CONTENTS.

PROLOGUE.

Pp. 1—25.

§ 1. Meaning of Political Economy. 2. The Word Economic. 3. Economic Laws — Normal. 4. Meaning of Economic Goods: Distinction of Positive from Negative Goods. 5. Distinction of Personal Goods from Material Goods or Wealth. 6. Meaning of Property. 7. Distinction of Objects of Enjoyment from Means of Production. 8. Meaning of Value, o. Distinction of Individual from Social Value. 10. Meaning of Exchange. 11. Meaning of Price. 12. Difficulties surrounding the Definition of Value: Adam Smith and the Modern Austrian School. 13. Meanings of Cost and of Labour. 14. Industrial and Non-Industrial Labour. 15. Meaning of Income or Revenue. 16. Complications. 17. Meaning and Varieties of Capital. 18. Meaning of Expenditure. 19. Cautions on the Use of Economic Terms : Professor Marshall on Continuity. 20. Note ori the Distinction of Industrial and Non-Industrial. 21. Over-Reaction against Adam Smith.

BOOK I.

Production and Consumption.

CHAPTER I.

Productive Capacities of the Earth . . . Pp. 26—38

§ 1. The Two Primary Factors of Production. 2. Points of Physical Geography Important for the Economist. 3. Conclusion from Physical Geography. 4. Limitation of the Earth's Resources. 5. Intensity of Production. 6. Law of Diminishing Returns. 7. Common Misapprehension of the Law. 8. Suitable Degree of Intensity.

CHAPTER II.

Productive Capacities of Man Pp. 39— 57

§ 1. Variations of Man's Productive Capacity : Race Problems. 2. Points of Anthropology for Economists. 3. Meaning of Country, Nation, and Civilisation.^ 4. Productive Capacity according to Nationality. 5. According to Locality and Morality 6. Education in the Wide Sense/ 7. Question of Technical Education 8. Distinction of General Education from Special. 9. Technical Education, Higher and Secondary. 10. Primary Technical Education. 11. Mistakes on Technical Education. 12. Costs of Technical Education. 13. Limits of Technical Education. 14. Further Limits to National Productive Capacity.

CHAPTER III.

Industrial Organisation Pp. 58—73

§ 1. Meaning of Concerted Labour. 2. Advantages of Concerted Labour. 3. Limitation to these Advantages. 4. Result of Concerted Labour: Law of Increasing Returns. 5. Exaggeration of the Law of Increasing Returns : Modern Form of this Mistake. 6. Evils connected with Industrial Organisation : I. Increase of Misdirected Production. 7. II. Increase of Misdirected Consumption. 8. III. Increase of Dishonesty. 9. Minor Evils connected with Indus- trial Organisation : Increase of Carelessness, Physical Injury, Mental Degradation. 10. Exaggerations on Division of Labour and Machinery.

CHAPTER IV.

Industrial Progress Pp. 74 — 95

§ 1. Meaning of Industrial Progress. 2. Historical Survey of Industrial Progress. 3. The Industrial Revolution. 4. Some Details on the Industrial Revolution. 5. Estimate of the Gain from the Industrial Revolution. 6. Difficulty : Why the Gain has Profited us so little. 7. Four Mistaken Explanations of the Difficulty. 8. The Real Explanation of the Difficulty. 9. Improvements less Important than they seem. 10. Misdirection of Efforts and Wants. 11. Destruction and Damage. 12. Work made Unpleasant or Injurious. 13. Artistic Loss. 14. Depreciation of Faculties. 15. Technical Progress as a Compensation for Injury to the Earth : Four Heads of Injury. 16. Destruction of Forests the Worst Injury. 17. Probable Secular Equilibrium. 18. Note on Machinery and the Demand for Labour.

