What are the sophisticated wants of an advanced society?

Professor Galbraith, an American lecture in economics, has called our type of society “The Affluent Society.” Affluence is wealth, and there can be little doubt that Western civilization body is wealthier than any previous civilization.

We have move material things, more useful goods, than any civilization before us yet we can still think of things we wish we had. Some of us want to be trend-setters in fashion; others want washing machines, colour TV, transistor radios, tape-recorders, and record players.

The very rich want swimming-pools or tennis courts in their gardens; they want to water-ski or to own two or three cars as status symbols. In fact human wants never decrease even among the wealthiest people or nations. It has been truthfully said that ‘appetite grows with feeding.

Specialization and the Growth of Surplus Output

The primitive producer, searching for food in the jungle or on the sea shore, may find enough food to keep him alive for the day, or he may find enough to leave him a small surplus which he can exchange with other tribesmen. In civilized societies every producer must provide much more than for his own needs: he must produce goods at all, but depend entirely on the output of others.

The schoolteacher, the doctor, the nurse, the lawyer, the typist and many other people do not produce goods at all, but give their services to others. The surpluses achieved by skilful work on farms, in factories, in mines and in the fishing industry grow larger every years made by scientists and research workers into the processes of manufacture and production, and experiments are carried out to discover which methods will yield the largest output.

The term mass production is used to describe any system which aims at producing, with the fewest workers, the greatest output of goods. In nearly every industry today techniques have been developed which allow manufacturing processes to be carried on continuously, often day and night. The work flows through the factory in endless stream, and operators at various stages perform individual operations with specially designed machinery. Henry Ford in America developed the motor-car industry from a system whereby one man built a car completely, to a system where hundreds of men one man built a car completely, to system where hundreds of men, each performing one operation repeatedly, produce an endless stream of cars. At one time a car was rolling off the production lines every ten seconds.

Henry Ford’s definition of mass production was: It is the focusing upon a manufacturing project of the principles of power, accuracy, economy, system, continuity, speed and repetition.’ Two other factors have been found to affect greatly the volume of production.

They are simplification and standardization. Together with specialization they are source of wealth in our affluent society.

Simplification is the process of making of manufactured article as simple and functional as possible. Our Victorian ancestors took great delight in embellishing their furniture and their homes with decorative knobs and patterns. We have done away with these adornments, and our furniture, kitchen equipment, houses and cars have clean, sweeping, functional surfaces- because this is the easy way to make them.

This trend can be seen in the contrast between the Houses of Parliament, which are richly decorated with ornate carvings, points, and windows, and some modern which have smooth clean lines, and perhaps a single piece of sculpture for decoration.

When an article is designed to be produced in the simplest possible way, the job for which it is intended is borne in mind, and quite often the article is not allowed to be more efficient than is really required. Hence a happy compromise is reached between cheapness and ability to do the job.

The famous Stengun invented during the Second World War was efficient enough to do the job for which it was intended, i.e. to fire bullets rapidly; but it was so cheap that if a soldier was tired and had used up all his ammunition, he could throw the gun away to save carrying it. A more modern example is a ball-point pen, which is discarded when used. If hour simplify an article you make it cheaper and it becomes easy to afford a new one when its working life is over.

Standardization is the process of making thing in standard parts, which can e used in many similar articles. For instance, an integrated circuit in one television set is very much like an integrated circuit in another set.

These integrated circuit packages are standard parts. All the television set made by one manufacture will have the same standard integrated circuit unit. Naturally design costs are heavy for these technical products, but the production runs of the finished article are very long and the design costs are spread over the greater volume of output.

The gear-boxes are so designed that the driving shaft can enter the box from any of six different positions. It then drives either one, two or three shafts, which can emerge from the gear-box in ten different ways. This gives a total of 60 possible shaft positions it is difficult to imagine a more versatile component.

Many examples of standardization can be seen in the motor-car industry. A company or group of companies can economize by using the same standard parts on several different ways. This gives a total of 60 possible shaft positions.

It is difficult to imagine a more versatile component. Many examples of standardization can be seen in the motor­car industry. A company or group of companies can economize by suing the same standard parts on several different vehicles. For instance, the 1-3 liter engines used on used on some For contains are identical with those used on the Ford Capri, and the 2-3 liter Cortina engine is also used in the Ford Granada. By using such standard parts economies are achieved which reduce prices and help manufacturers achieve a larger share of the car market.

