Wednesday, September 19, 2012

The relationship between economic and non-economic goods



Principles of Economics



In the preceding section I have described the every-day phenomena that result from the fact that requirements for certain goods are larger than their available quantities. I shall now demonstrate the phenomena arising from the opposite relationship—that is, as a consequence of a relationship in which the requirements of men for a good are smaller than the quantity of it available to them.
The first result of this relationship is that men not only know that the satisfaction of all their needs for such goods is completely assured, but know also that they will be incapable of exhausting the whole available quantity of such goods for the satisfaction of these needs.
Suppose that a village is dependent for water on a mountain stream with a normal flow of 200,000 pails of water a day. When there are rainstorms, however, and in the spring, when the snow melts on the mountains, the flow rises to 300,000 pails. In times of greatest drought it falls to but 100,000 pails of water daily. Suppose further that the inhabitants of the village, for drinking and other uses, usually need 200, and at the most 300, pails daily for the complete satisfaction of their needs. Their highest requirement of 300 pails is in contrast with an available minimum of at least 100,000 pails per day. In this and in every other case where a quantitative relationship of this kind is found, it is clear not only that the satisfaction of all needs for the good in question is assured, but also that the economizing individuals will be able to utilize the available quantity only partially for the satisfaction of their needs. It is evident also that partial quantities of these goods may be removed from their disposal, or may lose their useful properties, without any resultant diminution in the satisfaction of their needs, provided only that the aforementioned quantitative relationship is not thereby reversed. As a result, economizing men are under no practical necessity of either preserving every unit of such goods at their command or conserving its useful properties.
Nor can the third and fourth of the above-described phenomena of human economic activity be observed in the case of goods whose available quantities exceed requirements for them. If such a relationship should exist, what sense would there be in any attempt to make a choice between needs that men should satisfy with the available quantity and needs that they will resign themselves to leaving unsatisfied, when they are unable to exhaust the whole quantity available to them even with the most complete satisfaction of all their needs? And what could move men to achieve the greatest possible result with each quantity of such goods, and any given result with the least possible quantity?
It is clear, accordingly, that all the various forms in which human economic activity expresses itself are absent in the case of goods whose available quantities are larger than the requirements for them, just as naturally as they will necessarily be present in the case of goods subject to the opposite quantitative relationship. Hence they are not objects of human economy, and for this reason we call them non-economic goods.
To this point we have considered the relationship underlying the non-economic character of goods in a general way—that is, without regard to the present social organization of men. There remains only the task of indicating the special social phenomena that result from this quantitative relationship.
As we have seen, the effort of individual members of a society to attain command of quantities of goods adequate for their needs to the exclusion of all other members has its origin in the fact that the quantity of certain goods available to society is smaller than the requirements for them. Since it is therefore impossible, when such a relationship exists, to meet the requirements of all individuals completely, each individual feels prompted to meet his own requirements to the exclusion of all other economizing individuals. Thus, when all the members of a society compete for a given quantity of goods that is insufficient, under any circumstances, to satisfy completely all the needs of the various individuals, a practical solution to this conflict of interests is, as we have seen, only conceivable if the various portions of the whole amount at the disposal of society pass into the possession of some of the economizing individuals, and if these individuals are protected by society in their possession to the exclusion of all other individuals in the economy.
The situation with respect to goods that do not have economic character is profoundly different. Here the quantities of goods at the disposal of society are larger than its requirements, with the result that all individuals are able to satisfy their respective needs completely, and portions of the available amount of goods remain unused because they are useless for the satisfaction of human needs. Under such circumstances, there is no practical necessity for any individual to secure a part of the whole sufficient to meet his requirements, since the mere recognition of the quantitative relationship responsible for the non-economic character of the goods in question gives him sufficient assurance that, even if all other members of society completely meet their requirements for these goods, more than sufficient quantities will still remain for him to satisfy his needs.
As experience teaches, the efforts of single individuals in society are therefore not directed to securing possession of quantities of non-economic goods for the satisfaction of their own individual needs to the exclusion of other individuals. These goods are therefore neither objects of economy nor objects of the human desire for property. On the contrary, we can actually observe a picture of communism with respect to all goods standing in the relationship causing non-economic character; for men are communists whenever possible under existing natural conditions. In towns situated on rivers with more water than is wanted by the inhabitants for the satisfaction of their needs, everyone goes to the river to draw any desired quantity of water. In virgin forests, everyone fetches unhindered the quantity of timber he needs. And everyone admits as much light and air into his house as he thinks proper. This communism is as naturally founded upon a non-economic relationship as property is founded upon one that is economic.  Hence they are not objects of human economy, and for this reason we call them non-economic goods.
To this point we have considered the relationship underlying the non-economic character of goods in a general way—that is, without regard to the present social organization of men. There remains only the task of indicating the special social phenomena that result from this quantitative relationship.
As we have seen, the effort of individual members of a society to attain command of quantities of goods adequate for their needs to the exclusion of all other members has its origin in the fact that the quantity of certain goods available to society is smaller than the requirements for them. Since it is therefore impossible, when such a relationship exists, to meet the requirements of all individuals completely, each individual feels prompted to meet his own requirements to the exclusion of all other economizing individuals. Thus, when all the members of a society compete for a given quantity of goods that is insufficient, under any circumstances, to satisfy completely all the needs of the various individuals, a practical solution to this conflict of interests is, as we have seen, only conceivable if the various portions of the whole amount at the disposal of society pass into the possession of some of the economizing individuals, and if these individuals are protected by society in their possession to the exclusion of all other individuals in the economy.
The situation with respect to goods that do not have economic character is profoundly different. Here the quantities of goods at the disposal of society are larger than its requirements, with the result that all individuals are able to satisfy their respective needs completely, and portions of the available amount of goods remain unused because they are useless for the satisfaction of human needs. Under such circumstances, there is no practical necessity for any individual to secure a part of the whole sufficient to meet his requirements, since the mere recognition of the quantitative relationship responsible for the non-economic character of the goods in question gives him sufficient assurance that, even if all other members of society completely meet their requirements for these goods, more than sufficient quantities will still remain for him to satisfy his needs.
As experience teaches, the efforts of single individuals in society are therefore not directed to securing possession of quantities of non-economic goods for the satisfaction of their own individual needs to the exclusion of other individuals. These goods are therefore neither objects of economy nor objects of the human desire for property. On the contrary, we can actually observe a picture of communism with respect to all goods standing in the relationship causing non-economic character; for men are communists whenever possible under existing natural conditions. In towns situated on rivers with more water than is wanted by the inhabitants for the satisfaction of their needs, everyone goes to the river to draw any desired quantity of water. In virgin forests, everyone fetches unhindered the quantity of timber he needs. And everyone admits as much light and air into his house as he thinks proper. This communism is as naturally founded upon a non-economic relationship as property is founded upon one that is economic.







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