THE MEANING OF ECONOMY
The idea of scarcity as an essential to the concept of wealth suggests, next, the meaning of economy, which is another fundamental concept of the science of economics. Economy suggests the adjusting of means to ends, making a little go a long way, or, in the last analysis, choosing among one’s desires and sacrificing the less important in order that the more important may be satisfied. This choice is forced upon us by the fact of scarcity, without which such choosing would be unnecessary, since we could, if everything were sufficiently abundant, satisfy all our desires without sacrificing any. It is in the utilization of those things which are scarce that economy is called for. These things which, being scarce, need to be economized in the interest of the largest satisfaction or well-being constitute economic goods, for which wealth is only another name. These are the things which have to be appraised, evaluated, and compared with one another with respect to their utility, in order that the limited supplies may be meted out and made to go as far as possible in the satisfaction of human desires, and in order that they may satisfy the greater rather than the lesser desires.
The economizing of scarce goods cannot be dissociated from such outstanding facts as production and exchange. The things toward which we must practice economy come to be esteemed or evaluated in a very direct and practical sense which is not true of anything else. When we desire a thing and desire more than we have, we not only try to get more, either by purchase or by production, but the more intensely we desire more of it the more we will give in exchange for a given unit of it, or the harder we will try to produce more of it. This process of evaluation gives such a thing power in exchange in proportion to its scarcity, or rather in proportion to the intensity of our desire for more. It also determines the direction in which the productive energies of society will be turned. Whether a given individual himself desires more of a thing or not, if there is somewhere in the community such a desire for more as will give the thing a high power in exchange, or a high value, that value will serve as effectively to induce the individual to produce it as though he desired the thing itself.