Henry George
The Science of Political Economy Abridged Version


Chapter 2 -- The Three Modes of Production

All production results from human exertion upon external nature, and consists in the changing in place, condition, form or combination of natural materials or objects so as to fit them or more nearly fit them for the satisfaction of human desires.

But production takes place in different ways. If we run over in mind as many examples as we can think of in which the exertion of labor results in wealth -- either in those primary or extractive stages of production in which what before was not wealth is made to assume the character of wealth; or in the later or secondary stages, in which an additional value or increment of wealth is attached to what has already been given the character of wealth -- we find that they fall into three categories or modes.

The first of these three modes of production, for both reason and tradition unite in giving it priority, is the mode of production of the fisherman, the hunter, the miner, the smelter, the refiner, the manufacturer. We use it when we produce wealth by taking coal from the vein and changing its place to the surface of the earth; and again when we bring about a further increment of wealth by carrying the coal to the place where it is to be consumed in the satisfaction of human desires. We use this mode of production when we convert trees into lumber, or lumber into boards; when we convert wheat into flour, or the juice of the cane or beet into sugar; when we separate the metals from the combinations in which they are found in the ores, and when we unite them in new combinations that give us desirable alloys such as brass or bronze, or when by the various processes of separating and recombining we produce the textile fabrics, and convert them again into clothes, or when by bringing their various materials into suitable forms and combinations, we construct tools, machines, or houses. In fact, all that in the narrower sense we usually call "manufacturing" is brought about by the application of labor in this first mode of production -- the mode of "adapting."

In the Northwest, however, they speak sometimes of "manufacturing wheat;" in the West of "making hogs," and in the South of "making cotton" (the fiber) or "making tobacco" (the leaf). But in such local or special senses the words manufacturing or making are used as equivalent to producing. The sense is not the same, nor is the suggested action in the same mode, as when we properly speak of flour as being manufactured, or of bacon, cotton cloth or cigars being made. Wonderful machines are indeed constructed by man's power of adaptation. But no extension of his power of adaptation will enable him to construct a machine that will feed itself and produce its kind. His power of adapting extended infinitely would not enable him to manufacture a single wheat grain that would sprout, or to make a hog or a cotton-boll. The tiniest of such things are as much above man's power of adapting as is the "making" of a world or the "manufacture" of the solar system.

There is, however, another or second mode of production. In this man utilizes the vital or reproductive forces of nature to aid him in producing wealth. By obtaining vegetables, cuttings or seeds, and planting them; by capturing animals and breeding them, we are enabled not merely to produce vegetables and animals in greater quantity than Nature spontaneously offers them to our taking, but in many cases, to improve their quality of adaptability to our uses. This second mode of production, the mode in which we make use of the vital or generative power of nature, we shall, I think, best distinguish from the first, by calling it "growing." It is the mode of the farmer, the stock-raiser, the florist and the beekeeper.

And besides the first mode, which we have called "adapting," and the second mode, which we have called "growing," there is still a third mode in which, by men living in civilization, wealth is produced. In the first mode we make use of powers or qualities inherent in all material things; in the second we make use of powers or qualities inherent in all living things, vegetable or animal. But this third mode of production consists in the utilization of a power or tendency manifested only in man, and belonging to him by virtue of his peculiar gift of reason -- that of exchanging or trading.

Yet not merely is it through exchange that the utilization in production of the highest powers both of the human factor and the natural factor become possible, but it seems to me that in itself exchange brings about a perceptible increase in the sum of wealth, and that even if we could ignore the matter in which it extends the power of the other two modes of production, this constitutes, in itself, a third mode of production.

Each of the two parties to an exchange aims to get, and as a rule does get, something that is more valuable to him than what he gives -- that is to say, that represents to him a greater power of labor to satisfy desire. Thus there is in the transaction an actual increase in the sum of wealth, an actual production of wealth. A trading-vessel, for instance, penetrating to the Arctic, exchanges fish-hooks, harpoons, powder and guns, knives and mirrors, green spectacles and mosquito-nets for pelts. Each party to the exchange gets in return for what costs it comparatively little labor what would cost a great deal of labor to get by either of the other modes of production. Each gains by the act. Eliminating transportation, which belongs to the first mode of production, the joint wealth of both parties, the sum of the wealth of the world, is by the exchange itself increased.

This third mode of production let us call "exchanging." It is the mode of the merchant or trader, of the storekeeper; and of all the accessories, including in large measure transporters and their accessories.

We thus have as the three modes of production: 1) Adapting; 2) Growing; 3) Exchanging.

These modes seem to appear and to assume importance in the development of human society much in the order here given. They originate from the increase of the desires of men with increase of the means of satisfying them under pressure of the fundamental law of political economy, that men seek to satisfy their desires with the least exertion. In the primitive stage of human life the readiest way of satisfying desires is by adapting to human use what is found in existence. In a later and more settled stage it is discovered that certain desires can be more easily and more fully satisfied by utilizing the principle of growth and reproduction, as by cultivating vegetables and breeding animals. And in a still later period of development, it becomes obvious that certain desires can be better and more easily satisfied by exchange, which brings out the principle of cooperation more fully and powerfully than it could obtain among unexchanging economic units.


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