The Iron Heel, by JackLondon
Chapter 2
Challenges
After the guests had gone, father threw himself into a chair and gave vent to roars of Gargantuan laughter. Not since the death of my mother had I known him to laugh so heartily.
I'll wager Dr. Hammerfield was never up against anything like it in his life," he laughed. "'The courtesies of ecclesiastical controversy!' Did you notice how he began like a lamb-Everhard, I mean, and how quickly he became a roaring lion? He has a splendidly disciplined mind. He would have made a good scientist if his energies had been directed that way."
I need scarcely say that I was deeply interested in Ernest Everhard. It was not alone what he had said and how he had said it, but it was the man himself. I had never met a man like him. I suppose that was why, in spite of my twenty-four years, I had not married. I liked him; I had to confess it to myself. And my like for him was founded on things beyond intellect and argument. Regardless of his bulging muscles and prize-fighter's throat, he impressed me as an ingenuous boy. I felt that under the guise of an intellectual swashbuckler was a delicate and sensitive spirit. I sensed this, in ways I knew not, save that they were my woman's intuitions.
There was something in that clarion-call of his that went to my heart. It still rang in my ears, and I felt that I should like to hear it again--and to see again that glint of laughter in his eyes that belied the impassioned seriousness of his face. And there were further reaches of vague and indeterminate feelings that stirred in me. I almost loved him then, though I am confident, had I never seen him again, that the vague feelings would have passed away and that I should easily have forgotten him.
But I was not destined never to see him again. My father's new-born interest in sociology and the dinner parties he gave would not permit. Father was not a sociologist. His marriage with my mother had been very happy, and in the researches of his own science, physics, he had been very happy. But when mother died, his own work could not fill the emptiness. At first, in a mild way, he had dabbled in philosophy; then, becoming interested, he had drifted on into economics and sociology. He had a strong sense of justice, and he soon became fired with a passion to redress wrong. It was with gratitude that I hailed these signs of a new interest in life, though I little dreamed what the outcome would be. With the enthusiasm of a boy he plunged excitedly into these new pursuits, regardless of whither they led him.
He had been used always to the laboratory, and so it was that he turned the dining room into a sociological laboratory. Here came to dinner all sorts and conditions of men - scientists, politicians, bankers, merchants, professors, labor leaders, socialists, and anarchists. He stirred them to discussion, and analyzed their thoughts of life and society.
He had met Ernest shortly prior to the "preacher's night." And after the guests were gone, I learned how he had met him, passing down a street at night and stopping to listen to a man on a soap-box who was addressing a crowd of workingmen. The man on the box was Ernest. Not that he was a mere soap-box orator. He stood high in the councils of the socialist party, was one of the leaders, and was the acknowledged leader in the philosophy of socialism. But he had a certain clear way of stating the abstruse in simple language, was a born expositor and teacher, and was not above the soap-box as a means of interpreting economics to the workingmen.
My father stopped to listen, became interested, effected a meeting, and, after quite an acquaintance, invited him to the ministers' dinner. It was after the dinner that father told me what little he knew about him. He had been born in the working class, though he was a descendant of the old line of Everhards that for over two hundred years had lived in America. [1] At ten years of age he had gone to work in the mills, and later he served his apprenticeship and became a horseshoer. He was self-educated, had taught himself German and French, and at that time was earning a meagre living by translating scientific and philosophical works for a struggling socialist publishing house in Chicago. Also, his earnings were added to by the royalties from the small sales of his own economic and philosophic works.
This much I learned of him before I went to bed, and I lay long awake, listening in memory to the sound of his voice. I grew frightened at my thoughts. He was so unlike the men of my own class, so alien and so strong. His masterfulness delighted me and terrified me, for my fancies wantonly roved until I found myself considering him as a lover, as a husband. I had always heard that the strength of men was an irresistible attraction to women; but he was too strong. "No! no!" I cried out. "It is impossible, absurd!" And on the morrow I awoke to find in myself a longing to see him again. I wanted to see him mastering men in discussion, the war-note in his voice; to see him, in all his certitude and strength, shattering their complacency, shaking them out of their ruts of thinking. What if he did swashbuckle? To use his own phrase, "it worked," it produced effects. And, besides, his swashbuckling was a fine thing to see. It stirred one like the onset of battle.
Several days passed during which I read Ernest's books, borrowed from my father. His written word was as his spoken word, clear and convincing. It was its absolute simplicity that convinced even while one continued to doubt. He had the gift of lucidity. He was the perfect expositor. Yet, in spite of his style, there was much that I did not like. He laid too great stress on what he called the class struggle, the antagonism between labor and capital, the conflict of interest.
Father reported with glee Dr. Hammerfield's judgment of Ernest, which was to the effect that he was "an insolent young puppy, made bumptious by a little and very inadequate learning." Also, Dr. Hammerfield declined to meet Ernest again.
But Bishop Morehouse turned out to have become interested in Ernest, and was anxious for another meeting. "A strong young man," he said; "and very much alive, very much alive. But he is too sure, too sure."
Ernest came one afternoon with father. The Bishop had already arrived, and we were having tea on the veranda. Ernest's continued presence in Berkeley, by the way, was accounted for by the fact that he was taking special courses in biology at the university, and also that he was hard at work on a new book entitled "Philosophy and Revolution." [2]
The veranda seemed suddenly to have become small when Ernest arrived. Not that he was so very large - he stood only five feet nine inches; but that he seemed to radiate an atmosphere of largeness. As he stopped to meet me, he betrayed a certain slight awkwardness that was strangely at variance with his bold-looking eyes and his firm, sure hand that clasped for a moment in greeting. And in that moment his eyes were just as steady and sure. There seemed a question in them this time, and as before he looked at me over long.
