Nowanorganicinterpretationofindustrycannotacceptthismodeofconceivingtheproductiveandconsumptivefunctions。Considerationsoftheorganicoriginsofindustrylendnosupporttotheassumptionthatproductionisall'cost'andno'utility，'consumptionall'utility'andno'cost'。Onthecontrary，inourhumananalysisofeconomicprocessesweshallratherexpecttofindcostsandutilities，alikeintheirsenseofpainsandpleasuresandoforganiclossesandorganicgains，commingledinvariousdegreesinallproductiveandconsumptiveprocesses。

Ouraimwillbetosetout，aswellaswecan，reliablerulesforexaminingtheproductiveandconsumptivehistoryofthevarioussortsofconcretemarketablegoodssoastodiscoverthehumanelementsofcostandutilitycontainedineach，andbyacomputationofthesepositivesandnegativestoreachsomeestimateoftheaggregatehumanvaluecontainedintheseveralsortsofcommoditieswhichformtheconcreteincomeofthenationandinthisincomeasawhole。Onlybysomesuchprocessisitpossibletoreachaknowledgeoftherealwealthofnations。

Wemaystatetheproblemprovisionallyinthreequestions:

1。Whataretheconcretegoodsandserviceswhichconstitutetherealnationalincome？

2。Howarethesegoodsproduced？

3。Howaretheyconsumed？

Butintruththeconsiderationoftheso-called'concrete'natureofthesegoodsisasirrelevanttoouranalysisasthatofthemoneyticketplacedonthem。Forfromthestandpointofwelfarethesegoodsarenothingbuttheactivitiesofthosewhoproduceandconsumethem，or，ifitbepreferred，thehumanprocessesofproductionandconsumption。Thehumanmeaningofanygivenstockofwheatinournationalsupplywillconsistoftheeffortsofbodyandmind，thethoughtanddesireanddirectedskill，putintotheseveralprocessesofpreparingthesoil，sowing，tending，reapingandmarketingthewheat，undergonebythefarmerinManitobaorinNorfolk，themerchant，shipper，miller，bakerwhoconveyitfromthefarmandconvertitintobread，andfinallytheactivitiesofmastication，digestionandassimilationwiththeaccompanyingsatisfactionasitpassesintothephysicalsystemoftheconsumer。Andsowitheveryothersortofconcretemarketablegoodsorservices。Fromthestandpointofhumanvalue，theyarewhollyresolvableintothephysicalandmentalactivitiesandfeelingsofthehumanbeingswhoproduceandconsumethem。Itisthebalanceofthedesirableovertheundesirableintheseseveralactivitiesandfeelingsthatconstitutesthehumanvalueofanystockofmarketablegoods。Thestandardofdesirabilitywillbetheconceptionoftheorganicwellbeingofthesocietytowhichtheindividualswhoseactivitiesandfeelingsareconcernedbelong。

Ortheseveralstagesofinterpretationmaybeexpressedasfollows。

Agivenmoneyincomemustfirstberesolvedintotheconcretegoodswhichitexpresses:thosegoodsmustthenberesolvedintothevariouseffortsofproductionandsatisfactionsofconsumption，estimatedaccordingtothecurrentideasanddesiresoftheindividualswhoexperiencethem。thesecurrentindividualestatesofthedesirablemustbeadjustedbyreferencetoanidealstandardofthesociallydesirable。Theextentofthislatterprocessofadjustmentwill，ofcourse，dependuponhowfartheactualcurrentideasandfeelingsofindividualsarekeptinessentialharmonywiththetruestandardofsocialwell-beingbythenaturalevolutionofanorganicsociety。

&sect；6。Ourtaskinseekingtodeviseamethodforthehumaninterpretationorvaluationofindustryconsiststheninconfrontingthegoodswhichformthenetconsumableincomeofthecommunity，andinfindinganswerstothetworelatedquestions:

Whatarethenethumancostsinvolvedintheirproduction？

Whatarethenethumanutilitiesinvolvedintheirconsumption？

Asimplesuminsubtractionshouldthengiveustheresultweseek——sofarasanysuchquantitativecalculusisvalidandfeasible。5

Nowthougheconomists，ofcourse，arewellawarethatmanyoftheprocessesofproductioncontainelementsofpleasureandutilitytotheproducers，whilesomeoftheprocessesofconsumptioncontainelementsofpainandcosttotheconsumers，theyhave，rightlyfromtheirstandpoint，ignoredthesequalificationsintheirgeneralformulae，andhaverepresented'goods'

fromtheproducer'ssideasconsistingentirelyofaccumulatedcosts，whilefromtheconsumer'ssidetheyconstitutepureutility。Thoughourbriefpreliminarysurveyoftheoriginsofindustryindicatesthatnosuchsharpdistinctionbetweenproductionandconsumptioncanultimatelybemaintained，andthatthroughoutthewholecontinuouscareerofgoodsfromcradletogravetheactivitiesbestowedonthemarecompositesofpleasureandpain，costandutility，organicgainandorganicloss，sociallydesirableandsociallyundesirable，itwillbeexpedienttotakeourstartfromthecommonly-acceptedeconomicposition，andtogiveseparateconsiderationtothehumanvaluesunderlyingprocessesofproductionontheonehand，processesofconsumptionontheother。

Thegenerallinesalongwhichsuchaninvestigationmustproceedareunmistakable。

Inordertoexpressbusiness'costs'intermsofhumancost，werequiretoknowthreethings:

1。Thequalityandkindofthevarioushumaneffortsinvolvedinthebusiness'cost'。

2。Thecapacitiesofthehumanbeingswhogiveouttheseefforts。

3。Thedistributionoftheeffortamongthosewhogiveitout。

Correspondingstrictlytothisanalysisof'costs'ofProductionwillbetheanalysisof'utility'ofConsumption。Thereweshallwanttoknow:

1。Thequalityandkindofthesatisfactionorutilityyieldedbythe'economicutility'thatissoldtoconsumers。

2。Thecapacitiesoftheconsumerswhogetthis'economicutility'。

3。Thedistributionoftheeconomicutilityamongtheconsumingpublic。

Thehumanistcriticismofindustryiscondensedintothisanalysis。

Thehumanistrequiresthattheeffortexpendedonanysortofproductionshallbesuchastocontainaminimumofpainfulorinjuriousorotherwiseundesirableactivity。Hiscomplaintisthatindustry，asactuallyorganisedandoperatedunderasystemwhichtreatsallformsofproductivehumaneffortasmarketablegoods，doesnotsecurethishumaneconomy。Thehumanistrequiresthatthepersonssettogiveoutundesirableeffort，'humancost'，shallbethosebestcapableofsustainingthisloss。Weakwomenorchildren，forexample，shallnotbesettodoworkheavyordangerousinitsincidence，whenstrongmenareavailablewhocoulddoiteasilyandsafely。Thehumanistrequiresthatundesirableorhumanlycostlyworkshallnotmerelybeconfinedtoclassesofpersonscapableofperformingitmosteasilyandsafely，butthatthedistributionofsucheffortshall，asregardslengthoftimeandintensityofpace，besuchastoreducethehumancostperunitofproducttoaminimum。ThehumanistcriticismofindustryupontheCostssideconsists。pointingoutthatthereisnoadequatelyreliableornormalintendencyforthebusinesseconomyofcoststoconformtothisthree-foldhumaneconomy。

