Front Page Titles (by Subject) Distribution of Commodity in different Uses. - The Theory of Political Economy
The Online Library of Liberty
A project of Liberty Fund, Inc.
Distribution of Commodity in different Uses. - William Stanley Jevons, The Theory of Political Economy 
The Theory of Political Economy (London: Macmillan, 1888) 3rd ed.
About Liberty Fund:
The text is in the public domain.
Fair use statement:
Distribution of Commodity in different Uses.
The principles of utility may be illustrated by considering the mode in which we distribute a commodity when it is capable of several uses. There are articles which may be employed for many distinct purposes: thus, barley may be used either to make beer, spirits, bread, or to feed cattle; sugar may be used to eat, or for producing alcohol; timber may be used in construction, or as fuel; iron and other metals may be applied to many different purposes. Imagine, then, a community in the possession of a certain stock of barley; what principles will regulate their mode of consuming it? Or, as we have not yet reached the subject of exchange, imagine an isolated family, or even an individual, possessing an adequate stock, and using some in one way and some in another. The theory of utility gives, theoretically speaking, a complete solution of the question.
Let s be the whole stock of some commodity, and let it be capable of two distinct uses. Then we may represent the two quantities appropriated to these uses by x1 and y1, it being a condition that x1 + y1 = s. The person may be conceived as successively expending small quantities of the commodity; now it is the inevitable tendency of human nature to choose that course which appears to offer the greatest advantage at the moment. Hence, when the person remains satisfied with the distribution he has made, it follows that no alteration would yield him more pleasure; which amounts to saying that an increment of commodity would yield exactly as much utility in one use as in another. Let Du1, Du2, be the increments of utility, which might arise respectively from consuming an increment of commodity in the two different ways. When the distribution is completed, we ought to have D;
or at the limit we have the equation
which is true when x, y are respectively equal to x1, y1. We must, in other words, have the final degrees of utility in the two uses equal.
The same reasoning which applies to uses of the same commodity will evidently apply to any two uses, and hence to all uses simultaneously, so that we obtain a series of equations less numerous by a unit than the number of ways of using the commodity. The general result is that commodity, if consumed by a perfectly wise being, must be consumed with a maximum production of utility.
We should often find these equations to fail. Even when x is equal to of the stock, its degree of utility might still exceed the utility attaching to the remaining part in either of the other uses. This would mean that it was preferable to give the whole commodity to the first use. Such a case might perhaps be said to be not the exception but the rule; for, whenever a commodity is capable of only one use, the circumstance is theoretically represented by saying, that the final degree of utility in this employment always exceeds that in any other employment.
Under peculiar circumstances great changes may take place in the consumption of a commodity. In a time of scarcity the utility of barley as food might rise so high as to exceed altogether its utility, even as regards the smallest quantity, in producing alcoholic liquors; its consumption in the latter way would then cease. In a besieged town the employment of articles becomes revolutionised. Things of great utility in other respects are ruthlessly applied to strange purposes. In Paris a vast stock of horses were eaten, not so much because they were useless in other ways, as because they were needed more strongly as food. A certain stock of horses had, indeed, to be retained as a necessary aid to locomotion, so that the equation of the degrees of utility never wholly failed.