This section is from the "Economics In Two Volumes: Volume I. Economic Principles" book, by Frank A. Fetter. Also available from Amazon: Economic
§ 1. Variety in the objects of desire. §2. Increasing range of choice and use of goods. § 3. Historical view of increasing indirectness of uses. § 4. Goods with indirect uses. § 5. Direct and indirect uses of the same good. § 6. Various changes affecting value. § 7. Agencies for altering stuff or material. § 8. Agencies for changing the form of things. § 9. Natural members as agents in effecting changes of form. §10. The use of tools by man. §11. The gradual improvement of indirect agents. § 12. Tools and machines. § 13. The age of machinery.
§ 1. Variety in the objects of desire. It has been shown that market-price rests on, or results from, valuations; and that valuations are the reflection of the choices made by men among the objects of their desires. These objects are of the most varied nature, and are capable of the most varied uses. The desires for these uses of goods, to which the explanation of price has been traced, are neither fixed nor simple things. They change from moment to moment and are the resultant of man's whole nervous constitution, of his education and his social surroundings, and of the objective environment in which he finds himself. The features of the environment which are of the greatest import in affecting the strength of desires are the kinds and quantities of goods and the conditions under which they are to be had.
Every valuation, as it involves a comparison of two things, implies some regard to the conditions of supply. Every process of comparison as we have seen (Chapter 2) is more or less a matter of impulse; but it is generally likewise more or less a matter of calculation. The range of a man's choice is more or less far sighted in accordance with the range of his intelligence, his experience, his knowledge, and his forethought. To appreciate more fully the various sorts of relationships which exist between things and the desires of men, we should now make a further study of economic goods to see what are the conditions affecting both their quantity and the mode of their uses.
§ 2. Increasing range of choice and use of goods. The simplest form of life known to us, a unit of protoplasm, reacts in certain ways to the things it touches, reaching out to absorb some and withdrawing to escape others. This quality in the cell of living matter is the most primitive aspect, or element, in economic choice. As organisms develop, they become capable of reflex action, a muscle being moved as a nerve is stimulated, and thus action becomes more and more complicated, developing from simple reflexes to instincts and finally to judgments and to calculated courses of conduct. Every increase in the complexity of nervous structure increases the complexity of a creature's environment. The creature is in touch with more things and in more ways, and is adjusting its life to these things and the things to its life. This means making more and more indirect and complex valuations.
With man this process had already, at the dawn of history, attained a much higher stage of development than it ever has had in the case of any animal. This is shown by man's use of fire, tools, dress, houses, domestic animals, etc. The process became greatly hastened through the invention of more elaborate tools and more complex and efficient ways of doing things and by the development of tastes and habits of life, requiring more and more material objects as conditions for their continuance. It is obvious that in our modern civilization man has become dependent upon the uses of things in more complex ways than ever before; but further study and analysis are needed to enable us to see more clearly the real nature of this relationship between goods and man's desires.
§ 3. Historical view of increasing indirectness of uses. Now the relationship of goods and their uses to desires presents several important aspects, the first that we shall consider being that of technical relationship, or directness of use. The reader will recall at this point what was said (in Chapter 3, sections 11, 12) on the direct, present uses of goods. It is goods of this kind in our economic environment to which men first give attention. This narrow circle of our economic environment, however, which is in immediate relation with psychic income, is surrounded by broad zones of goods less immediately related in time, or in space, or in mechanical working. It will aid us to see the conditions more clearly if we take a historical glance at the development of man's command over his economic environment.
Primitive man had a very scanty stock of goods, the uses of which were direct - food, ornaments, clothing, a hut, etc.-and he had another scanty stock of goods with uses less direct -indirect or instrumental goods, such as his weapons, tools, dogs and horses to be used in the chase, etc. From very early times men have been discovering more indirect yet more effective ways of doing things so that they could get more direct goods, or better goods, or could get them with less labor, or in more agreeable ways. A poor man to-day may enjoy the use of a large variety of goods (some being his own and a much greater mass belonging to others), while the modern man of "means" brings about the gratification of his desires by the agency both of a great amount of goods with direct uses and of a great number of goods with indirect uses. Society as a whole may be thought of to-day as in the situation of a man of means.
Man alone regularly makes use of external objects as indirect agents to get what he wishes - not using merely his own bodily members. Primitive man saw the cocoanut hanging above his head out of reach. When he picked up a stick to throw at the branch, the nut was removed one step from attainment, the stick was an economic good with an indirect use. Slowly through thousands of years the processes of industry have come to involve more and more steps or links. The Indian with a crude knife fashioned his bow and arrow, fastened the flint and cord which were the outcome of still other processes of industry, and shot the bird which satisfied his hunger.
To-day in many cases it is only at the end of a long succession of technical steps that men attain the objects which directly yield the uses they desire. They take the indirect way of doing things not because they prefer indirectness for itself, but merely because experience has taught them that it is the easiest and the most effective way of getting what they desire. § 4. Goods with indirect uses. Some of these goods with indirect uses are so near to having direct uses that we hardly recognize that they do not have. It is the draft of air rather than the fan, which is the direct cause of the pleasant coolness ; the fan is a necessary indirect agent. It is the air-waves striking on the ear which cause the agreeable sound, while the violin, the bow, the skilful hand, are agents one step removed mechanically.