Similarly，turningtotheconsumptionside，thehumanistpointsout:

1。Thatmanyofthe'goods'soldtoconsumersareinherentlydestituteofhumanutility，or，worse，arerepositoriesofdisutility；andthatmoneyvaluesisnotruekeytohumanutility。2。Thattheamountofutilityorwelfaretobegotoutofanygoodsdependsuponthecharacter，thenaturaloracquiredcapacity，oftheparticularconsumersorclassesofconsumersintowhosehandstheyfall。3。Thatatrueeconomyofconsumption，therefore，involvestheirdistributionamongconsumersinproportiontotheircapacitytousethemforpurposesofwelfare。Itiscontendedthatthewentworkingofourindustrialsystem，onitsdistributiveandconsumptiveside，makesnoreliableprovisionforsecuringthatthemaximumofhumanutilityshallattachtotheconsumptionofthenationalincome。

&sect；7。Totestindetailtheexactvalidityofthishumanistcriticismwouldrequireustoexaminethecostsandtheutility，economicandhuman，representedineachitemofallthevarioussuppliesofgoodsandserviceswhichconstitutethenationalincome。Thisismanifestlyimpracticable。

Norisitnecessaryforourpurpose，whichistoestablishasoundmethodofvaluationratherthantoendeavourtoformanexactcomputationofthevaluesitdiscloses。Withthisobjectinviewitwillbesufficienttodirectourenquirytotheacceptedclassesorgradesofhumanactivitiesfiguringaseconomiccosts，andthecorrespondingclassesorgradesofhumanutilitiesaffectedbyconsumption。

Letusbeginwiththe'costs'side。

Acceptingthegeneralcategoriesofcostsofproduction，asrent，interestandprofit，salariesandfees，wages(forallotherbusiness'costs'，asforinstance，costofmaterial，machinery，fuel，canberesolvedintothese)，letusconsiderwhatisthenatureofthehumancostsforwhichthesepaymentsaremade，inthechiefordersofindustry，andhowthesehumancostsarerelatedtotheeconomiccosts。

Attheoutsetofthisenquiry，however，itwillbeconvenienttoeliminateoneeconomic'cost'ofconsiderablemagnitudefromourconsideration，viz。

economicrent。For，althoughNature，ortheearth，mayinastudyofobjectiveindustryberegardedasaproductiveagent，yieldingmaterials，physicalenergy，andspecialutilities，thisworkinvolvesnohumaneffort，andthereforeisrepresentedbynohumancost。Thisstatement，ofcourse，bynomeansimpliesthathumanforesightandactivitiesplaynopartintheeffectivesupplyoflandandothernaturalresources。Suchresources，hithertoexistingoutsidetheindustrialsystem，arecontinuallybeingdiscovered，broughtwithinreachanddevelopedbyhumanskillandeffort，whileneworimprovedusesarecontinuallybeingobtainedfromnaturalresourcesalreadywithinreach。Insuchprocessesofdiscoveryanddevelopmentmuchcapital，ability，andlabour，areconstantlyengaged，thecostsofwhichmustbedefrayed。Moreover，incertainusesoflandforagriculturalandotherpurposes，provisionmustbemadeforwearandtearorreplacement。

ButallsuchcostsorexpensesarereallypaymentsforthecapitalandlabouremployedOnthisworkofdevelopmentorupkeep。Theyarenotpaymentsfortheuseofnaturalresources。Theyarenoteconomicrent。Thatbusinesscosthasnohumancostattachedtoit。Fromthestandpointofthemanagerofaparticularbusinessthepaymentofrentisnecessarytoenablehimtogettheuseofthelandorothernaturalagentherequires。Whereprivatepropertyinlandexists，thepaymentofsuchrentislegallynecessary。

Wherethemaintenanceofsuchlegalrightshasenabledlandvaluestoexchangefreelywithotherformsofwealth，amoralexpediencymaybeclaimedforthepaymentofrent。Butnohumancostcorrespondstoit。Intheorganicinterpretationofindustry，itfiguresaswaste。While，therefore，dueaccountmustbetakenofthisdivisionofwealthorhumanutilitiesinanyfinalsurveyofoursocialeconomy，itmaybedismissedfromourimmediateconsideration。

&sect；8。Inordertogetaclearunderstandingofindustryregardedfromthestandpointofhumancosts，itwillbeconvenienttofastenourattentionfirstonthestructureandworkingofthesinglebusinesseswhicharetheproductiveunitsofthesystem。Forthebusinessisacloser，morecompact，andmoreintelligiblestructurethanthetrades，markets，orotherlargerdivisionsofindustry。Weshall，therefore，endeavourtoanalysethecombinationsofhumaneffortastheyareexpressedinthevarioustypesofbusiness，soastodiscoverandtoestimatethehumancoststhatareinvolved。

ThoughthetermBusiness，asweuseithere，mustbeextendedsoastoincludeallsortsofcentresofeconomicactivitynotcommonlyincluded，suchasaschool，adoctor'spractice，atheatre，itwillbebesttotakeforourleadingcaseanordinarymanufacturingbusiness。Herearegatheredintoclosecooperationalargenumberofhumanandnon-humanfactorsofproduction。Thecentreofthelittlesystemisthemanager，employer，ordirector，whoseideas，desires，andpurposesgovernandregulatethemovementsofthevariousformsofcapitalandlabour。Thismanhasgottogetheronhispremisesaquantityofmachineryandotherplantwhichexpressacomplicatedgrowthofinventionrunningfarbackintothepastandderivedfromgreatnumbersofhumanbrains。Thesemachinesandplantembodyingtheseinventiveideasweremadebypastlabourofvariouskinds。Thismanagerordirector，inplantingtheBusiness，chosewhatseemedthebestapparatusforthepurposeshehadinmind。Heinducedanumberofinvestorsorcapitaliststolendthemoneywhichenabledhimtoobtainthisapparatus，andtohirethevarioussortsoflabourpowerrequiredtooperateit。Thislabourpoweritselfistheproductoftheenergiesofmaninthepast，thedirectancestryofthelabourerswhoproducedthebeingsthatgiveforththelabour-power，thepastgenerationsofmenwhosegrowingknowledgeandpracticeyieldedthetrainingandthehabitsofindustryandofcooperationessentialfortheproductivenessoflabourinthemodernartsofindustry。

Hereareevidentlymanydifferentsortsofhumaneffort，someofthemphysical，othersintellectual，somepleasurable，otherspainful，somebeneficial，othersdetrimental，totheindividualswhogiveouttheeffort，ortosociety。

AlloftheseproductiveenergiesrankinPoliticalEconomyas'costs'，andassuchareremuneratedoutoftheproduct。Whichofthesearehuman'costs'andinwhatsenseandwhatdegree？Sucharethequestionsthatlieimmediatelybeforeus，ifweareseekingtoreduceour&pound；2，000，000，000

totermsofhumanwell-being。

&sect；9。Inthisconversionofeconomicintohumancostswecanbestbeginbyconsideringthefundamentaldistinctionbetweencreationandimitation，enforcedwithsomuchpenetrationbytheFrenchsociologist，M。Tarde。

