TRANSACTIONS OF THE SECTIONS. 159 
‘consumption of successive equal increments of a useful substance does ‘not usually 
produce equal increments of pleasure, but the ratio of utility on the last increment 
usually decreases as some function of the whole quantity consumed, Let this be 
called the final ratio of utility. 
8. Labour is accompanied by pain, and will be exerted both in intensity and 
duration until a further increment will be more painful than the increment of pro- 
duce thereby obtained is pleasurable. 
9. The abilities of two men in producing the same or of one man in producing 
general kinds of useful objects are very various, contrary to the erroneous assump- 
tion of Ricardo. 
10. When two persons, each possessing a known quantity of a commodity or 
useful substance capable of division into small quantities, exchange with each 
other, the unknown quantities which pass between them are determined by two 
equations, involving the known quantities of commodity previously possessed and 
the functions expressing the final ratios of utility of those commodities. It is also 
a necessary condition of the exchange that any portions of the commodities, and 
therefore the last small portions, are exchanged in the same ratio as the whole 
quantities. 
11. When there are more than two persons or commodities, a simple law of 
combinations gives the numbers of equations which will determine all the quantities 
passing in exchange, The whole system of trade, howsoever extensive, is thus 
theoretically represented by a system of equations. 
12. When the quantities of commodities are considered as produced by labour 
under the conditions stated in (8), a new set of equations will determine, in con- 
junction with the equations of exchange, the new set of unknown quantities intro- 
duced. Any system of production and trade is thus theoretically represented. 
13. Capital is defined to be simply maintenance of labourers while they are 
awaiting the results of labour employed in a manner which does not give immediate 
returns, As maintenance may be applied indifferently to any branch of industry, 
the interest of all (free) capital is the same. The interest is determined by the 
ratio which a new increment of produce bears to the increment of ena by which 
it was produced. It is shown to be a simple mathematical result of the above con- 
ditions that the interest of capital always tends to fall rapidly as its quantity in 
proportion to labour increases. 
14. When the remaining parts of the theory are completed, it will probably be 
shown that the rate of wages is the average produce of labour after deduction of 
rent, interest, profit, insurance, and taxation. These are so many payments which 
the labourer makes for peculiar advantages enjoyed. 
On the Definition and Nature of the Science of Political Economy. 
By Huyry Dunnixe Macrzop, B.A. 
The author said, as the science of political economy was daily growing in im- 
portance, and was now made a subject of examination in the public services, its 
nature and objects should be settled, as these points had not yet been decided by 
economists. Ever since it was founded, its cultivators had declared that it was a 
physical science, and that it should be investigated in a manner analogous to that 
in which the researches of physical science were conducted. If this were so, it 
must obey the well-understood conditions of a physical science. These were that 
it must be some large body of phenomena all founded on a single idea of the most 
general nature. The purpose of the science was to discover the laws of these phe- 
nomena. It must also be based upon certain conceptions and axioms which must 
be perfectly general. If political economy were therefore a physical science, it 
must be some large body of phenomena all based upon a single idea, and it must 
be based upon conceptions and axioms of the same wideness and generality as those 
of poe science. 
ike many other sciences, political economy had undergone some changes of con- 
ception since it was founded. At present there were two definitions which divided 
- economists. First, that it was the science which treated of the production, distribution, 
‘and consumption of wealth. This definition was first given to it by J. B. Say. 
