Butapartfromthisremoterandlargerguidanceofthecourseofindustry，thebusinessmenalso，andmorepersistentlyandpervasively，exerciseaguidanceoverthecourseofindustryindetail。Theproductionofgoodsandservicesiscarriedonforgain，andtheoutputofgoodsiscontrolledbybusinessmenwithaviewtogain。Commonly，inordinaryroutinebusiness，thegainscomefromthisoutputofgoodsandservices。Bythesaleoftheoutputthebusinessmaninindustry“realizes“hisgains。To“realize“meanstoconvertsalablegoodsintomoneyvalues。Thesaleisthelaststepintheprocessandtheendofthebusinessman’sendeavor。16*Whenhehasdisposedoftheoutput，andsohasconvertedhisholdingsofconsumablearticlesintomoneyvalues，hisgainsareasnearlysecureanddefinitiveasthecircumstancesofmodernlifeadmit。Itisintermsofpricethathekeepshisaccounts，andinthesametermshecomputeshisoutputofproducts。Thevitalpointofproductionwithhimisthevendibilityoftheoutput，itsconvertibilityintomoneyvalues，notitsserviceabilityfortheneedsofmankind。Amodicumofserviceability，forsomepurposeorother，theoutputmusthaveifitistobesalable。Butitdoesnotfollowthatthehighestserviceabilitygivesthelargestgainstothebusinessmanintermsofmoney，nordoesitfollowthattheoutputneedinallcaseshaveotherthanafactitiousserviceability。Thereis，ontheonehand，suchapossibilityasoverstockingthemarketwithanygivenlineofgoods，tothedetrimentofthebusinessmanconcerned，butnotnecessarilytotheimmediatedisadvantageofthebodyofconsumers。Andthereare，ontheotherhand，certainlinesofindustry，suchasmanyadvertisingenterprises，theoutputofwhichmaybehighlyeffectiveforitspurposebutofquiteequivocalusetothecommunity。Manywell-knownandprosperousenterpriseswhichadvertiseandsellpatentmedicinesandotherproprietaryarticlesmightbecitedinproof。
　　Intheolderdays，whenhandicraftwastheruleoftheindustrialsystem，thepersonalcontactbetweentheproducerandhiscustomerwassomewhatcloseandlasting。Underthesecircumstancesthefactorofpersonalesteemanddisesteemhadaconsiderableplayincontrollingthepurveyorsofgoodsandservices。Thisfactorofpersonalcontactcountedintwodivergentways:1producerswerecarefuloftheirreputationforworkmanship，evenapartfromthegainswhichsuchareputationmightbring；and2adegreeofirritationandill-willwouldariseinmanycases，leadingtopettytradequarrelsanddiscriminationsonothergroundsthanthegainstobegot，atthesametimethatthedetailcharacterofdealingsbetweenproducerandconsumeradmittedadegreeofpettyknaveryandhucksteringthatisnolongerpracticableinthecurrentlarge-scalebusinessdealings。Ofthesetwodivergenteffectsresultingfromclosepersonalrelationsbetweenproducerandconsumer；theformerseemsonthewholetohavebeenofpreponderantconsequence。Underthesystemofhandicraftandneighborhoodindustry，theadagethat“Honestyisthebestpolicy“seemsonthewholetohavebeenacceptedandtohavebeentrue。Thisadagehascomedownfromthedaysbeforethemachine’sregimeandbeforemodernbusinessenterprise。Undermoderncircumstances，whereindustryiscarriedononalargescale，thediscretionaryheadofanindustrialenterpriseiscommonlyremovedfromallpersonalcontactwiththebodyofcustomersforwhomtheindustrialprocessunderhiscontrolpurveysgoodsorservices。Themitigatingeffectwhichpersonalcontactmayhaveindealingsbetweenmanandmanisthereforeingreatmeasureeliminated。Thewholetakesonsomethingofanimpersonalcharacter。Onecanwithaneasierconscienceandwithlessofasenseofmeannesstakeadvantageofthenecessitiesofpeoplewhomoneknowsofonlyasanindiscriminateaggregateofconsumers。Particularlyisthistruewhen，asfrequentlyhappensinthemodernsituation，thisbodyofconsumersbelongsinthemaintoanother，inferiorclass，sothatpersonalcontactandcognizanceofthemisnotonlynotcontemplated，butisinasenseimpossible。Equity，inexcessoftheformalmodicumspecifiedbylaw，doesnotsoreadilyassertitsclaimswheretherelationsbetweenthepartiesareremoteandimpersonalaswhereoneisdealingwithone’snecessitousneighborswholiveonthesamesocialplane。Underthesecircumstancestheadagecitedabovelosesmuchofitsaxiomaticforce。Businessmanagementhasachancetoproceedonatemperateandsagaciouscalculationofprofitandloss，untroubledbysentimentalconsiderationsofhumankindnessorirritationorofhonesty。