"I have been reading your 'Working-class Philosophy,'" I said, and his eyes lighted in a pleased way.
"Of course," he answered, "you took into consideration the audience to which it was addressed."
"I did, and it is because I did that I have a quarrel with you," I challenged.
"I, too, have a quarrel with you, Mr. Everhard," Bishop Morehouse said.
Ernest shrugged his shoulders whimsically and accepted a cup of tea.
The Bishop bowed and gave me precedence.
"You foment class hatred," I said. "I consider it wrong and criminal to appeal to all that is narrow and brutal in the working class. Class hatred is anti-social, and, it seems to me, anti-socialistic."
"Not guilty," he answered. "Class hatred is neither in the text nor in the spirit of anything I have ever written."
"Oh!" I cried reproachfully, and reached for his book and opened it.
He sipped his tea and smiled at me while I ran over the pages.
"Page one hundred and thirty-two," I read aloud: "'The class struggle, therefore, presents itself in the present stage of social development between the wage-paying and the wage-paid classes.'"
I looked at him triumphantly.
"No mention there of class hatred," he smiled back.
"But," I answered, "you say 'class struggle.'"
"A different thing from class hatred," he replied. "And, believe me, we foment no hatred. We say that the class struggle is a law of social development. We are not responsible for it. We do not make the class struggle. We merely explain it, as Newton explained gravitation. We explain the nature of the conflict of interest that produces the class struggle."
"But there should be no conflict of interest!" I cried.
"I agree with you heartily," he answered. "That is what we socialists are trying to bring about,--the abolition of the conflict of interest. Pardon me. Let me read an extract." He took his book and turned back several pages. "Page one hundred and twenty-six: 'The cycle of class struggles which began with the dissolution of rude, tribal communism and the rise of private property will end with the passing of private property in the means of social existence.'"
"But I disagree with you," the Bishop interposed, his pale, ascetic face betraying by a faint glow the intensity of his feelings. "Your premise is wrong. There is no such thing as a conflict of interest between labor and capital--or, rather, there ought not to be."
"Thank you," Ernest said gravely. "By that last statement you have given me back my premise."
"But why should there be a conflict?" the Bishop demanded warmly.
Ernest shrugged his shoulders. "Because we are so made, I guess."
"But we are not so made!" cried the other.
"Are you discussing the ideal man?" Ernest asked, "--unselfish and godlike, and so few in numbers as to be practically non-existent, or are you discussing the common and ordinary average man?"
"The common and ordinary man," was the answer.
"Who is weak and fallible, prone to error?"
Bishop Morehouse nodded.
"And petty and selfish?"
Again he nodded.
"Watch out!" Ernest warned. "I said 'selfish.'"
"The average man IS selfish," the Bishop affirmed valiantly.
"Wants all he can get?"
"Wants all he can get--true but deplorable."
"Then I've got you." Ernest's jaw snapped like a trap. "Let me show you. Here is a man who works on the street railways."
"He couldn't work if it weren't for capital," the Bishop interrupted.
"True, and you will grant that capital would perish if there were no labor to earn the dividends."
The Bishop was silent.
"Won't you?" Ernest insisted.
The Bishop nodded.
"Then our statements cancel each other," Ernest said in a matter-of-fact tone, "and we are where we were. Now to begin again. The workingmen on the street railway furnish the labor. The stockholders furnish the capital. By the joint effort of the workingmen and the capital, money is earned. [3] They divide between them this money that is earned. Capital's share is called 'dividends.' Labor's share is called 'wages.'"
"Very good," the Bishop interposed. "And there is no reason that the division should not be amicable."
"You have already forgotten what we had agreed upon," Ernest replied. "We agreed that the average man is selfish. He is the man that is. You have gone up in the air and are arranging a division between the kind of men that ought to be but are not. But to return to the earth, the workingman, being selfish, wants all he can get in the division. The capitalist, being selfish, wants all he can get in the division. When there is only so much of the same thing, and when two men want all they can get of the same thing, there is a conflict of interest between labor and capital. And it is an irreconcilable conflict. As long as workingmen and capitalists exist, they will continue to quarrel over the division. If you were in San Francisco this afternoon, you'd have to walk. There isn't a street car running."
"Another strike?" [4] the Bishop queried with alarm.
"Yes, they're quarrelling over the division of the earnings of the street railways."
Bishop Morehouse became excited.
"It is wrong!" he cried. "It is so short-sighted on the part of the workingmen. How can they hope to keep our sympathy--"
"When we are compelled to walk," Ernest said slyly.
But Bishop Morehouse ignored him and went on:
"Their outlook is too narrow. Men should be men, not brutes. There will be violence and murder now, and sorrowing widows and orphans. Capital and labor should be friends. They should work hand in hand and to their mutual benefit."
"Ah, now you are up in the air again," Ernest remarked dryly. "Come back to earth. Remember, we agreed that the average man is selfish."
"But he ought not to be!" the Bishop cried.
"And there I agree with you," was Ernest's rejoinder. "He ought not to be selfish, but he will continue to be selfish as long as he lives in a social system that is based on pig-ethics."