Itisnotinitsprimarysignificanceadoctrineofcosts，butadivisionofproductiveenergyintotwoclasses。Allsocialprogress，indeedallsocialchangesupwardsordownwards，accordingtothistheory，comesaboutinthefollowingway。Someunusuallypowerful，original，orenterprisingperson，assistedoftenbygoodfortune，makeswhatiscalledadiscovery，sometrueandusefulwayofdoingthingsorofthinkingaboutthings，orevenofsayingthings。Thisnewtruth，newphrase，newdodge，iscapableofbeingrecognisedasinterestingoruseful，notonlybyitsdiscoverer，butbythemanywhohadnotthewitorthecourageorthelucktodiscoveritforthemselves。Bysuggestion，infection，contagion，orconsciousimitation，orbyanycombinationofthoseforcesandhabitsthatconstitutethesocialnatureofman，thenoveltybecomesadoptedandappliedbyanever-growingnumberofpersons，overawideningarea，untilitbecomesanacceptedpracticeorconventionofthewholesociety。Everynewreligiousormoralideaorsentiment，everyscientificlaw，everyinventionintheartsofindustry，everydevelopmentofanewtaste，thusproceedsfromoneormorespecialcentresoforiginaldiscovery，andspreadsbyawell-nighautomaticprocessofexpansionorimitation。

&sect；10。Nowthisdistinctionbetweencreationandimitation，aspropoundedandappliedbyM。Tarde，isdoubtlessopentoseriousobjections。Thepsychologyofimitationisshallow，forunderthissingletermiscoveredwhatareinrealitymanydifferentactions，whilethewholeconceptionofimitationasaprocessistoomechanical。Tosomeofthesedefectsweshallreferpresently。Butthough，regardedasanexplanationoftheprocessesofhumanprogress，theantithesisofcreationandimitationdoesnotsatisfy，itfurnishesanexceedinglyusefulstartingpointtowardsapsychologicalanalysisofeconomicprocesses。Forintheevolutionofindustryitisquiteevidentthatimprovementsdocomeaboutinthismanner。Acomparativelysmallnumberoforiginalorcuriousmindsinventnewusesornewwaysofdoingthingsthatarebetterthantheold，ortheyrecognisethevalueofnewideaswhichothersfailedtorecognise，andtheyhavetheenergyandenterprisetoputthenewideasintooperation。Manyoftheinventionsarenotgoodenoughorbigenough；onlybyaconsiderablenumberoflittleincrementsofnoveltywillanewmachine，oranewprocess，emergeintoeconomicvitality，or，inbusinesslanguage，becomeprofitable。Butwhereaninventionorimprovementhasonceemerged，Stationmultipliesitanditpassesintogeneraluse。6

Acomparativelysmallnumberofcreativeorinventivemindsthusundoubtedlyplayanexceedinglyimportantpartinthedevelopmentofindustry。ThebriefactsofthinkingofaWatt，aStevenson，aSiemensoranEdison，appeartobeincomparablymoreproductiveineffectthantheroutinelife-toilofthemanythousandsofworkerswhosimplyrepeathourbyhour，daybyday，yearbyyear，somesimplesingleprocesstheyhavelearned。Itistruethatinventionistoonarrowatermproperlytoexpressthedistinctionweareexaminingbetweenthatworkwhichexpressesthecreativeenergyofmanandthatwhichisessentiallyimitative。Forifasuccessfulinventionfurnishesmachineryormethodswhichthusmultiplytheproductivityofhumanlabour，theskilfulorganisationandadministrationofabusiness，theworkdonebytheemployer，hasthesamesortofeffect。Anableemployerwhodirectshisbusinesswithknowledgeandforesight，gatheringtogetherjusttherightmen，materialsandmachinery，producingtherightgoodsattherighttime，andmarketingthemproperly，seemsbyhispersonalabilitygreatlytoenlargethevaluableoutputoftheentirebusiness。Inabigbusinessheseemstobeasproductiveasathousandmen。

&sect；11。SoabroaddistinctionisbuiltupbetweenAbilityandcommonLabour，thecreativeandthemerelyimitativeworkofman。Fromthisdistinctionhasbeendrawnaningeniousdefenceofthecurrentinequalitiesindistributionofwealth。Sincealltheprogressofmodernindustryisreallyattributabletotheabilityandenterpriseofasmallgroupofinventing，organisingandenterprisingpeople，commonlabourbeinginitselfnomoreskilful，nomoreproductivethanbefore，therecan，itismaintained，beneitherjusticenorreasonintheclaimsoflabourtoalargershareofthathugeincreaseofwealthduetotheabilityofthefew。

Idonotproposejustnowtoexaminethevalidityofthiscontention。

WhatcriticismIhavetoofferwillemergeinthecourseofmycloserexaminationofthenatureofindustrialwork。AtpresentIwillonlyaskreaderstoobservethatthedoctrineassumesthatpaymentforindustrialservicesmustoroughttobedeterminedbytheproductivityofthoseservices，notbytheir'cost'。

Now，ourimmediateenquiry，wemustremember，isintohumancosts。

Andthedistinctionbetweencreativeandimitativeworkisparticularlyinstructiveinitsbearinguponhumancosts。Forifwegradethevarioussortsofhumaneffortthatcontributetotheproductionofwealthaccordingtotheamountofcreativeandimitativecharactertheyseemtopossess，somevaluablelightwillbethrownuponthedistributionofhumancostsamongthevariousclassesofproducers。

LeavingoutofconsiderationLand，which，asafactorinproduction，involvesnooutputofhumaneffort，weshallfindthattheprovisionandapplicationofalltheotherfactors，ability，capitalandlabour，involvesomehumaneffortbothofacreativeandanimitativetypeandcontainsomeelementsof'cost'。

ForthepurposeofthisanalysisIproposetoclassifyproductiveactivitiesunderthefollowingheads:Art，Invention，ProfessionalService，Organisation，Management，Labour，Saving。Thewarrantyforthisclassificationwillemergeinthecourseoftheanalysis。

NOTES:

1。IhavetakentheestimateofthetotalincomeofthenationmadebyMr。FluxinhisReportsoftheFirstCensusofProductionfortheUnitedKingdom(1907)asthebasisfortheroundfiguresadoptedhereforaggregateincomeandforsavings。

AsamatteroffactMr。Fluxassignstosavingsaslightlyhigherfigureandproportionofincomethanthattakenhere。Butsinceforourpurposenothingdependsupontheexactitudeofthefigures(andindeedMr。Fluxclaimsnosuchexactitudeforhis)itismoreconvenientforustotaketheroundfiguresofourtext，thoughprobablyinbothinstances，i。e。，aggregateincomeandsavings，theyaresomewhatbelowthetruefiguresfor1912。

2。Thereisnocommonerstumbling-blocktothebeginnerinthestudyofPoliticalEconomythanthefactthattheincomeofarichman，amountingtosay&pound；10，000，whenpaidawaytopersonswhosellhimgoodsorpersonalservices，seemstocount'overagain'asincomesofthesepersons。Why，theyaredisposedtoask，shouldtheprivatesecretarywhoreceives&pound；400

outofthis&pound；10，000berequiredtopayanincome-taxuponasumwhich(astheysay)hasalreadypaiditsshareaspartofthe&pound；10，000？