CHAPTER V

Industrial Locality and Dimensions . . . Pp. 96 — 124

§ 1. Reasons for the Locality of Industry. 2. Advantages of Concentration (Localisation of Industry). 3. Influence of the New Facilities of Transport. 4. The Explanation of Modern Urban Concentration. 5. Industrial Dimensions : Meaning of Industry and Business. 6. Varieties of Large-Scale and Small-Scale of Business. 7. Respective Advantages. 8. Complexity of the Question of Dimensions. 9. Conclusion on Large Undertakings versus Small. 10. Is Agriculture an Exception? 11. Probabilities for the Future. 12. Future of Agriculture. 13. Business Management : the Entrepreneur. 14. Two Kinds of Business Ability. 15. Three Main Varieties of Business Partnerships : Business Firm, Business Company, and Co-operative Business. 16. Modern Development of Joint-Stock Companies. 17. Alleged Social Evil of Joint-Stock Companies. 18. Modern Development of Cooperation. 19. Significance of the Co-operative Movement. 20. Confusion and Illusion about Co-operation.

CHAPTER VI.

Theory of Consumption Pp. 125 — 139

§ 1. Explanation of Terms. 2. Former Neglect of Consumption by English Economists. 3. Limitation of Human Wants. 4. Theory of Marginal Value. 5. Use of the Theory of Marginal Value. 6. Exaggerated into the Theory of Marginal Utility. 7. Professor Marshall on Marginal Utility. 8. Consumption as an Art. 9. Necessaries, Absolute and Conventional. 10. Standard of Life. 11. Superfluities. 12. When Superfluities are Luxuries. 13. Opposing Mistakes on Consumption.

CHAPTER VII

Particulars of Consumption .... Pp. 140—167

§ 1. Ten Principal Heads of Consumption : I. Food. 2. Mistake of the Vegetarians. 3. Famines and their Prevention. 4. Homicidal ••Political Economy." 5. II. Dwellings. 6. Importance of Dwellings for the Poorer Classes. 7. Grave Problem in Modern Towns. 8. Exaggerations and Mistakes. 9. Means of Reformation. 10. III. Fuel and Light. 11. IV. Clothing and Personal Adornment. 12. V. Furniture. 13. VI. Medical Expenditure. 14. VII. General Education. 15. VIII. Religious Expenditure. 16. IX. Justice. 17. X. Recreations. 18. Rough Classification of Recreations. 19. Vicious Recreations. 20. The Drink Traffic Problem. 21. The Solution. 22. Mistakes on the Drink Question and on Sumptuary Laws.

CHAPTER VIII.

Family Life and Law Pp. 168—182

§ 1. Fundamental Importance of the Family. 2. Christian Family Life. 3. Family Law in General. 4. Law on Married Women's Property. 5. Married Women in Factories. 6. Laws on Wills and Intestacy. 7. English Law of Intestacy and its Reform. S. Parental Control over Children and their Earnings. 9. Joint Families and their Importance. 10. The Complex Joint Family.

CHAPTER IX.

Growth and Decay qf Nations .... Pp. 183—205

§ 1. Excess of Births over Deaths. 2. Difficulty from the Prospect of Over-Population. 3. Colonisation and its Importance. 4. Evils of a Low Birth-rate. 5. Apparent Dilemma. 6. First Historical Answer. 7. Second Historical Answer. 8. Conclusion on Over-Population. 9. Essence of Malthusianism. 10. Misrepresentations about Malthus. 11. Explanation of the Prevalence of Malthusianism. 12. Answer to Two Difficulties. 13. Disastrous Results of Malthusianism. 14. Policy of Government on Population. 15. The Evil of withholding National Resources. 16. Historical Examples.

BOOK II. Exchange. CHAPTER I.

Trade in General Pp. 207—215

§ 1. Meaning of Exchange and Trade. 2. Five Main Reasons for Trade. 3. Principle of Comparative Advantage. 4. Advantages and Drawbacks of Trade. 5. Recapitulation on Value, Price, and Money-Price. 6. Discussion on the Relativity of Value or Price. 7. The Question before Us.

CHAPTER II.

Market Prices Pp. 216 — 244

§ 1. Meaning of a Market. 2. Four Factors determining Market Price. 3. The Working of Demand and Supply. 4. Meaning of Free Competition. 5. Private Costs of Production. 6. Variation and Complexity of Costs. 7. Distinction of Public and Private Costs t>f Production. 8. Private Utility. 9. The Order of Wants. 10, Benefit of Maskets: Elimination of the Unfit. 11. Scarce Goods and Scarcity Market Price. 12. Caution on die Benefit of Markets. 13. Fluctuations in Market Prices. 24. Evils of Fluctuations in Prices; and whether increasing. 15. Average Market Prices. t&. Theory of Normal Value. 17. Criticism of the Theory of Normal Value. jB. Summary on Value and Market Prices.