　　Thebroadprinciplewhichguidesproducersandmerchants，largeandsmall，infixingthepricesatwhichtheyoffertheirwaresandservicesiswhatisknowninthelanguageoftherailroadsas“chargingwhatthetrafficwillbear。“17*Whereagivenenterprisehasastrictmonopolyofthesupplyofagivenarticleorofagivenclassofservicesthisprincipleappliesintheunqualifiedforminwhichithasbeenunderstoodamongthosewhodiscussrailwaycharges。Butwherethemonopolyislessstrict，wheretherearecompetitors，therethecompetitionthathastobemetisoneofthefactorstobetakenaccountofindeterminingwhatthetrafficwillbear；competitionmayevenbecomethemostseriousfactorinthecaseiftheenterpriseinquestionhaslittleornoneofthecharacterofamonopoly。Butitisverydoubtfulifthereareanysuccessfulbusinessventureswithintherangeofthemodernindustriesfromwhichthemonopolyelementiswhollyabsent。18*Theyare，atanyrate，fewandnotofgreatmagnitude。Andtheendeavorofallsuchenterprisesthatlooktoapermanentcontinuanceoftheirbusinessistoestablishasmuchofamonopolyasmaybe。Suchamonopolypositionmaybealegallyestablishedone，oroneduetolocationorthecontrolofnaturalresources，oritmaybeamonopolyofalessdefinitecharacterrestingoncustomandprestigegood-will。Thislatterclassofmonopoliesarenotcommonlyclassedassuch；althoughincharacteranddegreetheadvantagewhichtheygiveisverymuchthesameasthatduetoadifferentialadvantageinlocationorinthecommandofresources。Theendsoughtbythesystematicadvertisingofthelargerbusinessconcernsissuchamonopolyofcustomandprestige。Thisformofmonopolyissometimesofgreatvalue，andisfrequentlysoldunderthenameofgood-will，trademarks，brands，etc。Instancesareknownwheresuchmonopoliesofcustom，prestige，prejudice，havebeensoldatpricesrunningupintothemillions。19*
　　Thegreatendofconsistentadvertisingistoestablishsuchdifferentialmonopoliesrestingonpopularconviction。Andtheadvertiserissuccessfulinthisendeavortoestablishaprofitablepopularconviction，somewhatinproportionashecorrectlyapprehendsthemannerinwhichapopularconvictiononanygiventopicisbuiltup。20*Thecost，aswellasthepecuniaryvalueandthemagnitude，ofthisorganizedfabricationofpopularconvictionsisindicatedbysuchstatementsasthattheproprietorsofacertainwell-knownhouseholdremedy，reputedamongmedicalauthoritiestobeofentirelydubiousvalue，haveforaseriesofyearsfoundtheirprofitsinspendingseveralmilliondollarsannuallyinadvertisements。Thiscaseisbynomeansunique。
　　Ithasbeensaid，21*nodoubtingoodfaithandcertainlywithsomereason，thatadvertisingascurrentlycarriedongivesthebodyofconsumersvaluableinformationandguidanceastothewaysandmeanswherebytheirwantscanbesatisfiedandtheirpurchasingpowercanbebestutilized。Totheextenttowhichthisholdstrue，advertisingisaservicetothecommunity。Butthereisalargereservationtobemadeonthishead。Advertisingiscompetitive；thegreaterpartofitaimstodivertpurchases，etc。，fromonechanneltoanotherchannelofthesamegeneralclass。22*Andtotheextenttowhichtheeffortsofadvertisinginallitsbranchesarespentonthiscompetitivedisturbanceoftrade，theyare，onthewhole，ofslightifanyimmediateservicetothecommunity。Suchadvertising，however，isindispensabletomostbranchesofmodernindustry；butthenecessityofmostoftheadvertisingisnotduetoitsservingtheneedsofthecommunitynortoanyaggregateadvantageaccruingtotheconcertswhichadvertise，buttothefactthatabusinessconcernwhichfallsshortinadvertisingfailstogetitsshareoftrade。Eachconcertmustadvertise，chieflybecausetheothersdo。Theaggregateexpenditurethatcouldadvantageouslybeputintoadvertisingintheabsenceofcompetitionwouldundoubtedlybebutaninconsiderablefractionofwhatisactuallyincurred，andnecessarilyincurredunderexistingcircumstances。23*
