BOOK IV.

PRODUCTION AND SUPPLY.

The Supply of

Supply Schedule.

pp. 102-104

Land in what sense a free

Man's power of altering the

pp. 105-108

Chapter I. Introductory. § 1. Marginal disutility.

labour regarded as governed by the price to be got for it.

Supply Price. § 2. Plan of the Book

Chapter II. The Fertility of Land. § 1.

gift of nature. § 2. Conditions of fertility.

character of the soil

Chapter III. The Fertility of Land, continued. The Law of

Diminishing Return. § 1. The basis of the Law of Diminishing

Return. The return is measured by the amount not the price of produce.

§ 2. A Dose of capital and labour, marginal dose, marginal return, margin

of cultivation. Surplus Produce. Its relation to rent. § 3. The Order

of relative fertility changes with circumstances. § 4. Good cultivation a

relative term. § 5. Misunderstandings of Ricardo's doctrine. § 6. Addi-

tions to it. § 7. The return from fisheries, mines and building ground.

pp. 109-122

Chapter IV. The Supply of Labour. The Growth of Numbers.

§ 1. Malthus. §§ 2, 3. Causes that determine marriage-rate and birth-

rate. § 4. History of population in England. § 5. Modern causes

affecting marriage-rate.
pp. 123-130

Chapter V. The Supply of Labour, continued. Health and Strength.

88 1, 2. General conditions of health and strength. § 3. Hope, freedom

and change. § 4. Influence of occupation. Town life. § 5. Nature's

tendency to select the strongest for survival is often counteracted by man.

pp. 131-139

Chapter VI. The Supply of Labour, continued. Industrial Train-

ing. § 1. Unskilled labour a relative term. General and Specialized

Ability. §§ 2, 3. Liberal and Technical Education. Apprenticeships.

§ 4. Education as a National investment. § 5. Mill's four industrial

grades ; but sharp lines of division are fading away

pp. 140-148

Chapter VII. The Growth of Wealth. § 1. Early and modern forms

of wealth. § 2. Slow growth of habits of saving. § 3. Security as a

condition of saving. § 4. The chief motive of saving is family affection.

§ 5. The source of accumulation is surplus income. Profits. Rent and

Earnings. Collective savings. § 6. Interest is the reward of waiting.

Influence of changes in the rate of interest on saving.

pp. 149-158

Chapter VIII. Industrial Organization. §1. Organization increases

efficiency. Teachings of biology. The law of the struggle for survival.

§ 2. Harmonies and discords between individual and collective interests.

pp. 159-161

Chapter IX. Industrial Organization, continued. Division of La-

bour. The Influence of Machinery. § 1. Practice makes perfect.

The provinces of manual labour and machinery. § 2. Interchangeable

parts. Machinery increases the demand for general intelligence and

weakens barriers between different trades. § 3. It relieves the strain

on human muscles, and thus prevents monotony of work from involving

monotony of life. 84. Specialized skill and specialized machinery com-

pared. External and Internal economies

pp. 162-170

Chapter X. Industrial Organization, continued. The Concentra-

tion of Specialized Industries in Particular Localities. § 1.

Primitive forms of localized industries; their various origins. § 2. Ad-

vantages of localized industries; hereditary skill, subsidiary trades, spe-

cialized machinery, local market for skill. Their disadvantages. Move-

ments of English industries
pp. 171-175

Chapter XI. Industrial Organization, continued. Production on

a large scale. §§ 1, 2. Advantages of a large producer as to economy

of material, specialization of and improvements in machinery, buying and

selling; specialized skill, especially in matters of management, but the

small producer makes many detailed savings

pp. 176-181

Chapter XII. Industrial Organization, continued. Business

Management. § 1. Various forms of business management classified

with reference to the tasks of undertaking risks and of superintendence.

§ 2. Faculties required in the ideal manufacturer. § 3. Hereditary

businesses, why they are not more common. § 4. Private partnerships.

$5. Joint-stock companies. Government undertakings. § 6. Co-opera-

tion. Profit Sharing. § 7. The rise of the working man hindered by

his want of capital and even more by the growing complexity of business.

§ 8. Adjustment of capital to business ability. Net and Gross Earnings

of Management

.

pp. 182-198

Chapter XIII. Conclusion. The Law of Increasing in Relation

to that of Diminishing Return. § 1. Relation of the later chap-

ters of this Book to the earlier. A Representative Firm. The Laws of

Increasing and Constant Return. § 2. An increase of numbers subject to

certain conditions generally leads to a more than proportionate increase

of collective efficiency

pp. 199-203

BOOK V.

THE THEORY OF THE EQUILIBRIUM OF DEMAND AND

SUPPLY.

