




                     Principles Of Political Economy

                                    By

                             John Stuart Mill

                Abridged, with Critical, Bibliographical,

                   and Explanatory Notes, and a Sketch

                   of the History of Political Economy,

                                    By

                       J. Laurence Laughlin, Ph. D.

      Assistant Professor of Political Economy in Harvard University

                        A Text-Book For Colleges.

                                New York:

                         D. Appleton And Company,

                         1, 3, and 5 Bond Street.

                                   1885





CONTENTS


Preface.
Introductory.
   A Sketch Of The History Of Political Economy.
   Books For Consultation (From English, French, And German Authors).
   Preliminary Remarks.
Book I. Production.
   Chapter I. Of The Requisites Of Production.
      § 1. The requisites of production.
      § 2. The Second Requisite of Production, Labor.
      § 3. Of Capital as a Requisite of Production.
   Chapter II. Of Unproductive Labor.
      § 1. Definition of Productive and Unproductive Labor.
      § 2. Productive and Unproductive Consumption.
      § 3. Distinction Between Labor for the Supply of Productive
      Consumption and Labor for the Supply of Unproductive Consumption.
   Chapter III. Of Capital.
      § 1. Capital is Wealth Appropriated to Reproductive Employment.
      § 2. More Capital Devoted to Production than Actually Employed in
      it.
      § 3. Examination of Cases Illustrative of the Idea of Capital.
   Chapter IV. Fundamental Propositions Respecting Capital.
      § 1. Industry is Limited by Capital.
      § 2. Increase of Capital gives Increased Employment to Labor,
      Without Assignable Bounds.
      § 3. Capital is the result of Saving, and all Capital is Consumed.
      § 4. Capital is kept up by Perpetual Reproduction, as shown by the
      Recovery of Countries from Devastation.
      § 5. Effects of Defraying Government Expenditure by Loans.
      § 6. Demand for Commodities is not Demand for Labor.
   Chapter V. On Circulating And Fixed Capital.
      § 1. Fixed and Circulating Capital.
      § 2. Increase of Fixed Capital, when, at the Expense of Circulating,
      might be Detrimental to the Laborers.
      § 3. --This seldom, if ever, occurs.
   Chapter VI. Of Causes Affecting The Efficiency Of Production.
      § 1. General Causes of Superior Productiveness.
      § 2. Combination and Division of Labor Increase Productiveness.
      § 3. Advantages of Division of Labor.
      § 4. Production on a Large and Production on a Small Scale.
   Chapter VII. Of The Law Of The Increase Of Labor.
      § 1. The Law of the Increase of Production Depends on those of Three
      Elements--Labor. Capital, and Land.
      § 2. The Law of Population.
      § 3. By what Checks the Increase of Population is Practically
      Limited.
   Chapter VIII. Of The Law Of The Increase Of Capital.
      § 1. Means for Saving in the Surplus above Necessaries.
      § 2. Motive for Saving in the Surplus above Necessaries.
      § 3. Examples of Deficiency in the Strength of this Desire.
      § 4. Examples of Excess of this Desire.
   Chapter IX. Of The Law Of The Increase Of Production From Land.
      § 1. The Law of Production from the Soil, a Law of Diminishing
      Return in Proportion to the Increased Application of Labor and
      Capital.
      § 2. Antagonist Principle to the Law of Diminishing Return; the
      Progress of Improvements in Production.
      § 3. --In Railways.
      § 4. --In Manufactures.
      § 5. Law Holds True of Mining.
   Chapter X. Consequences Of The Foregoing Laws.
      § 1. Remedies for Weakness of the Principle of Accumulation.
      § 2. Even where the Desire to Accumulate is Strong, Population must
      be Kept within the Limits of Population from Land.
      § 3. Necessity of Restraining Population not superseded by Free
      Trade in Food.
      § 4. --Nor by Emigration.
Book II. Distribution.
   Chapter I. Of Property.
      § 1. Individual Property and its opponents.
      § 2. The case for Communism against private property presented.
      § 3. The Socialists who appeal to state-help.
      § 4. Of various minor schemes, Communistic and Socialistic.
      § 5.  The Socialist objections to the present order of Society
      examined.
      § 6. Property in land different from property in Movables.
   Chapter II. Of Wages.
      § 1. Of Competition and Custom.
      § 2. The Wages-fund, and the Objections to it Considered.
      § 3. Examination of some popular Opinions respecting Wages.
      § 4. Certain rare Circumstances excepted, High Wages imply
      Restraints on Population.
      § 5. Due Restriction of Population the only Safeguard of a
      Laboring-Class.
   Chapter III. Of Remedies For Low Wages.
      § 1. A Legal or Customary Minimum of Wages, with a Guarantee of
      Employment.
      § 2. --Would Require as a Condition Legal Measures for Repression of
      Population.
      § 3. Allowances in Aid of Wages and the Standard of Living.
      § 4. Grounds for Expecting Improvement in Public Opinion on the
      Subject of Population.
      § 5. Twofold means of Elevating the Habits of the Laboring-People;
      by Education, and by Foreign and Home Colonization.
   Chapter IV. Of The Differences Of Wages In Different Employments.
      § 1. Differences of Wages Arising from Different Degrees of
      Attractiveness in Different Employments.
      § 2.  Differences arising from Natural Monopolies.
      § 3.  Effect on Wages of the Competition of Persons having other
      Means of Support.
      § 4. Wages of Women, why Lower than those of Men.
      § 5. Differences of Wages Arising from Laws, Combinations, or
      Customs.
   Chapter V. Of Profits.
      § 1. Profits include Interest and Risk; but, correctly speaking, do
      not include Wages of Superintendence.
      § 2. The Minimum of Profits; what produces Variations in the Amount
      of Profits.
      § 3. General Tendency of Profits to an Equality.
