Economics is the philosophy of human industry; its function is to explain the “why” in man's efforts to supply his material needs. Every industrial activity must ultimately answer the question “Will or  does it pay?” If it does not pay, it must eventually stop and the controlling factor is not engineering but the economic one of cost.

Economic selection is, therefore, based on a long-run cost. All permanent future manufactured-gas development – especially in the curtailing of waste – must reckon with this basic principle.



Regardless of the academic conception of the word “cost” and the wide variation in its use, as applied to any enterprise, the word “cost” in the inexorable law of human experience must always include the following:
 
a. Ordinary routine operating expenses necessary for carrying on the project including the various species of taxes and insurance.

b. Provision for the ultimate return to the owners of the value of the services or money put into the enterprise.

c. Rental or hire of the money used in the enterprise, ordinarily called “interest.” There is no mysterious reservoir of capital and all money used for the carrying on of an enterprise must ultimately come directly from some individual owner and this owner rightfully has the obvious right to receive a hire or rental for the use of this, his property.^[16] This rental of capital is a debt which must be paid before there can be profit and like wages is an element of cost and not a part of profit.



After the above three groups of expenditures have been fully met, then what is left represents profit, but there is no profit until the above three groups have been fully met. On this conception the cost

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^[16] Large capital is steadily becoming more and more a mobilization of the savings of the small holder -- the actual people themselves -- and its administration becomes at once more sensitive to the moral opinions of the people in order to attract their support. ----- Herbert hover in American Individualism.



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