books



previous page: The Dogs And The Fleas | by Frederic Scrimshaw
  
page up: Economics Books
  
next page: Introduction To Economics | by Frank O'Hara

The Principles Of Economics With Applications To Practical Problems | by Frank A. Fetter



This book had its beginning ten years ago in a series of brief discussions supplementing a text used in the classroom. Their purpose was to amend certain theoretical views even then generally questioned by economists, and to present most recent opinions on some other questions. These critical comments evolved into a course of lectures following an original outline, and were at length reduced to manuscript in the form of a stenographic report made from day to day in the class-room. The propositions printed in italics were dictated to the class, to give the key-note to the main divisions of the argument. Repeated revisions have shortened the text, cut out many digressions and illustrations, and remedied many of the faults both of thought and of expression; but no effort has been made to conceal or alter the original and essential character of the simple, informal, classroom talks by teacher to student. To this origin are traceable many conversational phrases and local illustrations, and the occasional use of the personal form of address...

TitleThe Principles Of Economics With Applications To Practical Problems
AuthorFrank A. Fetter
PublisherThe Century Co.
Year1904
Copyright1904, The Century Co.
AmazonThe Principles of Economics, With Applications to Practical Problem

By Frank A. Fetter, Ph.D., Professor Of Political Economy And Finance, Cornell University

The Century Co

To The Students Of Three Universities - Indiana, Stanford, And Cornell- For Whom, With Whom, And By Whose Aid This Book Came To Be Written

-Preface
This book had its beginning ten years ago in a series of brief discussions supplementing a text used in the classroom. Their purpose was to amend certain theoretical views even then generally question...
-Part I. Division A - Wants And Present Goods. Chapter 1. The Nature And Purpose Of Political Economy. I. Name And Definition
1. Economics, or political economy, may he defined, briefly, as the study of men earning a living; or, more fully, as the study of the material world and of the activities and mutual relations of men....
-II. Place Of Economics Among The Social Sciences
1. Political economy, as one of the social sciences, may be contrasted with the natural sciences, which deal with material things and their mutual relations, while it deals with one aspect of men's li...
-Sec. III. The Relation Of Economics To Practical Affairs
1. The ideal of political economy here set forth is that it should be a science, a search for truth, a systematized body of knowledge, arriving at a statement of the laws to which economic actions con...
-Chapter 2. Economic Motives. Sec. I. Material Wants, The Primary Economic Motives
1. A logical explanation of industry must begin with a discussion of the nature of wants, for the purpose of industry is to gratify wants. An economic want may be defined as a feeling of incompletenes...
-Sec. II. Desires For Non-Material Ends, As Secondary Economic Motives
1. The spiritual nature of man must not be ignored in economic reasoning. There has been much and just criticism of the earlier writers and of their conclusions because so little account was taken by ...
-Chapter 3. Wealth And Welfare. I. The Relation Of Men And Material Things To Economic Welfare
1. The gratifying of economic wants depends on things outside of the man who feels the wants. Man is to himself the center of the world. He groups things and estimates things with reference to their b...
-II. Some Important Economic Concepts Connected With Wealth And Welfare
1. Utility, in its broadest usage, is the general capability that things have of ministering to human well being. The term is evidently one without any scientific precision. It expresses only a genera...
-Chapter 4. The Nature Of Demand. Sec. I. The Comparison Of Goods In Man's Thought
1. As wants differ in kind and degree, so goods differ in their power to gratify wants. This general and simple statement unites the leading thoughts of the two chapters preceding. Confirmation of its...
-The Comparison Of Goods In Man's Thought. Continued
The diminishing utility of successive portions (doses or increments, as they are called) may be represented by a curve of utility. Scale of Supply. The diagram is constructed on the hypothesis tha...
-Sec. II. Demand For Goods Grows Out Of Subjective Comparisons
1. Demand is desire for goods united with the power to give something in exchange. An example frequently given to show the difference between desire and demand is the hungry boy looking longingly at t...
-Chapter 5. Exchange In A Market. I. Exchange Of Goods Resulting From Demand
Reciprocal demand becomes exchange. 1. Exchange in the usual economic sense is the transfer of two goods by two owners, each of whom deems the good taken more than a value-equivalent for the one give...
-II. Barter Under Simple Conditions
1. In isolated exchange, where only two traders engage in barter, their estimates give respectively the upper and the lower figures of the ratio at which the trade can take place. Let us recall the fa...
-III. Price In A Market
One price in a market. 1. A market is a body of buyers and sellers in such close business relations that the actual price conforms closely to the valuation of the marginal pair. The word price whic...