In one recent year Ford of Britain produced 400,584 motor vehicles in the United Kingdom, while the total European production approached one million vehicles.

Automation in Industry

When Products are made of standard parts with a high degree of specialization, it becomes possible for more and more the work to be done automatically by machines. The invention of electronic devices and tape recorders has had a profound influence on industry. Instructions can be inserted into tapes and run through a machine as an endless belt.

This instruction will be obeyed countless times as the tape repeats its journey. Such automatic devices operate much faster than human beings; they are not temperamental, and do not need holidays off. Today output in the factories and fields of the advanced nations is greater than ever seemed possible in the solidest dreams of our forefathers.

We have reached such a state of productivity that it is possible for the vast majority of people in these nations to be well fed, well clothed, well housed, and well cared for.

The basic Wants of Mankind

The six elementary wants of mankind are food, water, clothing, shelter, land, and medical care. Most of these are obvious, but the inclusion of land is worth a moment’ discussion. As we are earth-bound creatures, everyone must have somewhere to live, some geographical spot that can be called home.

Nothing reduces a people to a condition of poverty more rapidly than to e driven off their land by some natural or man-made disaster. Conversely history is full of examples of the sudden expansions of particular races at the expense of their neighbours, because of some technological advance which enabled them to overrun the land of others. The hordes of Gengis Khan are famous example.

If he has the six essentials man prospers and raises a family; if heirs unable to secure them, family life is abandoned. It is not only unfortunate primitive people who behave in this way: even highly civilized people, faced with a change in their circumstances, abandon the moral 1946, speaks of the accelerating pace of the collapse of the emigrants’ moral code. When the first man died they waited a full day in reverent respect, burying him in a well-made coffin. When the next one died they just dug hole and put a board over the body.

Later, they left the dead unburied. Later still they abandoned the living who could not keep up trapped in the mountains; men fought each other for food for their children behind them to try to get through to California. Those left behind turned to cannibalism, eating red Indians first, then dead white people.

If we are to understand commerce we must see it as part of man’s natural drive to provide himself with his basic wants.

Goods and Services

All the wants of mankind can be classified under the headings of either ‘goods’ or ‘services.’ Good are tangible things such as education and entertainment. If we are to have our wants satisfied as fully as possible, we must provide for ourselves both the material goods that we need to lead a happy and contented life, and the less tangible, but equally important, services. The provision of goods and services is called production.

Satisfying Human-Methods of Production

There are two methods of production: direct and indirect production. Direct production occurs where man satisfies his wants entirely unaided by other people. Indirect production occurs when we cooperate with other people in the production of the goods and services we need.

Direct Production-satisfying our Wants Entirely Unaided by Other people

Robinson Crusoe was versatile character. Cast away on a desert island, forced to do everything for himself, he succeeded in building a house, taming a flock of goats, hunting, fishing, and farming to supply his daily needs, and making a friend of man Friday.

Many people have pointed out how unlikely it would before a castaway to find so many useful articles saved from the wreck of his vessel. Crusoe had not only a gun, powder and shot, sailed and needles, but also a box of tools, some chickens, pigs, and a cat as a companion. Robinson Crusoe’s method of satisfying his wants is an example of direct production.

Direct production is the name economists give to production entirely unaided by other people-although Robinson Crusoe did cheat by starting off with a useful supply of things others had made for him. Some had found by a whole years of ceaseless struggle just how difficult it is for a man to satisfy his wants entirely unaided by other people. Three days after entering the wood he secured his first meal-by braining a rabbit with a club he had taken from a tree.

He had been taken ill and barely survived His efforts at producing directly for himself had been singularly unsuccessful, yet he was one of the more intelligent members of his year, and he had the experience of civilized man to draw upon.

This production of goods entirely unaided by other people is a very inefficient form of production, for the producer has to leave one task to perform another urgent one before he has really mastered the first. People who do satisfy their wants entirely by their own efforts, e.g. the Eskimos of northern Canada and the Fuegians of tierra del Fuego, are nearly always very poor. They are chiefly preoccupied with findings food; their shelter is quickly contrived from what Nature has provided a cave or snow hut. They are liable to be killed off by the slightest piece of hard luck, such as a blizzard that prevents them hunting, or a sudden that traps them on a lonely ice floe.

