Economics Volume II: Modern Economic Problems

by Frank A. Fetter

MATERIAL RESOURCES OF THE NATION

§ 1. Politico-economic problems. § 2. American economic problems in the past. § 3. Present-day problems: main subjects. § 4. Attempts to summarize the nation's wealth. § 5. Average wealth and the problem of distribution. § 6. Changes in the price-standard. § 7. A sum of capital, not of wealth. § 8. Sources of food supply. § 9. The sources of heat, light, and power. § 10. Transportation agencies. § 11. Raw materials for clothing, shelter, machinery, etc.

§ 1. #Politico-economic problems.# The word "problem" is often on our tongues. Life itself is and always has been a problem. In every time and place in the world there have been questions of industrial policy that challenged men for an answer, and new and puzzling social problems that called for a solution. And yet, when institutions, beliefs, and industrial processes were changing slowly from one generation to another and men's lives were ruled by tradition, authority, and custom, few problems of social organization forced themselves upon attention, and the immediate struggle for existence absorbed the energies and the interests of men. But our time of rapid change seems to be peculiarly the age of problems. The movement of the world has been more rapid in the last century than ever before—in population, in natural science, in invention, in the changes of political and economic institutions; in intellectual, religious, moral, and social opinions and beliefs.

Some human problems are for the individual to solve, as, whether it is better to go to school or to go to work, to choose this occupation or that, to emigrate or to stay at home. Other problems of wider bearing concern the whole family group; others, still wider, concern the local community, the state, or the nation. In each of these there are more or less mingled economic, political and ethical aspects. Economics in the broad sense includes the problems of individual economy, of domestic economy, of corporate economy, and of national economy. In this volume, however, we are to approach the subject from the public point of view, to consider primarily the problems of "political economy," considering the private, domestic, and corporate problems only insomuch as they are connected with those of the nation or of the community as a whole. Our field comprises the problems of national wealth and of communal welfare.

What then are our politico-economic problems in America? They are problems that are economic in nature because they concern the way that wealth shall be used and that citizens are enabled to make a living; but that are likewise political, because they can be solved only collectively by political action.

§ 2. #American economic problems in the past.# With the first settlements of colonists on this continent politico-economic problems appeared. Take, for example, the land policy. Each group of colonists and each proprietary landholder had to adopt some method of land tenure whether by free grant or by sale of separate holdings or by leasing to settlers. In one way and another these questions were answered, but rapidly changing conditions soon forced upon men the reconsideration of the problem as the old solution ceased to be satisfactory.

In large part our political history is but the reflection of the economic motives and economic changes in the national life. Thus the American Revolution arose out of resistance to England's trade regulations, commercial restrictions, and attempted taxation of the colonies. The War of 1812 was brought on by interference with American commerce on the high seas. The Mexican War was the result of the colonization of Texan territory by American settlers and the desire of powerful interests to extend the area of land open to slavery. The Civil War arose more immediately out of a difference of opinion as to the rights of states to be supreme in certain fields of legislation, but back of this political issue was the economic problem of slave labor. Illustrations of this kind, which may be indefinitely multiplied, do not prove that the material, economic changes are the cause of all other changes, political, scientific, and ethical; for in many cases the economic changes themselves appear to be the results of changes of the other kinds. There is a constant action and reaction between economic forces and other forces and interests in human society, and the needs of economic adjustment are constantly changing in nature.

§ 3. #Present-day problems: main subjects#. The particular economic problems in America at this time are determined by the whole complex economic and social situation. Two main factors in this may be distinguished: the objective and the subjective, or the material environment and the population composing the nation. The one is what we have, the other is what we are, as a people. These factors are closely related; for what we are as a people (our tastes, interests, capacities, achievements) depends largely on what we have, and what we have (our wealth and incomes) depends largely on what we are. We may consider the following phases; the first two of the objective factor, and the last two of the subjective factor.

(a) The basic material resources, consisting of the materials of the earth's surface and the natural climatic conditions which together provide the physical conditions necessary for human existence, and which furnish the stuff out of which men can create new forms of wealth.

(b) The industrial equipment, consisting of all those artificial adaptations and improvements of the original resources by which men fit nature better to do their will. These two (a and b) become more and more difficult to distinguish in settled and civilized communities, and become blended into one mass of valuable objects, the wealth of the nation.