CHAPTER III.

Non-Markex Prices Pp. 245 — 269

§ 1. Distinction of Non-Market from Market Prices. 2. Monopoly and Monopoly Price. 3. Practical Danger of Monopolies. 4. Adam Smith on Forestalling and Engrossing. 5. Mistaken Apology for Monopolies. 6. Dilemma: Waste through Competition. 7. How Monopolies can be a Benefit. 8. Patents and Copyright. 9. Retail Dealing: General Conditions. 10. Exorbitant Retail Prices, xx. Parasitic .Retailers. 12. Customary or Legal Prices, or Tariffs. 13. Problem of Railway Rates. 14. Theory of Fair Prices.

CHAPTER IV.

Differential Gains Pp. 270—284

§ 1. Meaning of Differential Gains or " Economic Rent." 2. Note on " Consumer's Rent." 3. Grounds of Differential Gains : Personal Capacity. 4. Favourable Connections ; Fortunate Accidents ; Possession of Trade Secrets. 5. Less Wages to Pay. 6. Less Rent or Interest to Pay. 7. Action of the Law of Increasing Returns. 8. Superannuation of Fixed Capital. 9. Action of the Law of Diminishing Returns. 10. Capitalisation of Differential Gains, xx. Note on the Ricardian Theory of Rent. 12. The use of "Rent " for Differential Gains a Cause of Confusion.

CHAPTER V.

International Trade Pp.285 — 3 10

§ 1. Reasons for Treating International Trade separately. j2. Mistaken Reasons: Professor Bastable's Restatement. 3. National Advantages from Foreign Trade, and Drawbacks. 4. Mill's Mistaken Criticism of Adam Smith. 5. Distribution within a Nation of the Gains from Foreign Trade. 6. Proportional -Gain of Different Nations. 7. International Balance of Indebtedness. 8. Supplementary Grounds of International Indebtedness. 9. The Question of Free Trade versus Protection. 10. Four Valid Grounds for Protection: I. Acclimatisation of Industries. 11. II. Preservation of Existing Industries. 12. III. Political Security. 13. IV. Social Peace and Fair Distribution. 14. Application to Oppressed Workpeople. 15. Summary on Free Trade and Protection. 16. Imperial Free Trade" and "Fair Trade." 17. Free Trade and the Laws of Diminishing and of Increasing Returns. 18. Curious Character of the Free Trade Controversy.

CHAPTER VI.

Money . . . Pp. 311 — 329

§ 1 . Inconvenience of Barter : Need of a Medium of Exchange. 2. Need of a Measure of Value. 3. Definition of Money, Currency, and Legal Tender. 4. Difficulties in Defining Money. 5. Different Goods used as Money. 6. The Terms Value and Price as applied to Money : Appreciation and Depreciation of Money. 7. Measurement of Changes in the Value of Money : Index Numbers. 8. Peculiarities of the Costs of Money. 9. Peculiarities of the Utility of Money. 10. Rapidity of Circulation or Efficiency of Money. 11. Vanation in the Amount of Money Payments. 12. Withdrawal of Real Money from Circulation. 13. Gresham's Law. 14. Cautions against Mistakes on Money. 15. Effect of a Depreciation or of an Appreciation of Money. 16. Note on the Quantity Theory of Money. .

CHAPTER VII.

Coinage and Tokens Pp. 330—350

§ 1. Advantage of Coins over Metallic Currency by Weight. 2. The Standard Unit of Value : Denomination of Coins. 3. Distinction of Standard and Token Coins. 4. Use and Abuse of Token Coins. 5. How to prevent Degradation of the Coinage. 6. Debasement of the Currency. 7. Use of Inconvertible Paper Currency. 8. Abuse of Over-issue. 9. Regulation of an Inconvertible Paper Currency. 10. Enhancement of the Currency. 11. Working of the Indian Coinage Act. 12. Bimetallism explained. 13. Working of a Bimetallic Union. 14. Grave Divergence of Interests an Obstacle to Bimetallism.

CHAPTER VIII.