-Chapter 6. Psychic Income. I. Income As A Flow Of Goods
1. Satisfaction and gratification being only temporary conditions, economic wants appear in more or less regularly recurring series. Impressions are short lived, sensations are temporary, wants that h...
-Sec. II. Income As A Series Of Gratifications
1. The value of consumption goods is derived from the pleasurable psychic impressions which they aid to produce, and these psychic effects constitute the psychic income. The objective income is someti...
-Division B - Wealth And Rent. Chapter 7. Wealth And Its Indirect Uses. Sec. I. The Grades Of Relation Of Indirect Goods To Gratification
Technical rank of agents. 1. Goods may he ranked according to their technical relation to wants. The technical rank of goods (sometimes spoken of as the degree of roundaboutness of the process) signi...
-II. Conditions Of Economic Wealth
1. The bounty and variety of the natural supply of indirect goods in the material world are the prime conditions of a bountiful income to society. The effect of climate on the supply of goods availabl...
-Chapter 8. The Renting Contract. Sec. I. Nature And Definition Of Rent
1. The temporary use of materials and power and their sources is necessary to bring most enjoyable goods into being. Indirect goods have value solely because they help to get direct goods. The apple-t...
-Sec. II. The History Of Contract Rent And Changes In It
1. Economic rent (likewise called natural, competitive, and sometimes rack rent) is to be distinguished from contract rent. Economic rent is the market value of the usufruct, and contract rent is the ...
-Chapter 9. The Law Of Diminishing Returns. I. Definition Of The Concept Of (Economic) Diminishing Returns
1. The phrase diminishing returns of industrial agents is the expression of the fact that there is an elastic limit to the utility any indirect good can afford within a given time. Successive attemp...
-II. Other Meanings Of The Phrase "Diminishing Returns"
Does not mean declining prosperity. 1. The phrase diminishing returns is sometimes taken as meaning merely a decrease in prosperity. Many ideas are connected with this phrase. It is not self-explanat...
-Sec. III. Development Of The Concept Of Diminishing Returns
1. The law of diminishing returns was first recognized and expressed with reference to the use of land in agriculture. There are several evident reasons why this occurred. It is obvious to every far...
-Chapter 10. The Theory Of Rent: The Market Value Of The Usufruct. I. Differential Advantages In Consumption Goods
1. Both rent and the value of durable wealth are based on the value of the fruits or products yielded by the wealth. Gratification, afforded directly or indirectly, is the basis of all values. The rel...
-II. Differential Advantages In Indirect Goods
1. Rent varies with the quality of the products yielded by agents, other things being equal. Let us take first a simple case where the agent is the sole condition of the product. If there is but one t...
-Chapter 11. Repair, Depreciation, And Destruction Of Wealth: Relation To Its Sale And Rent. Sec. I. Repair Of Rent-Bearing Agents
1. The continued rent of indirect agents is dependent on the continual repair of certain parts necessary for their efficiency. All earthly things wear out or decay. Whenever man's hand is withheld, na...
-Sec. II. Depreciation In Rent-Earning Power Of Agents Kept In Repair
1. Even where repairs are thoroughly kept up and present rent is undiminished, future rents may be decreasing because of natural decay. Changes go on in the substance of things which cannot be preven...
-Sec. III. Destruction Of Natural Stores Of Materials
1. A large part of industry is now conducted without regard to the preservation of the source of income. A striking example of this is the use, or rather the destruction, of the American forests. In t...
-Chapter 12. Increase Of Rent-Bearers And Of Rents. Sec. I. Efforts Of Men To Increase Products And Rent-Bearers
Desire for better agents impels men to improvements. 1. While man destroys some agents of production he multiplies many others. We have noted many kinds of depreciation, destruction, and wearing out ...
-II. Effects Of Social Changes In Raising The Rents Of Indirect Agents
Effect of decrease of the competing agents. 1. Changes in the number and kind of competing resources may raise the rents of particular agents. Rents may increase without increase in the quantity or n...
-Division C - Capitalization And Time-Value. Chapter 13. Money As A Tool In Exchange. Sec. I. Origin Of The Use Of Money
The consideration of money can no longer be postponed. 1. The exchange of goods by barter is extremely difficult in most cases. Thus far we have not considered the subject of money and have so far as...
-Sec. II. Nature Of The Use Of Money
1. Money in all its money uses is an indirect agent, to be judged just as other indirect agents are. The key to this section is the thought that the function of money is to serve as an indirect agent....
-Sec. III. The Value Of Typical Money
1. The money use, historically considered, is a new use added to a good, and increases the demand for that good. The history of any particular kind of money may be traced back to a point where it was ...
-Chapter 14. The Money Economy And The Concept Of Capital. Sec. I. The Barter Economy And Its Decline
Various points of view of the students regarding money. 1. The use of money prevails in very different degrees in various parts of the United States. The members of this class, representing nearly ev...
