10. Our Wants are various. After a little reflection, we shall see that we generally want but little of any one kind of commodity, and prefer to have a portion of one kind and a portion of another kind. Nobody likes to make his dinner off potatoes only, or bread only, or even beef only; he prefers to have some beef, some bread, some potatoes, besides, perhaps, beer, pudding, &c. Similarly, a man would not care to have many suits of clothes all alike; he may wish to have several suits, no doubt, but then some should be warmer, others thinner; some for evening dress, others for travelling, and so on. A library all made of copies of the same book would be absurd; to keep several exact duplicates of any work would be generally useless. A collector of engravings would not care to have many identical copies of the same engraving. In all these, and many other cases, we learn that human wants tend towards variety; each separate want is soon satisfied, or made full (Latin, satis, enough, and facere, to make), and then some other want begins to be felt. This was called by Senior the law of variety, and it is the most important law in the whole of political economy.

It is easy to see, too, that there is a natural order in which our wants follow each other as regards importance; we must have food to eat, and if we cannot get anything else we are glad to get bread; next we want meat, vegetables, fruit, and other delicacies. Clothing is not on the whole as necessary as food; but, when a man has plenty to eat, he begins to think of dressing himself well. Next comes the question of a house to live in; a mere cabin is better than nothing, but the richer a man is the larger the house he likes to have. When he has got a good house he wants to fill it with furniture, books, pictures, musical instruments, articles of vertu, and so forth. Thus we can lay down very roughly a law of succession of wants, somewhat in this order: air, food, clothing, lodging, literature, articles of adornment and amusement.

It is very important to observe that there is no end nor limit to the number of various things which a rich man will like to have, if he can get them. He who has got one good house begins to wish for another: he likes to have one house in town, another in the country. Some dukes and other very rich people have four, five, or more houses. From these observations we learn that there can never be, among civilised nations, so much wealth, that people would cease to wish for any more. However much we manage to produce, there are still many other things which we want to acquire. When people are well fed, they begin to want good clothing; when they are well clothed, they want good houses, and furniture, and objects of art. If, then, too much wealth were ever produced, it would be too much of one sort, not too much of all sorts. Farmers might be ruined if they grew so much corn that nobody could eat it all; then, instead of producing so much corn, they ought to produce more beef and milk. Thus there is no fear that, by machinery or other improvements, things will be made so plentifully that workmen would be thrown out of employment, and not wanted any more. If men were not required at one trade, they would only need to learn a new trade.

11. When things are useful. The chief question to consider, then, is when things are useful and when they are not. This entirely depends upon whether we want them or not. Most things about us, the air, rain water, stones, soil, &c., are not wealth, because we do not want them, or want so little that we can readily get what we need. Let us consider carefully whether we can say that water is useful, or in what sense we may say so. It is common to hear people say that water is the most useful substance in the world, and so it is in the right place, and at the right time. But if water is too plentiful and flows into your cellars, it is not useful there; if it soaks through the walls and produces rheumatism, it is hurtful, not useful. If a man wanting pure good water, digs a well and the water comes, it is useful. But if, in digging a coal pit, water rushes in and prevents the miners reaching the coal seam, it is clear that the water is the opposite of useful. In some countries rain comes very irregularly and uncertainly. In Australia the droughts last for one or two or even three years, and in the interior of the continent the rivers sometimes dry up altogether. The dirtiest pools then become very valuable for keeping the flocks of sheep alive. In New South Wales water has been sold for three shillings a bucketful. When a drought breaks up, sudden floods come down the rivers, destroying the dams and bridges, sweeping away houses, and often drowning men and animals. It is quite plain that we cannot say water is always useful; it is often so hurtful as to ruin and drown people. All that we can really say is that water is useful when and where we want it, and in such quantity as we want, and not otherwise. We must not say that all water is useful, but only that such water is useful as we can actually use.

It is now easy to see why things, in order to be wealth, must be limited in supply; for we never want an unlimited quantity of anything. A man cannot drink more than two or three quarts of water in the day, nor eat more than a few pounds of food. Thus we can understand why in South America, where there are great herds of cattle, the best beef is not wealth, namely, because there is so much that there are not people enough to eat it. The beef which is eaten there is just as useful in nourishing people as beef eaten in England, but it is not so valuable because there is plenty of beef to spare, that is, plenty of beef not wanted by the people.

12. What we must aim at. Now we can see precisely what it is that we have to learn in political economy. It is how to supply our various wants as fully as possible. To do this we must, first of all, ascertain what things are wanted. There is no use making things unless, when made, they are useful, and the quantities of things must be proportioned to what are wanted. The cabinetmaker must not make a great many tables, and few chairs; he must make some tables and more chairs. Similarly, every kind of commodity must be supplied when it is most wanted; and nothing must be over-supplied, that is manufactured in such large quantities that it would have been better to spend the labour in manufacturing other things.

Secondly, we must always try to produce things with the least possible labour; for labour is painful exertion, and we wish to undergo as little pain and trouble as we can. Thus, as Professor Hearn, of the University of Melbourne, well described it, political economy is the science of efforts to satisfy wants; it teaches us how to find the shortest way to what we wish for. The object which we aim at is to obtain the most riches at the cost of the least labour.

