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What are the reasons for differences in cost? Have wages risen and fallen in proportion to prices P In an automobile factory in Detroit there is a minimum wage of $5 a day. If this wage is higher than the average in other competing factories in Detroit, what will be the effect upon them 2 If wages are higher in the automobile factories of Detroit than in those of Toledo, what will be the result, (a) upon labor, (b) upon the cost of production? What is a luxury P. May luxuries ever be defended ? Is a luxury for one person always a luxury for another? Illustrate this by some examples. Show that luxury does not increase the demand for labor. What effect has luxury upon the demand for labor? Arrange a minimum-comfort budget for a family of five in your community, the family consisting of a man and his wife, a boy in high school, a girl of twelve, and a boy of five years of age. Does it require a larger income to live in comfort now than when your father was a boy? Why? Do you spend more money than he did P Do you have a better time than he did? Does he think so? What items of expense are greater in the country than in the city? What articles cost less in the city? Show the relative advantages of country and city life. Show why you favor or oppose minimum-wage laws. Find the opinion of local labor leaders on minimum-wage laws.

CHAPTER V

THE PRODUCTION OF WEALTH

Nature of Production.—Man cannot increase the material matter of the earth. He can, however, so change material things as to enable them to satisfy human wants. This process of changing things is the production of wealth. A large part of the production of wealth consists of putting things into a form in which they will satisfy human wants. This is known to the economist as the creating of form utility. Manufacturing is the creation of form utility. Iron ore satisfies no human want, but commodities which satisfy wants may be made from it. Putting goods in the place in which they may satisfy a human want is another process in the production of wealth. This is called place utility. Transportation agencies of all kinds furnish place utility.

A third variety of utility is time utility, which is created by those who furnish the goods at the time they are wanted. All stores and storage agencies furnish time utilities. Before most goods are ready for use, various agencies have contributed form, place, and time utilities. For example, a sheet of ice covering a Maine lake in February would not render an economic service. Men who cut the ice into cakes of convenient size for transportation produce form utility, the storage-house which keeps the ice until summer creates time utility, and the various agencies which place it where it can be used produce place utility. Since it is evident that goods in the possession of the consumer have a greater value than before they reach the consumer, we may use the term possession utility as applying to this increased utility, and all agencies which contribute to possession utility are productive. Personal Services.—Not only are economic services rendered by those who are concerned in the production of material things, but also by those who produce utilities of a non-material nature. John Stuart Mill divided people into two classes, producers and non-producers, and to the latter class he consigned those who rendered personal services. However, personal services satisfy human wants of a very intense nature and those who render such services are producers of utilities. For example, a dentist, when he extracts an ulcerated tooth, renders a service much to be desired and indirectly he aids the production of material things, inasmuch as he puts the laborer upon whom he operates in a condition to produce material commodities. Likewise lawyers, physicians, teachers, clergymen, actors, servants, and all others who render personal services, produce utilities which satisfy human wants, and each of them, in one way or another, indirectly aids in the production of material goods. Non-Producers.-Unfortunately every community has its idle classes, those of an age at which they should be producers who are simply living at the expense of others. This class does not include those who are still completing their education, or those who have retired from active service, having earned a rest after years of toil. Economics has been called the glorification of labor, and to the economist the idle rich and the idle poor alike stand condemned, if they can work and refuse to do so. No honest labor is degrading in the eyes of the economist, and every loafer, whether rich or poor, is a parasite. Mere acquisition of wealth does not mean production; wealth may be obtained by fraud, theft, or gambling, but such acquisition is without the rendering of useful service or production of utility. Economic progress largely consists in increasing the per-capita production of wealth, as it is obvious that the more goods produced, the more will be available for consumption. Factors in the Production of Wealth.-Three things are essential in all modern production of wealth. These are nature (some economists say land), labor, and capital. Nature and labor are original factors, but capital—being itself produced by nature and labor—is a derived factor. Nature.-The various powers of nature, such as the expansive power of steam, the force of gravity, the power of electricity, the force of the winds, and many others, are used in the production of wealth. Rivers, lakes, and oceans furnish means of transportation and supply opportunities for securing fish, seals, sponges, and other material. Most important among the contributions of nature is land. The most obvious contribution of land is standing room to support people, plants, animals, and buildings. Mere standing room is not enough to make land valuable, as deserts and waste places furnish that in abundance. Minerals, upon or under the surface, are a most important contribution of land. Situation, which makes land available, is always an important element. Coal deposits in Pennsylvania are much more useful than in Alaska, because they are easily sent to market, can be worked throughout the year, and labor is obtainable in sufficient amount. Situation sometimes alone would make land valuable, as is the case in regard to city land, where fertility is of no importance. Fertility of the soil and location are both elements of importance in agriculture. Land as Property.—In a primitive society land is seldom private property; it belongs to the tribe collectively. Men in such a condition of society obtain their living chiefly by hunting and fishing and gathering the wild fruits and nuts, but as animals and plants become domesticated and population increases, much of the land becomes private property. The waters of rivers, lakes, and oceans are not usually appropriated by individuals, though inland waters and waters of oceans within a three-mile limit, as well as enclosed bays, are regarded as national waters. The Influence of the Land upon the People.—A population will generally devote itself to that kind of industry for which the country which it inhabits is suitable. Wellwooded country will support a lumbering industry, at least until the trees are cut. Some lands are worthless for agriculture but valuable for ore; some are suitable for vineyards but worthless for cotton. In case lands may be used for various purposes, the industry which produces the largest return in value of products will be the one to which the population sooner or later will resort. Increase in Land.—The area of the earth cannot be increased, but it is possible to increase the useful area. The man who drains a swamp, clears the stone from a field, or makes fertile a barren piece of land increases the available land. Through the Reclamation Service of the Department of

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