The Principles of Economics, with Applications to Practical Problems
NEW YORK THE CENTURY CO. 1904 Copyright, 1904, by The Century Co. The DeVinne Press TO THE STUDENTS OF THREE UNIVERSITIES —INDIANA, STANFORD, AND CORNELL— FOR WHOM, WITH WHOM, AND BY WHOSE AID THIS BOOK CAME TO BE WRITTEN
This book had its beginning ten years ago in a series of brief discussions supplementing a text used in the class-room. Their purpose was to amend certain theoretical views even then generally questioned by economists, and to present most recent opinions on some other questions. These critical comments evolved into a course of lectures following an original outline, and were at length reduced to manuscript in the form of a stenographic report made from day to day in the class-room. The propositions printed in italics were dictated to the class, to give the key-note to the main divisions of the argument. Repeated revisions have shortened the text, cut out many digressions and illustrations, and remedied many of the faults both of thought and of expression; but no effort has been made to conceal or alter the original and essential character of the simple, informal, class-room talks by teacher to student. To this origin are traceable many conversational phrases and local illustrations, and the occasional use of the personal form of address.
The lectures, at the outset, sought to give merely a summary of widely accepted economic theory, not to offer any contribution to the subject. While they were in progress, however, special studies in the evolution of the economic concepts were pursued, and the manuscript of a book on that more special subject was carried well toward completion. That work, which it is hoped some time to complete, was, for several reasons, put aside while the present text was preparing for publication. The economic theories of the present transition period show many discordant elements, yet the author felt that his attempt to unify the statement of principles, in an elementary text explaining modern problems, and consistent in its various parts, helped to reveal to him both difficulties and possible solutions in the more special theoretical field. The unforeseen outcome of these varied studies is an elementary text embodying a new conception of the theory of distribution, an outline of which will be found in Chapter Forty-three. It is, in brief, a consistently subjective analysis of the relations of goods to wants, in place of the admixture of objective and subjective distinctions found in the traditional conceptions of rent, interest, and price.
Frank A. Fetter
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THE PRINCIPLES OF ECONOMICS
WITH APPLICATIONS TO PRACTICAL PROBLEMS
FRANK A. FETTER, PH.D.
CONTENTS
PART I
PREFACE
THE PRINCIPLES OF ECONOMICS
PART I
DIVISION A—WANTS AND PRESENT GOODS
CHAPTER I
THE NATURE AND PURPOSE OF POLITICAL ECONOMY
CHAPTER 2
ECONOMIC MOTIVES
CHAPTER 3
WEALTH AND WELFARE
CHAPTER 4
THE NATURE OF DEMAND
CHAPTER 5
EXCHANGE IN A MARKET
CHAPTER 6
PSYCHIC INCOME
DIVISION B—WEALTH AND RENT
CHAPTER 7
WEALTH AND ITS INDIRECT USES
CHAPTER 8
THE RENTING CONTRACT
CHAPTER 9
THE LAW OF DIMINISHING RETURNS
CHAPTER 10
THE THEORY OF RENT: THE MARKET VALUE OF THE USUFRUCT
CHAPTER 11
REPAIR, DEPRECIATION, AND DESTRUCTION OF WEALTH: RELATION TO ITS SALE AND RENT
CHAPTER 12
INCREASE OF RENT-BEARERS AND OF RENTS
DIVISION C—CAPITALIZATION AND TIME-VALUE
CHAPTER 13
MONEY AS A TOOL IN EXCHANGE
CHAPTER 14
THE MONEY ECONOMY AND THE CONCEPT OF CAPITAL
CHAPTER 15
THE CAPITALIZATION OF ALL FORMS OF RENT
CHAPTER 16
INTEREST ON MONEY LOANS
CHAPTER 17
THE THEORY OF TIME-VALUE
CHAPTER 18
RELATIVELY FIXED AND RELATIVELY INCREASABLE FORMS OF CAPITAL
CHAPTER 19
SAVING AND PRODUCTION AS AFFECTED BY THE RATE OF INTEREST
PART II
THE VALUE OF HUMAN SERVICES
DIVISION A—LABOR AND WAGES
CHAPTER 20
LABOR AND CLASSES OF LABORERS
CHAPTER 21
THE SUPPLY OF LABOR
CHAPTER 22
CONDITIONS FOR EFFICIENT LABOR
CHAPTER 23
THE LAW OF WAGES
CHAPTER 24
THE RELATION OF LABOR TO VALUE
CHAPTER 25
