CHAPTER Ⅰ FUNDAMENTAL CONDITIONS:MAN AND ENVIRONMENT 1
Income(product)comes from men and their possessions,and consists of goods 1
and is limited by consumption 2
not derived from standard of living nor determined by desires 3
nor by volume of money 4
inevitably twofold in origin—men and environment 5
difference of environments in effect on income 6
differences in men—in strength and industriousness 7
in knowledge 8
in morality 8
in institutions 9
interactions between men and environment 11
take place mostly in the human factor 13
in any case are mostly due to intelligence 13
but are confined within narrow limits 15
conditions determining relative supplies of goods 17
summary 18
CHAPTER Ⅱ COMPETITIVE ECONOMICS;THE RéGIME OF PRICE 19
Institutions change 19
competition a present institution 20
its characteristic traits 20
price its central characteristic 21
pervasiveness of price 22
criteria of definitions 25
economics defined 26
summary 26
CHAPTER Ⅲ THE RéGIME OF PRICE(Continued) 28
Price the pivotal point in all economic competitions 28
and in distribution 28
but only so in the competitive order 29
the classifications and generalizations of which must conform to the nature of this order 29
but must avoid appraisals 29
or any assumption of permanency or merit in the facts treated 30
human desires common to all economic systems 31
summary 31
CHAPTER Ⅳ SPECIALIZATION AND TRADE RELATED TO MONEY 33
Specialization imposes interdependence and promotes efficiency 33
isolation and independence imposing inefficiency for the individual 34
and for nations 36
specialization possible in the competitive order only through trade,and trade practicable only through intermediates 37
barter itself connoting multiplicity of media 38
not goods but money competitive demand for goods 39
value being mostly restricted to the price form 39
summary 40
CHAPTER Ⅴ THE ADJUSTMENT OF PRICE 42
The view of the outsider 42
of the insider 43
of the economist 44
unreserved supply against one demand 45
against several 46
supply with reservation prices 47
graphs 48
reservation prices as holdersdemands 50
goods demands for money 51
utility related to demand 51
logic of the marginal analysis 53
price fixed not by averages,or by demand solely,or snpply solely,or by margins,or by marginal pairs 54
summary 54
CHAPTER Ⅵ SUPPLY DETERMINED BY COST OF PRODUCTION 57
Price affects purchases 57
supply affects price 57
costs of production affect supplies relatively to one another,as an expression of specialization of production 58
supplies dependent upon choice of sacrifice—sacrifice being expressed as cost 59
alternative opportunities costs 60
what sacrifice cost includes 61
opportunity cost the leading collectivist category 62
as also a competitive cost 63
cost as reservation price 64
supply limited at marginal cost 64
the marginal analysis 64
marginal cost in relation to opportunity 65
various cost bases 67
ones own possessions and cost 67
a typical cost account 68
cost a forward-looking computation based on past experience and affecting future product 69
includes all resistances under the price denominator 70
cost and supply vsdemand 71
cost as expressing resisting demands 72
the focusing point of many influences bearing upon the entrepreneur 74
which the economist must investigate,rather than the entrepreneur 75
marginality personal rather than instrumental 77
the marginal enterprise 78
marginal discomfort 79
other margin-determining influences 80
the limited significance of marginality 82
pains and their significance 82
summary 83
CHAPTER Ⅶ UTILITY;DEMAND;DEMAND WITH SUPPLY 85
Price everywhere determined by demand and supply and changed by changes in either or both 85
no demand without utility 85
which is desiredness—changing as desires change 86
a relation to a human being and in this sense solely a quality 87
no demand without marginal utility 88
marginal utility discussed 89
therefore no demand without scarcity 91
not marginal utility alone but a comparison of marginal utilities,subjective valuation,gives demand 91
a marginal demand indicating an equality ratio between alternative marginal utilities 93
neither marginal demand nor marginal price fixes price,nor both together 94
all items,marginal and other,participating 95
intramarginal higgling 96
all utility,marginal and other,purely individual—social utility irrelevant 97
utility,marginal utility,and comparison necessary to explain demand 97
neither of which excludes impulse or habit,or instinct 98
or involves a hedonistic theory of desire,or any necessary relation to pleasure and pain 99
or even always deliberation and calculation 100
the nature and limits of abstraction and generalization 100
summaries 103
CHAPTER Ⅷ THE SIGNIFICANCE OF Co8T OF PRODUCTION 106
Entrepreneur cost not ultimate 106
but finds no explanation in pain;unexplained,leads to superficial and circuitous analysis 107
still inevitable and important,being actual 109
and pivotal 110
causal sequence on the cost side,the supply side 111
