672 TRANSACTIONS OF SECTION F. 



his magic formula, — and the utilitarian school of economists attempted no direct 

 discrimination in their measurements of utility and value between the qualities 

 which render an article an object of desire. The fact that a thing is 

 desired proved its right to be called ' useful ' within the meaning of their 

 theory, and it must be admitted that no coherent objective theory of value could 

 be built up on any other basis. Nevertheless, it is no new discovery that things 

 of equal value to'the individuals who possess them at a given moment may con- 

 duce in very different degrees to the ultimate national advantage. The old 

 distinction between productive and unproductive expenditure, and Adam Smith's 

 difficult argument as to the relative advantages of near and distant trade, are 

 examples of distinctions of this kind which were present to the minds even of 

 the economists who were most dominated by the theory of natural liberty. 



The great and growing importance attached by the best modern economists 

 to the element of time, and the consequential recognition of the importance of 

 ultimate as distinct from immediate effects, tend fro tanto to discriminate 

 between different qualities of satisfaction, and to give increased weight to those 

 kinds which tend to the building up and husbanding of the permanent economic 

 interests of the Commonwealth, as compared with the transitory satisfactions 

 which perish in their own gratification — in short, between the nobler and 

 ignobler forms of utility. 



I think it is a matter which needs the careful consideration of economists at 

 the present day, whether tne time has not come when they should accept fully 

 and frankly the task, from which in any case they cannot entirely escape, of 

 distinguishing between noble and ignoble ends of economic conduct, and should 

 regard all their methods of research — historical, analytical, comparative, and 

 statistical — as only means to this end. 



On the present occasion I cannot do more than illustrate my meaning by a 

 single important example. 



The recognition that the purposes and modes of consumption of commodities 

 have to be taken into account, as well as the mere amount of the satisfaction 

 yielded by them to their consumers, brings with it the necessity for recognising 

 the distribution of income in respect of time, no less than in respect of class, as 

 an essential factor in the national well-being. 



Thus, for example, a regular income of 21. a week may have a very different 

 economic significance from an income amounting in the aggregate to 104J. in the 

 year, but receivable in irregular and unequal instalments. Still more widely does 

 it differ economically from the chance of a variable income averaging 104Z. 

 one year with another. 



Now one of the moft significant and important economic tendencies of the 

 present day is the growing recognition of the importance of security and regu- 

 larity in all operations of industry and commerce. It is, of course, a trite 

 commonplace that the foundation of commerce is security — that safety of person 

 and property and security for the performance of legal obligations are essential 

 conditions of all industrial and commercial development. But it is not of 

 these elementary guarantees that I am speaking, but of the tendency which I 

 see to attach ever greater importance to the certainty and regularity of sequence 

 as distinguished from the mere aggregate volume of business transactions. 

 This tendency is reflected in the enormous development of the method of insur- 

 ance as a protection against risk. 



Nor is this development confined to business transactions properly so-called. 

 A number of the risks and contingencies of human life which cause irregu- 

 larity arid uncertainty in working-class incomes have been brought within the 

 sphere of insurance, whether by voluntary institutions, or, as in Germany, by a 

 State system of organisation. And the question of the perfection and further 

 development of the methods of social insurance is absorbing a large amount of 

 the best thought of the day. 



All this points to the growing importance attached by social observers to 

 stability and regularity, and the grounds for this attitude are sufficiently obvious, 

 whether we look at the matter from the point of view of the economy of the work- 

 man's household, or of the deteriorating effects of irregular habits on physique 

 and character. It may perhaps be suggested that the growing social poncern for 



