check this tendency somewhat, and, if these improvements follow one another rapidly, may check it entirely or set up a counter tendency, but during the last quarter of a century the increase in the value of city real estate and of the rents that such property affords have been phenomena common to all civilized countries. How far this may go in particular instances is illustrated by the fact that a lot sold in the heart of London recently for a price which would make an acre of unimproved land in that locality worth $2,300,000. In some sections of New York City land is equally valuable. In these cases also the increased value and correspondingly enlarged annual return are ascribable to social influences.

Generalizing on these illustrations, we may conclude that differences in situation in respect to markets and other social conditions are quite as influential as natural differences in determining the importance of different pieces of land and the rents they afford. When these social conditions are created by the forethought, enterprise and labor of some particular individual or group of individuals, as when, for example, a suburb is deliberately planned and brought into being by a syndicate of real-estate operators, we have a case similar to that presented by the modification of the character of agricultural land by drainage or fertilization, in which it is very difficult to distinguish man's purposive share in the result from the share of an unconsciously evolving community. These difficulties receive fuller consideration in the chapters on Distribution.

REFERENCES FOR COLLATERAL READING

*

*Seligman, Principles of Economics, Chap. XX.; Bullock, Selected Readings in Economics, Chaps. I. and IV.; * Marshall, Principles of Economics, Book IV., Chaps I., II. and III.; Walker, Political Economy, Part II., Chap. I., and *Land and Its Rent; Nicholson, Principles of Political Economy, Vol. I., Book I., Chaps. II. and IV.

CHAPTER V

PRODUCTION: LABOR AND CAPITAL

40. Labor as a Factor in Production. Of co-equal importance with nature as a factor in production is man. His contribution to the productive result depends partly upon his capacity as an individual and partly upon the way in which his efforts are applied, that is, whether to direct or to capitalistic processes of production, or whether independently or in co-operation with the organized efforts of others. Each one of these circumstances merits separate consideration.

The principal qualities which determine an individual's capacity as a producer are the following: (1) health, (2) physical strength and endurance, (3) intelligence, (4) judgment, (5) ambition, (6) energy, (7) perseverance, (8) imagination, (9) mechanical ingenuity and (10) technical knowledge. The importance of health and physical strength, especially to those doing manual work, is obvious. Intelligence and judgment are important adjuncts to the man with pick and shovel; they are indispensable to men in the higher grades of industry. Ambition, energy and perseverance are qualities that characterize all the world's greatest men, and without which other qualities are of little value. Imagination is important because to it are traceable all great inventions and discoveries. Mechanical ingenuity, though less important to the mass of men than formerly, when fewer tasks were performed by automatic machinery, is still a valuable quality. Technical knowledge, on the other hand, gains each year in importance as the ways of doing things that are

found to be most efficient increase in complexity. It is evident that the importance of these different qualities depends upon the kind of work to be done and that industrial progress tends to lessen the importance of some while it increases that of others.

41. Qualities Determining the Productive Efficiency of Workers. The above qualities, like other human characteristics, are either inherited or acquired. Whatever their origin in special cases the same general conditions, acting either on successive generations or on living men, account for their presence. A few words will serve to suggest what these conditions are.

The circumstances influencing health and strength are well understood. Fresh air and exercise, good food, adequate protection from dampness and sudden changes in temperature and the avoidance of all kinds of excesses, are the principal requisites. Of these good food is perhaps the most important. The human body resembles a machine, and the amount of work it can do depends very largely on the quality and quantity of the fuel, that is, the food, with which it is supplied. At the present time vigorous measures are being taken in all progressive countries to provide the requisites to health and strength for all classes. Sanitation and factory acts have been passed to insure the healthfulness of the conditions under which men work. A great deal of attention is being given, especially in those countries which maintain large standing armies, to the question of determining what diets are best for people doing different kinds of work, and model kitchens are being organized in the poorer quarters of cities to teach people to appreciate nutritious and properly prepared foods. Efforts to improve the tenement houses in which the populations of the larger cities live are also being put forth and with some success. Mention should also be made of the public baths, the playgrounds for children and the open-air gymnasiums which are being erected in

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those cities in Europe and America which are most progressive in caring for their inhabitants. Finally, it would be difficult to exaggerate the importance of the efforts that are just now being made to stamp out two of the most devastating diseases from which the human race has suffered, yellow fever and consumption. As is shown by mortality statistics, these efforts are beginning to bear fruit in the improved health of present-day city populations, but much yet remains to be done for both city and country people. There is no form of philanthropic activity which is more certain to benefit mankind than that designed to improve the conditions under which the mass of men live and work. Restored health and vigor are blessings in themselves, but equally important is the fact that they make for more efficient production and enable their possessors not only to hold what they have gained, but to add steadily to their advantages through their increased earning power. Every improvement that can be made in home and factory surroundings without undermining the independence and self-respect of the population is thus a certain means of "helping people to help themselves."

The development of intelligence and judgment depends largely upon education, and here too undoubted progress has been made. In place of the formal and traditional methods that have prevailed in the schools, methods having direct reference to the organic development of children are beginning to be introduced. Moreover, the proportion of children who go to school is on the increase, and the expenditures that modern states make for public education are growing. Nevertheless there is still much to criticize in current educational practices and in the shortsightedness of democratic states in not contributing even more liberally to the support of education. In it lies the hope of the future, since through its agency the standards of each generation of children are elevated. These higher

standards may be passed on to the next generation of children to be raised still further in the schools, and so the process may be repeated with steady progress as its necessary consequence. If improving educational advantages are added to steadily improving home surroundings, the advance of the race cannot fail to be rapid.

Ambition, energy and perseverance depend partly upon a people's range of wants in comparison with the means to their gratification, and partly on the probability which the situation presents that effort and enterprise will be crowned with success. These qualities are conspicuously lacking among a people which has developed few wants and whose means of livelihood are so limited by natural and social conditions that even the greatest efforts cannot result in a large command over economic goods. They are as conspicuously present among a people with numerous and varied wants to which are open a great variety of promising ways of acquiring wealth. This contrast is well illustrated by the difference between the peasantry of Europe and the plain people of America. Poverty of resources and the restrictions of a class organization of society tend to stifle the ambitions of the former as markedly as wealth of resources and absence of rigid class barriers tend to stimulate those of the latter. The most desirable situation for the fostering of these qualities is evidently one in which different scales of living prevail side by side and in which at the same time equality of opportunity is preserved. The danger in a country like the United States is that an aristocracy of wealth may grow up to monopolize the easiest means of acquiring further wealth and to hold the mass of the people down to working for mere wages. Under such circumstances different scales of living would foster not ambition but merely envy and bitterness in the minds of those who have little prospect of improving their condition. This danger must be kept in view in connection