all explanations which are not genetic imply a preceding and conditioning price situation 113
and a moving equilibrium 113
a necessary method of analysis 115
the interrelation of bases of cost 116
summary 116
CHAPTER Ⅸ WHAT IS PRODUCTION?WHAT THINGS ARE PRODUCTIVE? 120
Activity and enterprise employing a variety of means 120
to a diversity of ends,material and immaterial 120
test of production net proceeds,price results 121
not in materiality 121
accumulatability 123
but in objective price-bearing results 123
therefore men are not products 124
subject matter of economics classified 125
ethical criteria inapplicable as test of product 126
parasitism and predation irrelevant 127
so the question who consumes 127
the various sources of product—proceeds 128
saloons,gamblers,and thieves productive 130
so intangible properties 131
irrelevant to product who is user 131
wealth,capital,and property distinguished 132
rent and interest distinguished 132
innumerable directions of investment of proceeds,therefore innumerable varieties of costs 133
summary 134
CHAPTER Ⅹ THE DISTRIBUTIVE PROCESS:APPORTIONMENT OF PROCEEDS 137
Distribution according to the productivity theory 137
a price process 138
relates only to primary distribution 138
which is captained by the entrepreneur 139
theory lacks precision 140
production and consumption goods similar in point of the price process,—in demand 141
in supply 142
the entrepreneurs standpoint merely indicates the direction in which the explanation is to be sought 143
demand as distinguished from utility 144
demand motivates supply 144
but reports accurately neither utility nor the price significance to the entrepreneur 146
hire being merely market price of the efficiency 146
nor accurately is there a distinguishable specific efficiency 146
nor is specific efficiency necessary in order that profits and opportunities function as costs 148
the productivity theory only approximately true,and then only when product means proceeds 150
there are hirerssurpluses 151
social marginal productivity 153
distribution ethically viewed 153
property and deserving 154
summary 155
CHAPTER Ⅺ DIFFERENT BASES OF COST AND DISTRIBUTIVE SHARES 159
Cost outlays various in direction 157
mainly wages,profits,instrument rents,and interest 160
including equally all instrument hires 160
compelling a new concept of capital 161
and a new doctrine of costs 162
condemning traditional tests of labor origin 163
of materiality 165
of mobility 168
of technological functions 168
of elasticity of supply 169
of political or social significance 171
of relations to diminishing returns 171
what capital is 172
proved by income in time,or by discount,or by interest 173
the importance of the issue 175
summary 176
CHAPTER Ⅻ LAND:RENT AND INSTRUMENTS AS COST:LAND RENT AND COST 178
Substitution possible between factors 179
this not inconsistent with complementarity 179
no warrant therein for the threefold classification of factors 179
limitation on substitutions in agriculture,is spatial 179
else no land shortage possible 179
nor higher rents and prices with increasing population 180
effect of land shortage on wages 180
extensive and intensive cultivation as related to rent 181
to prices and wages 182
to hires and instrument costs 183
Ricardian doctrine of rent stated 181
developed and examined 183
rent as cost 186
the post-Ricardian disciples 186
various differentials related to cost 188
fundamental determinants of rent 190
costs as distributive shares 190
cost purely an entrepreneur computation 191
the entrepreneur uninterested in ultimate determinants 192
various costs indistinguishable relative to price determination 193
summary 193
CHAPTER ⅩⅢ URBAN RENTS,AGRICULTURAL RENTS,AND COSTS 196
With urban rents not fertility but only position important 196
nature of advantages 197
rents affected by demand for products,and by changes in technique irrespective of owners deserts 198
social aspects of proportions of factors 198
developing technique in transportation and manufacturing tends to increase urban as against rural rents 200
effect of urban transportation on distribution of urban rents 203
urban rents related to costs,and to price 204
fundamental causes of rents 207
CHAPTER ⅩⅣ CAPITALIZATION vsCOST AS DETERMINANT OF PRICE 209
Different goods affording incomes present and future 209
present price related to future income 210
through capitalization 210
but not so with free men 211
capitalization vscost as determinant of price 211
with durable consumption goods 212
with durable production goods 213
effects of changed proportions of factors 215
summary 217
CHAPTER ⅩⅤ CAPITALIZATION THE PROCESS BY WHICH FUTURE INCOMES ACHIEVE PRESENT WORTH 219
Future services 219
the effects of time perspective 219
doubtful as bearing upon mere consumable goods 220
but clear with money or with goods under money price 221
as with a series of money incomes 222
or with future incomes with indefinite money size 224
the commonly accepted view insufficiently individualized 225
any view prone to overrationalization 227
