[Sidenote: Exhaustion of certain natural resources]

1. _Present industrial progress is largely due to material conditions, temporarily favorable._ Many of the materials now being destroyed in immense quant.i.ties have been slowly stored up through the ages and are not renewable.[4] Till modern times man knew little of the world beneath its crust. Living, he scratched the earth's surface, and dying, left his bones to fertilize the soil. But to-day, man exhausts the stores in the interior of the earth, burns the treasures of the carboniferous age, casts the fertilizing elements into the ocean, and leaves the world an empty sh.e.l.l. Forests are being so rapidly cut off that the price of fuel-wood and lumber in many parts of the United States has, within twenty years, been multiplied by three. The world's store of iron ore is not yet fully known, but much of it has been measured, and of the deposits known to be within the United States over one half are said to be owned by one corporation, and they are enough to continue its present output no more than sixty years. Many other natural products are in like manner gathered by civilized man from a stock created long ago. While the supply of vegetable food promises to be ample, the supply of meat will be maintained with difficulty as population becomes denser.

[Footnote 4: Though at first glance this may seem contradictory to the statement in the foregoing paragraph regarding the nature of supply, it will not be found so on closer examination.]

[Sidenote: Possibilities of other resources]

2. _Many other inexhaustible sources of essential materials have not yet been developed._ What has just been said is the darker side. The coal-mines can be emptied, but so long as the sun shines and the rains fall, Niagara will remain as a source of light, heat, and power. The tides flow on forever. In every thunder-storm enough force is dissipated to run thousands of factories. The heat in the center of the globe, though not inexhaustible, would suffice for man's needs for many centuries. The force in Mount Pelee, if chained and utilized, would run a million factories a million years. It is not too much to hope that engineering skill will some day reach and utilize these sources. Such a cheapening and diffusion of power would put a new face on many of the problems of industry. New sources of materials undoubtedly will be developed. It is reasonable to hope that before iron ore has become extremely scarce, a cheap and practicable method of extracting aluminium from clay will have been perfected. Secure of these permanent sources, civilization will stand on a firmer foundation.

[Sidenote: Effect on values of shifting centers of power and materials]

A great displacement of local values must accompany this shifting of the centers of power and materials. When the coal districts are heaps of slag and cinders, industry will be found near the water-power. Because of distance from raw materials, New England even now finds herself hard pushed in her rivalry with the Southern states in the manufacture of textiles. The industrial map of our country will be greatly altered a hundred years hence. The possession of rich natural resources to-day does not insure a community enduring prosperity.

[Sidenote: Effect of acc.u.mulating wealth]

3. _The ma.s.s and quality of wealth will increase rapidly if social and political conditions remain stable._ The main method of increasing wealth must be the putting of energies and resources into more abiding forms. In order that a motive for saving may be present, there must be stable conditions. Increasing subordination of present to future will be accompanied by a fall in the rate of interest. The growth of wealth means a higher quality of all artificial productive agents. A larger part of the energies of men will then be directed merely to supervising the developed machinery. Man will live in a better environment, in a better and richer world. Wages must rise as the quality of tools and machinery improves. Population most probably will not increase proportionately and the relation of the labor-supply to the resources with which it works should be more and more in favor of the laboring cla.s.ses. The difficult problems of the concentrated control of industry and of the control of wealth must be solved in the interests of all.

[Sidenote: Social progress vs. race progress]

4. _Improvement of the race biologically, through selection of the ablest individuals, has been a great factor in human progress._ Social progress is not necessarily the steady biological betterment of the native ability of men. The education of the average member of society is becoming yearly better; it is doubtful whether the innate capacity of a new-born babe in Europe and America to-day is greater than it was among our Germanic ancestors in Roman times. Indeed, the progress of the past two thousand years has been in social organization, in the enlargement and simplifying of the ma.s.s of knowledge which has to be reappropriated by each new individual, rather than in race-breeding and in quality.

[Sidenote: Nature vs. culture]

Few thoughtful persons now hold the view that the race can be rapidly improved biologically by the process of educating the individual.

Education is c.u.mulative in so far as it builds up a better environment into which other children will be born, but the betterment is not due to the inheritance by the child of the acquired knowledge and skill of the parent. If this question is open to dispute among biologists, it is only as regards a minute increment of improvement. Practically, selection is the only means of improving the innate capacity of any species in any large measure. Many forces were at work in the past to lift man above the brute, and especially to increase the average brain-power of the human race. The weak, the ignorant, the incapable in primitive societies were ruthlessly killed off. The strong, the sagacious, and the enterprising left the largest numbers of descendants.

[Sidenote: Decrease of the successful elements]

5. _Progress will be checked if the native quality of the race declines._ Under modern conditions, especially within the last quarter of a century, the successful elements of society are becoming less fertile. Large families were the rule among the capable pioneers of America; now they are rare except in the lower industrial ranks.

Democracy and opportunity are favoring this process of increasing the mediocre and reducing the excellent strains of stock. Caste and status kept successful generations of capable men in humble social ranks from which only by chance some remarkable individual could rise. In a democracy, those of marked ability can more easily move into the better-paid callings and professions. This individual good fortune, however, reduces the probability of offspring. In the higher social ranks are more bachelors and old maids than in the lower ranks, and fewer children are born to each marriage. The president of our oldest university has shown that one fourth of the graduates of the last generation have remained single, and that the average number of children of the married graduate is two. That group of men, therefore, has left only three fourths enough descendants to maintain its numbers, and as the population has doubled within the same generation, that cla.s.s represents only three eighths as large a proportion of the American stock as formerly.