　　Notalladvertisingiswhollycompetitive，oratleastitisnotalwaysobviouslyso。Inproportionasanenterprisehassecuredamonopolyposition，itsadvertisinglosestheairofcompetitivesellingandtakesonthecharacterofinformationdesignedtoincreasetheuseofitsoutputindependently。Butsuchanincreaseimpliesaredistributionofconsumptiononthepartofthecustomers。24*Sothattheelementofcompetitivesellingisafterallnotabsentinthesecases，buttakestheformofcompetitionbetweendifferentclassesofwaresinsteadofcompetitivesellingofdifferentbrandsofthesameclassofwares。
　　Attentionisherecalledtothismatterofadvertisingandthenecessityofitinmoderncompetitivebusinessforthelightwhichitthrowson“costofproduction“inthemodernsystem，wheretheprocessofproductionisunderthecontrolofbusinessmenandiscarriedonforbusinessends。Competitiveadvertisingisanunavoidableitemintheaggregatecostsofindustry。Itdoesnotaddtotheserviceabilityoftheoutput，exceptitbeincidentallyandunintentionally。Whatitaimsatisthesaleoftheoutput，anditisforthispurposethatitisuseful。Itgivesvendibility，whichisusefultotheseller，buthasnoutilitytothelastbuyer。Itsubiquitouspresenceinthecostsofanybusinessenterprisethathastodowiththeproductionofgoodsforthemarketenforcesthestatementthatthe“costofproduction“ofcommoditiesunderthemodernbusinesssystemiscostincurredwithaviewtovendibility，notwithaviewtoserviceabilityofthegoodsforhumanuse。
　　Thereis，ofcourse，muchelsethatgoesintothecostofcompetitiveselling，besidestheexpensesofadvertising，althoughadvertisingmaybethelargestandmostunequivocalitemtobesetdowntothataccount。Agreatpartoftheworkdonebymerchantsandtheirstaffofemployees，bothwholesaleandretail，aswellasbysales-agentsnotexclusivelyconnectedwithanyonemercantilehouse，belongsunderthesamehead。Justhowlargeashareofthecostsofthedistributionofgoodsfairlybelongsundertherubricofcompetitivesellingcanofcoursenotbemadeout。Itislargest，onthewhole，inthecaseofconsumablegoodsmarketedinfinishedformfortheconsumer，butthereismoreorlessofitthroughout。Thegoodsturnedoutonalargescalebythemodernindustrialprocesses，onthewhole，carryalargerportionofsuchcompetitivecoststhanthegoodsstillproducedbytheold-fashioneddetailmethodsofhandicraftandhouseholdindustry；althoughthisdistinctiondoesnotholdhardandfast。Insomeextremecasesthecostofcompetitivesellingmayamounttomorethanninetypercent。ofthetotalcostofthegoodswhentheyreachtheconsumer。Inotherlinesofbusiness，commonlyoccupiedwiththeproductionofstaplegoods，thisconstituentofcostmayperhapsfallbelowtenpercentofthetotal。Wheretheaverage，forthepriceoffinishedgoodsdeliveredtotheconsumers，mayliewouldbeahazardousguess。25*
　　Itisevidentthatthegainswhichaccruefromthisbusinessofcompetitivesellingandbuyingbearnodeterminablerelationtotheserviceswhichtheworkinquestionmayrenderthecommunity。Ifacomparisonmaybehazardedbetweentwounknownandindeterminatequantities，itmayperhapsbesaidthatthegainsfromcompetitivesellingbearsomethingmoreofastablerelationtotheservicerenderedthandothegainsderivedfromspeculativetransactionsorfromthefinancieringoperationsofthegreatcaptainsofindustry。Itseemsatleastsafetosaythattheconversewillnotholdtrue。Gainsandservicesseemmorewidelyoutoftouchinthecaseofthelarge-scalefinancieringwork。Notthattheworkofthelargebusinessmeninreorganizingandconsolidatingtheindustrialprocessisofslightconsequence；butasageneralproposition，theamountofthebusinessman’sgainsfromanygiventransactionofthislatterclassbearnotraceablerelationtoanybenefitwhichthecommunitymayderivefromthetransaction。26*
　　Astothewagespaidtothemenengagedintheroutineofcompetitiveselling，assalesmen，buyers，accountants，andthelike，-muchthesameholdstrueofthemasoftheincomeofthebusinessmenwhocarryonthebusinessontheirowninitiative。
　　Theiremployerspaythewagesofthesepersons，notbecausetheirworkisproductiveofbenefittothecommunity，butbecauseitbringsagaintotheemployers。Thepointtowhichtheworkisdirectedisprofitablesales，andthewagesareinsomeproportiontotheefficiencyofthisworkascountedintermsofheightenedvendibility。