Perpetual change is the conspicuous fact of modern life. So revolutionary are the alterations which a few decades make in the industrial world as to raise the question whether there are economic laws which retain their validity for any length of time. If there are not, we have one economic science now, and shall have a different one ten years hence and a widely dissimilar one a century later. Of Descriptive Economics this is true, since it changes with the world it describes; but it is not true of Economic Theory. There are certain principles which are equally valid in all times and places. They were true in the beginnings of industry, are true now, and will remain so as long as men shall create and use wealth. They are not made antiquated either by technical progress or by social evolution. We have at the outset stated some of these truths. They have reference to man, to his natural environment, and to the interactions of the two, and they do not depend on the relations of man to man. We have also stated other economic truths which apply only to man in a social state. They are not universal, but are so general that they are exemplified in the economic life of every society, from the most primitive to the most highly civilized. They are the principles of Social Economic Statics, and in order to have them distinctly before us we have created in imagination a society which is changeless in size, in form, and in mode of economic action. In such a condition the wages of labor would remain fixed, as would also the interest on capital. Wages and interest would absorb the whole product of social industry; for the static condition, as we have thus created it, excludes profits of the entrepreneur. In broad outline this describes the condition toward which certain economic forces are continually impelling the actual world.

There is at each period a standard shape and mode of action to which static laws acting by themselves would bring economic society. This social norm, however, is not the same at any two periods. The static laws remain unchanged, but they act in changing conditions, and if they were left alone and undisturbed, would give one result in 1907 and another in 2007. The changes which a century will bring should make society larger and richer, the mode of production more effective, and the returns for all classes greater. The laws which set the standard of wages and interest will remain the same, but if the tendencies now at work have their natural effect, all these incomes will be larger. It is as though great quantities of water were rushing into a lake and causing disturbances and upheavals of the surface. If the inflow should now stop, the surface would subside to a general level. If the inflow should recommence, go on for a hundred years, and then stop, the surface would again subside to a level, but it would be higher than the former one. Yet the laws of equilibrium which produced the first static level would be identically the same as those which produced the second. Social Economic Statics is a body of principles which act in every stage of civilization and draw society at every separate period toward a static norm, though they do not at any two periods draw it toward the same norm. They make actual society hover forever about a changing standard shape.

The laws which govern progress—which cause the social norm to take a different character from decade to decade, and cause actual society to hover near it in its changes—are the subject of Social Economic Dynamics. We have made a study of the more general economic changes which affect the social structure, and they stand in this order:—

(1) Increase of population, involving increase in the supply of labor.
(2) Increase in the stock of productive wealth.
(3) Improvements in method.
(4) Improvements in organization.

All these things affect the productive power of society, and correlated with them and standing over against them is a fifth type of change, which affects consumers' wants and determines how productive power shall be used.

We have examined each single change by itself and have then endeavored to combine them and get the grand resultant of all. Beginning with the increase of population, we have traced its effects on wages, on interest, and on the values of goods. We have made a similar study of the growth of capital, the progress of technical method, and the organization of industry.

The variation of economic society from its static standard offers a problem for solution, and in this connection the type of change in which the most serious evils inhere is that which discards old technical methods and ushers in new ones. The question whether these evils are destined to increase or to diminish we have answered conditionally on the basis of past experience and present tendencies. If competition continues and labor retains its mobility, the evils will naturally grow less. The grand resultant of all the forces of progress is an upward movement in the standard of economic life gained, not without cost, but at a diminishing cost.

A vital question is that of the continuance of the movements now in progress. Do any of them tend to bring themselves to a halt? Is any change on which we rely for the hopeful outlook we have taken self-terminating? We have found that the growth of population tends to go on more slowly as the world becomes crowded, while the motives for an increase of productive wealth grow stronger rather than weaker. Technical progress gives no hint of coming to an end, and improvements in organization may go on indefinitely, though they will naturally go on more slowly as the modes of marshaling the agents of production are brought nearer to perfection. Knowledge of the causes of economic change is at best incomplete, and enlarging it by the statistical method of study will be a chief work for the economists of the future. Analytical study points distinctly to a coming time of increased comfort for working humanity. Progress gives no sign of being self-terminating, so long as the force which has been the mainspring of it, namely, competition, shall continue to act.