-The Barter Economy And Its Decline. Continued
4. With the growth of cities developed a new class of wealthy men and a new view of wealth. The student of history knows of the conflict that grew up during the Middle Ages between the cities and the ...
-Sec. II. The Concept Of Capital In Modern Business
1. The development of the use of money and credit has led to the expression of the value of all indirect agents, without distinction, in terms of money. This is a capitalistic age. The development of ...
-Chapter 15. The Capitalization Of All Forms Of Rent. I. The Purchase Of Rent-Charges As An Example Of Capitalization
The nature and sale of rent-charges. 1. From the twelfth to the sixteenth centuries the sale and purchase of rent-charges was the most general form of borrowing and lending wealth. A rent-charge in t...
-Sec. II. Capitalization Involved In The Evaluating Of Indirect Agents
1. The buying of any indirect agent is practically the purchasing of a rent-charge. To account rationally for the market value of anything, its importance must be traced back to gratification. We ...
-Sec. III. The Increasing Role Of Capitalization In Modern Industry
1. Where a system of exchange is highly developed, things are looked upon as capital yielding an objective income rather than as wealth yielding immediate means of enjoyment. In the old organization o...
-Chapter 16. Interest On Money Loans. Sec. I. Various Forms Of Contract Interest
1. Interest, the amount paid according to contract by one person to another for credit given in terms of money, is but one expression of a larger problem, that of the difference in present worth of go...
-Sec. II. The Motive For Paying Interest
1. Interest for loans to obtain consumption goods is paid because they are felt to have greater importance at the moment than an equal amount (either of goods or of money) will have in the future. A s...
-Chapter 17. The Theory Of Time-Value. Sec. I. Definition And Scope Of Time-Value
1. Time-value is the difference between the values of things at different times. Things differ in value according to form, place, quality of goods, and according to the feelings of men, and - not leas...
-Sec. II. The Adjustment Of The Rate Of Time-Discount
1. The fixing of the discount on future goods is, in its essentials, like the fixing of the market price of consumption goods. This problem appears to be one of the most difficult in economic theory; ...
-The Adjustment Of The Rate Of Time-Discount. Continued
A person wishing to make an exchange of the opposite kind to that described may sell his wealth for money; he may ex-change for present enjoyable goods his income at its capitalized value; or he may u...
-Chapter 18. Relatively Fixed And Relatively Increasable Forms Of Capital. Sec. I. How Various Forms Of Capital May Be Increased
The older and the modern way of viewing wealth. 1. Men seek to increase income by increasing capital. Men may strive to increase their rents without expressing the rent-bearer in terms of capital. Pe...
-Sec. II. Social Significance Of These Differences
1. Not the fixity of the physical amount of agents, but the economic supply is significant. There is danger of confusion between these two ideas. The statement that land cannot be created and that t...
-Chapter 19. Saving And Production As Affected By The Rate Of Interest. Sec. I. Saving As Affected By The Interest Rate
1. In the case of consumption goods, present marginal uses are often less than future uses as judged at the present. The proposition that future goods sometimes have a greater instead of a less value ...
-II. Conditions Favorable To Saving
1. Political security and domestic order are essential to the development of saving. As saving results from a comparison of the future with the present, any lack of certainty regarding the future decr...
-Sec. III. Influence Of The Interest Rate On Methods Of Production
1. The individual saver is enabled to improve the agents that he uses. The simplest case is presented when means of enjoyment are improved and made more durable. If Crusoe on his island spends less ti...
-Part II. The Value Of Human Services. Part II. Division A - Labor And Wages. Chapter 20. Labor And Classes Of Laborers. Sec. I. Relation Of Labor To Wealth
1. Labor is any human effort having an aim or purpose outside of itself. It is difficult to define satisfactorily the term labor. No definition will quite mark off all the cases. The efforts put forth...
-Sec. II. Varieties Of Talents And Of Abilities In Men
1. As material things differ in their fitness to gratify wants, so do men differ in their powers of labor. The fields, hammers, plows, tools, and machinery of different kinds and qualities have been s...
-Varieties Of Talents And Of Abilities In Men. Continued
4. The moral qualities of the worker are increasingly important as society grows more complex. The need of a particular moral quality is relative to the special task in hand. Honesty is needed in the ...
-Chapter 21. The Supply Of Labor. Sec. I. What Is A Doctrine Of Population ?
The employer'sand the social view of supply of labor. 1. The supply of labor means here not the number of workers available in any one industry, but the number available in the whole field of industr...
-Sec. II. Population In Human Society
1. In the earlier stages of human history, population is limited mainly by biologic factors. The biologic stage continues so long as there are no artificial restraints put on the birth-rate, and no de...
