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[ Pobierz całość w formacie PDF ] progressive. But in the analysis of such conceptions as the above it is not too much to look forward ultimately to a certain finality. It has been already observed that if the conceptions take on a somewhat different character in different connexion, we shall at least find something that is generic and universal in each one of them; and a consideration of them in their general character will be a valuable preliminary to more con- crete economic enquiries. Abstract economics next proceeds to discuss certain fundamental principles that are universal in the sense of pervading all economic rea- sonings. One of these principles is the law of the variation of utility, which is the key-note of Jevons s principal additions to the science. This principle applies not only to material commodities determining the law of demand for them, but also to services; and hence it is of the greatest importance in the whole theory of distribution. Thus, other thing s be- ing, equal, the aid which a dose of capital of a given description can render to the labour with which it is co-operating diminishes as the number of doses is increased; similarly, other thing being equal, the aid which a unit of labour of a given kind can afford to capital, and to the other 142/John Neville Keynes kinds of labour which it is assisting, diminishes if as the number of units is increased. The truth of this elementary principle is quite independent of social institutions and economic habits though the results which it actually brings about may vary considerably. Another principle of a similar character is that, other things being equal, a greater gain is pre- ferred to a smaller; or, as we may put it, every man so far as he is free to choose will choose the greater apparent good.194 On the basis of its analysis of fundamental conceptions, assisted by principles such as the above, abstract economics is enabled to draw certain negative or formal inferences which possess the character of universality. As, for instance, that a general rise in values is impossible; that if two kinds of commodities have the same law of utility, that which is the rarer will be the more valuable; that of different methods of pro- duction which can be used for obtaining a given result, the one that can do the work the most cheaply will in time supersede the others;195 that facilities of transport tend to level values in different places, while fa- cilities of preservation tend to level values at different times. In the same category may be placed such propositions as that no commodity or ser- vice can serve as a universal measure of value between different times and places, and that general over-production in a literal sense is impos- sible. We have already spoken of the relativity of the Ricardian law of rent as ordinarily stated. But compare with this the principle of eco- nomic rent in its most abstract and generalized form. The Ricardian law, so far as it claims to determine the actual payments made by the cultivators of the soil, is a relative doctrine, that is to say, it is based on assumptions, which, as regards both time and place, hold good over a limited range only. The theory of economic rent in its most generalized form, however, merely affirms that where different portions of the total amount of any commodity of uniform quality supplied to the same mar- ket are produced at different costs, those portions which are raised at the smaller costs will yield a differential profit; and there is now no similar imitation to its applicability. This principle may even be said to hold good in a socialistic community, for the differential profit does not cease to exist by being ignored or by being municipalized or national- ized. In this way may be built up a system of general theorems relating to economic phenomena which, with due modifications, are applicable under widely different conditions. It has to be admitted that the body of doc- The Scope and Method of Political Economy/143 trine thus built up is mainly hypothetical in character; that is, it will not by itself enable us to lay down definitely the laws according to which wealth is distributed and exchanged in any given society. In order to determine the latter, we have further to take into account the special conditions under which the general principles operate; and such condi- tions are indefinitely variable. But what is here maintained is that the abstract theory is invaluable as a preliminary study. The principles in- volved and the modes of investigation employed have a significance and importance which it would be misleading to call merely relative; and the economist who would deal with the more concrete problems of any par- ticular age or state of society cannot afford to neglect them. Thus, as we have already seen, there is a good deal of abstract reasoning in regard to the laws of supply and demand that has a very wide application indeed. These laws work themselves out differently under different conditions, and in particular there are differences in the rapidity with which they operate. Their operation may, however, be detected beneath the surface even in states of society where custom exerts the most powerful sway. And this would in all probability be overlooked were not our attention turned in the right direction by the method of analysis afforded by ab- stract economics. B. On the Conception of Political Economy as a Distinctively Historical Science It has been strewn in the preceding chapter that the study of economic history plays a distinct and characteristic part in the building up and perfecting of political economy There are many problems belonging to economic science whose solution must necessarily remain incomplete, apart from the aid afforded by historical research; and the historical method is, therefore, rightly included amongst the methods to which the economist ought to have recourse. Nevertheless economics is not to be considered, as some maintain, an essentially historical science. This view is opposed to the doctrines of those more advanced members of the historical school who maintain that their method should supersede and not merely supplement, other methods, and who seek to bring about thereby a complete transformation of political economy. A claim of this [ Pobierz całość w formacie PDF ] |