GOVERNMENT AND ECONOMIC El'I'ICI ENC V. 



BY E. H. KYUER. 



Problems of economic efliciency arc naturally considered from the 

 standl)oint of so-called economic laws. Tliesc laws have been formulated 

 from reliable data carefully gathered by observation of certain industrial 

 conditions. If these industrial conditions continued unchanged or no 

 new factors were introduced, these generalizations would remain acce})t- 

 able. and might be relied ujjon as a means of maintaining just and equit- 

 able relations both for the producer and consumer of economic goods. 



The industrial conditions which underlie the formulation of these 

 economic laws are the conditions of a relatively simple and natural in- 

 dustrial life where each individual is largely self-sustaining or may be 

 so. where the economic goods demanded are few in number or easily 

 c-apable of substitution; furthermore, in an industrial ])eriod when the 

 individual could seek relief from objectionable conditions by turning to 

 the land from which subsistence could be derived without the possession 

 of large capital. 



But society has not remained thus simple in organization in very recent 

 years. New factors of great consequence have entered into the determina- 

 tion of economic conditions whose influence can not be ignored or in- 

 differently set aside. Production, instead of being widely distributed 

 as in the early stage, is concentrated in many lines in the hands of the 

 few ; instead of a large number of producers utilizing relatively small 

 quantities of ca))ital, the business is centralized in the hands of the few 

 with enormous aggregations of productive capital. Coincident with this 

 concentration of i)roductive factors lias developed a highly specialized 

 consumer who, absorbed in some ])hase of production, has a wide range 

 of wants but possesses tittl/ knowledge of actual productive processes. 

 The economic goods used ar- ])roduced under conditions totally beyond 

 his range of knowledge. This transformation coincides with the evolu- 

 tion of the industrial corporation which institution has resulted in a 

 beneficent efficiency. However, these blessings of corporate scale pro- 

 duction have been accompanied by portentous evils which have brought 

 burdens to society in the way of poverty, disease, imbecility, etc., all of 

 which have become by-products of modern industrial conditions. Along 

 with these objectionable conditiojis comes another evil of special sig- 



intli Mich. .Acad. Sci. Kept., Kii;. 