Nothingbutagraspofthefactthatthesecretaryproducesa'real'incomeof'services'correspondingtothis&pound；400whichhereceivesclearsupthemisunderstanding。

3。Abouthalfofthispassesundertheheadofover-seasinvestmentsintotheindustrialsystemsofothernations，thoughtheinterestuponthisforeigncapitalisavailableforconsumptioninthiscountry。

4。WealthandWelfare，Chap。I。

5。Theexceedinglyimportantquestionofthelimitstothevalidityofsuchaquantitativecalculusisdiscussedintheconcludingchapter。

6。Tardeappliesthesameterm'imitation'totwodifferentsortsofact。Thebusinessmanoremployerwhorecognisessomeimprovedmachineormethodandcopiesitisanimitator。Everyimprovementthusstartingfromacentreofdiscoverybecomesdiffusedthroughoutatrade。

Buttheterm'imitation'isalsoappliedtotheregularworkoftheroutineoperator，whoisconstantlyengagedinrepeatingsomesingleprocess。

Now，regardedaspsychologicalandaseconomicfacts，thesetwoimitationsaredistinct。

Theformeristheadoptionofadiscoveryinvolvinganactofrecognitionandofjudgment——notapurelyautomaticimitation——atanyrateuntilithasbecomeacommonforminthetrade。Theemployerwhocopiesoradoptsanimprovementperformsasingleact——heincorporatesthisimprovementinthetechniqueofhismillorshop——onceforall。When，however，itissaidofamachine-workerthathisworkisimitative，somethingdifferentismeant。Heiscontinuallyrepeatinghimself，eachactofrepetitioninvolvinglessconsciousnessintheadaptationofmeanstoend。CHAPTERIV:THECREATIVEFACTORINPRODUCTION

&sect；1。Themostdistinctivelycreativekindofhumanworkiscalledart。Inmotiveandinperformanceitisthefreestexpressionofpersonalityinwork。Theartistinwhataretermedthefinearts，e。g。，aspainter，poet，sculptor，musician，desirestogiveformalexpressiontosomebeautiful，trueorotherwisedesirableconception，inordereithertosecureforhimselfitsfullerrealisationorthesatisfactionofcommunicatingittoothers。

Itisnot，however，necessaryforourpurposetoenterupontheexactpsychologyofartmotivesorprocesses。Indeed，wearenotconcernedwiththewholerangeofartisticactivity。Sofarastheartistworkssimplyandentirelyforhisownsatisfaction，inordertoexpresshimselftohimself，hecannotbedeemedtobecontributingtotheeconomicincomeofthenation。Forustheartististheproducerofamarketablecommodity，andweareconcernedtodiscoverthe'economic'andthe'human'costswhichheincursinthiscapacity。

Nowsofarasthepainter，poet，ormusicianworksaspureartist，exercisingfreelyhiscreativefaculty，hiseconomic'costs'consistmerelyofhis'keep'，thematerialandintellectualconsumptionnecessarytosupporthimandtofeedhisart。Thenethumancostsofthecreativeworkarenil。

Forthoughallcreativeworkmayinvolvesomepainsoftravail，thosepainsaremorethancompensatedbythejoythatachildisborn。Evenifwedistinguishthecreativeconceptionfromtheprocessofartisticexecution，whichmayinvolvemuchlaboriouseffortnotinterestingordesirableinitself，wemuststillrememberthattheselaboursaresustainedandendowedwithpleasurablesignificanceasmeanstoaclearlydesiredend，sothatthewholeactivitybecomesinarealsensealabouroflove。Inotherwords，thehumancostsareoutweighedbythehumanutilityevenintheprocessesofproduction，sothatthepurepracticeofartisanetincreaseoflife。Theartist，who，followingfreelyhisowncreativebent，producespictures，playsornovelswhichbringhimingreatgains，isthusinthepositionofbeingpaidhandsomelyforworkwhichisinitselfapleasuretoperformandwhichhewoulddojustaswellifhewereonlypaidhishuman'keep'。Thewastefulsocialeconomyoftheordinaryprocessofremuneratingsuccessfulartistsneedsnodiscussion。ForthetrueartfacultyresemblesthoseprocessesbywhichNatureworksintheorganicworldfortheincreaseofcommoditieswhosecomparativescarcitysecuresforthemamarketvalue。Apoetwho'doesbutsingbecausehemust，'andyetispaidheavilyfordoingso，isevidentlygettingthebestofbothworlds。Ourpresentpoint，however，isthatthe'economiccost'whichhispublisherincursinroyaltiesuponthesalesofhispoemisattendedbynonet'humancost'atall，butbyapositivefundof'humanutility'。Andthisholdsofalltrulycreativework:theperformanceinvolvesanincreaseoflife，notthatlosswhichistheessenceofallhumancost。

&sect；2。Ihavespokenofthepure'artist'。Theartisticproducerwhosellshisfreedomtothemoneyedpublicmayincurtheheaviestofhumancosts，thedegradationofhishighestquality。Thetemptationtoincurthesemoralandintellectualdamagesisgreatinanynationwherethedominantstandardofpersonalsuccessismoneyincomeandexpenditure。Butperhapsthereisafalsesimplicityintheromanticviewofartisticgenius，whichassumesthattheartistandhisworkarenecessarilydegradedbyinducementstoworkforapublic，insteadofworkingforhimselfalone。Itmay，indeed，beheldthatanartistwhoissoself-centredastohavenoconsciousconsiderationoftheartisticneedsandcapabilitiesofhisfellow-men，issoessentiallyinhumanastobeincapableofgreatwork。Theuseofanart-giftforcommunionwithothers，involvingsomemeasureofconscioussocialdirection，seemsinvolvedinthehumanityoftheartist。Evenwhenthatdirectiontakestheshapeofmarket-prices，itdoesnotnecessarilyincurtheviolentcensurebestowedbyromanticpersons。Whenasoundpublictasteoperates，thisdirectionmaybejustified。TheportraitswhichMrG。F。Wattspaintedreluctantlyformoneyneednotbeconsideredawasteofhispowers。Thenature，again，ofmanycreativemindsseemstorequiretheapplicationofanexternalstimulustobreakdownacertainbarrierofsterileself-absorptionorofdiffidence，whichwouldrobhumanityofmanyofthefruitsofgenius。

Atanyrateitneednotbeassumedthatworkingforapublic，orevenforamarket，isessentiallyinjurious。Wherethetastewhichoperatesthroughthedemandisdefinitelybase，andwherethepracticeandtheconsciousnessofhavingsoldone'ssoulformoneyareplainlyrealised，nodoubtcanexist。Butwherepublicsympathyandappreciation，evenexercisedthroughthemarket，inducetheartisttosubordinatesomeofhisprivatetastesandproclivitiestotheperformanceofworkwhich，thoughofsecondaryinteresttohimself，hasasoundsocialvalue，thepressureofdemandmayproducealargerbodyofrealwealthatnorealhumancosttotheproducer。

Verydifferent，ofcourse，aretheinstancesurgedwithsomuchpassionateinsistencebyRuskin，wheredepravedpublictastes，springingdirectlyfromluxuryandidleness，debauchthenaturaltalentsofartists，andpoisontheveryfountsofthecreativepowerofanation。Corruptiooptimipessima。

