Modern Economic Problems - Economics Vol. II | Page 7

wealth:
1850-1912," and the tables are spoken of (volume on Wealth, Debt, and
Taxation, p. 20) as "estimates of the aggregate wealth of the nation as
prepared by the United States censuses," but the tables themselves are
described (pp. 23-25) as the "estimated true valuation of all property,"
this phrase being used as equivalent to "wealth." For the definitions of
wealth and property see Vol. I, pp. 264-265.]
[Footnote 2: This change will be described below in ch. 6, in treating of
the standard of deferred payments.]
[Footnote 3: See Vol. I, pp. 265, 278, 508 for the distinction between

wealth and capital.]
[Footnote 4: See Vol. I, p. 25, for the definition of utility.]
[Footnote 5: See Vol. I, p. 510 on the paradox of value.]
[Footnote 6: That is, "the amount which can be developed upon the
basis of the flowage of the streams for a period of two weeks in which
the flow is the least," all the rest being allowed to escape unused. Van
Hise, "Conservation of Natural Resources," p. 119.]
[Footnote 7: These and other figures in this section relate to the year
1913.]
[Footnote 8: Coal has been mentioned above, sec. 9.]
CHAPTER 2
THE PRESENT ECONOMIC SYSTEM
§ 1. The place of private property. § 2. Nature of property. § 3. Relation
of wealth, property, and capital. § 4. Some theories of private property.
§ 5. Origin vs. justification. § 6. Limitations of private property. § 7.
Limitations of bequest and inheritance. § 8. Social expediency of
private property. § 9. The monetary economy. § 10. The competitive
system. § 11. Limitation of competition by custom. § 12. Effect of
modern forces upon custom. § 13. Adam Smith's influence. § 14. The
wage-system.
§ 1. #The place of private property#. Of fully equal importance with
material wealth in determining the economic power of a people is the
social system under which the nation lives. This is the term applied to
the whole complex of institutions and arrangements in which and by
which people live together in society. It is the embodiment of the
opinions, ideas, and habits of life inherited by each generation from its
forbears. It is, indeed, a people's whole state of civilization with its
political, economic, intellectual, scientific, religious, and esthetic
aspects.

The most important economic aspect of the existing system is, broadly
speaking, the institution of private property. So closely connected with
this that they are hardly more than different phases of the same thing,
are the use of money (the monetary economy), the wage system, and
competition as a mode of distribution. "The institution of private
property" is the general expression for the way in which men in the
modern state make use of their own energies and of material wealth
within the nation. Nearly all the total of the things mentioned in the
table in Chapter 2, section 4, are owned by private citizens.[1] We live
in a régime of private property, and all our economic problems are
affected by that fact. The determination of the exact boundaries of
private property makes up a large part of the politico-economic
problems which the people in each generation have to solve. A large
share, possibly, in a certain sense, every one of the economic problems
that are discussed involve change, limitation, definition, or, more
radically, abolition of present laws of property. Broadly understood, as
above, therefore, determination of the nature of private property is the
essential economic problem.
§ 2. #Nature of property#. Property means ownership, and "ownership"
is the abstract noun expressing the quality of possessing a thing.
Correspondingly, "owner" is the Anglo-Saxon equivalent of
"proprietor." Property thus, fundamentally, means not an object held, or
possessed, but the right in or belonging to a person to control
something that he owns. Ownership is a legal right to control under
certain conditions.[2] Physical, possession of an object is not
necessarily ownership.
There are different kinds of ownership. It may be private, as that of
individuals, families, partnerships, or corporations; or it may be public,
as that of nations, states, counties, cities and towns, owning such things
as public buildings, parks, highways, the Adirondack forest-reserve, or
the Erie Canal. These two kinds are equally effective as against the
claims of outsiders, but the rights of those inside the circle of
ownership differ. For example, the rights of one shareholder against
another, or the rights of one member of a family as against another, are
not the same as the rights against outsiders. Private property is the

characteristic feature of our present industrial society, but it exists side
by side with public property and with many intermediate grades
between private and common property.
Tho property meant originally and essentially the intangible right to a
thing, the word came to be applied also to the