Page:David Atkins - The Economics of Freedom (1924).pdf/254

 prised in the least to find that the effective value of our squad could be increased many times.

If a more conventional economic picture is required, let us make use of Crusoe’s island. At the outset we must firmly kill off Friday by tuberculosis as he is a slave and very much of a complication in the logic of the economics of democracy.

On this island, thus thoroughly rationalized by liberty, let us wreck in rapid succession the Swiss Family Robinson with its inconceivable fund of knowledge, a ship-load of tourists going round the world in search of local color, the directors of the National Bureau of Economic Research, Inc., still fired by their statistical yearnings, and a detachment of the Coast and Geodetic Survey with their invaluable training in precision.

If we thoroughly mix these ingredients and let them simmer for a couple of generations we should logically obtain an enlarged economic unit well worth consideration.

Let us assume that this unit consists of 100 acres with a population of 200 souls. The potential economic value of this area per hour can now be expressed as follows:

Total gross value (100 × 200) = 20,000 man-acre-hours.

The total effective value would obviously be modified by the basic resistance of the area—climate and infertility of soil—and also the diminishable resistance—lack of roads, lack of schools, and lack of sanitation.

Now let us assume that these difficulties are so great that the work of only ten of these men yields a net margin. In this case the total net economic value per hour is 100 acres × 10 men or 1,000 man-acre-hours.

If the resistance is cut in half by road-building, schools and plumbing, then the work of 105 men becomes effective and our effective value per hour becomes 100 acres × 105 men, or 10,500 man-acre-hours.

If the resistance is again cut in half the work of 152.5 men becomes effective and our economic value per hour is 152.5 men × 100 acres, or 15,250 man-acre-hours.

The resistance in this simple example has been reduced in the ratio of 4 to 1: the effective value has been increased in