Produced by Curtis Weyant, Ritu Aggarwal and the Online Distributed Proofreading Team at http://www.pgdp.net ESSENTIALS OF ECONOMIC THEORY _AS APPLIED TO MODERN PROBLEMS OF INDUSTRY AND PUBLIC POLICY_ BY JOHN BATES CLARK PROFESSOR OF POLITICAL ECONOMY IN COLUMBIA UNIVERSITY AUTHOR OF "THE DISTRIBUTION OF WEALTH," "THE PHILOSOPHY OF WEALTH," "THE PROBLEM OF MONOPOLY," ETC. New York THE MACMILLAN COMPANY 1915 _All rights reserved_ COPYRIGHT, 1907, BY THE MACMILLAN COMPANY. Set up and electrotyped. Published October, 1907. Reprinted July, 1909; July, 1915. PREFACE In a work on the "Distribution of Wealth," which was published in 1899, I expressed an intention of offering later to my readers a volume on "Economic Dynamics, or The Laws of Industrial Progress." Though eight years have since passed, that purpose is still unexecuted, and it has become apparent that any adequate treatment of Economic Dynamics will require more than one volume of the size of the present one. In the meanwhile it is possible to offer a brief and provisional statement of the more general laws of progress. Industrial society is going through an evolution which is transforming its structure and all its activities. Four general changes are going on within the producing organization, and the resultant of them, under favorable conditions, should be an enrichment in which all classes would share. Population is increasing, capital is accumulating, technical methods are improving, and the organization of productive establishments is perfecting itself; while over against these changes in industry is an evolution in the wants of the individual consumer, whom industry has to serve. The nature, the causes, and the effects of these changes are among the subjects treated in this volume.