Theproductionofbaseformsofart，inpainting，music，thedrama，literature，theplasticarts，mustnecessaryentailthehighesthumancosts，thelargestlossofhumanwelfare，individualandsocial。Forsuchanartistpoisonsnotonlyhisownsoulbutthesocialsoul，adulteratingthefooddesignedtonourishthehighestfacultiesofman。

Thereis，however，asenseinwhichitistruethateverypressureofsocialdirectionordemandupontheartistimpairsthecreativecharacterofhiswork。Forsuchsocialdemandrestsuponasimilarityoftasteamongthemembersofapublic，anditssatisfactionrequirestheartisttorepeathimself。Anartist，endowedbytheStateorsomeotherbody，mightexpresshimselfinuniquemasterpieces，aswasthecasewiththegreatartistsofantiquityoroftherenaissancewhowerefortunateintheirprivateorpublicpatrons。Butart，supportedbynumerousprivatepurchasers，whosesocialstandardsmouldtheirtastestotolerablycloseconformity，muststooptoqualifycreationbymuchimitativerepetition。Thisofteninvolvesalargehumancost，imposinganinjuriousspecialisation，mannerismsormechanicalroutine。Thisisparticularlytrueofartswherearefractorymaterialgivesgreatimportancetotechnique，andwherethepracticeofthistechniquenecessarilyrestrictsthespontaneityofexecution。

&sect；3。ThedescentfromArtisttothemoreorlessmechanicalproducerofart-productsismarkedbymanygrades。Thereisthegradewhichdoesnotpretendtoanyfreeexerciseofthecreativefaculty，confiningitselftointerpretationorexecution。ThisinmusicandincertainotherfineartsissignifiedbyadoptingtheFrenchterm'artiste'。Butsomeofthisinterpretativeworkaffordslargescopefortrulycreativework。Atraditionalorwrittendrama，ascoreofmusic，orothernecessarilyimperfectandhalf-mechanicalregisterofsomegreatcreativework，requiresaconstantprocessofre-creationbyasympatheticspirit。Insuchartsthereisagenuinelycreativecooperationbetweentheoriginalcomposerandhisinterpreters，thelatterenjoyingsomereallibertyofpersonalexpressionandgivingmerittotheperformancebythisunionofreproductiveandcreativeachievement。

Thegreatactorormusicianmaythusevencometousetheworkoftheplaywrightorthecomposerassomuchmaterialforhisowncreativeexpression。Hemayevencarrythistoanexcess，oustinghispredecessorandparasiticallyutilisinghisreputationforthedisplayofhisownartisticqualitiesordefects。Inpaintingandsculpture，ofcourse，wecometoamodeofskilledimitation，thatofthecopyist，wherethefreecreativeelementisconfinedtofarnarrowerlimits。Themainskillhereisthatoftechnicalimitation，notofinterpretation。

Aswedescendfromthehighergradesofdistinctivelycreativearttotheseinterpretativeandmoreorlessimitativegrades，itwillbeevidentthatlargerhuman'costs'ofproductionareapttoemerge。Allimitationorrepetition，eitherofoneselforofanother，isnotinhuman。Thereisarhythmintheprocessesoforganiclifewhichevenrequiressomerepetition。

Butthisrepetitionisneverprecise，fororganichistorydoesnotexactlyrepeatitself。Theattempt，therefore，toinduceapersontoperformanintricateprocessmanytimesandatshortintervalswithgreatexactitude，isagainsthumanity。Itinvolvessomephysicalandmoralinjury，ahumancost。Weshallconsiderthemoreseriouseffectsofthisprocedurewhenwecometoconsiderthatworkofindustrymostwidelyremovedfromart。

Inconsidering，however，thesub-artisticworkersitwillnotberighttoratethehumancoststoohigh。Agooddealofscopeforpersonalsatisfactionremainsinmanyofthesekindsofwork。Thesenseofskillinovercomingdifficulties，evokedwhereveranyintricateworkisdonebybrainandhand，yieldsavitaljoy。Thistheexecutantartist，eventhoughmainlyacopyist，experiencesinnomeanmeasure。Itsustainsafinevitality，and，whatissignificantforourparticularenquiry，itinvolveslowhumancost，unlessthepaceandstrainofrepetitionarecarriedtoexcess。Whereveranyreasonablescopeforindividualexpressionorachievementremains，thoughthemainbodyoftheproductmayberigorouslyprescribedbycloseimitation，ororderedbymechanicalcontrivance，theartspiritlivesandthehumancostsarelow。Thephotographer，oreventheskilledperformeronthepianola，retainsalargermeasureofthenatureandthesatisfactionoftheartistthanamerelycursoryconsiderationofhisoccupationwouldsuggest。

Aconsiderableandgrowingproportionofproductiveenergyisgivenoutinthesevariouslevelsofartisticorcreativework，andtheproportionofthenationalincomerepresentedbythisproductisgrowingwithfairrapidityineverymoderncivilisedcommunity。

&sect；4。Fromthefineartsweproceedbyaneasytransitiontotheprocessesofdiscoveryandinventionwhichplaysoimportantaroleinprogressiveindustryandareleadingchannelsofcreativeactivity。Theprocessofdiscoveringanewrelationbetweenphenomena，establishinganewfactoranewlaw，hasmuchincommonwithartisticcreation。Thescientificimaginationiscreativethroughitsuseoftheexistingmaterialofknowledgetoframehypotheses。Indeed，thedisinterestedplayofthemindintheexplanationoffactsbybringingthemwithintherangeofscientificlaws，or，conversely，inextendingtherangeofknownlawstonewgroupsoffacts，isaprocessofadventurecontainingnoveltiesofinsightandofoutlookakintoartisticproduction。Thosephilosophers，indeed，whoholdthatthelawsofsciencearenothingotherthanthepatternswhichmanimposesuponthephantasmagoriaofexperienceforhisownprivateends，wouldmakethewholeofscientificdiscoverymerelyanart，differingfromthefineartsinhavingutilityratherthanbeautyforitsgoal。Butweneednotpressthisinterpretationinordertoperceivethesimilarityofalldisinterestedpursuitofknowledgetothefinearts。Whenamathematicianspeaksofabeautifulsolutiontoaproblem，heisnotusingthelanguageofhyperbole，butattestingtothepresenceofanaestheticemotionattendantonthemodeinwhichatruthisreachedandstated。Modernphysicsisfullofdiscoveriescontainingsomesuchartisticquality，e。g。，thegroupingoftheelementsintheproportionsoftheiratomicweightwhichMendelieffestablished，orSirW。Ramsay'srecentdiscoveryoftherelationsbetweenheliumanditschemicalkindred。Butoneneednotlabourtheanalogybetweenartistandscientist。Forourmainenquiryisintohumancosts，anditwillbeadmittedthatthezestofthescientificstudentandthejoyofdiscoveryareemotionsasvitalandasvaluableinthemselvesastheemotionsoftheartist。Sofar，then，asthescientistcomeswithinourpurviewasaproductiveagent，hisactivitymustrankwiththeartist's，asyieldingmorehumanutilitythancost。Itmay，however，becontendedthatthemanofscienceseldom，assuch，entersintothefieldofindustrialproductivity，savewhenheaddstohisscientificworktherileofinventor。Withtheadventoftheinventortheattainmentofknowledgeisbenttosomepurposeofindustrialutility。Butthoughsomedefinitelygainfulpurposemaylurkintheinventor'smind，itdoesnotcommonlyimposeuponhisworkthedistinctivecostsoflabour。Forinvention，howevernarrowlyutilitarianinitsobjectsandresults，stillremainsintherealmofcreation，stillyieldsthesatisfactionofaproductionthatisinterestingandelevatinginitself。Itseemstomatterlittlewhethertheinventiveprocessisalargeboldspeculativehandlingofsomeprobleminwhichtheinventorisapioneer，orwhetherheisengageduponthenarrowertaskofbringingthepastinventionsofmanygreatermindsuptothelevelofindustrialutilitybysomesmallneweconomy。Theprocessofinventioncarriesthequalityofinterestingnoveltywhichfromourstandpointisthebadgeofcreativework。Weshall，doubtless，beremindedatthispointthathistoryshowsthepathoftheinventortobealmostashardasthatofthetransgressor，strewnwithtoilanddisappointments。Butthoughagreatinvention，likeagreatworkofart，oftenconcealsanarduousandpainfulgestationundertheappearanceofaspontaneousgeneration，toomuchmustnotbemadeofsuchacost。

