Most persons who begin to think of the subject are puzzled on the threshold.  They hear much of ‘good times’ and ‘bad times,’ meaning by ‘good’ times in which nearly everyone is very well off, and by ‘bad’ times in which nearly everyone is comparatively ill off.  And at first it is natural to ask why should everybody, or almost everybody, be well off together?  Why should there be any great tides of industry, with large diffused profit by way of flow, and large diffused want of profit, or loss, by way of ebb?  The main answer is hardly given distinctly in our common books of political economy.  These books do not tell you what is the fund out of which large general profits are paid in good times, nor do they ex plain why that fund is not available for the same purpose in bad times.  Our current political economy does not sufficiently take account of time as an element in trade operations; but as soon as the division of labour has once established itself in a community, two principles at once begin to be important, of which time is the very essence.  These are

First.  That as goods are produced to be exchanged, it is good that they should be exchanged as quickly as possible.

Secondly.  That as every producer is mainly occupied in producing what others want, and not what he wants himself, it is desirable that he should always be able to find, without effort, without delay, and without uncertainty, others who want what he can produce.

In themselves these principles are self-evident.  Everyone will admit it to be expedient that all goods wanting to be sold should be sold as soon as they are ready; that every man who wants to work should find employment as soon as he is ready for it.  Obviously also, as soon as the ‘division of labour’ is really established, there is a difficulty about both of these principles.  A produces what he thinks B wants, but it may be a mistake, and B may not want it.  A may be able and willing to produce what B wants, but he may not be able to find Bhe may not know of his existence.

The general truth of these principles is obvious, but what is not obvious is the extreme greatness of their effects.  Taken together, they make the whole difference between times of brisk trade and great prosperity, and times of stagnant trade and great adversity, so far as that prosperity and that adversity are real and not illusory.  If they are satisfied, everyone knows whom to work for, and what to make, and he can get immediately in exchange what he wants’himself.  There is no idle labour and no sluggish capital in the whole community, and, in consequence, all which can be produced is produced, the effectiveness of human industry is augmented, and both kinds of producers both capitalists and labourersare much richer than usual, because the amount to be divided between them is also much greater than usual.