Elementary Principles of Economics | by Richard T. Ely and George Ray Wicker

Preface

In offering this text-book to teachers and students of economics, the authors feel that a brief word of explanation and suggestion may afford help in judging the quality of the book as well as ...

Chapter I. Preliminary Remarks On The Nature Of Economics

Although the whole book which follows is but an expanded definition of economics, the student who is about to enter upon a study of the subject may well wish to have explained to him in advance, ...

Chapter II. The Principal Divisions Of Economics

Economics is a science which covers so wide a field that it has been found desirable to divide it into parts, each of which is often treated by writers in separate works or in separate volumes ...

Chapter III. Fundamental Institutions In The Existing Socio-Economic Order

In every civilized State to-day there are certain conditions under which men perform their economic activities, but which are so fundamental in their nature that we do not often stop to consider ...

IV. The Right to Establish Private Enterprises

The right to establish private enterprises is another fundamental one which is nevertheless changing and changeable. It is only within the last century that the right has come to have its ...

Book II. Chapter I. A Brief Sketch Of Economic History. Introductory

What Economic History Is.In beginning the study of economic history it will be well for us to recall what has been said in a preceding chapter as to the nature of the subject which is before us. ...

Economic Stages

I. Stages in the History of Labor 1. Slaughter of enemies. 2. Slavery and serfdom, along with free labor, regulated by custom, operating through contract. 3. Labor ...

Early Stages Of Industrial Development I. The Hunting and Fishing Stage

General Characterization. In the first stage of man's economic development, nature is the great factor in production. There is little labor and less capital. Man contents himself with what ...

Early Stages Of Industrial Development II. The Pastoral Stage

General Characterization. Between uncivilized man, who uses what he finds, and civilized man, who makes what he wants, there is a middle ground. The man of this middle period neither depends ...

Early Stages Of Industrial Development III. The Agricultural Stage

General Characterization. Man's next accomplishment, which carries him a distinct stage farther in his development, is of immense importance. Already knowing how to manage animals to advantage, ...

Early Stages Of Industrial Development IV. The Handicraft Stage

General Characterization. We have said on an earlier page that real material civilization begins with making things; it is with the stages in which men make things that we have now to deal. ...

Chapter III: The Industrial Stage In England

We come now to the last of the stages in man's economic development. Inasmuch as this last stage is the one in which we are living, it will be well to give to it a more detailed study than has ...

II. The Industrial Revolution in England

Economic Conditions in 1760. It was in England that the change from the handicraft stage to the industrial stage first began and was most rapidly accomplished. The change is generally called in ...

II. The Industrial Revolution in England. The Changes and their Result

1. Changes in Agriculture. During the eighteenth century there were great changes in English agriculture. High prices made possible more intensive farming, and with this greater application of ...

Reaction Against the Passive Policy of Government

We have already explained that accompanying the change in industrial methods went a radical change in opinion as to the proper attitude of the State toward human affairs, including industrial ...

Chapter IV. The Industrial Stage In The United States. I. The Industrial Revolution in the United States and England Contrasted

The story of the Industrial Revolution and of the industrial stage in England is in great part the story of the revolution and the stage in all countries that have gone through it. In studying ...

II. State Regulation of Competition in the United States Labor Legislation in the United States.

We have already noted and explained the fact that the misery and degradation of the wage-earning classes, which in England led to a reaction in favor of an active policy of government, were not ...

Book III. Economic Theory Part I. Consumption. Chapter I. Introductory. Utilities and Goods

We have now studied the history of man's efforts to get a living, and the fundamental conditions which determine all his efforts to that end. We have now to study analytically the process by ...

Chapter II. The Law Of Diminishing Utility

Illustrations of the Law. The wants of men are innumerable and, considered as a whole, are never satisfied. There seems to be no limit to the variety of things desired. But if we single out any ...

Chapter III. Demand

The Economic Order of Consumption. It follows from the law of diminishing utility that men in satisfying their wants consume commodities in a fairly regular order. So far as they consume things ...

The Laws of Demand

We have already explained that the study of human wants is directly connected with the study of consumption, and that the study of consumption leads to the study of demand. But we must note that ...

Chapter IV. The Economy Of Spending And Saving

Two important questions regarding economy in consumption remain to be studied. The first question is, briefly, How can one's whole expenditure or consumption be so distributed between the ...

The Economy Of Spending And Saving. Some Rules for Economy in Choices

We may exercise an influence over the growth of our own wants, in such a way that a great real satisfaction may flow from a comparatively small expenditure. Thus, (1) we should cultivate ...

Part II. Production. Chapter I. Introductory

Why Production should be studied Next. We have made human wants, consumption, and demand the first subjects of our study of economic theory because it is from these that all other economic ...

Over-production and Under-consumption

It is not uncommon to find men expressing a belief in the possibility of general over-production. Still more common is it for men to hold views which could only be correct if general over-...

