All economic activity can usefully be classified under three heads, namely: (i) Direct exploitation of natural resources (agriculture, pasture, forestry, fishing, hunting and trapping, mining and quarrying, hydroelectric power). (ii) Manufacture, which may be precisely defined as the organised labour of a number of workers using mechanical power for the purpose of continuously producing transportable goods. (This definition thus excludes, for instance, the workshop employing only one or two workers, the dressmaker who does not use mechanical power, the builder whose product is not transportable.) (iii) All other activities, which may be described for convenience as the Service Industries. The principal service industries are building and construction, commerce, transport, education, public administration, and the like. This classification must form the starting point for any scientific theory of the location of economic activities and of the functions of cities. For the first group of industries must, by their nature, be carried on where the natural resources are located. The manufacturing industries, on the other hand, producing, by definition, goods that are transportable, and using as materials either natural products or partially manufactured goods that are also transportable, can generally be carried on, if desired, at a point distant both from their consumers and from their suppliers of materials. (If either the product or the materials are particularly bulky, perishable, or otherwise difficult to transport, this freedom is of course diminished, but does not disappear.) The service industries, however, diverse though they may be in other respects, all share the fundamental characteristic that they can on the whole only be carried out in the city where the consuming population lives, or at least at some centre that the consuming population can reach without undue difficulty. A community at any given level of average income expects to consume services up to a certain standard

mT HERE is now no danger of confusing one Paley with another. But in nineteenthcentury England Paley's Evidences was a household word. To pass an examination on this theological treatise was obligatory for Cambridge undergraduates; with certain alternatives allowed, it has remained an examination text until comparatively recent times. A direct descendant of the famous eighteenthcentury ecclesiastic was Mary Paley, who married Alfred Marshall, and appears as joint author on the title page of The Economics of Industry, published in I879. A distinguished figure linking modern Cambridge with its past, she survived into the I940's. To the modern world, however, the name of Paley means the long and sumptuously produced document whose official title is A Report to the President by the President's Material Policy Commission, of June I952. It is not intended as a condemnation of the report, but rather as a commendation, to say that its primary object was to influence public opinion. To a reader outside the United States, it would appear that the magnificence of its production, the skillful choice of words, and still more of diagrams, whereby simple but important points are unobtrusively yet firmly driven home to the mind of a reader not accustomed to economic literature, all seem to indicate that it was designed to influence business leaders and Congressmen, who are accustomed to having a great deal of printed matter put before them and are only willing to read that which conforms to the highest standards of presentation. This otherwise plausible hypothesis, however, becomes very difficult to sustain when one considers the extraordinary length of the document. One has to assume that one's hypothetical business leader or Congressman, once his interest is really aroused, is willing to go on reading for days. Not that any of the text can be called superfluous; though some of it is more specifically addressed to economists and statisticians, some to legislators. And least of all let us decry the imputed objective. That the United States in the coming generation, in respect of a number of important raw materials at any rate, will have to be an importer on a largely increasing scale is a truth whose comprehension by legislators and businessmen is urgently necessary. It is indeed a truth of such importance that, if it fails to be properly disseminated and comprehended, the entire world may be thrown into disorder. Immediately on its publication, the report did succeed in attracting a great deal of attention in every quarter and in many countries, and comments and reviews in popular and other periodicals. At this date, no summary is necessary. But a few postscripts may be in order. We may open the discussion with what at first sight appears to be one of the most important commodities, one moreover where the question of imports cannot possibly arisenamely water. Here is American prodigality at its most striking. Water consumption has risen from 550 gallons per head per day in I900 to i ioo. now. Of the present day figure, it is true, slightly more than half is accounted for by irrigation of crops. But even the remainder, over 500 gallons per head per day, is enormously high. In European cities, consumption of water for all purposes generally does not exceed 50 American gallons 1 per head per day. Even modern cities in hot climates, in Australia and South Africa, rarely exceed a figure of I00. We see the matter in a different light, however, when we realize that, of the entire use of water apart from irrigating crops, industry takes 8o per cent, household and farm use only 20 per cent. We find a further concentration when we ascertain that much of the former figure represents the enormous demands of steel, chemicals, petroleum, and cooling of electric power generators (for this latter purpose brackish water, which could not have been used for any other purpose, is often used).