The Bishop was aghast, and my father chuckled.
"Yes, pig-ethics," Ernest went on remorselessly. "That is the meaning of the capitalist system. And that is what your church is standing for, what you are preaching for every time you get up in the pulpit. Pig-ethics! There is no other name for it."
Bishop Morehouse turned appealingly to my father, but he laughed and nodded his head.
"I'm afraid Mr. Everhard is right," he said. "LAISSEZ-FAIRE, the let-alone policy of each for himself and devil take the hindmost. As Mr. Everhard said the other night, the function you churchmen perform is to maintain the established order of society, and society is established on that foundation."
"But that is not the teaching of Christ!" cried the Bishop.
"The Church is not teaching Christ these days," Ernest put in quickly. "That is why the workingmen will have nothing to do with the Church. The Church condones the frightful brutality and savagery with which the capitalist class treats the working class."
"The Church does not condone it," the Bishop objected.
"The Church does not protest against it," Ernest replied. "And in so far as the Church does not protest, it condones, for remember the Church is supported by the capitalist class."
"I had not looked at it in that light," the Bishop said naively. "You must be wrong. I know that there is much that is sad and wicked in this world. I know that the Church has lost the--what you call the proletariat." [5]
"You never had the proletariat," Ernest cried. "The proletariat has grown up outside the Church and without the Church."
"I do not follow you," the Bishop said faintly.
"Then let me explain. With the introduction of machinery and the factory system in the latter part of the eighteenth century, the great mass of the working people was separated from the land. The old system of labor was broken down. The working people were driven from their villages and herded in factory towns. The mothers and children were put to work at the new machines. Family life ceased. The conditions were frightful. It is a tale of blood."
"I know, I know," Bishop Morehouse interrupted with an agonized expression on his face. "It was terrible. But it occurred a century and a half ago."
"And there, a century and a half ago, originated the modern proletariat," Ernest continued. "And the Church ignored it. While a slaughter-house was made of the nation by the capitalist, the Church was dumb. It did not protest, as to-day it does not protest. As Austin Lewis [6] says, speaking of that time, those to whom the command 'Feed my lambs' had been given, saw those lambs sold into slavery and worked to death without a protest. [7] The Church was dumb, then, and before I go on I want you either flatly to agree with me or flatly to disagree with me. Was the Church dumb then?"
Bishop Morehouse hesitated. Like Dr. Hammerfield, he was unused to this fierce "infighting," as Ernest called it.
"The history of the eighteenth century is written," Ernest prompted. "If the Church was not dumb, it will be found not dumb in the books."
"I am afraid the Church was dumb," the Bishop confessed.
"And the Church is dumb to-day."
"There I disagree," said the Bishop.
Ernest paused, looked at him searchingly, and accepted the challenge.
"All right," he said. "Let us see. In Chicago there are women who toil all the week for ninety cents. Has the Church protested?"
"This is news to me," was the answer. "Ninety cents per week! It is horrible!"
"Has the Church protested?" Ernest insisted.
"The Church does not know." The Bishop was struggling hard.
"Yet the command to the Church was, 'Feed my lambs,'" Ernest sneered. And then, the next moment, "Pardon my sneer, Bishop. But can you wonder that we lose patience with you? When have you protested to your capitalistic congregations at the working of children in the Southern cotton mills? [8] Children, six and seven years of age, working every night at twelve-hour shifts? They never see the blessed sunshine. They die like flies. The dividends are paid out of their blood. And out of the dividends magnificent churches are built in New England, wherein your kind preaches pleasant platitudes to the sleek, full-bellied recipients of those dividends."
It is not at all remarkable that this same note should have been struck by the Church a generation or so later in relation to the defence of capitalistic property. In the great museum at Asgard there is a book entitled "Essays in Application," written by Henry van Dyke. The book was published in 1905 of the Christian Era. From what we can make out, Van Dyke must have been a churchman. The book is a good example of what Everhard would have called bourgeois thinking. Note the similarity between the utterance of the Charleston Baptist Association quoted above, and the following utterance of Van Dyke seventy years later: "The Bible teaches that God owns the world. He distributes to every man according to His own good pleasure, conformably to general laws."
"I did not know," the Bishop murmured faintly. His face was pale, and he seemed suffering from nausea.
"Then you have not protested?"
The Bishop shook his head.
"Then the Church is dumb to-day, as it was in the eighteenth century?"
The Bishop was silent, and for once Ernest forbore to press the point.
"And do not forget, whenever a churchman does protest, that he is discharged."
"I hardly think that is fair," was the objection.
"Will you protest?" Ernest demanded.
"Show me evils, such as you mention, in our own community, and I will protest."
"I'll show you," Ernest said quietly. "I am at your disposal. I will take you on a journey through hell."
"And I shall protest." The Bishop straightened himself in his chair, and over his gentle face spread the harshness of the warrior. "The Church shall not be dumb!"
"You will be discharged," was the warning.
"I shall prove the contrary," was the retort. "I shall prove, if what you say is so, that the Church has erred through ignorance. And, furthermore, I hold that whatever is horrible in industrial society is due to the ignorance of the capitalist class. It will mend all that is wrong as soon as it receives the message. And this message it shall be the duty of the Church to deliver."
Ernest laughed. He laughed brutally, and I was driven to the Bishop's defence.