Credit and Banking Pp. 351—369

§ 1. Meaning of Credit and Cash. 2. Banking in General. 3. Chief Functions of Banks: I. Specific Deposit. 4. II. Generic Deposit. 5. III. Settling Debts. 6. Note on the Clearing System. 7. IV. Lending on Pledge. 8. V. Lending on Mortgage. 9. VI. Lending on Personal Security: Bills of Exchange and Bill-Discounting. 10. VII. Exchange Business. 11. VIII. Issue of Bank- Notes. 12. Advantages of an Elastic Currency. 13. Question of Free Banking. 14. The English Bank Act of 1844. 15. The Chief Provisions of the Bank Act. 16. IX. Dealing in Securities. 17. X. Banking for Government.

CHAPTER IX.

The Foreign Exchanges Pp. 370 — 385

§ 1. The Foreign Exchanges in General. 2. The Mint Par of Exchange. 3. The Real or True Rate of Exchange. 4. Gold and the Exchanges. 5. The Rate of Discount and the Exchanges. 6. The so-called Money Market. 7. Grounds for the Anxiety about Gold. 8. Single Reserve System of English Banking. 9. Political Danger from Lack of a Reserve. 10. Note on Money and Foreign Trade. 11. Does Depreciation foster Exports? 12. Do the Exchanges affect Prices in General ?

CHAPTER X.

Use and Abuse of Commercial Credit . . Pp. 386—405

§ 1. Great Power of Credit and Banking. 2. Meaning of Investing and Saving. 3. Benefits from Credit and Banking. 4. Benefits from Stock Exchanges. 5. Drawbacks of Commercial Credit : Fostering the Worst Men. 6. Misdirection of Enterprise. 7. Frauds on the Stock Exchange. 8. Gambling on the Stock Exchange. 9. Gambling on the Produce Exchanges. 10. Great Controversy on *• Futures." 11. Reform of the Stock and Produce Exchanges. 12. Insolvency Laws and their Reformation. 13. Causes of a Commercial Crisis. 14. Prevention or Alleviation of a Commercial Crisis. 15. Mistakes on Commercial Crises and Trade Depressions.

CHAPTER XI.

Uncommercial Credit Pp. 406 — 423

§ 1. Meaning of Uncommercial Credit. 2. Public Lending. 3. Agrarian Credit and its Four Different Purposes. 4. Miscellaneous Credit : Nature of Usury. 5. Mistakes on the Doctrine of Usury. 6. Charges against Catholic Teaching on Usury. 7. Prevalence of Usury. 8. Usury Laws and their Necessity. 9. Abolition and Renewal of Usury Laws. 10. Objections alleged against Usury Laws. 11. Need of Humane Laws of Debt. 12. Co-operative Associations as Averters of Usury. 13. Charitable and Public Lending.

BOOK III. Distribution. CHAPTER I.

Distribution in General Pp. 425 — 433

§ 1. The Problems of Distribution. 2. Triple Division of Income. 3. Distinction of Industrial and Non-Industrial applied to Wages, Interest, and Profits. 4. Note on the Words Interest and Rent. 5. Various Classifications of Income : Adam Smith's, Mill's, Walker's. 6. Nicholson's, Marshall's, Gide's. 7. Is any Classifi-cation Desirable ? 8. Complications in the Problems of Distribution.

CHAPTER II.

Profits Pp. 434—442

§ 1. Amount and Rate of Profit distinguished. 2. Rate of Profit on Total and on Single Transactions. 3. Real and Nominal Profits. 4. Compensation for Unpleasantness. 5. Question of the Equality of Profits. 6. Mistake of Adam Smith and his Followers. 7. Hiddenness of Profits. 8. Movements of Labour and Capital fail to equalise Profits. 9. Conclusion.

CHAPTER III.

Interest Pp. 443 — 45

§ 1. Various Forms of Interest. 2. Amount and Rate of Interest distinguished, 3. Real and Nominal Interest. 4. Question of the Equality of Rates of Interest. 5. Various Current Rates of Interest. 6. Grounds for the Varying Rates of Interest and Discount. 7. Five Influences affecting Average Rates of Interest : I. The Productivity of Industry. 8. II. The Desire of Future Income. 9. III. The Desire of Present Ease. 10. IV. Private Non-Industrial Borrowing. 11. V. Public Borrowing. 12. Interaction of the Five Influences. 13. Question of the Equality of Rates of Interest. 14. Movements of Labour and Capital fail to equalise Interest. 15. Alleged Historical Decline in Rates of Interest. 16. Two Facts seeming to indicate such a Decline.

