Part III The Production of Wealth

Chapter 1 The Meaning of Production

The word production comes from the Latin, pro, before, and ducere, to draw, and its literal meaning is a drawing forth.

Production, as a term of political economy, means a drawing forth by man; a bringing into existence by the power of man. It does not mean creation, the proper sense of which is a bringing into existence by a power superior to that of man. Nothing that is created can in the politico-economic sense be said to be produced. Man is not a creator; he has no power of originating things, of making something out of nothing. He is a producer; that is to say a changer, who brings forth by altering what already is. All his making of things, his causing things to be, is a drawing forth, a modification in place or relation, and in accordance with natural laws, which he neither originated nor altered, of what he finds already in existence. All his production has as its substratum what he finds already in the world; what exists irrespective of him. This substratum or nexus, the natural or passive factor, on which and by which the human or active factor of production acts, is in the terminology of political economy called land.

In common speech, the word production is frequently used in a sense which distinguishes the first from the later stages of wealth-getting; and those engaged in the primary extractive or formative processes are often styled producers, as distinguished from transporters or exchangers. This use of the word production may be convenient where we wish to distinguish between separable functions, but we must be careful not to import it into our use of the economic term. In the economic meaning of the word production, the transporter or exchanger, or anyone engaged in any sub-division of those functions, is as truly engaged in production as is the primary extractor or maker. A newspaper-carrier or the keeper of a newsstand would for instance in common speech be styled a distributor. But in economic terminology he is not a distributor of wealth, but a producer of wealth. Although his part in the process of producing the newspaper comes last, not first, he is as much a producer as the paper-maker or type-founder, the editor or compositor or press-man.

For the object of production is the satisfaction of human desires, that is to say it is consumption; and this object is not made capable of attainment, that is to say, production is not really complete, until wealth is brought to the place where it is to be consumed and put at the disposal of him whose desire it is to satisfy.

Thus, the production of wealth in political economy includes transportation and exchange. The distribution of wealth, on the other hand, has in economic phraseology no relation to transportation or exchange, but refers, as we shall see when we come to treat of it, to the division of the results of production. This fact has been ignored by the great majority of professed economists who with few exceptions treat of exchange under the heading of the distribution of wealth instead of giving it its proper place under the heading of the production of wealth.

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