Chapter II. The Factors Of Production

The Three Factors.Three things contribute to production as it is carried on to-day. They are therefore called the factors of production. Of these, two are called original or primary factors, ...

Labor

Definition. The second of the primary or original factors in production is labor. Labor is human exertion of mind or body undergone with the object of creating utilities. A common ...

Capital

Definition. The third factor in production, the secondary or derived one, is capital. Much as hydrogen and oxygen produce water, land and labor produce capital. Itself neither land nor labor, ...

Chapter III. The Organization Of Production

In the preceding chapter we have considered the factors of production separately, studying the nature of each, and the principles governing its efficiency and increase. We have now to study the ...

II. The Organization of the Factor Labor

In studying the forms of business undertaking, we have really been studying the different ways in which society secures cooperation and organization of the factors of production as a whole. We ...

III. The Organization of the Factor Capital

In the foregoing discussion of the organization of labor, it will perhaps have been noticed that the organization of labor is intimately associated with the organization of capital. That ...

V. Conditions Determining the Organization of Production

We have already noted in passing one or two of the conditions upon which depend the efficiency of organization of production. It may be well to bring them together at this point and to speak at ...

VI. Large Scale and Small Scale Production Compared

Modern times have witnessed a wonderfully rapid growth in the average size of the individual business. Indeed, the change in the size of the business unit during the past half-century is almost ...

Part III. Transfers Of Goods. Chapter I. Introductory

The Nature of the Subject. We have now studied two of the main parts of economic theory. We have learned something regarding the consumption of goods, and also something regarding their ...

Chapter II. Value

Meaning of the Term. One of the most important and difficult problems in economics, and the central problem in transfers or exchange, as well as in distribution, is that of the determination of ...

Cost of Production and Value

The value of this third class of goods is due to precisely the same cause that lies back of the value of all goods, namely, utility under a condition of scarcity. But it is commonly said that ...

Frictional Elements Most Frequently Present In Modern

Business, Preventing The Realization Of The Perfectly Competitive Price It remains for us to consider briefly but in detail some of the frictional elements which are most frequently ...

Chapter III. Monopolies And Monopoly Value

In the preceding chapter we reached the conclusion that in the case of goods freely produced under competitive conditions, value is determined on the side of demand by the marginal utility, and ...

Advantages claimed for Public Ownership

The principal advantages which are claimed for public ownership of such monopolies call for a brief discussion. 1. Increase of Public Prosperity. A general diffusion among the ...

Chapter IV. Money

Having discussed at length the fundamental principles on which exchange and value rest, we pass naturally to consider the nature of the complex mechanism by which exchange is effected. At the ...

Money. Coinage

Coinage. When the metals first came to be used as a medium of exchange, they passed from hand to hand in their rough state, as dust, or in nuggets, and the testing of amount and ...

The Value of Money and the Cost of Production

Finally, it should be added, the theory holds that in the long run, the value of money is influenced by the cost of production of the precious metals. Dear money and cheap goods, it is said, ...

Changes in the Amount of Money : Bimetallism

The Amount of Money Needed. The question has often been asked, How much money does a country need ? And the answer has sometimes been given: It makes no difference how much money there ...

Bimetallism. Recent Monetary History

Recent Monetary History states, as well as others, still provides a place for silver in its currency. By the Bland-Allison Act of 1878, the Secretary of the Treasury was required to coin not ...

Chapter V. Credit And Banking

What Credit Is. We have seen the immense development in exchange that has been made possible by the use of money, a development resulting in the division and organization of labor and a ...

The Nature Of Banking Operations

The nature of banking operations will be made clearer by an examination of the following statement of the condition of a national bank: ...

Evils of Credit

But we must not overlook the dark side of our credit economy. Without expanding upon the evils of credit we may mention some of the more important of them as follows: 1. Credit ...

Chapter VI. International Trade

The subject of international trade calls for somewhat extended study before we leave the division of transfers or exchange. Nations do not live to themselves alone. More and more with the ...

II. Restrictions on International Trade

Objects of the Restriction. Nations have always laid restrictions upon international commerce, and an examination of the history of such restrictions discloses at least four motives for ...

Does Protection protect Labor ?

The free-traders maintain (7) that the argument of the protectionists that a protective policy benefits the laborer will not bear close analysis. For nearly two centuries before any protective ...

Part IV. Distribution. Chapter I. Introductory

The Meaning of the Word Distribution.Having studied under the head of consumption the human wants that lead to economic activity, and the satisfactions that result from consumption ;...

Chapter II. Rent

As in the study of the factors of production we first discussed the factor land, so here in our study of the distribution of the social income among the factors that contribute to its production,...

Rent of Agricultural Land

To-day there exist large areas of land which may be had for nothing. Of this land some is cultivated which pays no rent; some is not cultivated at all. Why, then, is it that some land will bear ...

Rent of Urban Land

The fact that situation is the factor of special importance in determining the desirability of urban land leads to certain peculiar results that call for separate discussion. We may consider ...