CHAPTER IV.

Wages Pp. 460—476

§ 1. Industrial and Non-Industrial Wages. 2. Time- Wages and Piece-Wages. 3. Definite and Indefinite Wages. 4. Amount of Wages, Rate of Wages, Proportional Wages. 5. Real and Nominal Wages. 6. Great Difficulty of ascertaining Real Wages. 7. Maximum and Minimum Wages. 8. Question of the Equality of Wages. 9. Four Wrong Assumptions. 10. Conclusion. 11. The Wages-Fund Theory. 12. Pessimist and Optimist Wage-Theories. 13. Elements of Truth in Mistaken Wage-Theories. 14. Theory of the Economy of High Wages.

CHAPTER V.

Rich and Poor Pp. 477—491

§ 1. Prerequisites of Civilisation. 2. Distinction of Rich and Poor in Civilised States. 3. The Limitations to the Inequality of Incomes. 4. How these Limitations are removed by the Employment of a Serving Class. 5. Proportional Numbers of Masters and Servants. 6. Further Explanations. 7. Theory of Surplus Produce or Unearned Income. 8. Modern Restatement of the Nature of Unearned Income. 9. Causes of Enrichment and Impoverishment. 10. Particular Origins of Enrichment. 11. Particular Origins of Impoverishment. 12. Important Doctrine of Prescription.

CHAPTER VI. An Apologia for the Rich Pp. 492—505 § 1. The Defence of Riches a Distinct Task from the Defence of Property. 2. The Four Arguments for Inequality : Industrial, Intellectual, Political, and Religious. 3. The Arguments for Inequality strengthened by Christianity. 4. How the Arguments for Inequality modify the Doctrine of Unearned Income. 5. How the Arguments for Inequality make Riches and Responsibility Inseparable. 6. Four Heads of Duties of the Rich. 7. Danger from the Neglect of these Duties. 8. Fair Treatment of the Poorer Classes. 9. Note on Fair Wages. 10. Wages and Strict Justice.

CHAPTER VII.

Mistaken Theories on Riches .Pp. 506—526

§ 1. General Character of the Argument. 2. Theory of the Reward of Abstinence. 3. Theory of Discounting the Future. 4. Theory of the Reward for Waiting. 5. Theory of the Reward of Service. 6. Theory of the Reward of Ability or Mental Labour. 7. Legalistic Theory. 8. Cynical Theories. 9. General Character of Socialism. 10. Cautions on the Word Socialism. 11. Extreme Theories : Communism and Anarchism. 12. Elaborate Theories : Collectivism. 13. The Answer to Collectivism. 14. Collectivism Fatal to Simple Rights of Property. 15. Milder Theories: Land Nationalisation. 16. State Socialism. 17. How to Distinguish State Socialism from Social Reform.

CHAPTER VIII.

Liberty and Law Pp. 527 — 543

§ 1. Classification of Social Relations. 2. Feudalism and Slavery. 3. Meaning of an Unregulated Regime. 4. Classical Example of an Unregulated Regime ; England 1800 — 1850. 5. Restoration of Regulation. 6. Factory Laws. 7. Historical Sketch of the English Poor Laws. 8. The New Poor Law of 1834 and its Issue. 9. Poor Law Reform.

CHAPTER IX.

Association and Responsibility .... Pp. 544—567

§ 1. The Mediaeval Trade Guilds. 2. Characteristics of Trade Unions. 3. Good Results from English Trade Unions. 4. Weak Points of Trade Unions. 5. Employer's Associations. 6. Boards of Arbitration and Conciliation. 7. Their Weak Points. 8. Sliding Scales. 9. Industrial Partnership or Profit Sharing. 10. Weak Points of Profit Sharing. 11. Need of Strengthening the Organs of Conciliation. 12. The Incorporation of Trade Unions and Compulsory Arbitration. 13. The Quadrupal Insurance of Workpeople. 14. Law of Responsibility. 15. How Friendly Societies woula profit by the Law of Responsibility. 16. Encouraging Examples : Welfare Institutions. 17. Question of Old Age Pensions.