This text is an extension of a previous study, covering the period from the 1930s to 1959, published by the present writer in 1965. The results of the earlier study (amended) are included in the final table. Economic progress was violently interrupted by "The Year of the Great Leap Forward" (1958), when, as a result of misinformation about agricultural labor requirements and hysterically falsified statistics, it was claimed that agricultural output was being doubled in 1 year, and that immense transfers of labor to other employments were immediately possible. The result was acute agricultural shortages, indeed famine in 1960-61, and complete disruption of industrial production. Recovery from these disasters took several years. A lesser interruption (to industry but not to agriculture) took place in the "Cultural Revolution" of 1966-67. Those to whom the idea of a labor shortage in China appears paradoxical must be reminded that China has few draft animals and still fewer tractors. To cultivate a country the size of China with hand hoes requires several hundred million workers. Chinese population is probably substantially lower than is generally believed, and almost certainly has not been expanding at the rate of 2 percent per year frequently attributed to it. Famine conditions in the early 1960s caused a considerable reduction in the rate of population growth. Publication of Chinese official statistics virtually ceased in 1959, and sources of information for subsequent years are indirect and complex. The basis of the methods used is the construction of estimates of agricultural output and industrial production index numbers, supplemented by information about employment and wages. Almost all attempts hitherto to state China's (and other developing countries') national product in dollar terms give results considerably too low. The yuan has a high purchasing power over services and over some labor-intensive commodities. For a true comparison all Chinese consumption of food should also be revalued at U.S. retail prices. On this basis Chinese 1971 gross product per head, expressed in U.S. dollars of 1974 purchasing power, was 154 for food, 140 for other private consumption, and 157 for investment and government services, or 451 in all. The long-run rate of increase of real gross product per head of population has been about 2 percent per year, whether we take the 1930s or the early 1950s as our starting point. This rate is a little below the general average for developing countries, and much less than is usually claimed. Inequalities in income distribution in China are also not very different from those prevailing in other countries.

This text is an extension of a previous study, covering the period from the 1930s to 1959, published by the present writer in 1965. The results of the earlier study (amended) are included in the final table. Economic progress was violently interrupted by "The Year of the Great Leap Forward" (1958), when, as a result of misinformation about agricultural labor requirements and hysterically falsified statistics, it was claimed that agricultural output was being doubled in 1 year, and that immense transfers of labor to other employments were immediately possible. The result was acute agricultural shortages, indeed famine in 1960-61, and complete disruption of industrial production. Recovery from these disasters took several years. A lesser interruption (to industry but not to agriculture) took place in the "Cultural Revolution" of 1966-67. Those to whom the idea of a labor shortage in China appears paradoxical must be reminded that China has few draft animals and still fewer tractors. To cultivate a country the size of China with hand hoes requires several hundred million workers. Chinese population is probably substantially lower than is generally believed, and almost certainly has not been expanding at the rate of 2 percent per year frequently attributed to it. Famine conditions in the early 1960s caused a considerable reduction in the rate of population growth. Publication of Chinese official statistics virtually ceased in 1959, and sources of information for subsequent years are indirect and complex. The basis of the methods used is the construction of estimates of agricultural output and industrial production index numbers, supplemented by information about employment and wages. Almost all attempts hitherto to state China's (and other developing countries') national product in dollar terms give results considerably too low. The yuan has a high purchasing power over services and over some labor-intensive commodities. For a true comparison all Chinese consumption of food should also be revalued at U.S. retail prices. On this basis Chinese 1971 gross product per head, expressed in U.S. dollars of 1974 purchasing power, was 154 for food, 140 for other private consumption, and 157 for investment and government services, or 451 in all. The long-run rate of increase of real gross product per head of population has been about 2 percent per year, whether we take the 1930s or the early 1950s as our starting point. This rate is a little below the general average for developing countries, and much less than is usually claimed. Inequalities in income distribution in China are also not very different from those prevailing in other countries.

In this paper I construct and analyze a simple mathematical model for the commercial exploitation of a natural animal population. The model takes into account the response of the population to harvesting pressure, the increasing harvesting costs associated with decreasing population levels, and the preference of the harvesters for present over future revenues. The principal conclusion of the analysis is that, depending on certain easily stated biological and economic conditions, extermination of the entire population may appear as the most attractive policy, even to an individual resource owner.