[Sidenote: The menace to progress]

This sterilization of ability has c.u.mulative results. If society were composed in equal parts of two distinct strains of stock, not intermarrying; if the total population kept intact from one generation to another (say each period of thirty years), but the superior strain contributed only three fourths of its own number, at the end of five generations it would have sunk from one half to a little more than one eighth of the population. A period brief in the life of nations would serve to leave it an almost negligible factor in social life. There can hardly be a doubt that at present our society is on the average increasing far more from the less provident, less enterprising, less intelligent cla.s.ses. There has not yet been time for many of the c.u.mulative effects of this process to appear. Progress is threatened unless social inst.i.tutions can be so adjusted as to reverse the present process of multiplying the poorest, and of extinguishing the most capable families.

[Sidenote: Sympathy and selfishness in relation to progress]

6. _If progress is to continue, there must be left a wide field for the ambitions and for the compet.i.tion of individuals._ The results of any given ability are dependent upon the energy with which it is used. The social machinery finds its motive force in the nature of men. In taking economic wants as the starting point of our study, it was not implied that men were entirely selfish. Sympathy widens; economic wants include family, friends, and, in a growing measure, humanity. The happiness of a truly socialized man consists in part in the happiness of his fellows.

As social sympathy broadens, the sense of duty becomes a stronger economic force. Men change, but not rapidly, and not always for the better. It is unsafe to overestimate the generosity of men. Individual wants and interests must, so far as can now be seen, continue to be among the stronger forces that move society. Progress is made because to exceptional ability in general is now presented the hope of large rewards.

[Sidenote: Status endangering progress]

[Sidenote: Envy endangering progress]

These dynamic forces making for progress are at present, however, threatened from two sides. Enterprise is threatened from the side of privilege or status. The avoidance of certain kinds of work which, by social convention, come to be regarded as degrading, takes much ability out of business. The freedom of America to so great a degree from this disdain of honest labor has been a large factor in her progress, but it is endangered when men become timidly conservative of social position.

Progress is threatened, secondly, by democracy, with its tendency to carry the notion of literal equality over into industry. When democracy becomes envious, it denies to exceptional ability an exceptional reward.

The line of growth must be the resultant of the positive forces in these two principles. The energy of the social reformer must be directed along rational lines. If this can be done, the economic outlook is for a great development of wealth and popular welfare. Economics must be looked upon as the study of the forces in human nature as much as of the material resources of the world.

QUESTIONS AND CRITICAL NOTES

THE QUESTIONS.--These questions are not intended to be used merely as tests of knowledge of the text. They leave untouched many of the most important questions in the reading, and they raise other inquiries hardly hinted at in it. The list began ten years ago with one or two questions on each topic, a.s.signed in advance of lectures and recitations, with the object of arousing the student's thought, quickening his observation, and stimulating his interest in the subjects. The possibilities of helpful questions of this kind are hardly more than suggested by the examples given, and every teacher will find peculiar opportunities in his own neighborhood for other similar inquiries.

Other questions are more of the nature of those in _Problems in Political Economy_, by W. G. Sumner (published by Holt & Co., New York, 1884), which are intended to be reasoned out in the light of principles given in the cla.s.s-room. Many teachers and students have found much help in that little book, which in turn acknowledges large obligations to earlier lists of questions. The changed point of view in economic theory has, however, made most of the older problems of this nature unusable except after reformulation. Fertile in suggestions of both of the kinds of questions mentioned are two books by H. J. Davenport, _Outlines of Economic Theory_ and _Outlines of Elementary Economics_ (The Macmillan Co., New York, 1896 and 1897), though some of the questions imply theoretical views differing from those of this book. Excellent lists of questions with references to reading have been prepared by W. G. L.

Taylor, in his _Exercises in Economics_ (The University Publishing Co., Lincoln, Neb., 1900). The list of problems of this kind can easily be extended to meet the special conditions of each community.

THE BIBLIOGRAPHICAL NOTES.--The few references and critical notes given are intended as a help to teachers and advanced students desirous of following some of the more recent contributions to controverted points in economic theory. No attempt has been made to furnish a list of books for the beginner or the regular reader. Among accessible books containing helpful lists of that kind may be mentioned:

_The Reader's Guide in Economic, Social, and Political Science_, by Bowker and Iles.

_Outlines of Economics_, by R. T. Ely (published by Macmillan, New York, 2d ed., 1900). Contains both questions and bibliographies.

_Introduction to the Study of Economics_, by C. J. Bullock (published by Silver, Burdett & Co., 2d ed., 1900). The references to the literature are given by pages or sections at the end of each chapter, and at the back is a list (about twenty pages) of the most useful texts, doc.u.ments, and materials.

_Financial History of the United States_, by D. R. Dewey (published by Longmans, Green & Co., 1903). Contains excellent references on public finances, tariff, banking, and taxation of the United States.

_Introduction to Economics_, by H. R. Seager (published by Holt & Co., New York, 1903). Each of the first twenty-six chapters is followed by fresh and well-selected references varying from one line to nearly a page in length. A good general bibliographical note is given on pp.

61-2.

CHAPTER 1. THE NATURE AND PURPOSE OF POLITICAL ECONOMY

1. Has political economy anything to do with woman suffrage, the liquor problem, a republican _vs._ a monarchical form of government, the silver question?

2. Is political economy a study of things or of men?

3. Shall a piece of coal be studied in geology, botany, physics, chemistry, or economics?

4. Do you expect to acquire wealth more easily as a result of the study of political economy?

5. Of what practical use do you think political economy is?

6. Is political economy necessary to the understanding of the business world, or vice versa?

7. How wide a knowledge would a complete understanding of industrial society require?

8. Did the discovery of America make the study of political economy more important?

CHAPTER 2. THE ECONOMIC MOTIVES

1. If you found $10 to-day on the street, what would you do with it?

2. What would be the chief differences between your use of it now and at the age of five or the age of twelve?