"Remember," I said, "you see but one side of the shield. There is much good in us, though you give us credit for no good at all. Bishop Morehouse is right. The industrial wrong, terrible as you say it is, is due to ignorance. The divisions of society have become too widely separated."
"The wild Indian is not so brutal and savage as the capitalist class," he answered; and in that moment I hated him.
"You do not know us," I answered. "We are not brutal and savage."
"Prove it," he challenged.
"How can I prove it . . . to you?" I was growing angry.
He shook his head. "I do not ask you to prove it to me. I ask you to prove it to yourself."
"I know," I said.
"You know nothing," was his rude reply.
"There, there, children," father said soothingly.
"I don't care--" I began indignantly, but Ernest interrupted.
"I understand you have money, or your father has, which is the same thing--money invested in the Sierra Mills."
"What has that to do with it?" I cried.
"Nothing much," he began slowly, "except that the gown you wear is stained with blood. The food you eat is a bloody stew. The blood of little children and of strong men is dripping from your very roof-beams. I can close my eyes, now, and hear it drip, drop, drip, drop, all about me."
And suiting the action to the words, he closed his eyes and leaned back in his chair. I burst into tears of mortification and hurt vanity. I had never been so brutally treated in my life. Both the Bishop and my father were embarrassed and perturbed. They tried to lead the conversation away into easier channels; but Ernest opened his eyes, looked at me, and waved them aside. His mouth was stern, and his eyes too; and in the latter there was no glint of laughter. What he was about to say, what terrible castigation he was going to give me, I never knew; for at that moment a man, passing along the sidewalk, stopped and glanced in at us. He was a large man, poorly dressed, and on his back was a great load of rattan and bamboo stands, chairs, and screens. He looked at the house as if debating whether or not he should come in and try to sell some of his wares.
"That man's name is Jackson," Ernest said.
"With that strong body of his he should be at work, and not peddling," [9] I answered curtly.
"Notice the sleeve of his left arm," Ernest said gently.
I looked, and saw that the sleeve was empty.
"It was some of the blood from that arm that I heard dripping from your roof-beams," Ernest said with continued gentleness. "He lost his arm in the Sierra Mills, and like a broken-down horse you turned him out on the highway to die. When I say 'you,' I mean the superintendent and the officials that you and the other stockholders pay to manage the mills for you. It was an accident. It was caused by his trying to save the company a few dollars. The toothed drum of the picker caught his arm. He might have let the small flint that he saw in the teeth go through. It would have smashed out a double row of spikes. But he reached for the flint, and his arm was picked and clawed to shreds from the finger tips to the shoulder. It was at night. The mills were working overtime. They paid a fat dividend that quarter. Jackson had been working many hours, and his muscles had lost their resiliency and snap. They made his movements a bit slow. That was why the machine caught him. He had a wife and three children."
"And what did the company do for him?" I asked.
"Nothing. Oh, yes, they did do something. They successfully fought the damage suit he brought when he came out of hospital. The company employs very efficient lawyers, you know."
"You have not told the whole story," I said with conviction. "Or else you do not know the whole story. Maybe the man was insolent."
"Insolent! Ha! Ha!" His laughter was Mephistophelian. "Great God! Insolent! And with his arm chewed off! Nevertheless he was a meek and lowly servant, and there is no record of his having been insolent."
"But the courts," I urged. "The case would not have been decided against him had there been no more to the affair than you have mentioned."
"Colonel Ingram is leading counsel for the company. He is a shrewd lawyer." Ernest looked at me intently for a moment, then went on. "I'll tell you what you do, Miss Cunningham. You investigate Jackson's case."
"I had already determined to," I said coldly.
"All right," he beamed good-naturedly, "and I'll tell you where to find him. But I tremble for you when I think of all you are to prove by Jackson's arm."
And so it came about that both the Bishop and I accepted Ernest's challenges. They went away together, leaving me smarting with a sense of injustice that had been done me and my class. The man was a beast. I hated him, then, and consoled myself with the thought that his behavior was what was to be expected from a man of the working class.
Footnotes
1 The distinction between being native born and foreign born was sharp and invidious in those days.
2 This book continued to be secretly printed throughout the three centuries of the Iron Heel. There are several copies of various editions in the National Library of Ardis.
3 In those days, groups of predatory individuals controlled all the means of transportation, and for the use of same levied toll upon the public.
4 These quarrels were very common in those irrational and anarchic times. Sometimes the laborers refused to work. Sometimes the capitalists refused to let the laborers work. In the violence and turbulence of such disagreements much property was destroyed and many lives lost. All this is inconceivable to us--as inconceivable as another custom of that time, namely, the habit the men of the lower classes had of breaking the furniture when they quarrelled with their wives.
5 Proletariat: Derived originally from the Latin PROLETARII, the name given in the census of Servius Tullius to those who were of value to the state only as the rearers of offspring (PROLES); in other words, they were of no importance either for wealth, or position, or exceptional ability.
6 Candidate for Governor of California on the Socialist ticket in the fall election of 1906 Christian Era. An Englishman by birth, a writer of many books on political economy and philosophy, and one of the Socialist leaders of the times.
7 There is no more horrible page in history than the treatment of the child and women slaves in the English factories in the latter half of the eighteenth century of the Christian Era. In such industrial hells arose some of the proudest fortunes of that day.