-Sec. III. Current Aspect Of The Population Problem
1. Changes in population are resultants of many forces: those favoring a high birth-rate and low death-rate, and those limiting births or survival. Whether the population on the whole shall grow, stan...
-Chapter 22. Conditions For Efficient Labor. Sec. I. Objective Physical Conditions
1. The efficiency of labor, in its broadest sense, is its ability to render services or produce things that minister to welfare. The efficiency of labor is a resultant of many influences. In part it d...
-Sec. II. Social Conditions Favoring Efficiency
1. The first social condition for the workers' efficiency is political security. For the same reason that this condition is favorable to the growth of capital, it is essential if men are to labor in t...
-Sec. III. Division Of Labor
1. Division of labor is a term expressing that complex arrangement of industrial society whereby individual workers are enabled to apply themselves to the production of certain kinds of goods, securin...
-Chapter 23. The Law Of Wages. Sec. I. Nature Of Wages And The Wages Problem
1. Wage in the broad sense is the income due to labor, in distinction from that due to the control of material agents. The uses of material agents, studied under the subject of rent, are sometimes cal...
-Sec. II. The Different Modes Of Earning Wages
1. The self-employed laborer earns wages in the broad economic sense. In this sense the isolated workman, Robinson Crusoe on his island, earns wages, but these wages could not be measured at all exact...
-III. Wages As Exemplifying The General Law Of Value
1. Each grade of labor is a potential supply of desirable things and its wage is determined in essentially the same way as if it were an actual supply. If all the various psychic goods that labor prod...
-Chapter 24. The Relation Of Labor To Value. Sec. I Relation Of Rent To Wages
1. The law of wages must be considered in connection with other far-reaching influences. One may use the sentence, the marginal productivity of labor determines wages, without having a true understa...
-Sec. II. Relation Of Time-Value To Wages
1. The services of labor, whether for one's self or others, have a more or less immediate relation in time to the gratifying of wants. While all human efforts to which the term services is applied hav...
-Sec. III. The Relation Of Labor To Value
1. Labor is a cause, but only one of the causes of value. A cause is some one condition which is seen to be necessary to the existence of a thing, and usually that condition which brings the thing abo...
-Chapter 25. The Wage System And Its Results. Sec. I. Systems Of Labor
The wage system defined. 1. The wage system is the organization of industry wherein some men, owning and directing capital, buy at their competitive value the services of men without capital. The wag...
-Sec. II. The Wage System As It Is
1. Under the wage contract the worker gets in a definite sum at once the market value of his services. Under the wage contract the employer takes the risk as to the future selling price of the product...
-Sec. III. Progress Of The Masses Under The Wage System
The rise of money wages. 1. The nineteenth century was a period of great progress for the masses in America, England, and throughout Europe. There are differences of opinion as to the extent of this ...
-Chapter 26. Machinery And Labor. Sec. I. Extent Of The Use Of Machinery
Tools, machines, and power. 1. A machine is a mechanical device by which power is applied in an automatically repeated manner, to change the place or form of things. It is not easy, perhaps not impor...
-II. Effect Of Machinery On The Welfare And Wages Of The Masses
1. The immediate effect of improved machinery, if suddenly introduced, is almost always to throw some men out of employment. Any sudden change in industry injures men who have become adapted to the wo...
-Effect Of Machinery On The Welfare And Wages Of The Masses. Continued
4. Indeed, the economic effect of improved appliances is logically and inevitably to raise wages. It has been shown above, in the discussion of wages, that if the efficiency of machines increases fast...
-Chapter 27. Trade-Unions. Sec. I. The Objects Of Trade-Unions
1. A trade-union is an association of wage-workers for purposes of mutual information, mutual help, and for the raising of wages. The term trade-union is used in a general sense both of combinations o...
-Sec. II. The Methods Of Trade-Unions
1. The union's first aim is to get control of all the labor force in the market, and to minimize competition among workers. Every labor federation aims to extend its control to every branch of its tra...
-Sec. III. Combination And Wages
1. Wages in particular industries often are maintained above the competitive rate. The older economic writers were somewhat unsympathetic with trade-unions, and were even inclined to deny that organiz...
-Division B - Enterprise And Profits. Chapter 28. Production And The Combination Of The Factors. Sec. I. The Nature Of Production
1. The aim of industrial effort is the increase of the quantity and quality of scarce goods; this is economic production. The thought has become familiar to the student that the supply of economic res...
-Sec. II. Combination Of The Factors
1. The various parts, materials, and agents that unite to form products are called the factors of production. In a general sense every separate thing that enters into industry is a factor; as, in agri...
