controlling the struggle and directing it into productive channels. The self-interested individual cares nothing for production as such. What he is interested in is the acquisition of things which are scarce. If the easiest method of acquisition is that of production, then he will produce. If there is some easier way, he will pursue that way. The purpose of the law and government is to make it difficult and dangerous to acquire by any other method than that of production, or free and voluntary exchange of products, which means the same thing. In so far as the state succeeds in this attempt and thus forces all individuals to acquire by methods of production, it is justifying its existence.
When the struggle for existence is thus turned into productive channels, when every individual finds that he can acquire desirable things only by producing them, or by offering the producer something of equal value in exchange for them, then the brutal struggle for existence is transformed into economic competition. Perfect economic competition is merely a system under which each individual finds it most advantageous to acquire by productive or serviceable effort of some kind, and so, in Adam Smith's words, "to promote the public good while trying to promote his own."
When we consider that the individual's value to the rest of society is measured by the excess of his production over consumption, while his position in industry is determined by his rate of accumulation, which is merely his acquisition minus his consumption, we shall see how important it is that acquisition and production should be identified. This may be expressed by means of the following formulæ:
- The value of a man=his production—his consumption.
- His competing power=his acquisition—his consumption.
- When acquisition=production
- Then his value=his competing power.
- The purpose of the state is to make acquisition=production.
