Introduction to Economics

John Roscoe Turner

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000696738
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Originally published in 1919, this book is an outgrowth of classroom discussions. It contains in substance the talks on economics which have been made, for the past eleven years, to the author's classes in Cornell and New York Universities. The time has long since passed when a single volume can treat exhaustively the whole field of economics; designed as an introduction, this book will servce as a means to the end of a more intelligent study of economic questions and prepares the mind of the student for the thought contained in the more advanced and specialized works on the subject and the practical applications they reveal.

CHAPTER I
INTRODUCTION: THE BEGINNING OF ECONOMIC INSTITUTIONS

1. The science of economics

2. Requirements of the economist

3. Mistakes in early specialization

4. Principles first, then specialization

5. From objective to subjective control

6. Knowledge is power

7. From physical to mental

8. Three stages of progress

9. The hunter stage

10. The pastoral stage

11. Domestication and indirect production

12. Conflicting interests

13. Pressure and progress

14. Tribal property

15. Variety and trade

16. Self-sufficiency

17. The agricultural stage

18. What the agriculturist must know

19. Three essentials of thrift

20. A settled life

21. Production and civilization

22. Slavery

23. The conclusion

24. From primitive to manoral times

25. Feudalism

26. The manoral system in England

27. Ashley's picture of the eleventh-century manor

28. Tenants

29. Self-sufficiency on manors

30. The relation of property to government

31. Exercises

1. The Science of Economics

Science originates in man's endeavor to answer the eternal question "why." In answer to this question, thinkers are ever on the alert to detect agreements and differences among things. The untutored see a million phenomena, but these in chaotic mass. The scholar sees the same phenomena, but subjects these to law and order. He ties things with like qualities into a bundle by themselves, and this bundle is the subject-matter of a science.

Why are there panics in the business world? Why does the cost of living continue to rise? Why does a movie actor get more for a single performance than a common laborer gets for a year's work? Why is there mutual profit in trading? Why do we have monopolies? and why are some monopoly prices high and others low?

Problems of this sort are legion, but when exposed to examination they are found to exist in causal relationship. They may be tied into one bundle, and they form the subject-matter of one science—the science of Economics.

2. Requirements of the Economist

This group of related thought is subject to scientific classification and inquiry. But the ability to make such classification implies a grasp of the principles which underlie the science. New specimens of animals must remain stray individual curiosities to him who is ignorant of the eight great sub-kingdoms of animals. Likewise, no rigorous classification of the varied business phenomena is possible apart from the fundamental economic laws which these phenomena obey.

The student incapable of comprehending beyond his five senses is advised to let economics alone, for the characteristic feature of this science is the interdependence of its subject-matter. A sixth sense is required, that of the detection of hidden relations. In addition to this sense, the mental equipment of a first-rate economist comprises, first of all, greatness of mind, then breadth of scholarship, and finally the knowledge of application which converts dead facts into quick thought.

3. Mistakes in Early Specialization

The surest road to failure as an economist is for the student to begin with a special branch of the subject and pursue it to the exclusion of other studies. Specialization there must be, but this does not imply ignorance of all excepting one's chosen field. Each separate field of inquiry furnishes its own particular type of training, method of thought, and point of view. The mere specialist, who cannot bring to his aid the assistance of liberal training, can grasp facts but not situations, can solve isolated problems, but cannot deal with them in the broad aspect of their relationships with current economic activities. Like the perverted eye specialist who would prescribe for his patient with a sour stomach a new pair of spectacles, there are narrow specialists in labor, or money, or trusts, who would treat all economic ills from their one limited point of view.

4. Principles First, then Specialization

An economic fact is never an isolated datum; it is always the result of a combination of forces. To think through an economic problem requires mental power sufficient to marshal forces to a common end, and sufficient mental balance to see forces in their proper state of poise, for if any force is not given its due weight, the conclusion will be either only partially correct or wholly wrong. Two separate forces guide the earth around the sun: overemphasis upon the one leads to the conclusion that the earth must fly away into empty space; the direful conclusion from overemphasizing the other must be that the earth will fall into the sun and be consumed in fire. If one treats lightly the power of volitional control and overemphasizes procreation, he must conclude that the growth of population will outstrip the means of subsistence, resulting thus in actual starvation and premature death from disease. If one would approach his specialty in economics with a proper mental poise, he must first put himself in command of the general principles of the science.

