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feel that the economic machine is constructed and moved by individuals for 
individual ends, and that its social effect is incidental. It is a means, and its 
whole value consists in the nature of the ends it subserves and its efficacy in 
subserving them. The collective wealth of a community ceases to be a matter 
of much direct significance to us, for if one man has a million pounds, and a 
hundred others have ten pounds each, the collective wealth is the same as if the 
hundred and one men had a thousand each. What are we to expect from a 
survey made from a point of view from which these two things are indistin- 
guishable? The market does not tell us in any fruitful sense what are the 
‘national,’ ‘social,’ or ‘collective’ wants, or means of satisfaction, of a 
community, for it can only give us swms, and the significance of a sum varies 
indefinitely, according to its distribution. 
Tf we reflect on these things—and the study of differential significances forces 
us to reflect upon them—we shall never for a moment, in our economic inves- 
tigations, be able to escape from the pressure of the consciousness that they 
derive their whole significance from their social and vital bearings, and that the 
categories under which we usually discuss them conceal rather than reveal 
their meaning. We shall understand that this ultimate significance is determined 
by ethical considerations; that the sanity of men’s desires matters more than 
the abundance of their means of accomplishing them; that the chief dangers 
of poverty and wealth alike are to be found in degeneracy of desire, and that 
the final goal of education and of legislation alike must be to thwart corrupt 
and degrading ends, to stimulate worthy desires, to infect the mind with a whole- 
some scheme of values, and to direct means into the channels where they are 
likeliest to conduce to worthy ends. 
To sum up this branch of our examination, the differential theory of 
economics will never allow us to forget that organised ‘production,’ which is 
the proper economic field, is a means only, and derives its whole significance 
from its relation to ‘ consumption’ or ‘fruition,’ which is the vital field, and 
covers all the ends to which production is a means; and, moreover, the 
economic laws must not be sought and cannot be found on the properly economic 
field. It is on the vital field, then, that the laws of economics must be discovered 
and studied, and the data of economics interpreted. To recognise this will be to 
humanise economics. 
The merit of our present organisation of industry is to be found in the 
extent to which it is spontaneous, and lays every man, whatever his ends, 
under the necessity of seeking some other man whom he can serve in order to 
accomplish them. So far it is social, for it compels the individual to relate 
himself to others. But the more we analyse the life of society the less can we 
rest upon the ‘economic harmonies’; and the better we understand the true 
function of the ‘market,’ in its widest sense, the more fully shall we realise 
that it never has been left to itself, and the more deeply shall we feel that it 
never must be. Economics must be the handmaid of sociology. 
It is of good augury that so large a part of the economic work now being 
done is being done by sociologists and social and administrative reformers, in 
the full consciousness of this relationship. It is perhaps of still better augury 
that the last considerable work of a leading economist is devoted to a searching 
study of the relation of Wealth to Welfare. 
I now turn to the other set of considerations suggested by the recognition of 
the differential theory of economics; and I would again remind you that I am 
addressing myself to those who accept this theory in its full scope and without 
reserve or qualification. I am not here to defend it, but, assuming its truth, 
to point out some of the main consequences of its acceptance. 
At the root of all lies a profound modification of our conception of the nature 
and function of the ‘market’ itself. The differential theory when applied to 
exchangeable things tells us that there is equilibrium only when an exchangeable 
commodity is so distributed that everyone who possesses it assigns the same 
place to its differential value, amongst those of other commodities of which he 
has a supply; and that this place is a higher one than it occupies on the relative 
scale of anyone who does not possess it. What this place is—that is to say, the 
differential equivalence of the commodity in terms of other commodities, when 
equilibrium is established—is fixed absolutely by two determinants. These are ; 