8 Everhard might have drawn a better illustration from the Southern Church's outspoken defence of chattel slavery prior to what is known as the "War of the Rebellion." Several such illustrations, culled from the documents of the times, are here appended. In 1835 A.D., the General Assembly of the Presbyterian Church resolved that: "slavery is recognized in both the Old and the New Testaments, and is not condemned by the authority of God." The Charleston Baptist Association issued the following, in an address, in 1835 A.D.: "The right of masters to dispose of the time of their slaves has been distinctly recognized by the Creator of all things, who is surely at liberty to vest the right of property over any object whomsoever He pleases." The Rev. E. D. Simon, Doctor of Divinity and professor in the Randolph-Macon Methodist College of Virginia, wrote: "Extracts from Holy Writ unequivocally assert the right of property in slaves, together with the usual incidents to that right. The right to buy and sell is clearly stated. Upon the whole, then, whether we consult the Jewish policy instituted by God himself, or the uniform opinion and practice of mankind in all ages, or the injunctions of the New Testament and the moral law, we are brought to the conclusion that slavery is not immoral. Having established the point that the first African slaves were legally brought into bondage, the right to detain their children in bondage follows as an indispensable consequence. Thus we see that the slavery that exists in America was founded in right."
9 In that day there were many thousands of these poor merchants called PEDLERS. They carried their whole stock in trade from door to door. It was a most wasteful expenditure of energy. Distribution was as confused and irrational as the whole general system of society.
GLOSSARY
ability-to-pay principle– principle that states taxes ought to be paid by those who can best afford them
account balance – the amount of money that you have in your bank account
accountability– the obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner; it also includes the responsibility for money or other entrusted property
acquisition– taking control of a firm by purchasing 51 percent (or more) of its voting shares
aggregate demand– the total quantity of goods and services consumers, business and government are willing and able to buy at different possible price levels
aggregate supply– the total amount of goods and services produced by the economy in a given period, usually one year
agriculture– the science, art, or practice of cultivating the soil, producing crops, and raising livestock and in varying degrees the preparation and marketing of the resulting products
allocation of resources – the action or process of allocating or distributing resources; an amount of resources assigned to a particular recipient
artisan– a skilled worker who makes things by hand; one that produces something (as cheese or wine) in limited quantities often using traditional methods
assessed value– value placed on real estate or personal property by government (or court appointed) assessors for determining ad valorem (according to the value) taxes, or to levy damages on the orders of a court
asset(s) – a thing or value that a person or a company owns, such as money or property or the right to receive payment of a debt
balance sheet– financial statement summarizing a firm's assets, liabilities and net worth
bank – a financial establishment that uses money deposited by customers for investment, pays it out when required, makes loans at interest, and exchanges currency
bank account – (written abbreviation a/c) an arrangement with a bank that allows you to keep your money there. You can deposit (= pay in) or withdraw (= take out) money when you need to
banking– the business conducted or services offered by a bank
banknote– a piece of paper money of a particular value that you use to buy things. The usual word is note.
bankruptcy – the state of being unable to pay your debts
barter– an exchange without money of goods or services
benefit(s) – a helpful and useful effect that smth has; money that is paid to people who are unemployed, ill, etc. by the government or through a system of insurance; the advantages that you get from your company in addition to the money you earn
board of directors – the group of people chosen by shareholders to control a company, decide its policies and appoint senior officers
borrow– (antonym: to lend) to receive and use something that belongs to someone else and that you must give back to them later; to borrow money, especially from a bank. Money that you borrow from a bank is calleda loan.
broker– someone who buys and sells things such as shares in companies or foreign money for other people
budget– a financial plan that summarizes income and expenditures over a period of time
bulk– unpackaged, homogenous, dry or liquid goods, without mark or count and usually free-flowing, bought and sold by weight or volume, such as grains, oils, and ores
bureaucracy– a complicated official system which is annoying or confusing because it has a lot of rules, processes etc.; the officials who are employed rather than elected to do the work of a government, business etc.
buying behavior– the behaviour of individuals and households who buy goods and services for personal consumption
buying decision– a consumer's decision to make a specific purchase
capacity– the highest sustainable output rate (maximum number of units per month, quarter, or year) that can be achieved with current resources, maintenance strategies, product specifications, etc.
capital accounting – that part of balance of payments which records net changes in a country's international financial assets and liabilities
capital– money or property, especially when it is used to start a business or to produce more wealth
cash – money in the form of coins or notes rather than cheques or credit cards, etc.;money in any form that is available for you to use when you need it
centrally planned economy-an economic system in which a substantial majority of economic activity is carried out through central directions to people and firms as to what they must buy and sell, and at what prices
CEO (chief executive officer) top executive responsible for a firm's overall operations and performance
charter – (in some US states) the name used for the Articles of Incorporation, one of the legal documents that is created when a company is formed
cheque (Am. check) – written order to pay money, i.e., one of a set of printed pieces of paper that you can sign and use instead of money to pay for things; a commonly used means of transferring money through the banking system
coin– a flat disc or piece of metal with special designs on it, used as money. The right to make and issue money is a state monopoly.
command economy– an economic system in which the activities of firms and the allocation of productive resources is determined by government direction rather than market forces
commodity– a product that can be bought and sold
commodity money – money with its own value as a good. At different times different commodities were used as money: iron and bronze, cattle and fish, furs and skins, cowries and precious metals, especially gold and silver. Gold coins are examples of commodity money because gold is worth something as a commodity, not just as a monetary unit.