      § 4. The Cause of the Existence of any Profit; the Advances of
      Capitalists consist of Wages of Labor.
      § 5. The Rate of Profit depends on the Cost of Labor.
   Chapter VI. Of Rent.
      § 1. Rent the Effect of a Natural Monopoly.
      § 2. No Land can pay Rent except Land of such Quality or Situation
      as exists in less Quantity than the Demand.
      § 3. The Rent of Land is the Excess of its Return above the Return
      to the worst Land in Cultivation.
      § 4. --Or to the Capital employed in the least advantageous
      Circumstances.
      § 5. Opposing Views of the Law of Rent.
      § 6. Rent does not enter into the Cost of Production of Agricultural
      Produce.
Book III. Exchange.
   Chapter I. Of Value.
      § 1. Definitions of Value in Use, Exchange Value, and Price.
      § 2. Conditions of Value: Utility, Difficulty of Attainment, and
      Transferableness.
      § 3. Commodities limited in Quantity by the law of Demand and
      Supply: General working of this Law.
      § 4. Miscellaneous Cases falling under this Law.
      § 5. Commodities which are Susceptible of Indefinite Multiplication
      without Increase of Cost. Law of their Value Cost of Production.
      § 6. The Value of these Commodities confirm, in the long run, to
      their Cost of Production through the operation of Demand and Supply.
   Chapter II. Ultimate Analysis Of Cost Of Production.
      § 1. Of Labor, the principal Element in Cost of Production.
      § 2. Wages affect Values, only if different in different
      employments; "non-competing groups."
      § 3. Profits an element in Cost of Production.
      § 4. Cost of Production properly represented by sacrifice, or cost,
      to the Laborer as well as to the Capitalist; the relation of this
      conception to the Cost of Labor.
      § 5. When profits vary from Employment to Employment, or are spread
      over unequal lengths of Time, they affect Values accordingly.
      § 6. Occasional Elements in Cost of Production; taxes and
      ground-rent.
   Chapter III. Of Rent, In Its Relation To Value.
      § 1. Commodities which are susceptible of indefinite Multiplication,
      but not without increase of Cost. Law of their Value, Cost of
      Production in the most unfavorable existing circumstances.
      § 2. Such commodities, when Produced in circumstances more
      favorable, yield a Rent equal to the difference of Cost.
      § 3. Rent of Mines and Fisheries and ground-rent of Buildings, and
      cases of gain analogous to Rent.
      § 4. _Resume_ of the laws of value of each of the three classes of
      commodities.
   Chapter IV. Of Money.
      § 1. The three functions of Money--a Common Denominator of Value, a
      Medium of Exchange, a "Standard of Value".
      § 2. Gold and Silver, why fitted for those purposes.
      § 3. Money a mere contrivance for facilitating exchanges, which does
      not affect the laws of value.
   Chapter V. Of The Value Of Money, As Dependent On Demand And Supply.
      § 1. Value of Money, an ambiguous expression.
      § 2. The Value of Money depends on its quantity.
      § 3. --Together with the Rapidity of Circulation.
      § 4. Explanations and Limitations of this Principle.
   Chapter VI. Of The Value Of Money, As Dependent On Cost Of Production.
      § 1. The value of Money, in a state of Freedom, conforms to the
      value of the Bullion contained in it.
      § 2. --Which is determined by the cost of production.
      § 3. This law, how related to the principle laid down in the
      preceding chapter.
   Chapter VII. Of A Double Standard And Subsidiary Coins.
      § 1. Objections to a Double Standard.
      § 2. The use of the two metals as money, and the management of
      Subsidiary Coins.
      § 3. The experience of the United States with a double standard from
      1792 to 1883.
   Chapter VIII. Of Credit, As A Substitute For Money.
      § 1. Credit not a creation but a Transfer of the means of
      Production.
      § 2. In what manner it assists Production.
      § 3. Function of Credit in economizing the use of Money.
      § 4. Bills of Exchange.
      § 5. Promissory Notes.
      § 6. Deposits and Checks.
   Chapter IX. Influence Of Credit On Prices.
      § 1. What acts on prices is Credit, in whatever shape given.
      § 2. Credit a purchasing Power, similar to Money.
      § 3. Great extensions and contractions of Credit. Phenomena of a
      commercial crisis analyzed.
      § 4. Influence of the different forms of Credit on Prices.
      § 5. On what the use of Credit depends.
      § 6. What is essential to the idea of Money?
   Chapter X. Of An Inconvertible Paper Currency.
      § 1. What determines the value of an inconvertible paper money?
      § 2. If regulated by the price of Bullion, as inconvertible Currency
      might be safe, but not Expedient.
      § 3. Examination of the doctrine that an inconvertible Current is
      safe, if representing actual Property.
      § 4. Experiments with paper Money in the United States.
      § 5. Examination of the gain arising from the increase and issue of
      paper Currency.
      § 6. _Resume_ of the subject of money.
   Chapter XI. Of Excess Of Supply.
      § 1. The theory of a general Over-Supply of Commodities stated.
      § 2. The supply of commodities in general can not exceed the power
      of Purchase.
      § 3. There can never be a lack of Demand arising from lack of Desire
      to Consume.
      § 4. Origin and Explanation of the notion of general Over-Supply.
   Chapter XII. Of Some Peculiar Cases Of Value.
      § 1. Values of commodities which have a joint cost of production.
      § 2. Values of the different kinds of agricultural produce.
   Chapter XIII. Of International Trade.
      § 1. Cost of Production not a regulator of international values.
      Extension of the word "international."
      § 2. Interchange of commodities between distance places determined
      by differences not in their absolute, but in the comparative, costs
      of production.
      § 3. The direct benefits of commerce consist in increased Efficiency
      of