Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_The Foregoing Truths Universal._--All the general facts which have
been thus far stated hold true wherever wealth is produced. They do
not presuppose the facts of a division of labor and a system of
exchanges, and they do not even require that there should be any
social organization. Men in the most primitive tribes and even men
living in Crusoe-like isolation would create wealth by labor aided by
capital. The essence of that wealth would be effective utility, and
the measure of this, which is value, would be made in the specific way
that we have described. The varieties of capital, the distinction
between capital and capital goods, and the law of diminishing
productivity of such goods would appear in the most primitive
economics as well as in the most advanced. These are by no means all
of the facts and principles which are thus of universal application.
They are merely a few of the more important and may serve as a
foundation or a "Grundlegung," for further study. If we should extend
our list of general and basic truths, it would quickly appear that the
incomes that have been treated as rent and the various surplus gains
which are analogous to rent are universal economic phenomena which it
would be not illogical to discuss in the preliminary part of this
treatise. What has been stated, however, concerning the laws of
diminishing productivity of successive units of producers' wealth,
concerning the diminishing utility of successive units of consumers'
wealth, and also concerning the increasing burdensomeness of
continuous hours of labor, presents the essential principles on which
all rents and quasi-rents rest. It is best to study the applications
of these principles as they are made in a civilized state.
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