called wealth. Things which once were wealth but which have ceased to be wanted by man cease to be wealth. Were a man to gather a vast quantity of some commodity which was absolutely incapable of satisfying any possible want of man,

he could not be said to have wealth. If he could by any means create a desire on the part of men for the commodity he has gathered, he would thereupon become the possessor of wealth.

Objects Procured by Labor. Moreover, the object which thus satisfies some want must entail in its procuring some exertion of man's activity. It must be procured by labor. There are many objects which satisfy man's wants, but which are procured without labor; for example, air, water, sunshine. Nature bountifully bestows them upon all men. They do not, therefore, usually enter into the classification of wealth.

It may be, however, that such natural gifts as air, water, sunshine, will, under certain circumstances, be brought within the classification of things procured by labor. Thus, air may be wealth when pumped into a coal mine; water, when furnished to the inhabitants of an arid region or a crowded city; sunshine, when reflected into a sunless room for photographic or other chemical purposes.

Objects Exchangeable. — Again, the objects capable of satisfying wants and procured by labor must be exchangeable or transferable. There are many things possessed of the first two qualities which lack the third. Thus, a man's reputation, his health, his credit, his business sagacity, his privileges as a citizen, are personal to the man himself and cannot in themselves be exchanged for other things.

Even material things will not be wealth, if their acquisition is so beyond the power of man that they cannot be made transferable. An object may in the abstract be capable of satisfying wants, but if it cannot by any possibility either now or in the future be such as actually to satisfy those wants by being exchanged, it is as if it did not exist at all. So, if a man possessed a storehouse full of objects which could not at any time be exchanged for other objects, he would not have wealth.

It must be noted, however, that this portion of the definition of wealth has more particularly reference to private wealth, for when there is question of the public wealth of a nation, certain

things constitute wealth which cannot be transferred or exchanged. Such, for example, are sewers, harbors, bridges.

Immaterial Goods as Wealth. - Whether immaterial goods, such as business talent, skill, knowledge, should be included in the computation of wealth, is a matter upon which all economists are not in agreement. Some, like Laughlin, calculate only material things; others, like Andrews, include immaterial things. Still others include immaterial things but classify them as services."

Wealth may be considered under two aspects: as individual wealth, and as national wealth.

To classify immaterial things among an individual's wealth, and to say, for instance, that such a man, though he possess not a cent's worth of material things, is wealthy, because he has good talents, great knowledge of history, philosophy, etc., would, according to common parlance, take words out of their literal meaning and give them merely a metaphorical sense. But in speaking of a nation's wealth the fact that one nation has more skilled workmen than another in actual employment will make an evident factor in calculating its wealth. The possession by a nation of a greater amount of technical knowledge, of a higher degree of education, of a loftier morality in the matter of honesty and justice, will conduce to an increase of the material wealth of the nation. We cannot omit taking account of such immaterial things in computing national wealth, or in making a comparison between the productive capacities of different nations. They are, to say the least, conditions, the presence or the absence of which will exert an undoubted influence on the production of wealth.

Money as Wealth. The question may be asked: Is money wealth? Money may be considered in two ways: either as a material object containing a certain quantity of substances, gold, silver, copper, nickel, paper, which can have exchange value, or as an instrument stamped and issued by the government and legalized as a medium of exchange.

In the former view, money is wealth, just as any other similar

commercial article is wealth. In the second view, it is not wealth; it is a medium of exchange. It can procure commodities which will constitute wealth. It is an "order" for goods which is operative as long as the convention of people lasts or the credit of the government which issues it is unimpaired.

It will be interesting and instructive to endeavor to point out which of the things in the following list should be accounted as wealth air, sunshine, water, corn, wheat, grass, piano, hat, coat, shoes, privilege of citizenship, buildings, machinery, implements, work horse, race horse, government bonds, railroad stocks, mortgages, right of way, property in slaves, good will in a business, debts, personal qualities, business instinct and sagacity, health.

III. VALUE

Value in General. We now come to the question of value. It is declared to be one of the most difficult questions within the domain of economics, and it is one about which there is the greatest divergence of opinion.

Let us first consider value in general. A wise statesman is of great value to his country; prudence is a virtue of great value; a diamond is an object of value. In each of these we observe an objective reality, an inherent goodness, a degree of utility for a certain purpose: the wise statesman for the protection and guidance of his country; prudence for the direction of man's conduct; the diamond for adornment. Here is something objective and internal contained within the things themselves.

But this is not sufficient. In order that objects may have value, there must exist a perception of their inherent and objective qualities by intelligences outside the objects.

Men, considering the objects, must perceive their use and their capacity to serve in some way towards man's preservation or perfection. When such is the case, there arises in men an esteem for the objects, because of the objective goodness or utility perceived, and a desire on their part to possess the objects.