Darwin found that the Fuegians, in hard times, killed off and ate the old women. They had dogs, but these were more valuable than the old women, who were forced to accept this useful end to their lives the voyage of H.M.S. Beagle. Tierra del Fuego, the tip of Cape Horn, has one of the bitterest climates in the world. The mantle of seal skin is this man’s only protection against the weather.

“Such primitive races have no commerce, because they have nothing to trade with other tribes. Direct production is practised hardly anywhere in the world today. The quantity of goods that can be obtained in this way is so small that direct producers are always poor.

Indirect Production-Producing by Specialization

We have seen that direct production generally results in poverty. Man quickly finds that working together gives better results, chiefly because people can specialize. The best hunters go hunting, the best fish, the best potter makes pots for the whole village, and so on.

The fruits of their labour are then shared so that all are satisfied, and all enjoy a higher standard of living. Commerce really begins with such simple societies, for any surplus left over after all the tribe has been supplied can be exchanged with foreigners’ from other tribes.

The tribesmen are no longer producing directly for themselves: they are producing indirectly.

Modern Advanced Societies

All the advanced nations have highly complex social organizations which enable people to live together in a secure atmosphere, helping one another. In these societies, people do not build their own houses, grow their own food. Make their own clothes, or defend themselves against law­breakers. Experts are appointed to do certain jobs and work exclusively in them.

The most gifted people become scientists, research workers, administrators or university professors. Their knowledge becomes so highly specialized that few ordinary people can understand what type are talking about.

Below this range of gifted people the types of task performed grade of into less and less skilled work. The least able people still find useful work to perform, for the range of human wants is endless. The humble worker who keeps the factor clean, for example, is performing useful work even though he has no special gifts.

A great British economist, Adam Smith, investigated the way in which nations become wealthy. In his famous book, The Wealth of Nations, his inquiries led him to conclude that wealth came from specialization. Smith studied the methods of production used in the pin trade and said: A man not educated to this business could scarcely perhaps with his utmost industry make one pin a day, and certainly could not make twenty….But in the way this trade is carried on it is divided into a number of branches, of which the greater part are likewise peculiar trades.

One man draws out the wire, other straights it, a third cuts it, a fourth points it, and a fifth grinds it at the top. To make the head requires two or three distinct operations. To put it on is a peculiar business, to whiten the pins is another? It is even a trade by itself to put them into the paper, and the important business of making aping is divided in this way into eighteen different processes, which in some manufactories are all performed by distinct hands.

I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But although they were very poor, and therefore but indifferently accommodated they were very poor, and therefore but indifferently accommodated with the necessary machinery they could, when they exerted themselves, make among them twelve pounds of pins a day.

There are in a pound upwards of 4,000 pins of a mid­size. Each person, therefore, could make one-tenth of 48,000 pins in a day. But if they had wrought separately, without having been educated to this peculiar business, they certainly could not have each made twenty, and possible not even one.

Britain is still a leader in the manufacture of pins, but the processes have been largely mechanized. A modern pin- making machine heads, cuts and points the wire automatically. It makes about 500-600 pins per minute and about 250-300 tons are made every year in about 20 different size to market this enormous output of about 2 ½ billion pins, the manufacturers need world-wide market, and pins are exported by Britain to many countries, including the United States of America, which buys about one-fifth of the total.

Surplus Goods and the Provision of Services

The surplus output of highly specialized producers in the fields and factories of advanced nations sets some people free to concentrate on providing services-education, entertainment, health and dental services, legal advice, etc.

They are still ‘producers,’ however; to the economist the only people who are not producers are those who actually withdraw from economic activities and become tramps, beatniks or ‘drop-outs’ as the Americans call them. Such people can truly be said to be unproductive; naturally they do not enjoy the highest standard of living and their numbers tend to decrease in colder climates where the struggle for survival is hardest.

Commerce-Impersonal Tertiary Services

Commerce is the distribution and exchange of all the surplus goods produced in the fields, mines, seas, forests, and factories of the earth so that they reach the final consumer in the right place, and the right condition, at the right time, in the right quantity, and at the right price.

The Following points are important in this definition:-

(i) Production is usually mass production these days, but consumption is in tiny quantities. Somewhere along the line the bulk has to be broken down to the right quantity for one family or even one individual.

