THE RELATION BETWEEN STATICS AND DYNAMICS 67 
of statics. But where the problem and conditions are dynamic, 
discrepancies between the behavior of these varions elements are 
of the essence of the inquiry. Investment funds are spent on 
other things than technical productive equipment, and capitalized 
earning power rests partly on these other things, and partly on 
things for which no investment funds may have been spent at 
all. These elements must be carefully distinguished and their 
relations to each other inductively studied. No one of these 
aspects of capital can be made paramount or all-sufficient at the 
expense of the others. All must be recognized, and some sense 
of their dynamic interplay must be a part of that concept of 
capital which is to be an appropriate tool of dynamic study. 
13. The Concept of Production 
The static problem and static assumptions make it possible to 
treat production as a quantitative addition to human gratifica- 
tions, or at least to the means of gratification. Human wants 
are taken for granted, and the molding of wants is therefore not 
a part of static production. The protection of legal rights pre- 
vents the wants of some from being gratified at the expense of 
others, and competition prevents business incomes from being 
increased by withholding gratifications rather than by creating 
and bestowing them. The perfect static market prevents any 
gains being made by sheer “higgling and bargaining.” Thus the 
so-called technological concept of production is applicable, and is 
an adequate description of the process by which income is to be 
secured, in the static state. The process of bargaining, and the 
characteristic work of the entrepreneur, have, before the static 
equilibrium can be fully reached, worked themselves out to the 
point of zero return and have no further functions to perform, 
either from the standpoint of private gain or social production. 
Thus the concept of production is much simplified. 
But from the dynamic or realistic standpoint, the concept of 
production undergoes a transformation similar in general char- 
acter to that which we have already seen in the case of capital. 
Discrepancies arise between its various aspects: especially the 
aspect of private gain, that of technical production, and that of 
social creation of utilities. Private gains are to be secured by 
the adjustment of prices in bargains, by the modification of 
desires and the guidance of choice through salesmanship and