for use in filling wants. Second, the structure of production through which resources are used to fill wants will be discussed in its geographical, its functional, and its financial aspects. Third, the influences which give organization to the activity of the millions of separate individuals composing the American economy will be considered with particular emphasis on the market mechanism and administration.

For purposes of presentation it is necessary to make some such break-down as this. It should be remem

bered, however, that the structure of the economy is a single entity. Each chapter involves an examination of one aspect of this whole rather than a part of the whole. The report is not made up of a series of pieces which fit together like a puzzle but of a series of different points of view from which to consider one thing, the structure of the economy. In spite of a certain amount of inevitable repetition, this is the only way in which it is possible to view the structure of the whole economy as a going

concern.

Basic to the structure of the American economy are the wants of consumers. Food, clothing, shelter, education, transportation, and a host of other items are sought by consumers. To the extent that consumers have the power to make their wants effective, these wants are reflected in economic activity. The character and proportioning of these wants influences production and contributes to the structure of the whole economy.

Consumer Wants

The main characteristics of consumer wants are reflected in the way consumers apportion their expenditures. If consumers have the same amount of money to spend at one time as at another, but spend more on automobiles and less on food and shelter, this may reflect a shift in consumer wants. When consumers have less to spend the items which they forego are presumably those which they want less strongly. Thus, by examining the pattern of consumer expenditure in the past and the consumption from year to year of certain types of goods it is possible to discover the outline of what might be called the "structure of wants."

The pattern of consumer wants is not, of course, fixed and immutable, but is continually changing under the impact of fashion, advertising, education and new goods coming into use. Within limited periods of time, however, changes in the pattern of wants are largely changes in detail, not in the basic structure of wants as they relate to major categories of activity. While consumer expenditure is the most important

channel through which consumer which consumer wants influence production, it is not the only one, and some account must be taken of the wants reflected through other channels. The three most important cases of this sort occur in (1) production at home for home use, (2) Government services supplied without any direct charge but financed for the most part out of taxes and (3) group expenditure by consumers combined in such bodies as churches, hospitals, and similar consumer institutions. By placing money values on food raised for home consumption and on shelter obtained from owned homes, these, the two most important items of home production, can be combined with purchased goods in analyzing consumer wants. The services. rendered free by Government and by consumer institutions cannot be converted into the equivalent of private expenditure and can best be treated as reflecting wants which are met through social expenditure. These social expenditures are relatively small in comparison with all expenditures, so that the main elements of the structure of wants are to be found in the analysis of private expenditures.

All consumers are, of course, not equally able to express their wants in the market. Significant differences between different groups of consumers can be brought out in two related maps. Map 1 shows the distribution of all consumers, regardless of their ability to make their wants effective. In map 2 these same consumers are weighted by their purchasing power-by their ability to express their wants in terms which affect the direction of economic activity. From this map it will be seen that urban consumers are on the whole more economically articulate than rural ones1 and in particular that the wants of consumers living in the northeast section of the country and on the west coast are more effectively expressed in purchasing power than are the wants of consumers in some parts of the South.

The distribution of the total consumer income in 1935–36 is shown by tenths in chart I, from the highest tenth with incomes of $2,600 and over a year, to the lowest tenth with incomes under $340. Obviously, the wants of consumers at the upper income levels can be more effectively expressed than the wants of those at the lower level.

The actual expenditures which direct production, however, reflect primarily the wants of families and individuals with relatively small incomes. In chart II,

1 The map exaggerates this difference by showing as urban the purchases made by rural people in neighboring cities.

POPULATION WEIGHTED BY PURCHASING POWER, 1935

(BASED ON RETAIL SALES)

MAP 2.-Population Weighted by Purchasing Power, 1935