A. Economic goods.
In the two preceding sections we have seen how separate individuals, as well as the inhabitants of whole countries and groups of countries united by trade, attempt to form a judgment on the one hand about their equirements for future time periods and, on the other, about the quantities of goods available to them for meeting these requirements, in order to gain in this way the indispensable foundation for activity directed to the satisfaction of their needs. The task to which we now turn is to show how men, on the basis of this knowledge, direct the available quantities of goods (consumption goods and means of production) to the greatest possible satisfaction of their needs.
An investigation of the requirements for, and available quantities of, a good may establish the existence of any one of the three following relationships:
(a) that requirements are larger than the available quantity.
(b) that requirements are smaller than the available quantity.
(c) that requirements and the available quantity are equal.
We can regularly observe the first of these relationships-where a part of the needs for a good must necessarily remain unsatisfied- with by far the greater number of goods. I do not refer here to articles of luxury since, with them, this relationship seems selfevident.
But even the coarsest pieces of clothing, the most ordinary living accommodations and furnishings, the most common foods, etc., are goods of this kind. Even earth, stones, and the most insignificant kinds of scrap are, as a rule, not available to us in such great quantities that we could not employ still greater quantities of them.
Wherever this relationship appears with respect to a given time period-that is, wherever men recognize that the requirements for a good are greater than its available quantity-they achieve the further insight that no part of the available quantity, in any way practically significant, may lose its useful properties or be removed from human control without causing some concrete human needs, previously provided for, to remain unsatisfied, or
without causing these needs now to be satisfied less completelythan before.
The first effects of this insight upon the activity of men intent to satisfy their needs as completely as possible are that they strive: (1) to maintain at their disposal every unit of a good standing in this quantitative relationship, and (2) to conserve its useful properties.
A further effect of knowledge of this relationship between requirements and available quantities is that men become aware, on the one hand, that under all circumstances a part of their needs for the good in question will remain unsatisfied and, on the other hand, that any inappropriate employment of partial quantities of this good must necessarily result in part of the needs that would be provided for by appropriate employment of the available quantity remaining unsatisfied.
Accordingly, with respect to a good subject to the relationship under discussion, men endeavor, in provident activity directed to the satisfaction of their needs: (3) to make a choice between their more important needs, which they will satisfy with the available quantity of the good in question, and needs that they must leave unsatisfied, and (4) to obtain the greatest
possible result with a given quantity of the good or a given result with the smallest possible quantity-or in other words, to direct the quantities of consumers’ goods available to them, and particularly the available quantities of the means of production, to the satisfaction of their needs in the most appropriate manner.
Taken From : PRINCIPLES OF ECONOMICS