Chapter III. Wages And The Labor Problem I. How Wages are Determined

We have pointed out that of the factors of production, land and labor are the primary and original ones. Having discussed rent, or the portion of the product allotted to the owners of land, we ...

II. Labor Organizations

Wages have been shown to be largely dependent upon the relative bargaining strength of the laborers as compared with that of entrepreneurs and others who contribute to the work of production. ...

Weaknesses of Labor Organizations

Some of the weaknesses of labor organizations have already been touched upon. These and other weaknesses, some inherent in the nature of the unions and some accidental, may be briefly summarized ...

III. The Relation of the Laborer to the Product of his Labor

Labor organizations strive to secure higher wages and better conditions of employment for workingmen than they would otherwise obtain, and thus to increase their share of the product of ...

Arbitration and Conciliation

We cannot dismiss this subject of the relation of the laborer to the product of his labor without a few words regarding the part that arbitration and conciliation have played and are to-day ...

Chapter IV. Interest

After our long excursion into the subject of labor and its reward, it may be well for us to pause a moment and place in the right connection what is to follow. It should be recalled that under ...

The Austrian Theory of Interest

But what is it that determines the rate which the marginal investor will regard as just repaying him for his saving or abstinence ? This question finds its answer in the theory of interest which ...

Circumstances affecting the Rate

There is both a real and an apparent fluctuation in the interest rate from place to place and from time to time. The apparent fluctuation is that which is due to the inclusion of insurance ...

Chapter V. Profits

Economists recognize a fourth regular share in the distribution of the social income, though they have not been agreed as to precisely what this share consists of, or as to how it is determined. ...

Pure Profit and Monopoly Gains Contrasted

Under sharp and increasing competition, pure profit rests upon a precarious foundation. If the special ability upon which the profit depends is such as cannot be duplicated, the profit will ...

Chapter VI. Socialism

The Relation of Socialism to Distribution. In the fore-going chapters we have explained how in the existing social organization the annual produce of industry the social incomeis distributed. ...

Not all Public Business is Socialistic

It must be observed that not every public activity in relation to industry is socialistic. Properly speaking, that only can be considered socialistic which tends to render government dominant in ...

The Weaknesses of Socialism

In considering socialism as a scheme for social reconstruction, a number of difficulties suggest themselves. Prominent among these is (1) the probable numbing effect of the system upon ...

Present Status of the Socialist Political Movement

Socialism as a practical political movement has been making surprisingly rapid strides in Europe within the last decade. It is impossible to make an accurate estimate of the aggregate number of ...

Book IV. Public Finance. Chapter I. Expenditure And Revenue

I. Introductory Remarks on the Nature of Public Finance Definition of Public Finance. Public finance is the science, or the branch of economics, which deals with the revenues and ...

II. Public Expenditure

The Magnitude of Public Expenditure.The importance of public finance becomes more apparent when we consider the magnitude of government expenditures in modern times. The fact has often been ...

III. Public Revenue

Classification. Differing classifications of public revenue have been almost as numerous as the writers who have made them. Without entering into a discussion of the reasons for such ...

Land Nationalization and Land Municipalization

A very large number of intelligent citizens of England, Australia, and the United States are adherents and devoted advocates of a scheme for entirely abolishing taxation, as that word is ...

Chapter II. Revenues In The United States I. Federal Revenues

The following table shows the Federal revenue classified by sources for the fiscal year ending June 30, 1903 : Customs...............$284,479,582 Internal revenue...............

II. State Revenues

Income taxes and inheritance taxes have been levied by the Federal government, but as these taxes have also been resorted to by the states, we may defer our discussion of them to a later page. ...

Corporation Taxes

Partly owing to the proved injustice of the general property tax, but partly also owing to the recent great growth of the corporate form of business enterprise, there has been in the last ...

III. Local Revenues

Local areas of administration in the United States have usually relied in the main upon the same taxes which are levied by the state governments. Thus, as has been explained above, the general ...

IV. A Balanced Revenue System

In what has gone before, we have not dwelt upon the question whether any forms of revenue are particularly appropriate to different divisions of our government, or whether there is any gain in a ...

Appendix I: Subjects For Essays, Discussions, And Debates

The following list is intended simply to be suggestive. Students are advised first of all to choose such subjects for study as are best suited to the local environment. Thus, if the student ...

Appendix I: Subjects For Essays, Discussions, And Debates. Continued

Taxation And The Tariff Adam Smith on Taxation. Income Tax Decisions of the United States Supreme Court Taxes that Can Be Shifted. Taxation and Perjury....

Appendix II. Courses Of Reading

It is believed that both students and teachers may derive valuable aid from the following selected bibliographies. The first group in each case includes works of a relatively untechnical ...

Appendix II. Courses Of Reading. Continued

Socialism Group 1 Bellamy, E.: Looking Backward. Brooks, J. G.: The Social Unrest. Ely, R. T.: Socialism and Social Reform. Gronlund, L.: The ...