Book Principles Of Economics example essay topic

Photo by McMaster University, Canada Marshall, A (1842.7. 26-1924.7. 13) Birthplace London, England. Posts Held Fellow, St John's Coll. Camb., 1865-77, 1885-1908; Principal, Univ.

Coll., Bristol, 1877-82; Lect., Fellow, Balliol Coll. Oxford, 1883-4; Prof. Polit. Econ., Univ. Camb., 1885-1908.

Offices and Honours Fellow, BA; Vice-Pres., Royal Economic Society. Publications Books: 1. The Principles of Economics (1890), Book One - Preliminary Survey. 2. The Principles of Economics (1890), Book Two - Some Fundamental Notions.

3. The Principles of Economics (1890), Book Three - Of Wants and Their Satisfaction. 4. Book Principles of Economics, Book Four: The Agents of Production. 5. The Principles of Economics (1890), Book Five - General Relations of Demand, Supply and Value.

6. The Principles of Economics, Book Six: The Distribution of the National IncomeCAREERAlfred Marshall was born in Bermondsey, a London suburb, on 26 July 1842. He died at Balliol Croft, his Cambridge home of many years, on 13 July 1924 at the age of 81. Professor of Political Economy at the University of Cambridge from 1885 to 1908, he was the founder of the Cambridge School of Economics which rose to great eminence in the 1920's and 1930's: A.C. Pigou and J.M. Keynes, the most important figures in this development, were among his pupils.

Marshall's magnum opus, the Principles of Economics was published in 1890 and went through eight editions in his lifetime. It was the most influential treatise of its era and was for many years the Bible of British economics, introducing many still-familiar concepts. Alfred Marshall is one of the most outstanding figures in the development of contemporary economics and his influence has been enormous. His most famous student, J.M. Keynes, wrote that;' He was, within his own field, the greatest in the world for a hundred years'. The dominant figure in British economics of the late nineteenth and early twentieth centuries, who's Principles... still, has the power to fascinate and excite the reader.

Though he wrote infrequently, his teaching at Cambridge was a major source of influence on his contemporaries. An able mathematician, he sought to express himself in the simplest language possible, adding the mathematical and quantitative material as appendices and footnotes. His partial equilibrium analysis -- the chief element of his method -- was designed to be appropriate to a dynamic or biological view of economic life. The chief achievement of the Principles is his working out of the economics of the stationary State. He claimed to have independently discovered the marginal utility theory, though typically he did not publish until he had fully integrated this into his system. His welfare economics was of central importance since his decision to take up economics originated in a moral purpose, and his general conclusion was that a redistribution of income from rich to poor would increase total satisfaction.

Keynes was among his pupils and the 'Keynesian revolution' can be seen as remaining within the Marshall ian tradition. The last edition of Alfred Marshall Principles of Economics appeared in 1920, his final presentation of a course of thought of which successive editions during four decades had recorded the widening and deepening process. The very fact that a difficult treatise in systematic economics, a volume of 858 pages, total ling not far short of 400,000 words, could have arrived at an eighth edition, sufficiently attests the wide acceptance and unexampled influence of Marshall's thought. It is probably well within the truth to assert that the authority of Marshall has been for several decades, and still remains, supreme among the economists of the English-speaking world. This Eighth Edition reports, then, not only the latest but the most authoritative rendering of the school of thought known as the Classical Economics.

The position of leading economist of the leading school of economic thought in the world at large could probably, though less securely, is ascribed to Marshall. For many years, in any case, he has ranked as the dean of English economic writers and thinkers. He still so ranks. The successive editions remained in a surprising degree faithful to the positions which were central to Marshall's earlier published work. Growth there doubtless was -- but mainly in the details and the amplitude of statement and development. Both his starting point and his point of arrival were -- and were avowedly -- at essentially classical positions.