present things commanding future services have present utility 229
summary 232
CHAPTER ⅩⅥ THE DISCHARGE OF DEBTS:DEFERRED PAYMENTS 236
Each good has many values—each value an exchange ratio between terms specific and quantitative 236
barter implies value but no price—money exchanges only price,with all value relations mere deductions 236
exchange dependent on specialized production 237
the money economy 237
a standard inevitable in deferred payments 238
no equality in value since value is not quantitative 239
but is only a ratio which is actual only as price 240
this true over intervals of space 242
of time 242
and equally in present exchanges 242
money has not one but innumerable values 242
no value is measurable,measurement being quantitative and values not 243
meaning of instability 244
injustice of 245
evils of speculativeness 245
deferred payment merely one case of exchange 246
test of stability is utility,the things traded being not values but goods 247
the desideratum is indemnity 248
in terms of immediate consumption goods rather than of durable goods 249
summary 261
CHAPTER ⅩⅦ MONEY,CREDIT,AND BANKING 254
Currency the intermediate in exchanges 254
all functions are aspects of intermediateship,—standard,storehouse,payment 255
money defined 256
necessary qualities 259
banking and the issue of credit 260
reserves and their function 260
economy of money 262
banking viewed separately and in the aggregate 263
what banking really does 263
deposits and solvency 264
creative of loan funds 264
cost of currency from banks and from mines 265
analysis of costs in the issue of credit 265
the demand for media 267
traderssurpluses 267
the allocation of these 267
the sellersthe greater 268
volume of currency and prices 269
the value of gold in relation to demand 270
commodity uses as demands 271
monetary theory peculiar 271
elasticity of demand 271
all prices affected equally by changed volume 273
prices affect one another and tend to move together 274
relation of supply of gold to its utility 275
supply of banking media related to prices 276
discount rates and prices 276
Greshams Law:international trade 278
currency expansions,international trade,intercommunity trade 279
commercial crises 280
preceding conditions 280
rising prices 282
the reaction 282
benefits and dangers of credit 283
ameliorations 284
disorganized banking vsunified reserves 286
responsibility for panics 287
double counting of reserves dangerous but not most serious danger 289
contraction through scramble for reserves 289
is all credit therefore contracting? 291
effects on production 293
the remedy 294
post-panic depressions 295
effects of rising prices on dividends and credit 295
cause and effect of narrowing margins 297
the delay in recovery 298
restricted consumption and overproduction 300
hoarding of money and credit 302
investment with restricted saving 304
savings,luxury,charity,waste 306
quantity theory of money 310
admitting that not goods but only goods at a price are demand for money 311
and that not goods as an aggregate but only goods separately exchange against money 312
nothing follows adverse to the quantity theory 314
quantity of currency rather than money important 316
credit retains a fixed ratio to money 317
the phenomena of banking in relation to the quantity theory 318
and the phenomena of depressions 319
changed demand and reservation prices 319
bimetallism 321
effects of demonetization 321
compensatory action and its effects 321
national and international 324
advantages of international bimetallism conjectural and unimportant 327
what fluctuations are important 327
and what the proper base-lines 328
CHAPTER ⅩⅧ LOAN FUND CAPITAL 332
Interest determined as price adjustment 332
social capital 333
money as capital 334
whether credit is capital 334
what private capital includes 335
collectivist capital 336
method of increase of private capital 337
saving and lending 337
private capital divergent from social capital 337
borrowed thing,repaid thing,premium thing,all currency 342
the loan fund widely and authoritatively recognized 344
loan and rental contracts distinguished 346
loan fund derived from saving and from banking 347
effects of banking on interest 349
banking essentially underwriting 351
discount rates analyzed 351
summary 352
CHAPTER ⅩⅨ THE LOAN RATE:INTEREST 355
Income a currency flow 355
loans a method of modification 356
interest the payment to achieve this 356
loan fund furnished by saving and by banking 356
much capital is original bounty 358
saving never painful 359
interest rates not necessary to saving 361
abstinence,rightly interpreted,a truism 362
influences to modify individuals saving 364
saving and banking as sources of loan fund 366
different abstinence theories 367
land and capital in interest theory,as per Bullock,Hadley,Senior,and Taussig 373
productivity in time gives interest 376
gains from investment give interest 377
so also durable sources of service 377
rents related to interest 378
renterssurpluses and interest 379