5. From Objective to Subjective Control

In his primitive state man, like the animals about him, lived from the gratuitous fruits of nature. He produced no article of food, drink, or clothing, but hunted things and appropriated them. Every step of his progress from savagism to the highest-attained civilization has been marked by improved instrumentalities. Back of all physical developments, however, were his developments in knowledge. In power of body and swiftness of foot, in keenness of scent, taste, hearing, and sight, man is an inferior in the animal world. His power of supremacy is in his power of mind, and as this power is weaker he Is more nearly an animal, and thus more dependent upon the free gifts of nature. As this power is stronger, however, he more and more controls the animals about him, and so directs the laws of nature that they do his bidding.

6. Knowledge is Power

For time out of mind men have seriously debated as to which controls, nature or man. The contenders, pro and con, would have ceased their vain parleys long since, had they paused to define the word "control," for, indeed, the whole contention has been a play upon this one word. Whether man levels obstacles or goes around them is of no consequence; it is enough to know that he is not compelled to suffer them. One argues that man deceives himself in the "magnanimous claim that he conquers nature, for man's part is that of adapting himself to natural forces which he can neither create nor annihilate." The implication is that to conquer is to annihilate. These terms have little in common; the pugilist who lands the knock-out blow conquers, but does not annihilate his adversary. Call it conquer, adaptation, or what not, the issue of importance in man's economic development is this: His knowledge of natural forces is cumulative, and this knowledge is the power which enables him to levy tribute upon nature for the necessities, comforts, and luxuries of life. The peculiarity of a natural law is that it obeys only as it is obeyed. Learning this peculiarity, man in obedience to nature's law, directs her forces to the end of gratifying his desires. In the direction of natural forces, truly "knowledge is power."

7. From Physical to Mental

The knowledge of these forces gives rise to inventions which harness and set them to work. As the artist exhibits his thought on canvas or chisels it in marble, so the scientist exhibits his thought in the form of ingenious devices calculated to make easier the labor of man, and to allot to natural forces a larger share in production. In order of supremacy nature was first, and then man—first the supremacy of objective laws and finally that of subjective laws.

The development of sciences has, with few exceptions, taken precisely the same order—first the objective or physical sciences and then the moral or mental sciences.

During the seventeenth and eighteenth centuries the laws of physical science engrossed the attention of scholars. Thinkers followed a method and point of view which was in strict keeping with the order of thought prevailing in the physical sciences. At this time economics had its beginning, and what could be more natural than that the physical elements of this science should have been vitalized? The mental aspects of the subject were neglected almost as if they were beyond scientific statement, and so vividly were the objective laws painted by the old masters that they came to obsess the economists, and this holds true for many devotees of the subject even in our own time.

As we progress through the following pages, we shall see how mental laws step by step take predominance over physical force, how they motivate all economic activity and direct the operations of all economic forces.

8. Three Stages of Progress

The history of economic progress bears witness to the truth of the above observations. Even prior to authentic history, conjectural study permits this classification of economic progress:

• The hunter stage.
• The pastoral stage.
• The agricultural stage.

9. The hunter stage

sees man, devoid of industrial equipment and ignorant of natural laws, living, as the brute beasts about him, upon such wild fruits, nuts, and animal flesh as he could And and appropriate. He was subject to nature's lottery of weather, be it fair or foul, and enjoyed abundance or suffered want as the seasons varied. From hand to mouth, and from feast to famine, he neither took forethought nor made provision for the morrow. Having no fixed abode, such private property as may have been his was of a movable type, and formed an integral part of his own personality. He had brain for thought but no ideas upon which to build. His single handicap was his want of scientific knowledge, for, had he this, he could have given shape to tools and form to new industries that would have lifted him from the level of the brute beast to the higher plane of human supremacy. Wholly subservient to nature and without vision for the future, he contributes no lesson to the modern science of economics.

10. The Pastoral Stage

Different conjectures have been made as to how or why man came to domesticate animals. The "pet theory" seems to prevail; namely, that some of the savages who caught young animals would prefer to amuse themselves by playing with the captives rather than destroying them for food. This contact between savage and pet enabled the former to learn the value of the latter, enabled him to make selection among animals, retaining the more serviceable, and killing or driving away the objectionable ones. Domestication has long since, even long before the beginning of authentic history, been accomplished. "It is worthy of remark," says Professor Carver, "that our branch of the human race has not reduced a single new animal to domestication since the beginning of recorded history."

11. Domestication and Indirect Production

It little matters how animals came to be domesticated—this much is certain, a long step was made toward civilization when man learned to secure indirectly t...