willing to pay such prices for such properties for the sake of the enhanced earnings that it can derive from them by virtue of its own superior knowledge of how to run them. It was this principle, among others, that inspired the grouping of our great corporations that began about 25 years ago.
Knowledge in itself is a commercial asset, something that commands a price. Patents that are legally valueless are often purchased just to obtain the knowledge and experience of the owners who have been applying them. In such cases it is their knowledge that really is bought, not the patent, which in itself could not be upheld if challenged in the courts. It is generally the experience that the introduction of a new process is fraught with trials and tribulations. After a while—perhaps many years—these are overcome, or disappear. There is acquired what is called a “plant sense,” which means that the whole organization has learned how to handle itself. By the time such sense—such knowledge—has been acquired it has usually cost a great deal of money; but once acquired it commands a price. Illustrations of this kind might be multiplied to great length. In considering the wealth of a nation such intangible assets are not to be over- looked, not even if they can not be physically estimated.
Now, in such an inventory of the national wealth as I have made in the previous chapters the intangible wealth of the country does not figure to anything more than a small extent. In so far as my estimates are based upon earning capacity it is of course included. This is the case with my valuation of the mines, which being derived wholly from the principle of earning capacity includes all of the patents, knowledge and
