6o8 THE POPULAR SCIENCE MONTHLY. 



process of getting things we want for things we are willing to dispose 

 of, we generally first exchange the latter for money and then exchange 

 the money for the things we want. And, as the number of people 

 who want things of all sorts must manifestly be greater than the num- 

 ber of people who want the particular thing, whatever it may be that 

 we have to exchange, any difficulty there may be in making our ex- 

 change will generally attend the first part of it ; for, in exchanging 

 anything for money, I must find some one who wants my particular 

 thing, while in exchanging money for a commodity, any one who 

 wants any commodity or service will be willing to take my money. 

 Now, this habit of estimating wealth in money, and of speaking of 

 gain or loss of wealth as gain or loss of money, and this habit of asso- 

 ciating difficulties of exchange in individual cases with the difficulty 

 of obtaining money, constantly lead people who do not think clearly 

 to jump at the conclusion that money is more valuable than anything 

 else. Yet the slightest consideration would show them that wealth 

 never consists, but in very small part, of money ; that the difficulty in 

 individual exchanges has no reference to the relative value of money, 

 and is eliminated when the exchanges of large numbers of individuals 

 are concentrated or considered, and, in short, a dollar in money is 

 worth no more than a dollar's worth of wheat or cloth ; and that, in- 

 stead of the exchange of money for other commodities being proof of 

 a disadvantageous bargain, it is proof of an advantageous bargain, 

 for, if we did not want the goods more than the money, we would not 

 make the exchange. 



Or, to take another example : In connection with the discussion of 

 Chinese immigration, you have, doubtless, over and over again heard 

 it contended that cheap labor, which would reduce the cost of produc- 

 tion, is precisely equivalent to labor-saving machinery, and, as ma- 

 chinery operates to increase wealth, so would cheap labor. This con- 

 clusion is jumped at from the fact that cheap labor and labor-saving 

 machinery similarly reduce the cost of production to the manufac- 

 turer. But, if, instead of jumping at this conclusion, we analyze the 

 manner in which the reduction of cost is produced in each case, we 

 shall see the fallacy. Labor-saving machinery reduces cost by in- 

 creasing the productive power of labor ; a reduction of wages reduces 

 cost by reducing the share of the product which falls to the laborer. 

 To the employer the effect may be the same ; but, to the community, 

 which includes both employers and employed, the effect is very dif- 

 ferent. In the one case there is increase in the general wealth ; in 

 the other there is merely a change in distribution — whatever one class 

 gains another class necessarily losing. Hence the effect of cheap 

 labor is necessarily very different from that of improved ma- 

 chinery. 



And precisely similar to this fallacy is that which seems so natural 

 to men of another class — that because the introduction of cheaper 



