x-\UGUST 14, 1890] 



NATURE 



equilibrium, the buoyant gas plays a more important 

 part than the heavy car. To be sure balloons could not 

 go up without gas ; whereas they might, and sometimes 

 do, without a car. Still, from a mathematical point of 

 view, we submit, it is legitimate to attribute to the 

 positive and negative forces a " fundamental symmetry" 

 — as Prof. Marshall characterizes the equilibrating motives 

 towards utility and from disutility. By parity of reasoning 

 they also are to be condemned who, neglecting final 

 utility, worship only cost of production. But it may well be 

 doubed whether this form of what we may call the mono- 

 physite heresy in regard to the doctrine of value is attri- 

 butable in a serious degree to Ricardo. It is tenable that 



" the older economists seem to have been rightly guided 

 by their intuition when they silently determined that the 

 forces of supply were those the study of which was the 

 more urgent and involved the greater difficulty." 



The theory of cost of production would be easy if all 

 economic action were as simple as in the case of one who 

 goes on picking and eating blackberries until the labour 

 of picking just compensates the pleasure of eating. The 

 concrete case is greatly complicated by the element of 

 time. Under cost of production we must include the 

 less direct efforts and sacrifices, such as that of the parent 

 who, vicariously competing in the labour market, supplies 

 an educated employer or artisan to that occupation where 

 there appears to be the best opening. Before the educa- 

 tion is completed perhaps the opening has ceased to 

 be the best. The normal tendency to equilibrium is 

 thus ever interrupted by the introduction of some new 

 condition : — 



" There is a constant tendency of the surface of the 

 sea towards a position of rest, but the moon and sun are 

 always shifting their places and always therefore changing 

 the conditions by which the equilibrium of the sea is 

 governed ; and meanwhile there are ceaseless currents of 

 the raging winds ; the surface is always tending towards 

 a position of normal equilibrium, but never attains it." 



In this troubled scene everything is in flux, and subject 

 to the theory of fluxions : — 



" The amount of the commodity and its price, the 

 amounts of the several factors or agents of production 

 used in rti'aking it and their prices — all these elements 

 mutually determine one another [we italicize words which 

 convey a lesson which has never before been taught 

 thoroughly], and if an external cause should alter anyone 

 of them, the effect of the disturbance extends to all the 

 others." 



If there is any of the economic variables of which it 

 may be said that it is determined without determining, it 

 might be the old Ricardian " inherent properties " of land 

 about which Prof. Marshall has much that is new to say. 

 As for the quasi-rents which more recent theory has 

 evolved, they are all affected with the fallacy which Prof 

 Marshall's scientific method is particularly adapted to 

 guard against — the treating as constant quantities which 

 are variable. The " margin " from which the remuneration 

 in any skilled occupation is measured is itself a variable, 

 varying with the remuneration ; because the supply of 

 competitors is dependent upon the prospect held out by 

 the great prizes in that occupation. The apologist of the 

 existing economic regime who defends the profits of the 

 successful employer as being a rent of ability, the Socialist 

 NO. 1085, VOL. 42] 



who attacks the interest of capital as being a rent of 

 opportunity, are alike building their insecure construc- 

 tions upon the sands of a shifting coast-line. 



We are prevented by the narrowness of our limits from 

 exhibiting the important results obtained by the full treat- 

 ment of the subject to which we have barely adverted — 

 namely, the simultaneous determination both of the 

 relative value of products, and the remuneration of pro- 

 ducers, in a regime of free competition. We must 

 hasten on to observe that the same methods of abstract 

 reasoning are applicable, tnutaiis 7nutaftdis, to a regime 

 of monopoly. This case is important, not only for itself, 

 on account of the prevalence of trusts and monopolies, 

 but also by reason of the analogy between governmental 

 and monopolistic action. Prof. Marshall, by original 

 methods, deduces the startling conclusion 



"that it might even be for the advantage of the com- 

 munity that the Government should levy taxes on com- 

 modities which obey the law of diminishing return, and 

 spend part of the proceeds on bounties to commodities 

 which obey the law of increasing return." 



This reasoning is, of course, very abstract ; abstracting 

 the indirect evils which governmental interference may 

 produce. But it at least suffices to destroy the a priori 

 presumptions in favour of " economic harmonies " and 

 unqualified laissez /aire. Prof. Marshall reaches these 

 and other important conclusions by estimating the " con- 

 sumers' rent " — that is, the advantage which consumers 

 derive from a fall of price. In connection with this 

 subject we should advert to his beautiful theory of the 

 elasticity of demand. The more elastic or expansive 

 demand is, the greater is the increase of consumers' rent 

 due to a given fall of price. 



We should like to dwell upon the practical importance 

 of these conceptions. But it is impossible here to analyze 

 a work almost every page of which presents a new idea. 

 We must be content with indicating methods as distin- 

 guished from particular theories. The mathematical 

 method appears to be established in its proper position 

 by the precept and example of Prof. Marshall : — 



" Our observations of nature, in the moral as in the 

 physical world, relate not so much to aggregate quanti- 

 ties as to increments of quantities. ... It is not easy to 

 get a clear full view of continuity in this aspect without 

 the aid either of mathematical symbols or diagrams." . . . 



Prof. Marshall expresses some preference for diagrams : — 

 " Experience seems to show that they give a firmer 

 grasp of many important principles than can be got 

 without their aid, and that there are many problems of 

 pure theory which no one who has once learnt to use 

 diagrams will willingly handle in any other way." 



Developing a metaphor suggested by our author, we 

 might compare these mechanical aids to reason to the 

 machinery employed in material production. Appliances 

 useful to one producer will not be equally so to another. 

 There is what Prof. Marshall calls the " law of substitu- 

 tion," according to which each producer selects the ex- 

 pedients most serviceable in his own case. Usefulness 

 will depend much on familiarity. " It seems doubtful 

 whether anyone spends his time well in reading lengthy 

 translations of economic doctrines into mathematics that 

 have not been made by himself." 



By way of illustrating this character of intellectual 



