If it is generally correct that clarity about the objective of their endeavors is an essential factor in the success of every activity of men, it is also certain that knowledge of requirements for goods in future time periods is the first prerequisite for the planning of all human activity directed to the satisfaction of needs. Whatever may be the external conditions, therefore, under which this activity of men develops, its success will be dependent principally upon correct foresight of the quantities of goods they will find necessary in
future time periods-that is, upon correct advance formulation of their requirements. It is clear also that a complete lack of foresight would make any planning of activity directed to the satisfaction of human needs completely impossible.
The second factor that determines the success of human activity is the knowledge gained by men of the means available to them for the attainment of the desired ends. Wherever, therefore, men may be observed in activities directed to the satisfaction of their needs, they are seen to be seriously concerned to obtain as exact a knowledge as possible of the quantities of goods available to them for this purpose. How they proceed to do so is the subject that will occupy us in this section.
The quantities of goods available, at any time, to the various members of a society are set by existing circumstances, and in determining these quantities the only problems they have are to measure and take inventory of the goods at their disposal. The ideal result of these two varieties of provident human activity is the complete enumeration of the goods available to them at a givenpoint in time, their classification into perfectly homogeneous categories, and the exact determination of the number of items in each
category. In practical life, however, far from pursuing this ideal, men customarily do not even attempt to obtain results as fully exact as is possible in the existing state of the arts of measuring and taking inventory, but are satisfied with just the degree of exactness that is necessary for practical purposes. Yet it is significant evidence of the great practical importance that exact knowledge of the existing quantities of goods available to them has for many people that we find a quite exceptional degree of exactness of this knowledge among merchants, industrialists, and such persons generally as have developed a high degree of provident activity. But even at the lowest levels of civilization we encounter a certain amount of
knowledge of the available quantities of goods, since it is evident that a complete lack of this knowledge would make impossible any provident activity of men directed to the satisfaction of their needs.
To the degree to which men engage in planning activity directed to the satisfaction of their needs, they endeavor to attain clarity as to the quantities of goods available to them at any time. Wherever a considerable trade in goods already exists, therefore, we will find men attempting to form a judgment about the quantities of goods currently available to the other members of the societywith whom they maintain trading connections.
As long as men have no considerable trade with one another, each man obviously has but a small interest in knowing what quantities of goods are in the hands of other persons. As soon, however, as an extensive trade develops, chiefly as a result of division of labor, and men find themselves dependent in large part upon exchange in meeting their requirements, they naturally acquire a very obvious interest in being informed not only about all the goods in their own possession but also about the goods of all the other persons with whom they maintain trading relations, since part of the possessions of these other persons is then accessible to them, if not directly, yet indirectly (by way of trade).
Taken From : PRINCIPLES OF ECONOMICS