THE WAGE SYSTEM AND ITS RESULTS
CHAPTER 26
MACHINERY AND LABOR
CHAPTER 27
TRADE-UNIONS
DIVISION B—ENTERPRISE AND PROFITS
CHAPTER 28
PRODUCTION AND THE COMBINATION OF THE FACTORS
CHAPTER 29
BUSINESS ORGANIZATION AND THE ENTERPRISER'S FUNCTION
CHAPTER 30
COST OF PRODUCTION
CHAPTER 31
THE LAW OF PROFITS
CHAPTER 32
PROFIT-SHARING, PRODUCERS' AND CONSUMERS' COÖPERATION
CHAPTER 33
MONOPOLY PROFITS
CHAPTER 34
GROWTH OF TRUSTS AND COMBINATIONS IN THE UNITED STATES
CHAPTER 35
EFFECT OF TRUSTS ON PRICES
CHAPTER 36
GAMBLING, SPECULATION, AND PROMOTERS' PROFITS
CHAPTER 37
CRISES AND INDUSTRIAL DEPRESSIONS
PART III
THE SOCIAL ASPECTS OF VALUE
DIVISION A—RELATION OF PRIVATE INCOME TO SOCIAL WELFARE
CHAPTER 38
PRIVATE PROPERTY AND INHERITANCE
CHAPTER 39
INCOME AND SOCIAL SERVICE
CHAPTER 40
WASTE AND LUXURY
CHAPTER 41
REACTION OF CONSUMPTION ON PRODUCTION
CHAPTER 42
DISTRIBUTION OF THE SOCIAL INCOME
CHAPTER 43
SURVEY OF THE THEORY OF VALUE
DIVISION B—RELATION OF THE STATE TO INDUSTRY
CHAPTER 44
FREE COMPETITION AND STATE ACTION
CHAPTER 45
USE, COINAGE, AND VALUE OF MONEY
CHAPTER 46
TOKEN COINAGE AND GOVERNMENT PAPER MONEY
CHAPTER 47
THE STANDARD OF DEFERRED PAYMENTS
CHAPTER 48
BANKING AND CREDIT
CHAPTER 49
TAXATION IN ITS RELATION TO VALUE
CHAPTER 50
THE GENERAL THEORY OF INTERNATIONAL TRADE
CHAPTER 51
THE PROTECTIVE TARIFF
CHAPTER 52
OTHER PROTECTIVE SOCIAL AND LABOR LEGISLATION
CHAPTER 53
PUBLIC OWNERSHIP OF INDUSTRY
CHAPTER 54
RAILROADS AND INDUSTRY
CHAPTER 55
THE PUBLIC NATURE OF RAILROADS
CHAPTER 56
PUBLIC POLICY AS TO CONTROL OF INDUSTRY
CHAPTER 57
FUTURE TREND OF VALUES
QUESTIONS AND CRITICAL NOTES
Chapter 1. The Nature and Purpose of Political Economy
Chapter 2. The Economic Motives
Chapter 3. Wealth and Welfare
Chapter 4. The Nature of Demand
Chapter 5. Exchange in a Market
Chapter 6. Psychic Income
Chapter 7. Wealth and its Indirect Uses
Chapter 8. The Renting Contract
Chapter 9. The Law of Diminishing Returns
Chapter 10. The Theory of Rent
Chapter 11. Repair, Depreciation, and Destruction of Wealth
Chapter 12. Increase of Rent-bearers and of Rents
Chapter 13. Money as a Tool in Exchange
Chapter 14. The Money Economy and the Concept of Capital
Chapter 15. The Capitalization of all Forms of Rent
Chapter 16. Interest on Money Loans
Chapter 17. The Theory of Time-value
Chapter 18. Relatively Fixed and Relatively Increasable Forms of Capital
Chapter 19. Saving and Production as Affected by the Rate of Interest
Chapter 20. Labor and Classes of Laborers
Chapter 21. The Supply of Labor
Chapter 22. Conditions for Efficient Labor
Chapter 23. The Law of Wages
Chapter 24. The Relation of Labor to Value
Chapter 26. Machinery and Labor
Chapter 27. Trade-unions
Chapter 28. Production and the Combination of the Factors
Chapter 29. Business Organization and the Enterpriser's Function
Chapter 30. Cost of Production
Chapter 31. The Law of Profits
Chapter 32. Profit-sharing, Producers' and Consumers' Coöperation
Chapter 33. Monopoly Profits
Chapter 34. Growth of Trusts and Combinations
Chapter 35. Effect of Trusts on Prices
Chapter 36. Gambling, Speculation, and Promoters' Profits
Chapter 37. Crises and Industrial Depressions
Chapter 38. Private Property and Inheritance
Chapter 39. Income and Social Service
Chapter 40. Waste and Luxury
Chapter 41. Reaction of Consumption on Production
Chapter 42. Distribution of the Social Income
Chapter 43. Survey of the Theory of Value
Chapter 44. Free Competition and State Action
Chapter 45. Use, Coinage, and Value of Money
Chapter 46. Token Coinage and Government Paper Money
Chapter 47. The Standard of Deferred Payments
Chapter 48. Banking and Credit
Chapter 49. Taxation in its Relation to Value
Chapter 50. The General Theory of International Trade
Chapter 51. The Protective Tariff
Chapter 52. Other Protective Social and Labor Legislation
Chapter 53. Public Ownership of Industry
Chapter 54. Railroads and Industry
Chapter 55. The Public Nature of Railroads
Chapter 56. Public Policy as to Control of Industry
Chapter 57. Future Trend of Values
INDEX
FOOTNOTES:
