The following chart classifies about every kind of wealth that man requires,
and also "personal services," which, though as useful as wealth,
do not crystallize in material products — such services as those of
lawyers, barbers, doctors, teachers, actors, and so on: [chart]
The circle of variegated colors represents the commercial
reservoir into which Wealth is poured by
production, and from which it is drawn for consumption,
each color typifying the
kind of wealth or service
named in it. Now, let us suppose that
Personal Servants tap the commercial
reservoir
for
food.70
They do it by applying
at retail stores for what will relieve their
poverty as to food, and food
flows out to them" as
indicated by the blue arrow,
which we now insert in the chart: [chart]
Let us now complete this chart. When we began it a distinction was noted
between Personal Servants, who render mere intangible services, and the other
classes, who produce tangible wealth. But essentially there is no difference.
By referring to the chart and observing the course of the arrows, Food-makers
are seen working for Personal Servants precisely as Personal Servants work
for Luxury-makers. We may therefore abandon the distinction. This makes it
no longer necessary to mention particular classes of products in the chart;
it is enough to distinguish the different kinds of labor.76 Thus: [chart]
76. "This, then, we may say is the great law which binds society — 'service
for service.' "— Dick's Outlines, p. 9.
For simplicity the workers have been divided into great classes, and each
class has been supposed to serve only one other class. But the actual currents
of trade are much more complex. It would be practically impossible to follow
them in detail, or to illustrate their particular movements in any simple
way. And it is unnecessary. The principle illustrated in the chart is the
principle of all division of labor and trade, however minute the details
and intricate the movement; and any person of ordinary intelligence who wishes
to understand will need only to grasp the principle as illustrated by the
chart to be able to apply it to the experiences of everyday industrial life.
All legitimate trade is the interchange of Labor for Labor.77
77. In the light of this principle how absurd are some of the explanations
of hard times.
Overproduction! when an infinite variety of wants are
unsatisfied which those who are in want are anxious and able to satisfy
for one another.
Hatters want bread, and bakers want hats, and farmers want both, and they
all want
machines, and machinists want bread and hats and machines, and so on
without end. Yet while men are against their will in partial or complete
idleness,
their wants go unsatisfied! Since producers are also consumers, and production
is governed by demand for consumption, there can be no real overproduction
until demand ceases. The apparent overproduction which we see — overproduction
relatively to "effective demand" — is in fact a congestion
of some things due to an abnormal underproduction of other things, the
underproduction being caused by obstructions in the way of labor.
Scarcity of capital! when makers of capital in all its forms are involuntarily
idle. Scarcity of capital, like scarcity of money, is only an expression
for lack of employment. But why should there be any lack of employment while
men have unsatisfied wants which they can reciprocally satisfy?
Too much competition! when competition and freedom are the same. It is not
freedom but restraint, not competition but protection, that obstructs the
action and reaction of demand and supply which we have illustrated in the
chart.
... read the book