BOOK IV.

Public Finance.

CHAPTER I.

Functions and Cost of Government . Pp. 569 — 582

§ 1. General Character of Public Finance. 2. Summary on the Nature of the State. 3. Primary Functions of Government. 4. Secondary Functions of Government. 5. Private Exercise of Public Functions. 6. Public Exercise of Private Functions. 7. Three Ways of meeting the Cost of Government. 8. Grave Danger of Over-Taxation. 9. Taxable Capacity Different in Different Countries,

CHAPTER II.

Public Ownership and Management . . Pp. 583—592

§ 1. Public Receipts either Non-Tax Revenue or Tax Revenue. 2. Public Property which yields no Revenue. 3. Varieties of Non- Tax Revenue. 4. Objections in General to Public Ownership or Management. 5. Cases where these Objections are outweighed. 6. Question of Public Revenue in the Shape of Interest. 7. Question of Monopolies, especially Railways, and the State.

CHAPTER III.

Principles of Taxation Pp. 593—607

§ 1. Restatement on the Nature of Taxation. 2. Problem of Fair Taxation. 3. Principle of Special Benefit. 4. Principle of Taxable Capacity. 5. Explanation on Progressive Taxation. 6. Objections raised against Progressive Taxation. 7. Subordinate Principles to be regarded in Taxation. 8. The Opportunist Theory of Taxation : Doctrine of Diffusion of Taxes. 9. Note on the Shifting and Incidence of Taxation. 10. Technical Canons of Taxation.

CHAPTER IV.

Different Kinds of Taxes Pp. 608—621

§ 1. Classification of Taxes. 2. First Head of Taxation : Impersonal Taxes on Property or Produce. 3. Second Head of Taxation : Personal Taxes on Capital or Income. 4. Third Head of Taxation : Direct Taxes on Expenditure. 5. Fourth Head of Taxation : Indirect Taxes on Expenditure. 6. Objections to these Taxes. 7. In some Cases outweighed. 8. Fifth Head of Taxation : Taxes on Occasions. 9. Discussion on Death Duties. 10. Taxes on Contracts.

CHAPTER V.

Public Debts Pp. 622 — 632

§ 1. Character of Public Debts. 2. How to meet Extraordinary Public Expenditure. 3. Advantages of Borrowing. 4. Whether Debts should ever be paid off. 5. Grave Abuses connected with Public Debts. 6. Reasonable Estimate of these Abuses. 7. Conclusions, Moral and Technical.

EPILOGUE.

PART I.

Scope and Method of Economic Science . Pp. 633—646

§ 1. Causes of Disagreement among Economists. 2. Economics a Part of Ethics. 3. Distinction of Sciences and Arts : Economics a Science not an Art. 4. Bearing of Physical Science and Psychology on Economics. 5. Note on Normative and Positive Science. 6. Bearing of History on Economics : Exaggerations of the Historical School. 7. Theories of Sociology. 8. Both Theory and Observation, Deduction and Induction, needed for Economics. 9. Use of Mathematics and Statistics.

PART II.

History of Economic Science .Pp. 647—662

§ 1. The Greeks and Romans. 2. The Scholastic Period. 3. The Mercantile Period. 4. Period of Economic Liberalism. 5. Adam Smith and the Physiocrats. 6. " Orthodox " or " Classical " Political Economy. 7. The Overthrow of Economic Liberalism. 8. Critical Estimate of Ruskin as an Economist. 9. Modern Schools of Economists.

ERRATA.

P. 15 eight lines from top for A. Graham read P. A. Graham.

P. 139 last line Whiting „ Whiteing.

P. 148 sixth line of § 7 „ sixth chapter ,, fifth chapter.

P. 304 first line „ Crawford „ Crawfurd.

P. 486 near the middle ,, Thomson Thompson.

P. 642 in the middle „ Gibbins „ Giddings.

P. 220 seventh line of § 5 before costs insert remembered or anticipated.

P. 548 eighth- line from bottom before labourers insert and female.