Chapter 11 Chapter One Introduction

The first section is about the relationship between this article and the following three articles. An older definition of economics says that economics is the science that studies the production, distribution, exchange, and consumption of wealth.Subsequent experience has shown that the problems of distribution and exchange are so closely related that it is doubtful whether it would be advantageous to attempt to study them separately. The general inferences concerning the relation of demand and supply are numerous, however, and serve as a basis for the practical problem of value, and serve as the basic backbone which gives unity and coherence to the body of economic inference.The breadth and generality of this reasoning set it apart from the more concrete problems of distribution and exchange it illustrates, and so it is placed entirely in Part V, "The General Theory of Demand and Supply," and this One is to pave the way for the sixth "Distribution and Exchange or Value".

But, first of all, the present third book, the study of desire and its satisfaction, is the study of needs and consumption; and then the fourth book is the study of the factors of production, that is, those factors used as means of satisfying desires, including man himself — Man is the main factor and the only goal of production.In a general character, Part IV corresponds to the study of production which has dominated almost all English writing on general economics in the past two generations, although its relation to problems of demand and supply is not quite clearly defined. illustrate. Section II Until recently enough attention has been paid to needs and consumption.

Until recently, the question of need or consumption was somewhat neglected.For the study of how best to employ our resources, important though it is, is not, so far as personal expense is concerned, a study suited to the methods of economics.The common sense of a man of extensive life experience will guide him more in such matters than he can get from careful economic analysis; economists had said little on this subject until recently, because They really don't have much to say, except what is common to all people of common sense.Recently, however, the question has acquired greater importance in economic research for several reasons combined.

The first reason arises from the growing conviction among economists that Ricardo's habit of giving too much attention to aspects of production costs when analyzing the causes which determine exchange-value are harmful.For, although he and his chief followers knew that the conditions of demand were as important as those of supply in determining value, they did not mean this very clearly, and all but the most attentive They have misunderstood. Second, the growth of economically precise habits of thought makes people more careful to state clearly the premises on which their inferences are made.This increased attention is partly due to the application of mathematical language and mathematical habits of thought by some writers.It is doubtful how beneficial the use of complex mathematical formulas is; but the application of mathematical habits of thought has done much to keep people from thinking about problems until they are quite clear what they are. ; and before further research, it is necessary to know what is to be assumed and what is not to be assumed.

This in turn obliges us to make a more careful analysis of all the main concepts of economics, especially that of demand; new aspects of the main problem.Although the theory of demand is still in its infancy, we have learned that it may be possible to collect and organize consumption statistics to explain difficult problems of great importance to the public welfare. Finally, the spirit of the age draws our closer attention to the following question: Can our increasing wealth be employed to increase the general welfare any further than it is at present?This question again compels us to investigate: Wealth—

The exchange value of any factor, whether public or private, represents exactly how much it increases happiness and welfare. In this part we shall begin with a short study of various human desires, considered in relation to human effort and activity.Because the nature of human progress is a whole.For the sake of study we can advantageously isolate the economic aspect of human life, but only temporarily and temporarily; we should look carefully at the totality of this aspect.It is especially now that we need to insist on this, since the reaction to the comparative neglect of the study of desire by Ricardo and his followers shows signs of going to the opposite extreme.It is still important to maintain the important truth of their partiality; this truth is: Desire is the master of life in the lower animals, but when we search for the basic principles of human history, we must study the changes in the forms of effort and activity.