ABSTRACT
E FFICIENCY, as defined in Chapter I, may be measured on any one of three levels-the physical, the pecuniary or economic, and the psycho-physiological. Hitherto we have considered mainly the physical level. The physical volume per man-hour or machine-hour worked was held to be increased by large-scale production and operation. But as soon as relations with the consumer are considered, there comes the question whether the physical output turned out is needed or wanted and demanded. Engineers have told us that, if left alone as technocrats to run the economic machine, they could produce things in much greater quantities per man or machine, and that they are baulked in doing so only by the middleman distributor. This may well be true; but suppose the consumer does not demand, or want, or need, those 'things', what then? The physical things will merely pile up in warehouses to rust and rot, and in the end it will be worse from the standpoint of efficiency than if they had never been made. Room will be taken up and when rot has gone far enough decay will spread throughout the land. It is ultimately not the middleman or the economist who prevents the engineer's dream from fulfilment, but the demand, wants and needs of the consumer.
