Consumption (Economics); Prices; Supply and demand
Where there
is no such presumption, as surely there is none in the case of the
great bulk of commodities, the relation between price and marginal
cost should be rigidly maintained; it is the distribution of
purchasing power which we should rather seek to alter. How far is it
possible to alter that?
I suppose that it is inevitable that many readers will have concluded
that the preceding chapters must be taken to mean that the
distribution of wealth is not susceptible of any appreciable change. I
would remind those readers of an important distinction upon which
impatient people have sometimes based a complaint against
economists. The economist, it is said, analyses with great pomp and
ceremony the laws governing the distribution of wealth among the
agents of production, but says practically nothing about the
distribution between individuals and classes, which is the only thing
of any real interest to practical people. Now the economist
concentrates on the agents of production for the very good reason that
it is only with respect to them that any clear and certain laws as to
distribution can be laid down. Into the distribution between
individuals and classes there enter other and variable factors,
governed by no fundamental economic law; and _here_, the conclusion
should at once suggest itself, is the field for action designed to
alter the distribution of wealth. What is possible or desirable in
this field, it is again not the purpose of this volume to discuss. It
is an obvious, even if not a very helpful conclusion that an increase
in the habit of saving among weekly wage-earners might, without
appreciably affecting the distribution between Capital and Labor,
greatly modify the resulting distribution between social classes. But
questions as to how far it might be possible or justifiable to achieve
a similar result by the use of the weapon of taxation, by changes in
inheritance laws, or by the public ownership of industry take us into
a far more uncertain and controversial sphere. The difficulties and
objections which present themselves are familiar and formidable; but
they are of quite a different order from the economic laws which we
have been examining. The laws themselves do not entitle us to make any
dogmatic pronouncement upon these large issues of social policy.
Public-domain text, read in full here on John Shaqi.
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