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.Even in the commercialera, therefore, it is necessary carefully to examine the applicability ofour premisses, and to recognize still a relativity.As a matter of fact,there is comparatively little risk of our misapplying modern economictheories to savage or oriental states of society.It is when we come nearerhome that the danger of the undue extension of economic doctrines isthe greater; and that danger is at least not diminished by Bagehot s con-ception of a transcendently economic era, in regard to which it may besupposed that the application of economic theories its absolute, needingno qualification.§3.In what sense univerality may be claimed for the principles ofabstract economics. The relativity of concrete economic doctrines doesnot establish the impossibility of an abstract theory having a certaincharacter of universality; and it remains to be indicated in what senseuniverality may still be claimed for the principles of abstract econom-ics.In the first place, abstract economics analyses the fundamental con-ceptions of the science, such as utility, wealth.value, measure of value,capital, and the like.It has been pointed out in an earlier chapter thateven the definitions of political economy may sometimes be relative orprogressive.But in the analysis of such conceptions as the above it isnot too much to look forward ultimately to a certain finality.It has beenalready observed that if the conceptions take on a somewhat differentcharacter in different connexion, we shall at least find something that isgeneric and universal in each one of them; and a consideration of themin their general character will be a valuable preliminary to more con-crete economic enquiries.Abstract economics next proceeds to discuss certain fundamentalprinciples 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.Thisprinciple applies not only to material commodities determining the lawof demand for them, but also to services; and hence it is of the greatestimportance in the whole theory of distribution.Thus, other thing s be-ing, equal, the aid which a dose of capital of a given description canrender to the labour with which it is co-operating diminishes as the numberof doses is increased; similarly, other thing being equal, the aid which aunit of labour of a given kind can afford to capital, and to the other 142/John Neville Keyneskinds of labour which it is assisting, diminishes if as the number of unitsis increased.The truth of this elementary principle is quite independentof social institutions and economic habits though the results which itactually brings about may vary considerably.Another principle of asimilar 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 tochoose will choose the greater apparent good.194On the basis of its analysis of fundamental conceptions, assisted byprinciples such as the above, abstract economics is enabled to drawcertain negative or formal inferences which possess the character ofuniversality.As, for instance, that a general rise in values is impossible;that if two kinds of commodities have the same law of utility, that whichis 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 cando the work the most cheaply will in time supersede the others;195 thatfacilities of transport tend to level values in different places, while fa-cilities of preservation tend to level values at different times.In the samecategory may be placed such propositions as that no commodity or ser-vice can serve as a universal measure of value between different timesand places, and that general over-production in a literal sense is impos-sible.We have already spoken of the relativity of the Ricardian law ofrent as ordinarily stated.But compare with this the principle of eco-nomic rent in its most abstract and generalized form.The Ricardianlaw, so far as it claims to determine the actual payments made by thecultivators of the soil, is a relative doctrine, that is to say, it is based onassumptions, which, as regards both time and place, hold good over alimited range only.The theory of economic rent in its most generalizedform, however, merely affirms that where different portions of the totalamount of any commodity of uniform quality supplied to the same mar-ket are produced at different costs, those portions which are raised atthe smaller costs will yield a differential profit; and there is now nosimilar imitation to its applicability.This principle may even be said tohold good in a socialistic community, for the differential profit does notcease 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 toeconomic phenomena which, with due modifications, are applicable underwidely different conditions [ Pobierz caÅ‚ość w formacie PDF ]