-Chapter 29. Business Organization And The Enterpriser's Function. Sec. I. The Direction Of Industry
1. In the simplest kinds of individual production the value of the results depends largely on intelligent choice. Even for the solitary worker the choice of the right time to do work is most important...
-Sec. II. Qualities Of A Business Organizer
1. The organizer and director of industry must first have technical knowledge of methods, processes, and materials. The qualities required in the direction of industry are implied in the foregoing sec...
-III. The Selection Of Ability
1. The men actually in control of industry have been selected in manifold ways. Skill develops a small industry into a large one. A small factory owner gradually adds machine to machine, building to b...
-Chapter 30. Cost Of Production. Sec. I. Cost Of Production From The Enterpriser's Point Of View
1. The task of the enterpriser is to get together the essential factors to secure valuable products. The enterpriser must first decide what product he will endeavor to secure, and the kind, the place,...
-Sec. II. Cost Of Production From The Economist's Standpoint
1. The economist should view money cost as an intermediate and not as an ultimate explanation of value. The value of all things must be traeed back to gratification, to the relation of goods with psyc...
-Chapter 31. The Law Of Profits. Sec. I. Meaning Of Terms
Broadest use of the term profit. 1. The term profit is popularly used as any gain or advantage secured by any means in business. The terms used in economics, being taken from popular language, vary i...
-Sec. II. The Typical Enterpriser's Services Reviewed
1. The enterpriser guarantees to the capitalist-lender a fixed return. Agents will yield the highest economic rent of which they are capable only in the hands of those who can use them with exceptiona...
-Sec. III. Statement Of The Law Of Profits
1. Some apparent profits are due to antisocial or criminal acts. Cheating, lying, breaking of contracts, bribery of public officials, and many similar acts may greatly increase individual incomes. The...
-Chapter 32. Profit-Sharing, Producers' And Consumers' Cooperation. Sec. I. Profit-Sharing
Nature and definition of profit-sharing. 1. Profit-sharing is rewarding labor with a share of the profits in addition to contract wages. The essential mark of profit-sharing is that the additional pa...
-II. Producers' Cooperation
1. Producers' cooperation is the union of workers in a self -employing group to do away with any other enterpriser than themselves, and to secure for themselves the profits. Its object is not to do aw...
-Sec. III. Consumers' Cooperation
1. Consumers' cooperation is the union of a number of buyers to save for themselves the profits of the merchants or agents. There are many classes of consumers' cooperation, but the chief ones are: (1...
-Chapter 33. Monopoly Profits. Sec. I. Nature Of Monopoly
Difficulty of fixing the meaning of monopoly. 1. The term monopoly is used loosely and in many senses. In popular discussion monopoly means almost any wealthy corporation or the power the corporation...
-Sec. II. Kinds Of Monopoly
1. Monopoly gets its power from political, economic, and commercial sources. A political monopoly derives its power of control from a special grant from the government, forbidding others to engage in ...
-Sec. III. The Fixing Of A Monopoly Price
1. A competitive producer gets the highest price that will permit him to dispose of his product. The enterpriser seeks to get the highest price for his product that the market will afford. His ability...
-Chapter 34. Growth Of Trusts And Combinations In The United States. Sec. I. Growth Of Large Industry In The United States
Distinction between large capital. Large production. And monopoly. 1. In the discussion of the so-called trust problem three things must be distinguished: large individual capital, large production...
-Growth Of Large Industry In The United States. Continued
4. The amount of capital per establishment is tending to increase in the leading lines of industry. The amount of capital is not so easy to determine as the number of employees, and it is recognized t...
-Sec. II. Advantages Of Large Production
1. A great technical advantage of large production is the better and fuller use of machinery. A large factory with a large output can keep a special machine adjusted for each pattern and process, wher...
-Sec. III. Causes Of Industrial Combinations
1. Trusts are large combinations of capital with some degree of monopoly power. The original, legal meaning of the term trust does not include the idea of monopoly. The old legal idea of a trust is th...
-Chapter 35. Effect Of Trusts On Prices. Sec. I. How Trusts Might Affect Prices
1. The economist's task, strictly confined, is to explain the relation of trusts to prices, not to solve the problem of their political control. The question of trusts is such a large one that its dis...
-Sec. II. How Trusts Have Affected Prices
1. Examination of the course of prices in the case of some notable trusts shows that, wherever effective, they raise prices above the competitive rate possible to smaller production. The most instruct...
-Chapter 36. Gambling, Speculation, And Promoters' Profits. Sec. I. Gambling Vs. Insurance
1. Many forms of chance are inseparable from the individual enterprise. There are what may be called natural chances, arising from the uncertainties of the seasons, from rainfall, heat, hail, storm, f...