competition– a situation in which people or organizations try to be more successful than other people or organizations; the people or groups that are competing against you, especially in business or in a sport; an organized event in which people or teams compete against each other
consumer – a person who buys goods or services for their own use
consumer behavior – the way in which consumers choose how to spend their oncomes
consumer goods– goods that people buy for their own use, rather than goods bought by businesses and organizations
consumption– the utilization of economic goods in the satisfaction of wants or in the process of production
convertible currency – a currency that can legally be exchanged for another or for gold. In times of crisis, governments sometimes restrict such exchange, giving rise to black market exchange rates.
chief executive officer– top executive responsible for a firm's overall operations and performance. He or she is the leader of the firm, serves as the main link between the board of directors (the board) and the firm's various parts or levels, and is held solely responsible for the firm's success or failure. One of the major duties of a CEO is to maintain and implement corporate policy, as established by the board. Also called President or managing director, he or she may also be the chairman (or chairperson) of the board
corporate tax – a tax that companies pay on their profits
corporation – a large company or group of companies; a business organisation that has been officially created (incorporated) and is owned by shareholders
costs – the amount of money that a business needs to spend regularly; the amount of money that is paid to produce smth
counterfeit – (adj.) made to look exactly like something else. Counterfeit bank notes, tickets, etc. are illegal copies made in order to trick people
credit card – a small plastic card issued by a bank or a credit company, which enables the lawful owner to make purchases (to obtain goods and services) on credit. A similar card that you use to pay for things directly from your bank account is called a debit card
currency –money that is used in a particular country;the physical embodiment of money, in the forms of paper bills or notes, and metal coins. Money from a country with a strong economy that can be used for buying things in other countries is called hard currency.
customer– someone who buys goods or services from a shop or business
debt– a sum of money that a person or organization owes
decision-making – the process of reaching decisions, especially in a group of people or in an organisation
default– failure to meet an obligation when it comes due
demand – a consumer's willingness and ability to buy a product or service; the quantity of a commodity or service wanted at a specified price and time
demand curve – the graphic representation of demand
denomination – the face value of a banknote or coin
depreciation– a reduction in the value or price of something;the decrease in the economic potential of an asset over its productive or useful life
distribution– the act of sharing things among a large group of people in a planned way; when goods are supplied to shops and companies for them to sell
dividend – an amount of the profits that a company pays to shareholders
economic growth– increases in an economy's total output over a period of time
economic incentives – a reason for doing smth. In market economies, profit, interest, wages, and rent provide economic incentives
economic resources – the assets (things of value) which an economy (or business) may have available to supply and produce goods and services to meet the ever-changing needs and wants of individuals (in the case of a business) and society (in the case of society as a whole)
economics– the social science concerned with the production, distribution, exchange and consumption of goods and services and the analysis of the commercial activities of a society
economy– the system by which a country's money, goods and services are produced and used, or a country considered in this way; something that you do in order to spend less money; the careful use of money, time, goods etc. so that nothing is wasted
effective demand– the level of demand that represents a real intention to purchase by people with the means to pay
effectiveness– the degree to which objectives are achieved and the extent to which targeted problems are solved. In contrast to efficiency, effectiveness is determined without reference to costs and, whereas efficiency means "doing the thing right," effectiveness means "doing the right thing"
efficiency – getting any given results with the smallest possible inputs, or getting the maximum possible output from given resources
elasticity– the responsiveness of a dependent economic variable to changes in influencing factors
elasticity of demand –a measure of the sensitivity of demand for goods or services to changes in price or other marketing variables, such as advertising
electronic money – non-physical currency that is traded and used over the Internet.
electronic transfer – the process of moving money from one account or bank to another that involves the use of electronic systems
employee - a person who is paid to work for smb
employer – a person, company, or organization that pays people to work for them
employment– the state of being employed; the number of people who have jobs; the use of a particular object, method, skill etc. to achieve something
enterprise– a company, organization, or business; the activity of starting and running businesses; a large and complicated project, especially one that is done with a group of other people; the ability to think of new activities or ideas and make them work
entity – a business that exists as a separate unit that has its own legal identity
entrepreneur - a person who makes money by starting or running businesses, especially when this involves taking financial risks
entrepreneurship– the capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit
environmental economics– a branch of economics study that analyzes financial impacts from environmental policies. Environmental Economics includes impacts such as regulatory compliance costs
equipment– the tools, machines, clothes etc. that you need to do a particular job or activity;the process of equipping someone or something
equity– share in a company from which the owner of the shares receives some of the company's profits rather than a fixed regular payment; a situation in which all people are treated equally and no one has an unfair advantage
exchange rate– the rate, or price, at which one country's currency is exchanged for the currency of another country.
expenditures– the total amount of money that a government, organization, or person spends during a particular period of time
exploitation– the development and use of minerals, forests, oil etc. for business or industry; (sometimes) a wasteful or destructive utilization of a natural resource; an unjust or improper use of another person for one's own profit or advantage
externalities– a loss or gain in the welfare of one party resulting from an activity of another party, without there being any compensation for the losing party
factors of production– resources required for generation of goods or services, generally classified into four major groups: (1) land (including all natural resources), (2) labour (including all human resources), (3) capital (including all man-made resources), and (4) enterprise (which brings all the previous resources together for production). These factors are classified also as management, machines, materials, and money (this, the 4 Ms), or other such nomenclature. More recently, knowledge has come to be recognized as distinct from labour, and as a factor of production in its own right
fiat money – money whose usefulness results, not from any intrinsic value or guarantee that it can be converted into gold or another currency, but only from a government's order (fiat) that it must be accepted as a means of payment.
