PREFACE. THIS HIS Volume is an attempt to adapt the first Volume of my Principles of Economics (Second Edition, 1891), to the needs of junior students. The necessary abridgement has been effected not by systematic compression so much as by the omission of many discussions on points of minor importance and of some difficult theoretical investigations. For it seemed that the difficulty of an argument would be increased rather than diminished by curtailing it and leaving out some of its steps. The argumentative parts of the Principles are therefore as a rule either reproduced in full or omitted altogether; reference in the latter case being made in footnotes to the corresponding places in the larger Treatise. Notes and discussions of a literary character have generally been omitted. The influence of Trade-Unions on wages depends much on the course of Foreign Trade and on Commercial Fluctuations; and therefore in the Principles all discussion of the subject is postponed to a late stage. But in the present Volume, the practical convenience of discussing it in close connection with the main theory of Distribution seemed to outweigh the disadvantages of treating it prematurely and in some measure incompletely; and a Chapter on Trade-Unions has been added at the end of Book VI. A few sentences have been incorporated from the Economics of Industry, published by my wife and myself in 1879. Though she prefers that her name should not appear on the title-page, my wife has a share in this Volume also. For in writing it, and in writing the Principles, I have been aided and advised by her at every stage of the MSS. and the proofs; and thus the pages which are now submitted to the reader are indebted twice over to her suggestions, her judgment and her care. Dr Keynes, Mr John Burnett and Mr J. S. Cree have read the proofs of the Chapter on Trade-Unions, and have given me helpful advice with regard to it from three different points of view. CONTENTS. [Italics are used to give references to definitions of technical terms.] BOOK I. PRELIMINARY SURVEY. Chapter I. Introduction. § 1. Economics is a study of wealth, and a part of the study of man. § 2. Urgency of the problem of poverty. §3. Economics is a science of recent growth. § 4. Characteristics of modern business. Free Industry and Enterprise. § 5. Preliminary account of value pp. 1-9 Chapter II. The Growth of Free Industry and Enterprise. § 1. Early civilizations. Influence of climate and of custom. § 2. The Middle Ages. Free towns. § 3. New forces promoting freedom. pp. 10-13 Chapter III. The Growth of Free Industry and Enterprise continued. § 1. Englishmen early developed a faculty for organized action. § 2. Influence of the Reformation. § 3. Beginnings of modern forms of business management. § 4. Rise of the factory system. The new organization accompanied by great evils. §§ 5, 6. Many of these were due to the pressure of war, taxes and bad harvests; and competition was seen at its worst. But now with the increase of knowledge and wealth we should seek to restrain its evil and to retain its good influences Chapter IV. The Growth of Economic Science. pp. 14-25 § 1. Origin of The Physiocrats. Mill and modern pp. 26-32 Chapter V. The Scope of Economics. § 1. Economics as a social science. 2. Chiefly concerned with measurable motives. § 3. These are not exclusively selfish. § 4. The desire for money is the result of many various motives. Motives to collective action pp. 33-39 Chapter VI. Nature of Economic Law. Methods of Study. § 1. Uses of the machinery of science. Social Law. Economic Law. Normal. The Action of a Law. § 2. Relation of Economics to the actual facts of life Chapter VII. Summary and Conclusion. § 1. inquiries. Relation of science to practice. § 2. vestigated. § 3. Practical issues lying partly Economics pp. 40-43 Order of economic Questions to be inwithin the range of pp. 44-48 BOOK II. Chapter I. Introductory. § 1. Difficulties of definition in Economics. pp. 49-50 Chapter II. Wealth. § 1. Classification of Goods. Wealth. § 2. Per- sonal Wealth. Broad meaning of wealth. § 3. Collective Goods. Chapter III. Production. Consumption. Labour. Necessaries. § 1. Man produces and consumes only utilities. Consumption and Pro- duction Goods. § 2. Productive labour and Productive consumption. § 3. Necessaries for existence, and for efficiency. Conventional neces- Chapter IV. Capital. § 1. The term Capital has many uses. It includes Trade Capital. Its attributes are productiveness and prospectiveness. § 2. Social Capital. Consumption and Auxiliary Capital. §3. Circu lating, Fixed, Specialized and Personal Capital Chapter V. Income. § 1. Gross and Net Income. Money Income. Ele- ments of real income in danger of being overlooked. § 2. Net Advan- tages. Usance of wealth. Interest. Profits. Earnings of Management. Chapter I. Introductory. § 1. Relation of Book III. to the rest of the Chapter II. Wants in relation to Activities. gressive. Desire for variety and distinction. § 4. Desire for excellence. Chapter III. The Law of Demand. §1. The Law of Satiable Wants or Diminishing Utility. Total Utility. Marginal Increment. Marginal Utility. § 2. Marginal Demand Price. § 3. The marginal utility of money varies. § 4. A person's Demand Schedule. § 5. Demand of a Chapter IV. Law of Demand, continued. Elasticity of Demand. § 1. Elasticity of Demand §§ 2, 3 varies with different incomes. § 4. Demand for Necessaries. § 5. Causes that obscure the influence Chapter V. The Choice between different uses of the same thing. Immediate and deferred uses. §§ 1, 2. Distribution of means between different uses. § 3. Distribution between present and future Chapter VI. The Measurement of the Utility of Wealth. § 1. Price and Utility. Consumers' Rent. § 2. Different utilities of money to rich and poor. Allowance for collective wealth. § 3. Wisdom in the pursuit |