Principles of Political Economy, Vol. 1Roscher, Wilhelm
History
Principles of Political Economy, Vol. 1
Roscher, Wilhelm
Economics
Those enterprises which necessarily produce different products at the same
time deserve special consideration.(639) Here we may speak of “_united_
costs of production,” and all that is needed is that the aggregate of
these costs should be covered by the aggregate price of both products.
This complicates to a certain extent the calculations which the seller
must make to determine his minimum demand for each product. To ascertain
this, he must subtract from the united costs of production the amount of
value which he expects with certainty for the other product.(640)
Section CVII.
Equilibrium Of Prices.
Goods whose cost of reproduction,(641) that is, the highest necessary cost
of reproduction is the same, have uniformly the same value in exchange.
Every deviation from this level immediately sets forces in motion which
endeavor to restore the level, just as the water of the sea seeks its
level, notwithstanding the mountains and abysses which the winds bring
forth from its bosom.(642)(643)
Section CVIII.
Effect Of A Rise Of Price Much Above Cost.
If the market price rises high above the cost of production, producers
make a profit greater than the average profit made in the country. This
induces them, by the appropriation of new land and the employment of new
labor and capital, to increase their business. Other parties also engage
in this profitable department of trade. This competition not only makes
the means of production dearer, but must eventually, by increasing the
demand, reduce the price of the product to the ordinary level of profit,
that is to an equilibrium with other commodities.(644) Hence, in the
beginning, every diminution of the cost of production(645) turns to the
advantage of the producer; but afterwards and permanently to that of the
consumers: an economic law exceedingly beneficent in its operations, and
not unlike the action of positive legislation in the matter of patents.
There is no greater stimulus to the making of improvements than the
certainty of reward to the person who first introduces one. The moment,
however, that the improvement is imitated by all producers, the advantage
gained by it becomes the common good of the whole nation.(646) These are,
as J. B. Say says, conquests made over the gratuitous productive force of
nature. As a consequence, the value in use of a people’s resources
increases; generally, also, their value in exchange, in so far as the
production of the now cheaper goods increases in a degree greater than
their cost of production has diminished.(647)
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