finance– the management of money by governments, large organizations etc.; (plural) money or other liquid resources of a government, business, group, or individual; the system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities
fiscal policy – the way in which a government charges taxes or spends money in order to manage the economy
flat tax – fixed tax, a system in which tax is paid at the same rate, however much you earn or spend
free enterprise economy – an economic system in which private business operates in competitive markets to satisfy consumer demands and to maintain equilibrium in the national economy and in which government action in this respect is restricted to protecting the rights of individuals rather than acting as a directing economic force
free market– a market that operates under conditions of perfect competition
functions of money – the roles played by money in an economy. These are a medium of exchange, a measure of value, and a store of value
glut– market situation where the supply of a good or service far exceeds its demand, usually resulting in a substantial fall in its price
gold standard – a monetary system in which both the value of a unit of the currency and the quantity of it in circulation are specified in terms of gold. If two currencies are both on the gold standard, then the exchange rate between them is approximately determined by their two prices in terms of gold
goods– commodities, or physical, tangible items that satisfy some human wants or needs, or something that people find useful or desirable and make an effort to acquire it
gross domestic product– the value of a country's overall output of goods and services (typically during one fiscal year) at market prices, excluding net income from abroad
health insurance – insurance against medical expenses and loss of earnings due to accident or illness
household – all the people living together in a single house or flat/apartment, considered as a unit
income– the money that you earn from your work or that you receive from investments, the government etc.
income tax – the amount of money that you pay to the government according to how much you earn or receive from some other sources
incorporate – (v) – to form a legal company or organisation, for example by obtaining a certificate from the authorities
inflation– a continuing increase in prices and fall in the purchasing value of money, or the rate at which prices increase
input– anything that goes into the production process
insurance– risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by event(s) beyond the control of the insured party
intermediary – a person or an organisation that helps other people or organisations who are unable or unwilling to deal with each other directly to reach an agreement
investment – the action or process of using money in order to make a profit or earn interest, for example by buying shares, bonds, property, etc.; the act or process of buying materials, machines, etc. to make goods to sell
irredeemable – impossible to change or make better; money or something that cannot be exchanged
know-how– commercial and saleable knowledge of how to do a particular thing; experience
labour– work, especially physical work;all the people who work for a company or in a country
labour productivity– rate of output per worker (or a group of workers) per unit of time as compared with an established standard or expected rate of output
labour supply– availability of suitable human resources in a particular labor market
laissez-fair– literally, leave to do; a policy of non-intervention by government in the economy, leaving all decisions to the market
land– includes all physical elements in the wealth of a nation bestowed by nature such as climate, environment, fields, forests, minerals, mountains, lakes, streams, seas, and animals
Law of Supply and Demand –the theory that prices are determined by the interaction of supply and demand: an increase in supply will lower prices if not accompanied by increased demand, and an increase in demand will raise prices unless accompanied by increased supply
lease– a legal agreement which allows you to use a building, car etc. for a period of time, in return for rent
legal tender – money that can legally be used to pay for things in a particular country
liability/liabilities – the amount of money that a company or a person owes; the state of being legally responsible for smth
liquidity – the capacity to turn assets into cash, or the amount of assets in a portfolio that have that capacity. Cash itself (i.e., money) is the most liquid asset.
macroeconomicsthe study of large economic systems such as those of a whole country or area of the world
management– the conducting or supervising of something (as a business); especially: the executive function of planning, organizing, coordinating, directing, controlling, and supervising any industrial or business project or activity with responsibility for results; the directors and managers who have the power and responsibility to make decisions and oversee an enterprise
manufacturing– the process of converting raw materials, components, or parts into finished goods that meet a customer's expectations or specifications.
margin for profit– ratio of profit after taxes to cost-of-sales, often expressed as a percentage. It is one of the measures of the profitability of a firm, and an indicator of its cost structure.
marginal costs – the increase or decrease in the total cost of a production run for making one additional unit of an item. It is computed in situations where the breakeven point has been reached: the fixed costs have already been absorbed by the already produced items and only the direct (variable) costs have to be accounted for
marginal product– output that results from one additional unit of a factor of production (such as a labour hour or machine hour), all other factors remaining constant
marginal revenue product– the worth of the extra output that can be generated by adding an extra input unit
marginal tax rate – a rate of tax that is paid on your next unit of income; the highest rate of tax that smb pays
Marginalism – the concept that economic behaviour can be determined by analysing the fluctuations in the demand for basic goods and services
market – the area of economic activity in which buyers and sellers come together and the forces of supply and demand affect prices; the available supply of or potential demand for specified goods or services
market economy– an economic system in which the main decisions regarding production, distribution, and exchange are made by the market, i.e. by the forces of supply and demand
market equilibrium– the situation when supply and demand in a market are equal at the prevailing price
means of liquidity – money or goods that can easily be sold to pay debts or anything else that can easily be exchanged for money
means of production– the facilities and resources for producing goods
measure of value – one of the most important properties of money: its ability to be a benchmark for measuring value of goods and services.
medium of exchange - anything that is used, like money, to make payments for goods, services, and assets. For payments between countries with different currencies, if the national currencies are not trusted, another country's currency or gold may be used.
