1.That many of the 'goods' sold to consumers are inherently destitute of human utility, or, worse, are repositories of disutility; and that money values is no true key to human utility.2.That the amount of utility or welfare to be got out of any goods depends upon the character, the natural or acquired capacity, of the particular consumers or classes of consumers into whose hands they fall.3.That a true economy of consumption, therefore, involves their distribution among consumers in proportion to their capacity to use them for purposes of welfare.It is contended that the went working of our industrial system, on its distributive and consumptive side, makes no reliable provision for securing that the maximum of human utility shall attach to the consumption of the national income.
§7.To test in detail the exact validity of this humanist criticism would require us to examine the costs and the utility, economic and human, represented in each item of all the various supplies of goods and services which constitute the national income.This is manifestly impracticable.
Nor is it necessary for our purpose, which is to establish a sound method of valuation rather than to endeavour to form an exact computation of the values it discloses.With this object in view it will be sufficient to direct our enquiry to the accepted classes or grades of human activities figuring as economic costs, and the corresponding classes or grades of human utilities affected by consumption.
Let us begin with the 'costs' side.
Accepting the general categories of costs of production, as rent, interest and profit, salaries and fees, wages (for all other business 'costs', as for instance, cost of material, machinery, fuel, can be resolved into these), let us consider what is the nature of the human costs for which these payments are made, in the chief orders of industry, and how these human costs are related to the economic costs.
At the outset of this enquiry, however, it will be convenient to eliminate one economic 'cost' of considerable magnitude from our consideration, viz.
economic rent.For, although Nature, or the earth, may in a study of objective industry be regarded as a productive agent, yielding materials, physical energy, and special utilities, this work involves no human effort, and therefore is represented by no human cost.This statement, of course, by no means implies that human foresight and activities play no part in the effective supply of land and other natural resources.Such resources, hitherto existing outside the industrial system, are continually being discovered, brought within reach and developed by human skill and effort, while new or improved uses are continually being obtained from natural resources already within reach.In such processes of discovery and development much capital, ability, and labour, are constantly engaged, the costs of which must be defrayed.Moreover, in certain uses of land for agricultural and other purposes, provision must be made for wear and tear or replacement.
But all such costs or expenses are really payments for the capital and labour employed On this work of development or upkeep.They are not payments for the use of natural resources.They are not economic rent.That business cost has no human cost attached to it.From the standpoint of the manager of a particular business the payment of rent is necessary to enable him to get the use of the land or other natural agent he requires.Where private property in land exists, the payment of such rent is legally necessary.
Where the maintenance of such legal rights has enabled land values to exchange freely with other forms of wealth, a moral expediency may be claimed for the payment of rent.But no human cost corresponds to it.In the organic interpretation of industry, it figures as waste.While, therefore, due account must be taken of this division of wealth or human utilities in any final survey of our social economy, it may be dismissed from our immediate consideration.
§ 8.In order to get a clear understanding of industry regarded from the standpoint of human costs, it will be convenient to fasten our attention first on the structure and working of the single businesses which are the productive units of the system.For the business is a closer, more compact, and more intelligible structure than the trades, markets, or other larger divisions of industry.We shall, therefore, endeavour to analyse the combinations of human effort as they are expressed in the various types of business, so as to discover and to estimate the human costs that are involved.
