The Theory of Political Economy Volume 2

The Theory of Political Economy Volume 2

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This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1871 edition. Excerpt: ... of 9 to 8; we must conclude that people generally esteem mutton more than beef in this proportion, otherwise they would not buy the dearer meat. It follows, that the final degrees of utility of these meats are in this ratio, or that if px be the degree of utility of mutton, and y that of beef, we have tx = iy. This equation would doubtless not hold true in extreme circumstances; if mutton became comparatively scarce, there would probably be some persons willing to pay a higher price merely because it would then be considered a delicacy. But this is certain, that so long as the equation holds true, the ratio of exchange between mutton and beef will not diverge from that of 8 to 9. If the supply of beef falls off to a small extent, people will not pay a higher price for it, but will eat more mutton; and if the supply of mutton falls off, they will eat more beef. The conditions of supply will have no effect whatever upon the ratio of exchange; we must, in fact, treat beef and mutton as one commodity of two different strengths, just as gold at eighteen and twenty carats is hardly considered as two but as one commodity, of which twenty parts of one are equivalent to eighteen of the other. It is upon this principle that we must explain, in harmony with Professor Cairnes' views, the extraordinary permanence of the ratio of exchange of gold and silver, which for several centuries past has never diverged much from 15 to 1. That this fixedness of ratio does not depend upon the amount or cost of production is proved by the very slight effect of the Australian and Californian gold discoveries, which never raised the gold price of silver more than about 4$ per cent., and has failed to have a permanent effect of more than H per cent. It must be due to...
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Product details

  • Paperback | 52 pages
  • 189 x 246 x 3mm | 109g
  • United States
  • English
  • black & white illustrations
  • 1236898834
  • 9781236898838