-Sec. II. The Speculator As A Risk-Taker
1. Every enterpriser is to some extent specializing as a risk-taker. This familiar idea may be taken as a starting point in discussing speculation. In its broadest sense speculation means to look into...
-III. Promoter's And Trustee's Profits
1. The promoter of trusts performs in some ways a substantial economic service. A promoter is one who undertakes to convert a number of unrelated factories, or establishments, into a trust, or combina...
-Chapter 37. Crises And Industrial Depressions. Sec. I. Definition And Description Of Crises
1. In a broad sense, a crisis is a decisive moment or turning point; hence, in industry, a collapse of prosperity. In the course of a fever the crisis is the point where there is a turn for the better...
-Sec. II. Crises In The Nineteenth Century
1. The periods of industrial hardship in the Middle Ages were connected with adverse conditions of production, not with the collapse of prices. Periods of exceptional hardship in medieval times were m...
-Sec. III. Various Explanations Of Crises
1. Over-production and under-consumption theories are those most widely held. In the first annual report of the United States Commissioner of Labor (1886) is given a long list of theories, more or les...
-Part III. The Social Aspects Of Value. Division A - Relation Of Private Income To Social Welfare. Chapter 38. Private Property And Inheritance. Sec. I. Impersonal And Personal Shares Of Income
1. Under the title the social aspects of value are to be considered the influences exerted upon incomes by various social acts, ideals, and institutions. The incomes from the wages of free labor and...
-Sec. II. The Origin Of Private Property
1. Property is ownership, the legal control over the sources of economic income. The Latin word property means ownership, and hence that which pertains to the individual, that which is a man's own. Th...
-Sec. III. Limitations Of The Right Of Private Property
1. Unmodified private control of property is unknown: the public makes many reservations in its own interest. Few realize the manifold ways in which property rights are limited. There is, first, a who...
-Chapter 39. Income And Social Service. The Justice Of Property Questioned. Sec. I. Income From Property
1. Property rights must meet the test of social expediency. If private property is defended on the ground of social expediency, it must show good social results. It is not a sacred thing; it is open t...
-The Justice Of Property Questioned. Income From Property. Continued
4. Many fortunes built on favoring legislation are defended as due to social service. In the Middle Ages kings often granted great estates to nobles as rewards for past merit and as a payment for expe...
-II. Income From Personal Services
1. Incomes from legitimate enterprise and speculation Correspond roughly to social service. It has been recognized above that there are many grades of chance, of speculation, and of enterprise. The ex...
-Chapter 40. Waste And Luxury. Sec. I. Waste Of Wealth
1. The accidental destruction of wealth is a loss to the owner, rarely with benefit, on the whole, to others. In the consumption of wealth the loss of its utility is accompanied by the gratifying of w...
-Sec. II. Luxury
1. Luxury, while variously defined, involves always the thought of great consumption of wealth for unessential pleasures. It is not possible to define luxury absolutely; it is a relative term. Those o...
-Luxury. Continued
5. As a question of consumption luxury involves for the individual both an economic and a moral problem. The economic question is, Does luxury enhance the man's real income? Does a greater expenditure...
-Chapter 41. Reaction Of Consumption On Production. Sec. I. Reaction Upon Material Productive Agents
Essential mark of the consumption of goods. 1. Economic consumption is the enjoyment of the utilities which wealth is capable of affording. All wealth looks toward consumption. To take away the prosp...
-Sec. II. Reaction Upon The Efficiency Of The Workers
1. All consumption works some temporary change in the consumer, making him a more or less efficient producer. Most consumption goods are used to gratify a wish of the moment. Many actions are governed...
-Sec. III. Effects On The Abiding Welfare Of The Consumer
1. Man and his welfare are the end and aim of the economic process. The starting point of industry is wants; the goal is welfare. Momentary gratification is only a way-station, not the journey's end. ...
-Chapter 42. Distribution Of The Social Income. Definition Of Personal Distribution Reviewed. Sec. I. The Nature Of Personal Distribution
1. Personal distribution, in economics, is the reasoned explanation of the ways in which income is divided among the members of the community. Before noting more exactly the ways in which distribution...
-Sec. II. Methods Of Personal Distribution
Compulsory distribution; violence. 1. Distribution is sometimes compulsory, by force or fraud. This crude and primitive mode of distribution, the negation of personal liberty, never has been quite el...
-Methods Of Personal Distribution. Continued
In patriarchal tribes, in communal societies, in monastic and other religious orders distribution is by an accepted authority. Each person works at what he is commanded to do, and some one in authorit...
-Chapter 43. Survey Of The Theory Of Value. Sec. I. Review Of The Plan Followed
The cycle and order of economic study. 1. The beginning and end of economic study is man. Before leaving the more theoretical and abstracter part of the theory of value, it may be well, at the cost o...