no implication of social service 380
various independent causes,each adequate 381
the process of fixation a price process 382
reservation prices in interest theory 383
the concept of a market 383
interest not an adjustment of pleasures against pains 385
social explanations and the social organism 387
method of hypothesis 390
the social cosmos 391
summary 388
CHAPTER ⅩⅩ RISK,PROFIT,AND INTEREST 398
Risks,insurable and non-insurable,as costs 399
advantages of affiliations 399
risk costs greater as competitor is weaker 399
risk as limit on size 400
risk as related to profit and interest 401
profits and social welfare 405
speculation,gambling,and underwriting 404
summary 405
CHAPTER ⅩⅩⅠ CAPITALIZATION AND DISCOUNT RATES 407
Résumé of previous conclusions 407
not one but many interest rates 410
these related to the capitalization process 410
capitalization doctrine circuitous unless individualized 411
CHAPTER ⅩⅩⅡ CLASSIFICATION OF THE FACTORS OF PRODUCTION 413
Scope of the objects of cost outlays 413
traditional view of these 414
land vscapital 414
traditional view collective and genetic 415
also technological but inaccurate 416
many kinds and degrees of factors 417
interrelations and interactions numberless 419
interdependence and substitution 420
traditional classification indicted 421
summary 421
CHAPTER ⅩⅩⅢ LAWS OF RETURN:PROFITABLE PROPORTIONS:PROFITABLE SIZE 423
Industrial facts underlying the law of proportions 423
social-static formulation 424
social-dynamic 425
competitive-static 426
differences in entrepreneurs 427
classification of factors irrelevant 428
a price calculation,despite various authorities 429
deductions 430
more than a land law 431
or than technological law 431
competitive-dynamic formulation 433
deductions 434
distributive applications 435
general applications 437
advantage in size 437
size vsproportions 438
applies to industries in competition with one another 441
long-time and short-time best size 442
law illustrated in what industries 442
the applications 442
summary 443
CHAPTER ⅩⅩⅣ DISTRIBUTION AND THE LAW OF PROPORTIONS 446
Costs mainly distributive shares 446
traditional exaggeration of technology 446
some factors technological,others not 447
interdependence and substitutions 448
distribution favors the relatively scarce 448
complementary factors 449
relation of population to wages 450
confusions of static with dynamic 450
wages and standard of living 451
changes in factors require new distributive analysis 452
effects of changed industrial technique 454
especially in agriculture on land rent 455
elasticity of consumption related to land rent 455
Gregory Kings law 456
CHAPTER ⅩⅩⅤ COSTS IN CORPORATE AND LARGE BUSINESSES 459
Profits in the large organizations 459
related to interest,dividends,and risks 460
stockholdersoperations in corporate stocks 461
managersoperations for private gain 461
business code of ethics 461
cost related to monopoly supply 463
giant industry contrasted with farming 464
temporary cost not inconsistent with loss 467
idle plants 468
supply in average conditions 469
in favorable conditions 470
in adverse conditions 471
partial applications of monopoly methods 472
summary 473
CHAPTER ⅩⅩⅥ COMPETITION AND MONOPOLY 474
Monopoly and competition antithetical 474
yet monopoly competitive in spirit 476
good and ill in competition 476
laissez faire criticized 477
wastes of competition 478
com?petition often self-destructive 479
economies and advantages of size 479
monopoly affecting buyersand sellerssurpluses 480
buyersand sellerscombination 481
monopoly theory and competitive theory 482
pressure toward monopoly,cut-throat competition 482
unwise legislation 484
combinations of combinations 485
a degree of monopoly in all successful business 486
CHAPTER ⅩⅩⅦ THE SOCIAL DIVIDEND AND THE INDIVIDUAL INCOME 488
Social dividend the total of valuable benefits 488
distributed mainly through money incomes 490
products the primary fact 490
in what these consist 491
different sorts of services 491
service from durable properties 491
privilege and power as income 493
primary and secondary distribution 494
property,especially natural bounty,related to distribution 495
also franchises and monopolies 496
great wealth controls high ratio of gains 497
which defy accurate division into interest and profit 498
summary 501
CHAPTER ⅩⅩⅧ THE DISTRIBUTIVE ANALYSIS IN THE LARGE 504
Scope of the chapter 504
genesis of current economic doctrines 504
unproductive labor 505
cameralism 505
mercantilism 506
physiocracy 507
later views,egAdam Smith,JSMill 508
influence of English legal system 510
Providence guides 511
natural law controls 512
laissez faire 513
modern views summarized 514
criticized 515
the census of wealth in the United States 519
criticized for its concept of capital 521
natural bounty 522
wealth and poverty in the United States 523
enormous production and its explanation 523
single tax and other taxes 527
exploitation by franchises,monopolies,and private property in natural bounty 528
the need of a new economics 528