MICHIGAN ACADEMY OF SCIENCE. 3\) 



we find the only rational incentive to a division of labor by and 

 through an exchange of its products on the only equitable basis, viz., 

 that of competitive equivalence in the gravities of the two hindrances 

 necessarily involved in the production of the articles to be ex- 

 changed. 



Now, in a highly organized economic group of whicli S and T 

 are normal members, how would it fare with X, our man of many- 

 sided efficiency? Isolated from his fellows, he would be marvel- 

 ously well equii)i»ed to carry on his struggle for existence. But in 

 a highly organized group, would his mere versatility give him any 

 advantage over men like S and T. Plainly not. For under such 

 conditions an// member of society, directing his3 energies solely 

 to the production of articles for which his capacity is highest, and 

 converting them into mone}' (the medium through which exchanges 

 like those between S and T are ordinarily etfectetl, instead of by 

 direct exchange of product for product, thereby obviating the neces- 

 sity for bringing parties like S and T together), would be prepared 

 to secure everything needful on the basis of that in the ])roduction 

 of which his capacity is highest. 



Thus it is, that, in the absence of monopolistic conditions that 

 alone afford Greed its opportunity to prey upon Need, an equitable 

 division of labor is most effectively secured by and through an ex- 

 change of its products, on the basis of competitive equivalence in 

 the gravities of the two hindrances it has been necessary to sur- 

 mount in order to render the products involved in the tr-ansaction 

 available for this purpose. 



Thus, broadly speaking, profit is the saving in cost that by right 

 and in equity accrues to one as a consequence of his relatively higher 

 cai)acit3^ to produce, replace, or otherwise acquire, the product or 

 thing parted with, when compared with his relatively lower capa- 

 city to produce, replace, or otherwise acquire the product or thing- 

 secured through the exchange. This being true, it must follow, that 

 even though the importance of the thing exchanged for, considered 

 as a means of ministering to our anticipated needs, is a thousand- 

 fold greater than that of the thing parted with, yet loss, and not 

 profit, must result from tlie transaction, if the product secured 

 through the exchange could have been ])ioduced by us at less of 

 cost impairment than has attended the production of the product 

 parted with. 



Greenville, Mich. 