-Sec. II. Relation Of Value Theories To Social Reforms
1. The earlier theories of political economy implied a dismal view of the future of the masses. The theory of value one holds is sure to affect his view of economic progress and of social reform. The ...
-Sec. III. Interrelation Of Economic Agents
1. The industrial process is a unity and the different agents bear an organic relation to each other. The problem of value is not one of physical division; it is one of logical analysis, and this is n...
-Division B - Relation Of The State To Industry. Chapter 44. Free Competition And State Action. Sec. I. Competition And Custom
Definition of economic freedom. 1. Economic freedom exists when men's goods or their qwn services may be exchanged as they choose, without hindrance. Competition is but another expression for economi...
-Sec. II. Economic Harmony Through Competition
1. The industrial events following the discovery of America strengthened the forces making for economic freedom. Discoveries in the Western hemisphere opened up a wide field for the adventure and ente...
-Sec. III. Social Limiting Of Competition
1. Undoubted evils result from some forms of competition under the conditions actually existing. Complete freedom must remain a somewhat abstract ideal, and actual conditions must be recognized. Entir...
-Chapter 45. Use, Coinage, And Value Of Money. Sec. I. The Precious Metals As Money
1. Money we have defined as a material means of payment and medium of exchange, generally accepted and passing from hand to hand. The origin and function of money were set forth in the study of capita...
-Sec. II. The Quantity Theory Of Money
1. The fundamental use that money serves is to apportion incomes of goods so as to make them yield the maximum gratification. Money first increases utility by increasing the ease with which exchange t...
-The Quantity Theory Of Money. Continued
4. A reasonable interpretation of the quantity theory makes it a statement of the effect of a change in a single factor. The objections to the quantity theory assume that it is a statement of what occ...
-Chapter 46. Token Coinage And Government Paper Money. Sec. I. Light-Weight Coins
1. When the number of coins issued is limited properly, a seigniorage charge does not reduce their money value; they are worth more as money than as bullion. The coinage thus far considered has been t...
-Sec. II. Paper Money Experiments
1. Government paper money may be defined as money for which a seigniorage of one hundred per cent, is charged. The order in the study of the money question is from seigniorage to paper money, because ...
-Sec. III. Theories Of Political Money
Commodity-money theory. 1. The commodity-money theorists declare that govern-ment is powerless to influence value, or to impart value to paper by law. There are two extreme views regarding the nature...
-Chapter 47. The Standard Of Deferred Payments. Sec. I. Function Of The Standard
1. The standard of deferred payments is the thing of value in which, by the law or by contract, the amount of a debt is expressed. A credit transaction is a lengthened exchange; one party fulfils his ...
-Sec. II. International Bimetallism
1. The fall of prices in 1873 and the following years meant a great change in the standard of deferred payments. The monetary changes following the discovery of America were due to the inflow to Europ...
-Sec. III. The Free-Silver Movement In America
1. International bimetallism, despite many efforts, failed of adoption. This brief proposition sums up the history of the movement, from 1878 to 1892, to form a league of states and an agreement for i...
-Chapter 48. Banking And Credit. Sec. I. Functions Of A Bank
The essential banking function. 1. A bank is a business whose income is derived chiefly from lending its promises to pay. Banks have passed through many changes in the past three centuries. Originati...
-Sec. II. Typical Bank Money
1. Typical bank money consists of notes issued by banks on the credit of their general assets, without special regulation by law. As no two leading countries have quite the same system of bank-notes, ...
-Sec. III. Banks Of The United States Today
1. The three forms of banks in the United States are private, state, and national. Any one with a little capital may become a private banker. There are curbstone brokers in almost every town, and so...
-Chapter 49. Taxation In Its Relation To Value. Sec. I. Purposes Of Taxation
1. Provision for the expense of organized government is the fundamental purpose of taxation. Taxation may be defined as the taking by the government of private property for public uses. This implies a...
-Sec. II. Forms Of Taxation
1. Taxes usually are a portion taken from the income arising from labor or from wealth. In rare cases more than the net income of wealth may be taken, but the aim of taxation in general is to take onl...
-Sec. III. Principles And Practice
1. Taxation should be adjusted with reference to the general social interest. Many standards have been suggested to measure the distribution of the burden of taxation, such as benefit, equality, and a...
-Chapter 50. The General Theory Of International Trade. Sec. I. International Trade As A Case Of Exchange
The motive of individual gain in foreign trade. 1. International trade is exchange between individual men, and has the same object as other exchange of goods. The term international trade should not ...
-Sec. II. Theory Of Foreign Exchanges Of Money
1. Foreign exchange of money is the purchase and sale of the right to receive a given kind and weight of metal at a specified time and place. Par of exchange is the number of units of the standard coi...
