152 KEASBEY — A CLASSIFICATION OF ECONOMIES. [Aprils, 



despite this ethnic divergence a distinctly American standard of 

 life has been established to which all citizens, foreigners and natives 

 alike, endeavor to conform. Since such are the facts it is evidently 

 necessary in man's case to draw a sharp distinction between prog- 

 ress through selection and progress by utilization — between what 

 may be called ethnic variations and economic distinctions. 



Let us examine the situation a little more closely. Looking first 

 to the subjective side, human beings do not seem to be content, as 

 most animals are, to consume the same goods day after day, year 

 after year, and from generation to generation. On the contrary, 

 man appears to be bent on obtaining variety. The gratification of 

 one set of desires seems to cause a new series to emerge in the 

 mind. We imagine we shall be satisfied with what we want, but 

 acquisition soon convinces us to the contrary — like the boy who 

 found a watchkey, and on the basis of this possession asked his 

 father for a watch. In short, the mere fact of acquisition extends 

 the horizon of our wants and arouses a desire for further acquisi- 

 tion ; or, to put it in economic terminology, the possession of cer- 

 tain essential goods- stimulates a demand for complementary goods. 

 Without dvi'-elling on this pyschic phenomenon, so familiar to us 

 all, it may be stated as a general proposition : human beings 

 naturally seek variety and strive to extend the scope of their 

 consumption. 



The emergence of new wants in men's minds naturally suggests 

 a corresponding series of satisfactions ; demand is necessarily cor- 

 related with supply. Suppose we turn, then, to the objective side 

 and take the extrinsic factors into account. The moment the con- 

 ditions of supply are considered, it becomes apparent that man's 

 desire to extend the scope of his consumption is met by obstacles 

 arising from the character of the environment. Outer nature 

 affords a few free goods, it is true, but by no means enough to 

 satisfy man's expanding wants. For the rest, raw materials must be 

 transformed into pleasure-giving products by artificial processes. 

 To this end implements are necessary, since human beings are not 

 equipped, as most animals are, with the technical means of produc- 

 tion. Organization is also essential, as it is only through the 

 systematic division and association of their productive forces that 

 men are able to provide the requisite variety of goods. Because 

 his expanding wants outstrip his inherited capacity, to overcome the 

 obstacles arising between demand and supply, man is accordingly 