Thetrainingofacreativefaculty，thoughlikealltrainingitinvolvesanexerciseandadisciplinenotpleasinginthemselves，can，indeed，scarcelyberegardedinoursenseasacostoflabour。Itisafurtheranceandnotarepressionofpersonality:thepracticeitinvolves，thetechniqueitimpartsarenotmerelymechanicalaptitudes，andtheyalwayscarryinthemtheconscioushopeofcreativeachievement。Theeducationofartisticorinventivefacultyinvolvesnorealwearandtearofhumanvitalitybeyondthatphysicalwastewhicheveryprolongedoccupationinvolves。Inventionitselfinvolvesnocost。Innoneoftheseoperationsisthecharacteristicoflabourpresent，thegiving-outofsomesinglesortofenergybyconstantrepetitionofidenticalactsinanarrowgrooveofendeavour。Suchactsoflabourareindeedinimicaltoinvention:theactofinventioncomescommonlyintimesofleisure。Itistheproductmoreofplaythanofwork，andtheelementofinstinct，perhapsevenofchance，isoftenafactorofsuccess。

&sect；5。M。Tarde，inhisabruptcontrastbetweencreationandimitationorlabour，hasdogmatisedupontherarityofthecreativefaculty，andcertainothersociologistsandpoliticianshavebusilyengagedthemselvesinsowingfearslestthegreedoforganisedlabourortherashnessofsocialisticlegislationshould，byrobbinggeniusandabilityofitsproperrewards，tamperwiththespringsofindustrialprogress。Now，theimportantquestionoftheeconomicrewardofabilityandgeniusmaybedeferreduntilwehaveascertainedmoreclearlywhatpartthesecreativequalitiesplayinallthedifferentmodesofproductiveenergy。Buttheassumptionthatartisticandinventivefacultyisexceedinglyrare，becauseithassoseldombeendisplayed，mustbeboldlychallenged。Thestudiesofmodernpsychologistsandeducationalistsrefuteit。Onthecontrary，thereisreasontobelievethathumannatureisexceedinglyrichinallsortsofvariationsfromthenormal，andthatverymanyofthesevariationshavevaluableuses，providedthatsuitableconditionsfortheirdiscovery，trainingandapplicationarepresent。

Thenotionthatgenius，likemurder，will'out'isafalsesentimentalism。

Somemenofgeniusdo，indeed，maketheirwayinspiteofadversecircumstances，forcingthemselvesoutoftheobscurityoftheirsurroundings:they'breaktheirbirth'sinvidiousbar，andbreasttheblowsofcircumstance，andgrasptheskirtsofhappychance。'Thatistosaysomesortsofgeniusareunitedwithqualitiesofaudacity，persistence，andluck，whichenablethemtowin'through'。Buthowmanymenofgeniusdonotpossessthesefacultiesandthereforedonotemerge，itisfromthenatureofthecaseimpossibletolearn。Butitisprobablethatmuchgenius，talent，andability，capableofyieldingfinesocialservice，islost。Indeeditisprobablethatmanyofthefinesthumanvariations，involvingunusualdelicacyoffeelingandperhapsofphysique，willbynaturalnecessitybeincapacitatedformakingtheirwayandforcingrecognitionamiduncongenialsurroundings。

Itislikelythatfarmorehumangeniusislostthanissaved，eveninthemorecivilisednationsofto-day。Forwhataretheconditionsofthesuccessfulutilisationofgenius，andforwhatproportionofthepopulationaretheysecurelyattained？

Leisureisafirstconditionforallfreeandfruitfulplayofthemind。Veryfewinventionshavecomefromworkerscompelledtokeeptheirnosestothegrindstone，andunabletolettheireyesandthoughtsplayfreelyroundthenatureoftheirwork。Thisiswhyslaverycontributedsoverylittletothedevelopmentoftheindustrialarts:thisiswhysocomparativelyfewinventionsofimportancehavebeenmadebyhiredlabourersinthisandothercountries。Thestrongesteconomicpleaforashorterandalighterworking-dayisthatitwillliberateforinventionandindustrialprogressthelatentcreativeenergyofcountlessworkersthatisstifledunder。theconditionsofalongday'smonotonoustoil。

Educationisthenextcondition。Thegreatmassofthepopulationinthiscountryhavenosuchopportunityofeducationasisneededtodiscover，stimulate，andnourishthecreativefacultiesinart，science，andindustrialinvention。Oneneednotoverratewhateventhebesteducationcandoforhumantalentofthecreativeorder。Indeed，theeducationoftheschoolsmaysometimesratherinjurethanimprovethefinestfaculties。Buteducationcandooneincomparableservicetonativegeniusortalent。Byputtingthesensitivemindofayoungmanorwomanincontactwiththeinnumerablewavesofthoughtastirintheintellectualatmospherearound，itsuppliesthefirstessentialofallcreativeactivity，thefruitfulunionoftwothoughts。Untilallthenewmindsbroughtintotheworldareplacedinsuchfreecontactwitheveryfertilisingcurrentofthoughtandfeeling，andenjoyfree，fullopportunitiesofknowingthebestthathasbeenthoughtandsaidinalldepartmentsofhumanknowledge，wecannottellhowmuchcreativefacultyperishesforlackofnecessarynutriment。

&sect；6。Fromartisticandinventiveworkwhichisessentiallycreative，enjoyable，vitallyserviceableandcostless，weproceedtoreviewtheregularskilledmentalworkoftheprofessionalandadministrativeclasses。

ThebulkoftheproductiveenergyclassedasAbilitycomesundertheseheads。

Itisevidentthatinmostofthisworkthecreativequalityisblendedinvariousdegreeswithimitationorroutine。Wepassfromthemoremiraculous，interesting，andrapidmodesofproductiveachievementtoalowerlevel，wheretheexpenditureoftimeandeffortisgreaterandwheretheterms'practice'and'practitioner'themselvesattestthemoreconfinednatureoftheactivities。Therecanbenodoubtthatthepracticeoflawormedicine，eveninitshighestwalks，involvesagooddealoftoilsomeandalmostmechanicalroutine，thoughthemostsuccessfulpractitionersgenerallyshiftthebulkofthisburdenontothelowergradesoftheprofession。