-Sec. III. Real Benefits Of Foreign Trade
1. The direct advantages of foreign trade consist in the increased efficiency it imparts to productive forces. In explanation of the advantages of foreign trade it is said to be a vent for surplus pro...
-Chapter 51. The Protective Tariff. Sec. I. The Nature And Claims Of Protection
1. A protective tariff is a schedule of import duties so arranged as to give appreciably more favorable conditions to some domestic industries than they would enjoy with free trade. Tariff duties were...
-Sec. II. The Reasonable Measure Of Justification Of Protection
1. For military and political reasons an otherwise uneconomic tariff may be justified. It usually is admitted by the believers in free trade that in the interest of diplomacy, to secure proper concess...
-Sec. III. Values As Affected By Protection
1. An increase of the tariff is favorable to many capitalists and to many owners of natural resources. A denial of large general advantages in protection is not the denial of all its influence on valu...
-Chapter 52. Other Protective Social And Labor Legislation. I. Social Legislation
City growth and new-social problems. 1. Under modern conditions many laws restricting free competition are required to secure the health and convenience of the citizens. The rapid growth of city popu...
-Sec. II. Labor Legislation
1. Factory laws now limit in many ways the employment of women and children, and the hours of work. Factory legislation began in England, early in the nineteenth century, to check some of the worst ev...
-Chapter 53. Public Ownership Of Industry. Sec. I. Examples Of Public Ownership
The kinds of political units. 1. Local political units generally acquire only industries whose products must be used in the place where produced. The word industry is used here in a broad sense, incl...
-Sec. II. Economic Aspects Of Public Ownership
1. Public ownership is primarily to control the essential agencies of government. A large part of public ownership and activity in industry develops from political functions. The primary need of publ...
-Economic Aspects Of Public Ownership. Continued
5. A third feature favoring monopoly is uniformity in the quality of the product furnished. It is a general truth that competition is most persistent where there is the greatest range of choice open t...
-Chapter 54. Railroads And Industry. Sec. I. Transportation As A Form Of Production
1. Transportation of goods and men is one of the most important modes of production. When utility was thought of as inherent in things rather than as resulting from a relation between things and wants...
-Sec. II. The Railroad As A Carrier
1. Different modes of transport are more or less economical relatively to the other industrial conditions. Not only new routes but new agents of travel change the scale of values. In early societies, ...
-Sec. III. Discrimination In Rates On Railroads
1. The railroad has more monopoly power in fixing rates at points along its lines than is the case with other agents of transportation. The ownership of the wagons, ships, and canal-boats of a country...
-Chapter 55. The Public Nature Of Railroads. Sec. I. Public Privileges Of Railroad Corporations
Public nature of railroad franchises. 1. Railroads enjoy peculiar public privileges through their charters, franchises, and the right of eminent domain. Railroads in our country are owned by private ...
-Sec. II. Political And Economic Power Of Railroad Managers
1. In various ways railroad managers exercise great political influence and power. Some writers maintain that the power to make rates on railroads is a power of taxation. They point out that if rates ...
-Sec. III. Commissions To Control Railroads
1. Most of the states have undertaken, through commissions, to regulate the railroads in the public interest. When it became evident that public and private interests in the railroads were so divergen...
-Chapter 56. Public Policy As To Control Of Industry. Sec. I. State Regulation Of Corporate Industry
The social problems of corporations. 1. The great increase of late in the number of industries under corporate control has brought new problems of social regulation. Inventions, machinery, better tra...
-Sec. II. Difficulties Of Public Control Of Industry
1. The progress of industry is compelling greater social contact and more use of the agencies of government. The numerous exemplifications of this general statement that have been met in the course of...
-Sec. III. Trend Of Policy As To Public Industrial Activity
1. There has been a large increase of state socialism in recent years. The term state socialism, broadly understood, includes all the forms of public participation in industry that have been passed in...
-Chapter 57. Future Trend Of Values. Sec. I. Past And Present Of Economic Society
1. The meaning and scope of economics can be better seen at the end than at the beginning of its study. The proposition with which this inquiry opened may well be recalled in the closing chapter. The ...
-Sec. II. The Economic Future Of Society
1. Present industrial progress is largely due to material conditions, temporarily favorable. Many of the materials now being destroyed in immense quantities have been slowly stored up through the ages...
-The Bibliographical Notes
The few references and critical notes given are intended as a help to teachers and advanced students desirous of following some of the more recent contributions to controverted points in economic theo...









TOP
previous page: The Dogs And The Fleas | by Frederic Scrimshaw
  
page up: Economics Books
  
next page: Introduction To Economics | by Frank O'Hara