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Front Page Titles (by Subject) Illustrations of the Theory. - The Theory of Political Economy

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Subject Area: Economics
Topic: General Treatises on Economics

Illustrations of the Theory. - William Stanley Jevons, The Theory of Political Economy [1871]

Edition used:

The Theory of Political Economy (London: Macmillan, 1888) 3rd ed.

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.

Illustrations of the Theory.

It is very easy to illustrate the Theory of Rent by diagrams. For, let distances along the line ox denote quantities of labour, and let the curve apc represent the variation of the rate of production, so that the area of the curve will be the measure of the produce. Thus when labour has been applied to the amount om, the produce will correspond to the area apmo. Let a small new increment of labour, mm', be applied, and

suppose the rate of production equal over the whole of the increment. Then the small parallelogram, pp'm'm, will be the produce. This will be proportional in quantity to pm, so that the height of any point of the curve perpendicularly above a point of the line ox represents the rate of production at that point in the application of labour.

If we further suppose that the labourer considers his labour, mm', repaid by the produce pm', there is no reason why any other part of his labour should not be repaid at the same rate. Drawing, then, a horizontal line, rpq, through the point p, his whole labour, om, will be repaid by the produce represented by the area orpm. Consequently, the overlying area, rap, is the excess of produce which can be exacted from him as rent, if he be not himself the owner of the land.

Imagining the same person to cultivate another piece of land, we might take the curve, bqc, to represent its productiveness. The same rate of production will repay the labourer in this case as in the last, so that the intersection of the same horizontal line, rpq, with the curve, will determine the final point of labour, n. The area, rn, will be the measure of the sufficient recompense to the whole labour, on, spent upon the land; and the excess of produce or rent will be the area, rbq. In a similar manner, any number of pieces of land might be considered. The figure might have been drawn so that the curves would rise on leaving the initial line oy, indicating that a very little labour will have a poor rate of production; and that a certain amount of labour is requisite to develop the fertility of the soil. This may often or always be the case, as a considerable quantity of labour is generally requisite in first bringing land into cultivation, or merely keeping it in a fit state for use. The laws of rent depend on the undoubted principle, that the curves always ultimately decline towards the base line ox, that is, the final rate of production always ultimately sinks towards zero.