The suspicious element in the general dynamic movement is progress in organization. That which we have primarily studied is the marshaling of forces for mere production—the creation of efficient mills, shops, railroads, etc. This, however, carries with it a tendency to create large mills, shops, and railroad systems, and, in the end, to combine those which begin as rivals in a consolidation in which their rivalry with each other ceases. This means a danger of monopoly, and is the gravest menace which hangs over the future of economic society.

If anything should definitely end competition, it would check invention, pervert distribution, and lead to evils from which only state socialism would offer a way of escape. Monopoly is not a mere bit of friction which interferes with the perfect working of economic laws. It is a definite perversion of the laws themselves. It is one thing to obstruct a force and another to supplant it and introduce a different one; and that is what monopoly would do. We have inquired whether it is necessary to let monopoly have its way, and have been able to answer the question with a decided No. It grows up in consequence of certain practices which an efficient government can stop. Favoritism in the charges for carrying goods is one of these practices. Railroads have become both monopolies and builders of other monopolies. Certain principles, which we have briefly outlined, govern their policy, and the natural outcome of their working is consolidation. This creates the necessity for a type of public action which is new in America—the regulation of freight charges.

Akin to this is the necessity for keeping alive competition in the field of general industry by an effective prohibition of various measures by which the great corporations are able to destroy it. The dynamic element in economic life depends on competition, which at important points is vanishing, but can, by the power of the state, be restored and preserved, in a new form, indeed, but in all needed vigor. With that accomplished we can enjoy the full productive effect of consolidation without sacrificing the progress which the older type of industry insured.

The organization of labor, its motives, its measures, and its tendencies,—including a tendency toward monopoly,—we have examined. Through all the wastes and disturbances which the struggle over wages occasions we have discovered a certain action of natural economic law, and have seen what type of measures, on the part of the state, will remove impediments in the way of that law and enable it to act in greater perfection.

Connected with the dynamic movement on which the future of society depends are the policies of the government in connection with currency and with protective duties. Here, less action, rather than more, is demanded on the part of the state. While no renewal of a laissez-faire policy is possible, a reduction of the duties which now play into the hands of monopoly is distinctly called for. In connection with currency a greater trust in nature and a smaller reliance on governments will give the best results.

Our studies have included, not the activities of the whole world, but those of that central part of it which is highly sensitive to economic influences. The whole producing mechanism here responds comparatively quickly to any force which makes for change. This society par excellence is extending its boundaries and annexing successive belts of outlying territory; and as this shall go on, it must bring the world as a whole more and more nearly into the shape of a single economic organism. The relations of the central society to the unannexed zones are attaining transcendent importance, and a fuller treatment of Economic Dynamics than is possible within the limits of the present work would give much space to such subjects as the transformation of Asia and the resulting changes in the economic life of Europe and America. Here again the conscious action of the people determines the economic outcome. In the main we can still leave the natural forces of industry to work automatically; but we have passed the point where we can safely leave to self-regulation the charges of the common carrier, the conduct of monopolistic corporations, or certain parts of the policy of organized labor. Foreign relations are, of course, a subject for public control, and they are coming to affect in a most intimate way our own economic life. Everywhere our future is put into our own hands and will develop the better the more we know of economic laws and the more energy we show in applying them. The surrendering of industries generally to the state may be avoided, and the essential features of the system of business which evolution has created may be preserved; but to keep this system free from unendurable evils will require, on the part of the people, a rare combination of intelligence and determination. It will require a public policy that shall neither be hampered by prejudice nor incited by ebullitions of popular feeling, but shall be guided through a course of difficult action by a knowledge of economic law.