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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

Various Cases of the Theory.

As we have now reached the principal question in Economics, it will be well to consider the meaning and results of our equations in some detail.

It will, in the first place, be apparent that the absolute facility of producing commodities will not determine the character and amount of trade. The ratio of exchange is not determined by nor by separately, but by their comparative magnitudes. If the producing power of a country were doubled, no direct effect would be produced upon the terms of its commerce provided that the increase were equal in all branches of production. This is a point of great importance, which was correctly conceived by Ricardo, and has been fully explained by J. S. Mill.

But though there is no such direct effect, it may happen that there will be an indirect effect through the variation in the degree of utility of different articles. When an increased amount of every commodity can be produced, it is not likely that the increase will be equally desired in each branch of consumption. Hence the degree of utility will fall in some cases more than in others. An alteration of the ratios of exchange must result, and the production of the less needed commodities will not be extended so much as in the case of the more needed ones. We might find in such instances new proofs that value depends not upon labour but upon the degree of utility.

It will also be apparent that nations possessing exactly similar powers of production cannot gain by mutual commerce, and consequently will not have any such commerce, however free from artificial restrictions. We get this result as follows:—Taking as before, to be the final ratios of productiveness in one country, and in a second, then, if the conditions of production are exactly similar, we have

But when a country does not trade at all, its labour and consumption is distributed according to the condition

Now, from these equations, it follows necessarily that

that is to say, the production and consumption already conform to the conditions of production of the second country, and will not undergo any alteration when trade with this country becomes possible.

This is the doctrine usually stated in works on Political Economy, and for which there are good grounds. But I do not think the statement will hold true if the conditions of consumption be very different in two countries. There might be two countries exactly similar in regard to their powers of producing beef and corn, and if their habits of consumption were also exactly similar, there would be no trade in these articles. But suppose that the first country consumed proportionally more beef, and the second more corn; then, if there were no trade, the powers of the soil would be differently taxed, and different ratios of exchange would prevail. Freedom of trade would cause an interchange of corn for beef. Thus I conclude that it is only where the habits of consumption, as well as the powers of production, are alike, that trade brings no advantage.

The general effect of foreign commerce is to disturb, to the advantage of a country, the mode in which it distributes its labour. Excluding from view the cost of carriage, and the other expenses of commerce, we must always have true

If, then, was originally less in proportion to than is in accordance with these equations, some labour will be transferred from the production of y to that of x until, by the increased magnitude of and the lessened magnitude of w equality is brought about.

As in the theory of exchange, so in the theory of production, any of the equations may fail, and the meaning is capable of interpretation. Thus, if the equation

cannot be established, it is impossible that the production of both commodities, y and x, can go on. One of them will be produced at an expenditure of labour constantly out of proportion to that at which it may be had by exchange. If we could not, for instance, import oranges from abroad, part of the labour of the country would probably be diverted from its present employment to raise them; but the cost of production would be always above that of getting them indirectly by exchange, so that free trade necessarily destroys such a wasteful branch of industry It is on this principle that we import the whole of our wines, teas, sugar, coffee, spices, and many other articles from abroad.

The ratio of exchange of any two commodities will be determined by a kind of struggle between the conditions of consumption and production; but here again failure of the equations may take place. In the all-important equations

expresses the ease with which we may make additions to y. If we find any means, by machinery or otherwise, of increasing y without limit, and with the same ease as before, we must, in all probability, alter the ratio of exchange in a corresponding degree. But if we could imagine the existence of a large population, within reach of the supposed country, whose desire to consume the quantity y¹ never decreased, however large was the quantity available, then we should never have equal to and the producers of y would make large gains of the nature of rent.