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• Preface to the First Edition (1871)
• Preface to the Second Edition (1879)
• Preface to the Third Edition By Harriet Jevons
• Errata
• Chapter I: Introduction
• Mathematical Character of the Science.
• Confusion Between Mathematical and Exact Sciences.
• Capability of Exact Measurement.
• Measurement of Feeling and Motives.
• Logical Method of Economics.
• Relation of Economics to Ethics.
• Chapter II: Theory of Pleasure and Pain
• Pleasure and Pain As Quantities.
• Pain the Negative of Pleasure.
• Anticipated Feeling.
• Uncertainty of Future Events.
• Chapter III: Theory of Utility
• Definition of Terms.
• The Laws of Human Want.
• Utility Is Not an Intrinsic Quality.
• Law of the Variation of Utility.
• Total Utility and Degree of Utility.
• Variation of the Final Degree of Utility.
• Disutility and Discommodity.
• Distribution of Commodity In Different Uses.
• Theory of Dimensions of Economic Quantities.
• Actual, Prospective, and Potential Utility.
• Distribution of a Commodity In Time.
• Chapter IV: Theory of Exchange
• Importance of Exchange In Economics.
• Ambiguity of the Term Value.
• Value Expresses Ratio of Exchange.
• Popular Use of the Term Value.
• Dimension of Value.
• Definition of Market.
• Definition of Trading Body.
• The Law of Indifference.
• The Theory of Exchange.
• Symbolic Statement of the Theory.
• Analogy to the Theory of the Lever.
• Impediments to Exchange.
• Illustrations of the Theory of Exchange.
• Problems In the Theory of Exchange.
• Complex Cases of the Theory.
• Competition In Exchange.
• Failure of the Equations of Exchange.
• Negative and Zero Value.
• Equivalence of Commodities.
• Acquired Utility of Commodities.
• The Gain By Exchange.
• Numerical Determination of the Laws of Utility.
• Opinions As to the Variation of Price.
• Variation of the Price of Corn.
• The Origin of Value.
• Chapter V: Theory of Labour
• Definition of Labour.
• Quantitative Notions of Labour.
• Symbolic Statement of the Theory.
• Dimensions of Labour.
• Balance Between Need and Labour.
• Distribution of Labour.
• Relation of the Theories of Labour and Exchange.
• Relations of Economic Quantities.
• Various Cases of the Theory.
• Joint Production.
• Over-production.
• Limits to the Intensity of Labour.
• Chapter VI: Theory of Rent
• Accepted Opinions Concerning Rent.
• Symbolic Statement of the Theory.
• Illustrations of the Theory.
• Chapter VII: Theory of Capital
• The Function of Capital.
• Capital Is Concerned With Time.
• Quantitative Notions Concerning Capital.
• Expression For Amount of Investment.
• Dimensions of Capital, Credit and Debit.
• Effect of the Duration of Work.
• Illustrations of the Investment of Capital.
• Fixed and Circulating Capital.
• Free and Invested Capital.
• Uniformity of the Rate of Interest.
• General Expression For the Rate of Interest.
• Dimension of Interest.
• Peacock On the Dimensions of Interest.
• Tendency of Profits to a Minimum.
• Advantage of Capital to Industry.
• Are Articles In the Consumers' Hands Capital?
• Chapter VIII: Concluding Remarks
• The Doctrine of Population.
• Relation of Wages and Profit.
• Professor Hearn's Views.
• The Noxious Influence of Authority.
• Appendix I
• Appendix Ii

Problems in the Theory of Exchange.

We have hitherto considered only one simple case of the Theory of Exchange. In all other cases where the commodities are capable of indefinite subdivision, the principles will be exactly the same, but the particular conditions may be subject to variation.

We may, firstly, express the conditions of a great market where vast quantities of some stock are available, so that any one small trader will not appreciably affect the ratio of exchange. This ratio is, then, approximately a fixed number, and each trader exchanges at that ratio just so much as suits him. These circumstances may be represented by supposing A to be a trading body possessing two very large stocks of commodities, a and b. Let C be a person who possesses a comparatively small quantity c of the second commodity, and gives a portion of it, y, which is very small compared with b, in exchange for a portion x of a, which is very small compared with a. Then, after exchange, we shall find A in possession of the quantities a - x and b + y, and C in possession of x and c - y. The equations will become

Since a - x and b + y, by supposition, do not appreciably differ from a and b, we may substitute the latter quantities, and we have, for the first equation, approximately,

The ratio of exchange being an approximately fixed ratio determined by the conditions of the trading body A, there is, in reality, only one undetermined quantity, x, the quantity of commodity which C finds it advantageous to purchase by expending part of c. This will now be determined by the equation

This equation will represent the condition in regard to any one distinct commodity of a very small country trading with a much larger one. It might represent, to some extent, the circumstances of trade between the Channel Islands and the great markets of England, though, of course, it is never absolutely verified, because the smallest purchasers do affect the market in some degree. The equation still more accurately represents the position of an individual consumer with regard to the aggregate trade of a large community, since he must buy at the current prices, which he cannot in an appreciable degree affect.

A still simpler formula, however, is needed to represent the conditions of a large part of our purchases. In many cases we want so little of a commodity, that an individual need not give more than a very small fraction of his possessions to obtain it. We may suppose, then, that y in the last problem is a very small part of c, so that y² (c - y) does not differ appreciably from y²c. Taking m as before to be the existing ratio of exchange, we have only one equation—

This means that C will buy of the commodity until its degree of utility falls below that of the commodity he gives. A person's expenditure on salt is in this country an inconsiderable item of expense; what he thus spends does not make him appreciably poorer; yet, if the established price or ratio is one penny for each pound of salt, he buys in any time, say one year, so many pounds of salt that an additional pound would not have so much utility to him as a penny. In the above equation m. y²c represents the utility to him of a penny, which being an inconsiderable fraction of his possessions, is approximately invariable in utility, and he buys salt until f²x, which is approximately the utility of the next pound, is equal to, or it may be somewhat less than that of the penny. But this case must not be confused with that of purchases which appreciably affect the possessions of the purchaser. Thus, if a poor family purchase much butchers'-meat, they will probably have to go without something else. The more they buy, the lower the final degree of utility of the meat, and the higher the final degree of utility of something else; and thus these purchases will be the more narrowly limited.