Thepracticecalled'devilling'inthelawillustratesmymeaning。

Buteveryprofessionhasitslowergradesofroutineworkers，assistants，dispensers，nurses，clerksandothers，whosesphereoflibertyiscloselycircumscribed，andwhosework，althoughinvolvingsomequalitiesofpersonalskillandresponsibility，mainlyconsistsincarryingoutorders。

Thisconsiderationofthesubsidiaryprofessionalservicesbringstolight，however，acertaindefectintheuseoftheantithesisbetweencreationandimitation，regardedasanindexofhumanlydesirableandhumanlyundesirablework。

Mererepetitionorcloseroutineisnotthedistinctivecharacterofmuchofthiswork。Theworkofaprivatesecretary，clerk，orothersubordinatetoaprofessionalmanorahighofficial，maycontainmuchvarietyandnoveltyindetailoreveninkind。Thesamemaybetrueoftheworkofavaletorotherpersonalattendant。Itappliestoallworkwhichconsistsincarryingoutanother'sorders。Theremaybeplentyofvarietyandscopeforskillinsuchwork；initsinitialstage，asconceivedbythechieforemployer，itmaycontainelementsofcreativeenergy。Butthesubordinatedoesnotreaptheseelementsofpersonalinterestbecausetheinitiationoftheprocessdoesnotrestwithhim。Theessentialsoftheworkareimposeduponhimbytheintellectandwillofanother:neitherthedesignnorthemodeofexecutionishisown。Though，therefore，hisworkmaynotconsistinmereroutine，butmaybewidelyvaried，thefactthatitisnotproperly'his'work，theexpressionof'his'personality，deprivesitofallqualitiesofcreationorachievement，savesuchfragmentsasadheretothedetailsthatare'lefttohim。'Suchworkmay，indeed，bedescribedasimitative，inthatitconsistsinexecutingadesignprescribedtohimbyanother。

Butifthetermimitationberequired，asitis，todesignatethesortoflabourwhichconsistsinconstantrepetitionofasingleactorprocess，itwouldbebettertomarkthisdistinctionbetweenfreeagentandsubordinateinadifferentway。Thesubordinationofthesecretaryortheclerkinvolvesthehumancostofasurrenderofhispersonaljudgmentandinitiative。

Totheextentthathedoesthis，hebecomesaninstrumentofanother'swill。Theextenttowhichthisinvolvesahumancostwillvarygreatlywiththeparticularconditions，technicalorpersonal。Wheresuchsubordinationbelongstogenuineeducationorapprenticeship，orwhereclosesympathyandmutualunderstandinghappentoexistbetweensuperiorandsubordinate，sothatthemindofoneisthemindofboth，nohumancostatallbutahumanutilitymayemerge。Or，inothercases，thetechnicalnatureoftheworkmayinvolvethenecessityofleavingtothesubordinateagooddealofdiscretionandacorrespondinglylargefieldforpersonalexpression。

Butwherethesubordinatebecomesthemeretoolofhismaster，aheavycostisentailed。Thatcostisheavierindeedthaninordinarymanualroutinelabour，becauseitinvolvesmoredirectlythesubordinationofthemindandwilloftheworker。Partofthedistastefordomesticandothercloselypersonalserviceisduetothecloserbondageofthewholepersonalitythatisinvolvedintherelation。Itisnotsomuchthattheworkisintrinsicallydullorunpleasantasthatitencroachesuponpersonalityandinhibitsinitiativeandachievement。

&sect；7。Theworkofthehighest，mosthonouredandbestremuneratedmembersoftheprofessionsretainsessentiallythequalityofpersonalachievement。Itconsistsofanumberofdetachedandusuallybriefactsofintellectualskill，theformationofajudgmentuponthemeaningormeritsofacomplicatedcase，thepresentationofthatjudgmentinadviceorargument，thebringingintellectualandmoralinfluencestobearuponsomelineofconduct。

Insomeinstances，asintheargumentofadifficultcaseincourt，ortheconductofacomplicatedBillinParliament，prolongedandarduousexertion，bothmentalandphysical，maybeinvolved。Evenwheretheseparateactsrequirenoprolongedoutputofenergy，aprofessionalcareer，comprisinglongseriesofsuchacts，maystrainorexhaustthementalandphysicalresourcesevenofastrongman。Thougheachcasewillbedifferent，andwillcallforqualitiesofpersonalskillandjudgment，interestingandagreeableintheirexercise，allwillfallwithinthelimitsofaspeciallineofpractice，andthisspecialismwillwearuponthenervoussystem，bringingtheactivityunderaneconomyofcosts。Thetemptationsofabusyandsuccessfulprofessionalcareerinsidiouslysaptheinterestandjoywhichattendtheearlierstruggle，unlessamanhastherarewisdomandthestrengthofwilltolimithisamountofworkandincome。

Whatissaidhereofthecompetitiveprofessionsisinlargemeasureapplicabletotheofficialgradesofthepublicservices。Thehighersortsofofficialworkcontinuallyinvolvequalitiesofjudgmentandimagination，andthereislittlemererepetition。Asonedescendstothelowerofficiallevels，theroutineorrepetitiveelementincreases，untilonereachesasortofofficial，theliberty，initiative，skill，andinterestofwhoseworkhardlyexceedsthatoftheordinarymachine-feederinafactory。Inallsuchdistinctivelyroutineworkthereisaheavymentalandevenphysicalcost。Butthereisthisdistinctionbetweenthecaseoftheofficialandoftheprofessionalman。Theformerisnotsubjecttotheconstantdriveofthecompetitivesystemandisusuallyrelievedfromthesenseofinsecurityandanxietywhichwearsuponthemindofmostprofessionalmen。

&sect；8。Thepsychologyoftheentrepreneurorbusinessmanisoneofgreatinterestandcomplexity。Ifwetaketheordinaryactivitiesofthemanagerofawell-establishedbusinessinastapletrade，theydonotseemtoinvolvemuchinthewayofhighintellectualskill，imagination，orexploit——butmerelyalimitedamountofspecialtradeknowledge，ordinaryintelligence，andcommonsense。Hehastoperformanumberoflittleactsofcalculationanddecision。Whatwecallhischaracter，viz。，honesty，reliability，senseofresponsibility，reallycountsformorethanintellect:

thereislittledemandforconstructiveorcreativeimagination，orforhighenterprise。Theconductofsuchabusiness，evenonthepartofitsmanager，thoughnotdestituteofinterestingincident，involvesagooddealofdullroutineandevendrudgerywhichcarriesadistinct'cost'

inmentalwearandtear。

Thesubordinateofficialsinsuchbusinessare，ofcourse，subjectedtoacloserroutine，thoughnevertoamerelymechanicalrepetition，andtheirworkinglifeislessaffectedbyhopesandfearsrelatingtotheprofitsorlossonthehalf-year'sworking。

