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 METHODS OF DETERMINING THE ECONOMIC PRO- DUCTIVITY OF MUNICIPAL ENTERPRISES. 1

THIS topic must be defined and limited before it can be profitably discussed. Obviously it does not cover all municipal enterprises. No practical object would be gained by a dis- cussion of the economic productivity of roads or parks or sewers or police. They all have an economic side, and might be justified from that standpoint. But it is needless to justify what everyone accepts. On the other hand there are classes of municipal enterprises the economic productivity of which is a matter of controversy. Means of transportation within the municipality, or public docks, may serve as examples. It is to enterprises of this character that the subject may be consid- ered as limited. The question, therefore, presents itself: By what test may municipal enterprises of this class be distin- guished from other municipal enterprises ? The best test is probably to be found in a consideration of the main purpose of the enterprise. If it aims primarily at rendering an economic service it may fairly be tested by its economic productivity, but otherwise not. For example, a sewerage system is economically productive. By improving the health of citizens and lengthen- ing their lives it increases their productive power. But life and health are higher aims than production. We produce to live rather than live to produce. Hence the benefit of a sewer- age system should be measured in terms of decreased mortality rather than in terms of increased productivity. An example nearer the division line is found in the case of a water supply. Where the population is crowded the water supply is second only to the sewerage system as a means to life and health. Under such conditions the economic advantages are not the

1 Paper read by request before the American Social Science Association, Septem- ber I, 1896.

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