(ii) The goods have to reach the final consumer. This involves bridging the geographical gap that separates the producer from his market.

(iii) The whole process must be so efficient that the price is still reasonable.

(iv) It is only the surplus goods that commerce deals with; goods consumed by the producer do not enter the commercial network at all.

(v) The goods have to arrive in the condition in which the customer requires them. This means bridging the time gap between production and consumption so that the goods are still in perfect condition when required.

(i) The Complexity of Commerce

The intricate pattern of commercial firms has arisen because of the need for specialization. In a free-enterprise society people may do anything they like that is not actually criminal to earn their living. If a man sees an opportunity to offer a better service at a profit to himself he will do it, and make the profit as his reward for his efforts.

This rapidly develops into a complicated network of specialist firms able to offer goods or services to the producer or consumer. Commerce, like all other human activities, is not static, but dynamic. It is always on the move, always changing, always developing. It is because of its dynamic nature that commerce improves from year to year. New methods, new ideas, new materials can revolutionize commerce.

What is efficient and reasonable toady will be old- fashioned and expensive tomorrow compared with the new techniques that science ad business research have produced.

The world commercial scene is a very complicated picture. Everyone is busy producing, transporting or expediting the movement of goods. The producers of all this wealth are specializing in their own trades, but in return they expect to be able to purchase a selection of the goods created by other producers.

The organization required to supply us with our fair share of other people’s products is complex but necessary. Only a few people can be left out of the productive system. A few tramps, hobos, or beatniks elect to live on the fringes of life; unproductive and careless of whether get a reasonable share of the goods produced. A few fortunate rich people do not produce, although with taxes and death duties as high as they are the unproductive rich get fewer year by year.

The rest of us play our part in creating wealth and in consuming it. Living in a social organization of one type or another, civilized people make laws and regulations to preserve their society.

Civilized life brings the advantages that co-operation gives to all who join in and help. If we are sick the doctor will do his best to cure us. If we need shelter a builder will erect a house. If we are cold a tailor will make a suit. If we fast travel the engineer will make us a motor cycle, the chemical engineer will provide petrol, the rubber planter will supply the material for tires and the glass-maker will help us to see out away with headlamps. Each of these undertaking is a skilled process and requires expert knowledge which only civilized men can discover. Uncivilized men have to learn the arts of self-protection and of self-preservation.

(ii) The Expansion of Commerce

We have already seen that it is only the producers’ surplus goods that are available to be distributed to other people. The larger the surpluses, the more commerce will be needed because of the increased distribution and exchange that has to take place before the goods can reach the consumer.

If a firm needs the whole world for its market the chain of distribution will be long. As the goods are passed from one person to other changes of ownership will occur. The Most significant development in the modern world is the growth of commerce as mass production has made larger surpluses available. Some of the advantages of mass production are inevitably lost in providing the expensive commercial services that are needed to dispose of the surpluses.

One well-known manufacturer recently said of his product It is not just a question how to make ten million stainless-steel razorblades. There is a commercial problem too…’. That problem is to distribute and sell them to other people willing to giving money in exchange for them.

Money is the medium through which exchange takes place. It represents all the other goods we can buy with it, and a sale of surplus razor blades for money is really an exchange of this commodity for a variety of other goods which the seller is free to select in the way that gives him maximum satisfaction of his wants.

(iii) Commerce at Work Even before Production Begins

Even before the goods are produced, commercial firms will have been at work ensuring the proper financial backing for the enterprise. Once this has been secured the necessary orders will e placed for the capital assets required by the enterprise, and for the employment of expert, skilled or semi-skilled labour as required. These capital assets and personnel will be summoned through the communications network and transported by the commercial transport systems to the area where production is to be started.

On the way the asses will be insured against loss and accidental damage so that the enterprise shall not founder because of some unfortunate event. The branches of commerce that perform these varied functions are banking and finance, insurance, transport and communications.

Once the assets and personnel of the business have been assembled and put to work the output of goods begins. Because of specialization this output will be greater than the actual producers need for their own use, and there will be a surplus for commerce to deal with.

The Three Types of Production

We all specialize in some sort of work, producing some useful commodity or service, but to study production we must try to sort out the different classes of producers. The three main types of production are known as Primary Production, Secondary Production, and Tertiary Production.