Chapter I. On Markets. § 1. Most economic problems have a common

kernel relating to the equilibrium of supply and demand. § 2. Definition

of a Market. §§ 3, 4. Limitations of a market with regard to space.

Conditions of a wide market. Grading. Portability. World markets.

pp. 204-209

Chapter II. Temporary Equilibrium of Demand and Supply.

§ 1. Equilibrium between desire and effort. Illustration from a local

corn-market of a true though temporary equilibrium .
pp. 210-212

Chapter III. Equilibrium of Normal Demand and Supply. § 1.

Transition from market to normal price. § 2. Real and Money Cost of

Production. Expenses of Production. Factors of Production. Rent in

relation to Expenses of production. § 3. The Law of Substitution.

§4. Basis of the general theory. The Supply Schedule. § 5. Equi-

librium amount and equilibrium price. § 6. Influence of Utility and

Cost of Production on value. The former preponderates in market values,

the latter in normal values

pp. 213-223

Chapter IV. The Investment of Capital in a Business. Prime

Cost and Total Cost. § 1. Motives determining the investment of

capital. § 2. Different routes are chosen in obtaining the same end.

The margin of profitableness. § 3. Prime Cost. Supplementary and

Total Cost

pp. 224-227

Chapter V. Equilibrium of Normal Demand and Supply, con-

tinued. The Term Normal with Reference to Long and Short

Periods. §§ 1-3. Elasticity of the term normal. Long and short

period normal prices. Illustrations. § 4. The general drift of the term

Normal Supply Price is the same for short and long periods. But for

short periods the appliances of production have to be taken for granted;

meanwhile the income derived from them affords a Quasi-rent.

pp. 227-235

Chapter VI. Joint and Composite Demand. Joint and Composite

Supply. § 1. Derived demand and joint demand. Illustration, taken

from a labour dispute. § 2. Conditions under which a check to supply

may raise much the price of a factor of production. Moderating influence

of the Law of Substitution. § 3. Composite demand. § 4. Joint Supply.

§ 5. Composite Supply

.

pp. 236-241

Chapter VII. Prime and Total Cost in relation to Joint Products.

Cost of Marketing. Insurance against Risk. § 1. Difficulties as

to the joint products of the same business and as to the expenses of

-marketing. § 2. Insurance against risk

pp. 242-245

Changes of Demand and Supply. Monopolies.

§1. Effects of an increase of normal demand on price. § 2. Monopoly

price. Relation between the interests of monopoly producers and of con-

pp. 246-249

Chapter VIII.

sumers

BOOK VI.

VALUE, OR DISTRIBUTION AND EXCHANGE.

Chapter I. Preliminary Survey of Distribution and Exchange.

1. The Physiocrats. Adam Smith. Malthus and Ricardo. J. S. Mill.

2. The Law of Substitution in relation to the demand for labour.

3. Modifications of the assumptions of the Physiocrats. § 4. The

amounts and prices of the several agents of production mutually deter-

mine one another

pp. 250-256

Chapter II. Preliminary Survey of Distribution and Exchange,

continued. § 1. The aggregate Net product of the agents of produc-

tion is the National Dividend, which is also the sole source of demand for

all of them. An increase of supply of any agent generally lowers its

price to the benefit of other agents. § 2. Net product of a man's labour.

$3. Wages in relation to the net product of labour. § 4. Competition

is assumed to be normally active but not perfect. NOTE on the Wages-

Fund Theory, and on two of Mill's Fundamental Propositions on Capital.

pp. 257-266

Chapter III. Demand and Supply in relation to Labour. Real

and Nominal Earnings. § 1. Time-earnings. Payment by Piece-

work. Efficiency-earnings. Time-earnings do not tend to equality, but

Efficiency-earnings do. § 2. Real wages and Nominal wages. § 3. Un-

certainty of success. Irregularity of employment. Supplementary earn-

ings. § 4. The attractiveness of a trade depends on its Net Advantages.

pp. 267-275

Chapter IV. Demand and Supply in relation to Labour, con-

tinued. § 1. Many peculiarities in the action of demand and supply

with regard to labour are cumulative in their effects. §§ 2-4. The

worker sells his work, but he himself has no price, consequently the

investment of capital in him is limited by the means, forethought and

unselfishness of his parents. Economic importance of moral forces.

§ 5. The seller of labour must deliver it himself. § 6. Labour is perish-

able, and the sellers of it are often at a disadvantage in bargaining.

pp. 276-284

Chapter V. Demand and Supply in relation to Labour, con-

cluded. § 1. Slowness of growth of new supplies of labour. Difficulties

of forecasting the future. § 2. The movements of adult labour are of

increasing importance. § 3. Fluctuations of earnings chiefly governed

by those of demand. §4. Causes which determine earnings during long

and short periods respectively

pp. 285-289

Chapter VI. Demand and Supply in relation to Capital. Gross

and Net Interest. § 1. Résumé of the causes that govern the supply

of capital. § 2. The demand for capital. § 3. The rate of interest is

determined in the long run by these forces of supply and_demand.

