Economic conditions are constantly changing, and each age sees its own problems in its own way.In England, as well as in Continental Europe and America, the study of economics is now being pursued more vigorously than ever; but all this activity has only made it clearer that economics is—and must be—a slow and ever-evolving science. .Some of the best contemporary writings do appear at first to contradict those of their predecessors; but as they mature and their roughness is corrected, we know that they are not contrary to the development of economics. continuity.New doctrines supplement old ones, enlarge and develop them, sometimes revise them, and often give them new interpretations with different emphases; but seldom overthrow them.

With the help of new writings in our own time, and in relation to new problems of our own time, this book intends to give new interpretations to old doctrines.The first part states the general scope and purpose of the book; at the end of the first part there is also a brief account of the main problems of economic research, as well as the main practical problems related to economic research.According to the British traditional view, we regard the function of economics as collecting, collating and analyzing economic facts, and using the knowledge gained from observation and experience to determine the immediate and final effects of various causes; and we believe that economics The rule of thumb is the narrative of tendencies expressed in the direct tone, not the moral success expressed in the imperative tone.Economic laws and reasoning are in fact but a part of the material which conscience and common sense employ to solve practical problems and establish those laws by which life may be directed.

But moral forces are also included among those that economists have to take into account.Indeed, there was once such a plan: to establish an abstract economics based on the activities of an "economic man", who is not influenced by morality, but mechanically and self-interested.But this attempt was not successful, nor even fully carried out.Because they never really regard economic man as completely self-interested: a person who has the desire to benefit others, who is willing to work and sacrifice to support his family, is the most trustworthy, and his normal motives are often tacitly assumed to include the family. emotion inside.But if his motives included familial sentiments, why should it not include all other altruistic motives-operating so uniformly among men of any class at any time and place as to be transformed into General rules - what's inside?There seems to be no reason for this; in this book normal activities are considered to be those which members of an industrial group would have under certain conditions; and no influence of any motive - which operates with regularity - is left unchecked. consideration, simply because the motive is altruistic, but there is no such intention in this book.If this book has its own characteristics, it can be said that it focuses on various applications of the continuous principle.

This principle applies not only to the moral quality of motives by which a man chooses his ends, but to all the intelligence, effort, and enterprise with which he pursues them.We shall thus stress the following facts: from the activity of the "city folk,"1 which is based on shrewd and far-sighted calculations and carried out with effort and talent, to the businesslike The way to do things is the activity of ordinary people, in which there is a continuum of differences in degree.The normal willingness to economize, the normal willingness to work for some pecuniary reward, or the normal care to find the best market for buying or selling, or the most profitable employment for oneself or for one's children--these words must be related to a certain place and time. but, once this is known, the theory of normal value applies equally, though not in the details, to the activities of merchants or bankers. That's accurate.

Just as there is no sharp distinction between normal behavior and behavior temporarily regarded as abnormal, there is no sharp distinction between normal value and "current" or "market" or "accidental" value.The latter is the value at which temporal chance prevails; the normal value is the value which the economic conditions under consideration would eventually acquire if they had had time to exert their full force without hindrance.But there is no impassable gulf between the two; they are held together by a difference in degree of succession.If we think of the moment-to-moment changes in commodity exchanges, we may think of them as normal values, but when viewed from a one-year history, this value is only indicative of current changes: normal values ​​from a one-year history Value, if viewed from a century of history, is nothing but current value.For the element of time—which is at the heart of the main difficulty of almost every economic problem—is itself absolutely continuous: nature does not divide time absolutely into long and short; , the two are combined with each other, which is short-term for one issue and long-term for the other.

Thus, for example, the difference between rent and interest on stock depends largely, though not entirely, on the length of the period in which we have in mind.It is proper to think of something as "free" or "fluid" capital or interest on new investments, but it is more appropriate to think of it as a kind of ground-rent on old investments--hereinafter called quasi-rent-. appropriate.There is no sharp distinction between circulating capital and capital which has been "fixed" in a particular branch of production, nor between new investment and old investment; each capital is gradually combined with the other up.Even the rent of land is not regarded as an isolated thing, but as the principal one of a great class; is very important.