13. When to consume wealth. To consume a commodity is to destroy its utility, as when coal is burnt, or bread eaten, or a jug broken, or a piano worn out. Things lose their utility in various ways, as when they go bad, like meat and fish; when the fashion changes, as with ladies’ attire; or when they merely grow old, as in the case of an almanack, or a directory. Again, houses fall into bad repair; ricks of corn may be burnt down; ships may founder. In all these cases utility is destroyed, slowly or quickly, and the commodities may be said to be consumed. It is obvious that we must use things while they are fit to be used, if we are to use them at all.

It is evident, too, that we ought to try to get the utmost possible use out of things which we are happy enough to possess. If an object is not injured nor destroyed by use, as in the case of reading a book, or looking at a picture, then the more often we use it the greater is the utility. Such things become more useful if they are passed on from one person to another, like books in a circulating library. In this case there arises what we may call the multiplication of utility. Public libraries, museums, picture galleries and like institutions all multiply utility, and the cost of such institutions is little or nothing compared with their usefulness.

When a commodity is destroyed at once by use, as in the case of food, it is obvious that only one person can use the same portion of commodity. Our object must then be to consume it when it is most useful. If a man lost in the bush find himself with a short supply of food, it would be foolish of him to eat it all up at once, when he might starve for several days afterwards. He should spread out his supply, so as to eat each bit of food when it will support his strength the most. So we ought to do with the earnings of a life time. The working man should not spend all his wages when trade is brisk, because he will want some of it much more when trade becomes slack, and he is out of employment. Similarly, that which is spent in early life upon mere luxuries and frivolities, might be much more useful in old age, when even necessaries and ordinary comforts may be difficult to obtain. All wealth is produced in order that it may be consumed, but then it must be consumed when it best fulfils its purpose; that is, when it is most useful.

14. The Fallacy of Consumption. It is not uncommon to hear people say that they ought to spend money freely in order to encourage trade. If every person were to save his money instead of spending it, trade, they think, would languish and workmen would be out of employment. Tradespeople favour these notions, because it is obvious that, the more a milliner or draper can persuade his customer to buy, the more profit he makes thereby. The customers, too, are quite inclined to think the argument a good one, because they enjoy buying new dresses, and other pleasant things. Nevertheless the argument is a bad fallacy.

The fact is, that a person who has riches cannot help employing labour of some kind or other. If he saves up his money he probably puts it into a bank; but the banker does not keep it idle. The banker lends it out again to merchants, manufacturers and builders, who use it to increase their business and employ more hands. If he buy railway shares or government funds, those who receive the money put it to some other profitable use. If the rich man actually hoards up his money in the form of gold or silver, he gets no advantage from it, but he creates so much more demand for gold or silver. If many rich people were to take to hoarding up gold, the result would be to make gold mining more profitable, and there would be so many more gold miners, instead of railway navvies, or other workmen.

We see then that, when a rich person decides how to spend his money he is deciding not how many more workpeople shall be set to work, but what kind of work they shall do. If he decide to give a grand fancy ball, then in the end there will be so many more milliners, costumiers, lacemakers, confectioners, &c. A single ball indeed will have no great effect; but, if many people were to do the same, there would soon be more tradespeople attracted to these trades. If, on the other hand, rich people invest their money in a new railway, there will be so many more surveyors, engineers, foremen, navvies, iron puddlers, iron rollers, engine mechanics, carriage builders, &c.

The question really comes to this, whether people are made happier by more fancy balls, or by more railways. A fancy ball creates amusement at the time, but it costs a great deal of money, especially to the guests who buy expensive costumes. When it is over there is no permanent result, and no one is much the better for it. The railway, on the other hand, is no immediate cause of pleasure, but it cheapens goods by enabling them to be carried more easily: it allows people to live in the country, instead of the crowded town, or it carries them on pleasant and wholesome excursions.

We see, then, that it is simple folly to approve of consumption for its own sake, or because it benefits trade. In spending our wealth we ought to think solely of the advantage which people get out of that spending.

15. The Fallacy of Non-consumption. Some people fall into the opposite fallacy of thinking that all spending is an evil. The best thing to do with wealth is to keep it and let it grow by interest, or even to neglect the interest and keep the gold itself. Thus they become what we call misers, and there are always a certain number of people, who deprive themselves of the ordinary pleasures of life, in order that they may have the pleasure of feeling rich. Now these kind of people do no positive harm to their fellow-men; on the contrary they increase the wealth of the country, and some one or other will sooner or later benefit by it. Moreover, if they put their wealth into banks and other good investments, they do great service in increasing the capital of the nation, and thus enabling so many more factories, docks, railways, and other important works to be constructed. Most people are so fond of spending their money on passing amusements, entertainments, eating and drinking, and fine dressing, that it is a distinct advantage to have other people who will put their wealth into a more permanently useful form.

Nevertheless, there could be no use in abstaining from all enjoyment in order that we might lay up a store of wealth. Things are not wealth unless they are useful and pleasant to us. If everybody invested his savings in railway shares, we should have so many railways that they could not be all used, and they would become rather a nuisance than a benefit. Similarly, there could be no good in building docks unless there were ships to load in them, nor ships unless there were goods or passengers to convey. It would be equally absurd to make cotton mills if there were already enough to manufacture as much cotton goods as people could consume.

Thus we come to see that wealth must be fitted for use and consumption in some way or other. What we have to do is to endeavour to spend our means so as to get the greatest real happiness for ourselves, our relatives, friends, and all other people whom we ought to consider.