microeconomics– the branch of economics that deals with the behaviour of individual market participants, mainly individual firms or consumers
mixed economy– an economy in which both publicly and privately owned enterprises operate simultaneously
money –anything (any commodity or token) that is generally accepted in payment for goods and services. It serves as a medium of exchange, a measure of value and a store of value
money supply – the quantity of currency in circulation plus the amount of demand deposits. The money supply, together with the amount of real economic activity in a country, is an important determinant of its price level and its exchange rate
natural resources– naturally occurring materials such as coal, fertile land, etc., that can be used by man
necessity– something that you need to have in order to live
needs and wants – unsatisfied human desires that motivate their actions and enhance their fulfilment when met
opportunity costa benefit, profit, or value of something that must be given up to acquire or achieve something else
output– the amount of goods or work produced by a person, machine, factory etc.
ownership– the ultimate and exclusive right conferred by a lawful claim or title, and subject to certain restrictions to enjoy, occupy, possess, rent, sell, use, give away, or even destroy an item of property
partnership – a business that is owned by a group of professional people that work together and share the profits
perishable goods = perishables – things, especially foodstuffs, likely to decay after a short time if it is not kept in the proper conditions
population– the number of people living in a particular area, country etc.; all of the people who live in a particular area;
price system – the use of prices to allocate scarce resources
private enterprise – the economic system in which industry or business is owned by individuals and independent companies and is not controlled by the government; a business that is owned by individuals or other companies, not by the government
private sector – the part of a country’s economy that is not under the direct control of the government, but is owned by individuals and independent companies
privatization– sale or return of publicly owned enterprises to private ownership and control
product– the good or service one receives in an exchange
production– the processes and methods used to transform tangible inputs (raw materials, semi-finished goods, subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services
productive resources– materials, labour or money which is used to create goods and services
productivity– the output of goods and services as measured per unit of time, or per person, per company, per industry, or for the whole economy
profit – the surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise
profitability– when a business or an activity makes a profit, or the amount of profit it makes
property– the thing or things that someone owns; a building, a piece of land, or both together
proprietor– the owner of a business
purchasing power - the amount of of real goods and services that money will buy, usually measured (inversely) by the CPI (consumer price index); value of a unit of money considered in terms of how much you can buy with it
ratio– a relationship between two amounts, represented by a pair of numbers showing how much bigger one amount is than the other
rationing – government allocation of scarce resources and consumer goods, usually adopted during wars, famines, or other national emergencies
raw material– basic substance in its natural, modified, or semi-processed state, used as an input to a production process for subsequent modification or transformation into a finished good
representative money – paper currency backed by a government or bank’s promise to redeem it for a given weight of precious metal (gold or silver). Money of this type was based on the gold standard, and, in theory, could be exchanged for a fixed amount of gold. For example, the US dollar was convertible to gold until 1934.
reserve currency –a currencythat is consideredstrong and reliable and is used a lot in international trade. National banks keep large stores of reserve currencies
resource– an economic or productive factor required to accomplish an activity, or as means to undertake an enterprise and achieve desired outcome
retailing– the business of selling goods to ultimate consumers for personal or household consumption
returns on capital– ratio measuring the profitability of a firm expressed as a percentage of funds acquired from investors and lenders
revenue– the income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted; the income accruing from taxation to a government during a specified period of time, usually a year
salary– a fixed regular payment made usually on a monthly basis by an employer to an employee, especially a professional or white-collar worker
scarcity– a limit to the supply of productive resources or consumer goods in relation to producers' or consumers' demand for them
securities– financing or investment instruments (some negotiable, others not) bought and sold in financial markets, such as bonds, debentures, notes, options, shares (stocks), and warrants
services– intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment, or transportation
shareholder – a person or group that owns shares in a company or business
shortage – a situation when there is not enough of the people or things that are needed
small-scale decision-making unit – the informal group of individuals within an organization that decides which items the organization should buy
sole proprietorship – a business that is owned and run by one person
stock – the value of all the shares a company can make available; a number of shares in a company that one investor holds; a supply of a particular type of thing that a shop has available to sell; the total amount of something that is available to be used in a particular area
stock market– a place where shares are bought and sold, i.e. a stock exchange
store of value – one of three basic functions of money: the ability to retain value over time, and therefore be useful for those who wish to sell something now and not spend he proceeds until later
substitute – a good or service which can be used instead of another
supply– the amount of a good or service offered for sale
supply curve– a curve showing the amount that firms in an industry are willing to supply at each possible price
surplus – an amount of something left over when requirements have been met; an excess of income or assets over expenditure or liabilities in a given period
sustainability– continued development or growth, without significant deterioration of the environment and depletion of natural resources on which human well-being depends
tax– an amount of money that you must pay to the government according to your income, property, goods etc. and that is used to pay for public services;compulsory monetary contribution to the state's revenue, assessed and imposed by a government on the activities, enjoyment, expenditure, income, occupation, privilege, property, etc., of individuals and organizations
tax loophole – a provision in the laws governing taxation that allows people to reduce their taxes
tax rate – the percentage of an amount of money or of the value of smth that has to be paid as tax
taxation– a means by which governments finance their expenditure by imposing charges on citizens and corporate entities
trade– the activity of buying, selling, or exchanging goods or services between people, firms, or countries
trade-off– giving up one thing in order to obtain something else
traditional economy –an economic system that allocates scarce resources according to customs; change and growth are very slow; people do what their parents did before them; and most goods are produced and consumed locally