6

ECONOMIC PRINCIPLES

Further, the existence of competition is, generally, also
assumed. By this is meant much more than can be briefly
expressed here, but it generally includes the assumption that
men are free to follow the course which commends itself to
them as most suited to their conditions and the ends at
which they aim. Artificial exclusion from industries or
occupations which they might be suited to enter, and
which they desire to follow, is inconsistent with the assumption
 of free competition. In reference to this assumption,
 as with some of those which precede it, it is known
not to be universally applicable, and it is consequently
recognised as necessary to endeavour to introduce, into
problems where it is markedly deficient, some allowance
for the lack of correspondence of some features of the
problem with this part of the general basis of argument.
[n some cases the entire absence of competition, in some
part of the field surveyed, forms part of the data of the
problem.
Before proceeding to the discussion of the influences
which operate in determining the relative values of commodities
 and services, the conception of capital, and its
correlative income, must receive a brief consideration. The
idea of capital is associated with those parts and forms of
wealth which are used to secure future wealth rather than
present gratification. The appliances of production, tools,
materials, buildings, etc., form a prominent and characteristic
part of the capital of the community, The essential features
connected with the conception are that it embraces the
wealth used to produce or secure a future income. Now the
income may be a trade income, or a supply of goods secured
by the use of the capital in business operations; or it may
be an income of personal satisfactions directly secured by
the actual use of the capital. Thus a yacht yields to its
owner an income which may take the form of the price
received for its hire, or may take the form of the gratification
 derived from the use of a yacht by a yachtsman., The
gratifications are afforded as a direct income of utilities to
the owner of a private yacht; analogous gratifications are
secured by the hirer of a similar yacht, but the owner