_Exchange in production._—The immense importance of exchange in promoting
the welfare of communities is easily granted, and is illustrated in every
village store or even in every simple farming community. Today the market
for farm products is easily felt to be the most important consideration,
and weighs in every farmer’s mind when buying or selling his farm. When a
state like Kansas raises from six to ten times as much wheat as its people
can use, exchange is evidently an essential factor in every farmer’s
welfare.
The multitude of everyday wants in most households supplied only through
commerce shows the extent and importance of this exchange of labor
throughout the world. The great advantages, however; may be seen by a
little more careful analysis of the growth of individual powers under a
ready system of exchange. Every laborer becomes effective by experience in
some particular industry. A thousand years will not perfect a single
worker in any of the thousands of employments needed to supply his wants.
Every farmer knows the weakness of a beginner in farming, coming from any
other business; and without exchange, every workman must always be a
beginner in everything. Exchange is one of the chief motives to
accumulation, since others’ wants as well as our own are kept in view. The
“hand to mouth” liver is almost always a man of all work, thinking little
of exchange. It is especially a stimulant to saving, since it makes
capital itself more useful and brings it directly into competition with
all other forces. Products stored in the granary have their significance
because of exchange.
Still more important is the cultivation of special abilities, impossible
without exchange. The indefinitely varied powers of human nature are made
most useful where each can devote his talent to a definite business; and
usually the talent best fitted to a business is attracted toward it.
Habits, too, which are the chief labor-saving characteristics in human
nature; become all-important, and enable an individual to do a large part
of his work with the least possible care. The routine of everyday life is
followed with little effort or pain. The more regular the routine the
easier it is to follow.
A still greater advantage to communities is found in the enlargement of
the range of wants in all individuals. The superiority of enlightened men
over savages is largely due to their greatly increased needs, since
necessity, the mother of invention, compels exertion and finds the way to
satisfaction. It seems, however, that exchange contributes most
extensively to welfare by combining individuals into a community, and
smaller communities into a larger, until the whole world is brought into
sympathy. Thus every human being gains the advantage of growth in mind and
character through some contact with every other human being within the
commercial world. If ever a reign of peace and plenty shall extend over
the world, no one doubts the importance of commerce and intimate exchange
in bringing that time. The full advantage of free exchange in promoting
human welfare cannot be over-estimated.
_Exchange limited by powers._—With all its advantages, there are certain
obstacles in the way of its extension, always more or less effective in
limiting its range. A community can have few exchanges among individuals
if all are busied in the same or similar trades. A farming community has
little need of buying and selling among the farmers. A horse trade or an
exchange of one brute for another may supply all necessities. In larger
communities similar limitations are found where abilities are similar, or
where habits in education, government or religion are very uniform. In
such cases opportunities for exchange are limited, and commerce itself
grows slowly.
The story of pioneer settlements is uniformly one of slow and uncertain
commerce for want of the variety in wants and abilities which makes the
very foundation of exchange. Sometimes “day’s work for day’s work” is the
limit of exchange throughout a whole region or country. In the world at
large limitations often arise from hostile feelings between nations, and
as yet the highest freedom of exchange between people under different
governments has seldom been reached. The United States affords the
brightest example of people with varied characteristics developed through
the stimulating effect of ready exchange.
_Commerce over-estimated._—So rapid has been the advancement of systems of
exchange within the last half century that men are prone to over-estimate
the importance of commerce and its interests. The amount of wealth in
motion exaggerates the importance of wealth itself, so that multitudes
overlook the foundation in productive industry, and become mere bettors
upon the market, attempting to catch a part of the moving wealth as it
passes. Any speculation in mere commercial transactions may become a very
serious obstacle to legitimate industry by its effect upon both the
industry itself and the incentives to industry among the people. This
danger is increased by the greatly extended interest in exchange among the
rural population.
Scarcely a farmer in our country is beyond the effect of any extensive
commerce throughout the world. The crops of South America and of the
Russian plains are now as important to a farmer of Dakota as his own,
since all must find a common market in the manufacturing countries of
Europe. Speculation on the Chicago Board of Trade is likely to be as
interesting to a farmer in Nebraska as to members of the Board. He is even
tempted to try his hand at speculation, either directly through a
commission house or indirectly through the marketing of his grain. In
either case he is caught by the dangerous motion of modern commerce. The
chief remedy for these tendencies must be found in a wider acquaintance
with the facts of commercial life and a clearer perception of what is
genuine commerce.
Every farmer needs to distinguish, and distinguish carefully, the actual,
necessary machinery of trade and the principles underlying it, that he may
appreciate the genuine and oppose the false. On this account several
chapters are given to questions of exchange, with an effort to bring into
more prominent light the ways in which all commerce affects the farmer’s
life.