SS 4, 5. Net and Gross interest. Gross interest includes some Insurance

against risks both Trade and Personal, and also Earnings of Management,

and therefore does not tend to equality as net interest does.

pp. 290-298

Chapter VII. Demand and Supply in relation to Capital, Busi-

ness Power and Industrial Organization. § 1. Action of the

Struggle for Survival. Services of those who pioneer. § 2. Action of

the Law of Substitution in controlling Earnings of Management. § 3. The

Law of Substitution acts through the employer and also on him. The

business man working with borrowed capital. § 4. Joint Stock com-
panies. § 5. The supply of business ability is drawn from a wide area
and is non-specialized. The adjustment of Earnings of Management to
the difficulty of the work to be done is fairly accurate.

pp. 299-306

Chapter VIII. Demand and Supply in relation to Capital and

Business Power, concluded. § 1. Profits. Rate of profits how far

tending to equality. Profits in small businesses appear higher than they

are. Rate of profits declines generally as the size of the business in-

creases. § 2. Profits are high where the Circulating Capital is large

relatively to the Fixed. § 3. The rate of profits on the turnover varies

much more widely than the annual rate of profits on capital. § 4. Profits

are a constituent element of normal supply-price, but the income derived

from capital already invested is generally determined by the price of the

product (and is a Quasi-rent). §§ 5, 6. The earnings of business power

fluctuate more and vary more from one individual to another than ordi-

nary earnings do

pp. 307-314

Chapter IX. Demand and Supply in relation to Land. Pro-

General view of the causes that determine

The argument so far applicable to nearly all

ducers' Surplus. § 1.

Producers' Surplus. § 2.

systems of land tenure.

pp. 315-318

Chapter X. Demand and Supply in relation to Land, continued.

Land Tenure. § 1. Early forms of Land-tenure have generally been

based on partnerships. § 2. Metayage or rental by shares. Peasant-

proprietorship, its advantages and disadvantages. The American farmer.

83. The English system enables the landlord to supply that capital over

which he can keep control and it gives considerable freedom of selection.

SS 4, 5. Large and small holdings. Allotments. Co-operation. § 6. Con-

flict between public and private interests in the matter of building on

open spaces

pp. 319-329

Chapter XI. General view of Distribution. § 1. Résumé of the gene-

ral theory of equilibrium of demand and supply. §§ 2-4. In the last

eight chapters is traced a thread of continuity transverse to that in Book

V., and establishing a unity between the causes that govern the normal

values of the various agents and appliances of production, material and

human. § 5. The various agents of production are the sole source of

employment for one another. How an increase of capital enriches the

field for the employment of labour. § 6. Relations between the interests

of different classes of workers in the same trade. § 7. Trade-unions

and combinations among employers tend to make the problem of distribu-

tion indeterminate

pp. 330-341

Chapter XII. The Influence of Progress on Value. § 1. The rich-

ness of the field of employment for capital and labour in a new country

depends partly on its access to markets in which it can sell its goods and

mortgage its future income for present supplies of what it wants. § 2.

England's direct gains from the progress of manufactures have been less

than at first sight appears, but those from the new means of transport

have been greater. § 3. Changes in the labour values of corn, meat,

house-room, fuel, clothing, water, light, news and travel. § 4. Progress

has raised the labour value of English land, urban and rural, taken

together. § 5. The increase of capital has lowered its proportionate but

not its total income. §§ 6, 7. Changes in the earnings of different indus-

trial classes. § 8. Earnings of exceptional ability. § 9. Progress has

probably lessened inconstancy of employment. § 10. Broader influence

of progress. Standard of Comfort and Standard of Life. § 11. Pro-

gress in relation to leisure. The wastefulness of excessive work. § 12.

In some trades shorter hours combined with double shifts would bring

almost unmixed gain. § 13. But in many trades shortening the hours of

labour would lessen the output. §§ 14, 15. Fallacies underlying the

opinion that a general lessening of the hours of labour would raise wages.

16. General conclusion as to the good and evil of a reduction of the

hours of labour

Chapter XIII.

pp. 342-373

Trade-Unions. § 1. Early history of Trade-unions.
§ 2. General organization. § 3. Opening of inquiry as to the influence
they can exert on wages. Recapitulation of effects of a permanent limita-
tion of the supply of labour. §§ 4, 5. Transition to effects of temporary
limitations, by strikes or otherwise, of the supply of labour. Disadvan-
tage in bargaining of the isolated workman without reserve. Claim of
Unions to make economic friction side with, instead of against, the work-