A''' B''' C''' H'''
A'' B'' C'' H''
A' B' C' H'
A B C H

We have already represented, in a highly simplified form, the
synthesis by which the goods which make up the income of society are
produced. A, B, and C represent different raw materials, and they are
changed by a series of transmutations into A''', B''', and C''', which
stand for all the consumers' goods that the society uses. They
represent food, clothing, furnishings, vehicles, and countless means
of comfort and pleasure.

_The Making of Active Instruments of Production._--It is necessary
always to have and use a stock of tools, machines, buildings, and
other active instruments of production; and as these wear out in the
using, it is necessary that there should be persons who occupy
themselves in keeping the stock replenished. Under a system of
division of labor there would be special industries devoted to the
making of new appliances of production to take the place of those
which are worn out and discarded, and also to make repairs on those
which are still in use. For illustration, we may let the symbol H'''
represent all active capital goods that the society uses, the various
raw materials which enter into such active goods being represented by
H and the partly made instruments by H' and H''. If the stock of
appliances is not growing larger, just enough of the articles H''' are
made to replace the discarded ones. No producer gets new machinery,
but every one keeps his stock intact.

_The Simplified Representation Correct in Principle._--We have now a
very simple representation of what actually goes on under the name of
the division of labor, and yet the representation is in essential
points accurate. In reality a very detailed and minute division and
subdivision of industries takes place and the varieties of goods
produced are innumerable. Society, as a whole, is making the most
highly composite product that can be conceived; namely, consumers'
wealth in its countless forms. Each of the grand divisions of
society--the general groups that we have represented by the series of
A's or of B's--makes a complete article; but even that is in its own
way far more composite than the symbol indicates, for it is apt to
contain several kinds of raw material and to be made up of a large
number of distinct utilities, each of which has its own set of
producers. This complexity of the process of production does not
ch