pursuit of any aim, whether it be success in business, the advancement of art and science, or the improvement of the condition of one's fellow-beings. The highest constructive

work of all kinds must often alternate between periods of overstrain and periods of lassitude and stagnation; but for ordinary people, for those who have no strong ambitions, whether of a lower or a higher kind, a moderate income earned by moderate and fairly steady work offers the best opportunity for the growth of those habits of body, mind and spirit in which alone there is true happiness.

There is some misuse of wealth in all ranks of society. And though speaking generally, we may say that every increase in the income of the working classes adds to the fulness and nobility of human life, because it is used chiefly in the satisfaction of real wants; yet even among the artisans in England, and perhaps still more in new countries, there are signs of the growth of that unwholesome desire for wealth as a means of display which has been the chief bane of the well-to-do classes in every civilized country. Laws against luxury have been futile; but it would be a gain

uses of wealth.

if the moral sentiment of the community could The higher induce people to avoid all sorts of display of individual wealth. There are indeed true and worthy pleasures to be got from wisely ordered magnificence: but they are at their best when free from any taint of personal vanity on the one side, and envy on the other; as they are when they centre round public buildings, public parks, public collections of the fine arts, and public games and amusements. So long as wealth is applied to provide for every family the necessaries of life and culture, and an abundance of the higher forms of enjoyment for collective use, so long the pursuit of wealth is a noble aim; and the pleasures which it brings are likely to increase with the growth of those higher activities which it is used to promote.

When the necessaries of life are once provided, everyone

should seek to increase the beauty of things in his possession rather than their number or their magnificence. An improvement in the artistic character of furniture and clothing trains the higher faculties of those who make them, and is a source of growing happiness to those who use them. But if instead of seeking for a higher standard of beauty, we spend our growing resources on increasing the complexity and intricacy of our domestic goods, we gain thereby no true benefit, no lasting happiness. The world would go much better if everyone would buy fewer and simpler things, and would take trouble in selecting them for their real beauty; being careful of course to get good value in return for his outlay, but preferring to buy a few things made well by highly paid labour rather than many made badly by low paid labour. But we are exceeding the proper scope of the present Book; the discussion of the influence on general well-being which is exerted by the mode in which each individual spends his income is one of the more important of those applications of economic science to the art of living which will find their place at the end of the Treatise.

BOOK IV.

THE AGENTS OF PRODUCTION.

LAND, LABOUR, CAPITAL AND ORGANIZATION.

CHAPTER I.

INTRODUCTORY.

duction.

§ 1. THE agents of production are commonly classed as Land, Labour and Capital. By Land is meant the material and the forces which Nature gives freely for Agents of Proman's aid, in land and water, in air and light and heat. By Capital is meant all stored up provision for the production of material goods, and for the attainment of those benefits which are commonly reckoned as part of income.

Capital consists in a great part of knowledge and organization and of this some part is private property and other part is not. The distinction between the public and private property in knowledge and organization is of great and growing importance in some respects of more importance than that between public and private property in material things: it cannot be fully examined till a much later stage in our inquiry: but something has to be said of it in the present Book. And partly for that reason it seems best sometimes to reckon Organization apart as a separate Agent of Production.

It is not possible at this stage to do more than indicate very slightly the general relations between Demand and Supply, between Consumption and Production. But it may be well, while the discussion of utility and value is fresh in our minds, to take a short glance at the relations between

value and the disutility or discommodity that has to be overcome in order to obtain those goods which have value because they are at once desirable and difficult of attainment.

§ 2. While demand is based on the desire to obtain commodities, supply depends on the overcoming of the unwillingness to undergo "discommodities." These fall generally under one of two classes, labour and the abstinence involved in putting off consumption.

work is the

hope of reward.

It is true that much exertion is undergone for its own At present the sake, as for instance in mountaineering, in playchief motive to ing games and in the pursuit of literature, of art, and of science; and much hard work is done under the influence of a desire to benefit others; and such work has for the greater part no economic measure. But the chief motive to most work, in the present state of the world, is the desire to obtain some material advantage, which often appears in the first instance in the form of the gain of a certain amount of money, or command over commodities in general. Even when a man is working for hire, he often finds pleasure in his work; but he generally gets so far tired before it is done, that he is glad when the hour for stopping arrives. Perhaps after he has been out of work for some time, he might, as far as his immediate comfort is concerned, rather work for nothing than not work at all; but he will probably prefer to store up his strength till he can get paid for his work. In most occupations even that part of the work which affords the worker more pleasure than pain, must as a rule be paid for at the same rate as the rest; the price of the whole therefore is determined by that part of the labour which is most unwillingly given, and which the worker is on the verge of refusing to give; or as we may say Marginal disby the MARGINAL DISUTILITY of labour'.

utility.

1 As with every increase in the amount of a commodity offered for sale its marginal utility falls, and as with every fall in the marginal utility there is a fall in the price that can be got for the whole of the commodity, and not for

The discommodity or disutility of labour may arise from bodily or mental fatigue, or from its being carried on in unhealthy surroundings, or with unwelcome associates, or from its occupying time that is wanted for pastime, or for social or intellectual pursuits. But whatever be the form of the discommodity, its intensity nearly always increases with the severity and the duration of labour; even though at the outset the exertion may have been pleasurable.

supply.

As the price required to attract purchasers for any given amount of a commodity, was called the Demand price for that amount; so the price required to call forth the exertion necessary for producing any given amount of a commodity, may be called the Supply price for that amount. And A simple baif for the moment we assumed that production lance of dedepended solely upon the exertions of a certain mand and number of workers, already in existence and trained for their work, we should get a list of supply prices (a Supply Schedule) corresponding to the list of demand prices (or Demand Schedule) which we have already considered. This list would set forth theoretically in one column of figures various amounts of exertion and therefore of production; and in a parallel column the prices which must be paid to induce the available workers to put forth these amounts of exertion.

§ 3. But this simple method of treating the supply of labour of any kind, and consequently the supply of goods made by that labour, assumes that the number of those who are qualified for it is fixed; and that assumption can be made only for short periods of time. The total numbers of the

the last part only; so it is with regard to the supply of labour. If there is an increase in the amount required of a certain kind of work, and some of it has to be done with greater difficulty, so as to cause a greater disutility, then a higher price must be paid for this; and the price of all the rest of the work will rise at the same time. This surplus price which has to be paid to all the rest of the labour in some respects resembles Rent, as will be more clearly seen hereafter.