Sec. 18] THE RISK ELEMENT 291 
ciples, from the standpoint of an individual, apply to bank 
deposits, and thus to the whole volume of the circulating 
medium. 
§ 18 
The third method of reducing risks is by increasing 
knowledge. It has been seen that risk is nothing but an 
expression of ignorance, and decreases with the progress 
of science. It may be said that the chief progress now 
being made industrially consists in lifting the veil which 
hides the future. The countless trade journals now in 
use have their special reason for existence in enabling 
their readers better to forecast the future, by supplying 
them with data as to past and present conditions, as well 
as by instructing them in the relations of cause and effect. 
The government reports of crops, the technical schools 
and agricultural colleges, all tend in the same direction. 
Whereas formerly the mine prospector could only guess 
wildly at the ore “in sight” and the time and cost 
required to mine it, the graduate of mining schools is 
now able, through knowledge of geology and metallurgy, to 
bring these forecasts into some degree of scientific accuracy. 
And, whereas until recently farming was one of the most 
uncertain of occupations, it is to-day — thanks to modern 
scientific agriculture — almost if not quite as amenable 
to prediction as industry or commerce. 
§ 19 
We come now to that important means of avoiding 
and shifting risks, called insurance. Insurance involves 
the offsetting of one risk by another; that is, the consoli- 
dation of a large number of chances whereby relative cer- 
tainty is, as it were, manufactured out of uncertainty. 
To illustrate this, let us suppose that 10,000 houses of 
the same kind are too distant from each other to be de- 
stroyed by the same fire, and let us suppose that these