Butalargeproportionofbusinessmenworkunderverydifferentconditionsfromthese。

Mostindustriesto-dayaresubjectedtorapidchangesinregardtoinstrumentsandmethodsofwork，marketsformaterialsandforfinishedproducts，wagesandconditionsofemployment。Akeeneyefornovelties，arapidjudgment，long-sightedcalculation，commandingcharacter，courageinundertakingrisks——theseareleadingnotesinthemodernbusinesslife。

Thebusinessmanwhoconstructs，enlarges，andconductsamoderncompetitivebusiness，performsagoodmanyfunctionswhichcallforvariousmentalandmoralqualities。Hemustplanthestructureofhisbusiness-determineitssize，thesizesandsortsofpremisesandplanthewillrequire，theplacewhichhecanbestoccupy；hemustgetreliablemanagersandassistants，andagoodsupplyofskilledlabourofvariouskinds。Hemustwatchmarketsandbeamasteroftheartsofbuyingandselling:hemusthavetactinmanagingemployeesandaquickeyeforimprovementsinmethodsofproductionandofmarketing:hemustbeapracticalfinancier，andmustfollowthecourseofcurrenthistorysofarasitaffectstradeprospects。

Ifwetakethemostgeneralisedtypeofmodernbusinessman，thefinancierwhodirectstheflowofcapitalintoitsvariouschannels，orthecapitalistwholivesbymanaginghisinvestments，wefindthebusinessabilityinitsmostrefinedform。Forthesemenarethegeneraldirectorsofeconomicenergy，operatingthroughjointstockenterprise。

Thehumancostsofthisworkofspeculationanddirectionaredifficulttoassess。Suchtermsaslabourandindustryarealienfromtheatmosphereofthesehigheconomicfunctions。Atthesametimethestrainofexcitement，and，atcertainseasons，ofprolongedintellectualeffortandattention，thesenseofresponsibilityforcriticaldecisions，involveaheavynervouswearandtear。Probablytheheaviesthumancost，however，isacertainmoralcallousnessandrecklessnessinvolvedinthefinancialstruggle。

Forthepapersymbolsofindustrialpower，whichfinanciershandle，aresoabstractinnatureandsoremotefromthehumanfateswhichtheydirect，thatthechainofcausationlinkingstocksandshareswithhumanworkandhumanlifeisseldomrealised。HowshouldthetemporaryholderofablockofsharesinPeruvianrubberconcernhimselfwiththeconditionsofforcedlabourintheAmazonforests，orthegroupformedtofloataforeigngovernmentloanconsiderthehumanmeaningofthenavalpolicyitisintendedtofinance？

Exceptinsofarastheyaffectthevaluesoftheirholdingsandthepriceatwhichtheycanmarkettheshares，thehumansignificanceofthebusinessorpoliticalenterpriseswhichareconcreteentitiesbehindfinance，hasnomeaningforthem。Thesemenandtheireconomicactivitiesarefurtherremovedfromhumancostsandutilitiesthananyothersortofbusinessmen。Inviewoftheimmensehumanconsequenceswhichfollowfromtheirconductthisaloofnessisademoralisingcondition。

Sooccultandsosuspectaremanyoftheoperationsoffinanciersassomewhattoobscuretheimportanceoftheactualeconomicservicestheyrendertoourindustrialsystem。Generalfinanceisthegovernoroftheeconomicengine:itdistributeseconomicpoweramongthevariousindustries，allocatingthecapitalofthesavingclassestoroad-making，irrigation，mining，theequipmentofnewcities，theestablishmentofstaplemanufactures，andthesupplyoffinancialresourcesforvariouspurposesofgovernment。

Thefinestbusinessinstincts，themostrapid，accurate，andcomplexpowersofinferenceandprophecy，thebestbalanceofaudacityandcaution，thelargestandbest-informedimagination，areneededforthisworkofgeneralfinance。Itisintenselyinteresting，andexertsafascinationwhichistraceabletoacombinationofappeals。Thechieffieldforhigheconomicadventure，itevokesmostfullythecombativequalitiesofforceandcunning；

itisfullofhazardandfluctuation，withlarge，rapidgainsandlosses:

itneitherrequiresnorpermitsclosepersonalcontactwiththetroublesomeorsordiddetailsofindustrialorcommerciallife。

Suchistheworkofthefinancierandtheskilledinvestor，whofoundcapitalisticenterprisesanddealintheirstocksandsharesoverthewholeareaoftheindustrialworld。Itisthemostintellectualand，inonesense，themost'moral'ofbusinessactivities，involvingatoncethefinestartsofcalculationandthefullestfaithinhumannature。

Forfinanceismostcloselylinkedwithcredit，andcreditisonlythebusinessnameforfaith。Whenpeopletalkoffinanceasifitwereriddledwithdishonesty，factsgivethemthelie。Thenormalhonestyoffinanceisprovedbythefactthatlargerandlargernumbersofmenandwomenineverycountryofthecivilisedworldarecomingtoentrusttheirsavingsmoreandmoretomenwhoarepersonalstrangers，forinvestmentindistantcountriesandinbusinessestheexactnatureofwhichisunknowntothem，andoverwhichtheycannothopetoexerciseanappreciablecontrol。

TheworkingofthemachineryofmoderninvestmentbywhichmillionsofmeninEngland，France，andGermanyhavesenttheirsavingstomakerailwaysinS。America，ortoopenupminesinS。Africa，ortobuilddamsinEgypt，isthelargesttangibleresultofmoderneducationthatcanbeadduced。

Itimpliestheintellectualandmoralcooperationoflargernumbersofdistinctpersonalitiesacrosswiderlocalandnationalbarriersthanbaseveroccurredbeforeinthehistoryoftheworld。

&sect；9。Areasonablefaithinthefutureandawillingnesstorunsomeriskarecomplementarymotivesinthisgrowthoffinancialinvestment。

Theyare，however，bynomeansconfinedtooperationsoffinance。Allindustryinvolvesfaithandrisk-taking。Everyproducerwhoactsasafreeagentconceivessomegoodobjectwhichbethinksattainablebyhiswork。Hemaybemistaken，eitherinconceivingwrongly，orinfailingtocarryouthisplan。Hisfailuremaybeduetowantofskillorknowledge，ortoadversecircumstances。Inprimitivesocieties，whereamanproducesmostlyforhisownuse，theriskisless。Forhemaybesupposedtoknowwhathewants，howmuch，andwhenhewantsit。Butwhenhemakesforothers，i。e。，foramarket，therisksaregreater。Forhewillnotknowsomuchaboutthewantsofotherpersonsasabouthisown。Itmightseemasifsmalllocalmarkets，inwhichtheproducerdealtexclusivelywithneighbours，wouldcarrytheleastrisk，andthattheriskwouldexpandwitheachexpansionofthemarketarea。Butthisisnotcommonlythecase。Asarule，thereislessriskfortheproducerservingalargemarket，theindividualmembersofwhichhedoesnotknow，thanasmallmarketofhisneighbours。Forthefluctuationsofaggregatedemandwillbesmallerinthelargermarket，andthoughhewillknowlessabouttheindividualcontributionstoitssupplyanditsdemand，hisriskoffailingtoeffectasale，whenhedesirestodoso，willusuallybeless。Thisatanyrateappliestomoststandardtrades。

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