Next, man himself is markedly different from the tools he employs; the supply and demand of human effort and sacrifice, though characteristically distinct from the supply and demand of tangible goods, are, after all, often the goods themselves the result of human effort and sacrifice. the result of.The labor theory of value and the labor product value theory cannot be separated: they are two parts of a larger whole; even if there are differences between the two in details, it can be seen after research that most of them are degrees. difference, not a difference in kind.Just as birds and beasts, though very different in shape, have a fundamental idea in their bodies, so the general theory of the balance of supply and demand is a fundamental idea of ​​the structure of the parts which permeate the central problem of distribution and exchange.

The principle of continuity also applies to the use of nouns.An attempt has often been made to divide economic goods into well-defined classes--of which many concise propositions can be made, to satisfy the scholar's desire for logical accuracy, and the layman's understanding of seemingly esoteric but intelligible The love of dogma.But great evil seems to have taken place in consequence of this attempt, and of drawing broad artificial boundaries where nature has not drawn them.The simpler and more absolute an economic doctrine is, the greater the confusion it will bring about in its practical application, if the dividing line to which it refers cannot be found in real life.In practical life there is no sharp distinction between what counts as capital and what does not count as capital, between necessities and dispensations, or between productive and unproductive labour.

The notion of a continuum of development is common to all schools of modern economic thought, whether the main influence upon them has been that of biology—as represented by the writings of Herbert Spencer; The influence of history and philosophy - as represented by Hegel's Lectures on the Philosophy of History and the recent ethical historical research on the Continent and elsewhere.These two influences, more than any other, determine the substance of the views expressed in this book; but they are most influenced in form by the mathematical conception of continuity—as in Cournot's Mathematical Principles in The Theory of Wealth. Research" represented.Cournot told us that we must face such difficulties: the various factors of an economic problem are not viewed as being determined one by one in an interlocking causal relationship, such as A determines B, B determines C, etc., but they are viewed as mutually determined.The workings of nature are complex: it is, after all, no good to make them simple and try to explain them in a series of elementary propositions.

Inspired by Cournot and Tuenen (the latter to a lesser extent), I have drawn much attention to the fact that, in the spiritual and material worlds, our observations of nature have no relation to total quantities. In particular, the demand for a thing is a continuous function, and the "marginal" addition of that thing is, in steady equilibrium, offset by a corresponding increase in its cost of production.It is not easy to fully appreciate this aspect of continuity without the aid of mathematical notation or diagrams.No special knowledge is required to use graphs, and graphs often show the state of economic life more correctly and easily than mathematical symbols.Use diagrams in the footnotes of this book as supplementary illustrations.Arguments in the text never use symbols and diagrams; they can be omitted.But experience seems to show that by their aid we gain a more definite understanding of many important principles;

And for many purely theoretical problems, once we know the method of applying diagrams, we are reluctant to use other methods to solve them. The chief use of pure mathematics in economic matters seems to be to help a man to put down a part of his thoughts quickly, briefly, and correctly for his own use: and to convince him that he has enough of his conclusions. — is merely sufficient — the premise (that is to say, that his equation is exactly numerically equal to his unknown).However, when we have to use many symbols, it is very troublesome for anyone but the author himself.Although Cournot's genius necessarily imparted a new intellectual activity to those inspired by him, mathematicians like him may use their triumphant methods to clear the way for themselves to arrive at the ideals of economic theory. It is part of the center of the difficult problem that only appearances are mentioned; but it seems doubtful whether, after economic doctrines have been converted into lengthy mathematical notation, anyone will read carefully such mathematical notation which was not rewritten by himself.However, some of the examples in the application of the language of mathematics which have proved most useful for my own purposes have been grouped together as an appendix to this book. September 1890