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that of price, cost and the resultant profit, and it would be fatal to take that away, unless an equally simple and more accurate measure could be substituted for it.
This is not a question, it should be observed, of motive or incentive. Very likely we much exaggerate the importance of the profit motive. It may be true that men would work, perhaps that they already work in fact, as zealously for a fixed salary, as for personal gain. But aim and motive are two somewhat different things, and the aim of profit, is, and will remain, essential to the efficient conduct of business. In a game the players are not animated by the motive of scoring runs or points, but they aim at them; and the zest disappears very speedily from the game, if that aim ceases to be of interest. Moreover, while a scoring system is always a somewhat arbitrary thing, measuring imperfectly the true merits of the play, if it measures them with the roughest accuracy, we prefer the issue of our games to be decided so, rather than by the decisions of an impartial judge, who can take into account the finest points of skill. So it is in the world of business. The scoring-board of profits may be an imperfect one; let us, by all means, where we can, alter the rules of the game so as to make it better. But let us not imagine that it displays a finer insight or a superior intellect to speak as though the scoring-board could be dispensed with, and the test of profit and loss treated as irrelevant. Quantitative measurement is essential to efficiency. Let us be careful to remember all that this implies.
INDEX
Ability Accountancy Allocation of resources Ambiguities Australasia
Bastiat, Frederic Beef and hides Borrowing and lending, system of Business efficiency Business man as a purchaser Business risk
Capital; as representing a period of waiting; distribution; distribution and rate of interest; effect on labor of an increased supply; not a stock of consumable goods; reaction of price charges on; reflections upon; supply; supply as affected by charges in interest rate Capital goods Capital market Capitalism Capitalist Chance Coal industry, cost of production and price; miners' wages Coats, J. & P. Collective saving Commodities; labor as a commodity Competition Composite demand Composite supply Consumable goods Consumers' goods and producers' goods Consumption, margin of; waiting for Control and risk-taking Controversy Coöperation; unorganized Cost, general relation of price, utility and cost; price relation to; rent as factor in real costs; ultimate; utility and Cotton and cotton-seed; contrast to wool and mutton Cotton industry Criteria of policy Currency inflation Cycles
Demand, ambiguity of expression "increase in demand,"; derived; elastic and inelastic; see also Composite demand; Joint demand; Supply and demand Derived demand Derived utility Diagrams, use of Diminishing utility; money and Directors Distribution of wealth; interest rate and Dividends Division of labor
Economic laws; fundamental character Economic theory; fact and Economic world, orderly nature Education Efficiency Elastic demand Employers' associations Enterprise Entrepreneur "Equal pay for equal work," Expectation
Fact and theory Farmers Fortunes
Gambling Government, enterprises; failings
Hides and beef Houses Housewife as purchaser Housing
Ideas and institutions Incompetents Increase in demand, ambiguity Index numbers Inelastic demand Inflation Institutions and ideas Insurance companies; significance Interest; necessity of Interest rate; changes and their effect on supply of capital; distribution and; price of land and Intuition
Joint demand; importance of the unimportant; marginal utility under; summary of considerations Joint products; cost of production Joint-stock company Joint supply, marginal cost under; summary of considerations
Keynes, J. M.
Labor; apportionment among occupations; apportionment among places; apportionment among social grades; as a commodity; cost, difficulty of estimating; division; effect of increased supply of capital; four grades; mobility; product of; reaction of price changes on; supply in general Laissez-faire; retrospect on Land, characteristics; differential aspect; margin of transference; marginal; price and rent, relation; question of real costs; scarcity aspect; supply; tenure; urban; see also Rent Landlords Large scale business Laws, fundamental
Malthus, T.R. Management Margin, danger of ignoring Margin of consumption Margin of production Margin of transference Marginal cost, aspects; misinterpretation; under joint supply Marginal land Marginal purchaser Marginal utility; price relation to; under joint demand Market Marshall, Alfred Marx, Karl Mill, J. S. Miners Monetary changes, disturbances of Money, diminishing utility Monte Carlo Mutton. See Wool and Mutton
Natural ability Normal conditions
Occupations; apportionment of labor among Order, economic
Pasture versus tillage Pigou, A. C. Policy, criteria Population Postal charges Poverty; national Price, consequences of higher; general relation with utility and cost; law of tendency; marginal utility and; post-war; reaction of changes in demand and supply; relation of demand and supply to; utility and Producers' goods Production, power of; real costs; waiting for Professions Profiteering Profits; elements; general analysis; in risky industries Protective tariff Psychology and economics Purchasers, business man; housewife; marginal Purchasing power
Railway rates Railways Rate of interest. See Interest rate Rent; complex character; marginal land; necessity; rate of interest and Reserves Residuary profits Resources, allocation Risk, reward for; under large-scale organization
Satisfaction Saving; individual; involuntary; psychology; social School teachers Service Serving cotton Shareholders Sinking-fund Situation Smith, Adam Social grades, labor movement among Socialism Speculation Steel smelters Subsidies, industrial Substitutes Supply, reactions of price changes on; see also Composite supply; Joint supply Supply and demand, changes in, and their reaction on price; forces behind; general laws; relation of price to; wages and Supreme Allied Council
Teachers Theory, economic Thrift Tillage versus pasture Trade cycles Trade depression Trade unions; actions; wage level and
Ultimate real costs Unearned increment Unemployment; trade union policy and Utility; cost and; derived; general relation of price, utility and cost; law of diminishing utility; law of diminishing utility as applied to money; marginal; price relation to; wealth and
Wages, general wage level; trade unions and; women's Wages Fund Waiting, essence of; for consumption; for production Waste, economic Wealth, distribution; utility and "What should be" and "What is," Women's wages Wool and mutton; contrast to cotton and cotton-seed Workers' control
End of Project Gutenberg's Supply and Demand, by Hubert D. Henderson