It is especially, then, as representative of this classical body of doctrine, and as the latest authoritative presentation of it in systematic form, that this work of Marshall's is here chosen for interpretation and criticism. This is to assume, doubtless, some common point of view or some unity of doctrine in this so-called school -- an assumption that must a little await its justification. SECONDARY LITERATURE J.M. Keynes, 'Alfred Marshall', in Essays in Biography (Macmillan, 1933, 1972); B. Corry, 'Marshall, Alfred', International Encyclopaedia of the Social Sciences, D.L. Sills (ed.) (Macmillan and Free Press, 1968), vol. 10; D.P. O'Brien, 'A. Marshall' Pioneers of Modern Economics in Britain, eds. D.P. O'Brien and J.R. Presley (Macmillan, 1981); Alfred Marshall: Critical Assessments, 4 vols, ed. J.C. Wood (Croom Helm, 1983). CRITICAL REVIEW Author: Alfred, Marshall (1842-1924) Title: Principles of Economics Published: London: Macmillan and Co., Ltd., 1920. Eighth edition. First published: 1890.

Book IV. The Agents of Production. Land, Labour, Capital and Organization. IV. I Introductory.

IV. II The Fertility of Land. IV. The Fertility of Land Continued. The Tendency To Diminishing Return.

IV. IV The Growth of Population. IV. V The Health and Strength of the Population. IV.

VI Industrial Training. IV. VII The Growth of Wealth. IV. V Industrial Organization. IV.

IX Industrial Organization Continued. Division of Labour. The Influence of Machinery. IV. X Industrial Organization Continued. The Concentration of Specialized Industries in Particular Localities.

IV. XI Industrial Organization Continued. Production on a Large Scale. IV. XII Industrial Organization Continued. Business Management.

IV. X Conclusion. Correlation of the Tendencies To Increasing and To Diminishing Return. BOOK IV THE AGENTS OF PRODUCTION: -Land, Labour, Capital and Organization. BOOK IV, CHAPTER I INTRODUCTORY. SS 1.

The agents of production are commonly classed as Land, Labour and Capital. By Land is meant the material and the forces which Nature gives freely for man's aid, in land and water, in air and light and heat. By Labour is meant the economic work of man, whether with the hand or the head 1. By Capital is meant all stored-up provision for the production of material goods, and for the attainment of those benefits which are commonly reckoned as part of income.

It is the main stock of wealth regarded as an agent of production rather than as a direct source of gratification. IV.I. 1 Capital consists in a great part of knowledge and organization: and of this some part is private property and other part is not. Knowledge is our most powerful engine of production; it enables us to subdue Nature and force her to satisfy our wants. Organization aids knowledge; it has many forms, e.g. that of a single business, that of various businesses in the same trade, that of various trades relatively to one another, and that of the State providing security for all and help for many.

The distinction between public and private property in knowledge and organization is of great and growing importance: in some respects of more importance than that between public and private property in material things; and partly for that reason it seems best sometimes to reckon Organization apart as a distinct agent of production. It cannot be fully examined till a much later stage in our inquiry; but something has to be said of it in the present Book. IV.I. 2 In a sense there are only two agents of production, nature and man. Capital and organization are the result of the work of man aided by nature, and directed by his power of forecasting the future and his willingness to make provision for it. If the character and powers of nature and of man be given, the growth of wealth and knowledge and organization follow from them as effect from cause. But on the other hand man is himself largely formed by his surroundings, in which nature plays a great part: and thus from every point of view man is the centre of the problem of production as well as that of consumption; and also of that further problem of the relations between the two, which goes by the twofold name of Distribution and Exchange.

IV.I. 3 The growth of mankind in numbers, in health and strength, in knowledge, ability, and in richness of character is the end of all our studies: but it is an aim to which economics can do no more than contribute some important elements. In its broader aspects therefore the study of this growth belongs to the end, if to any part of a treatise on economics: but does not properly belong even there. Meanwhile we cannot avoid taking account of the direct agency of man in production, and of the conditions which govern his efficiency as a producer. And on the whole it is perhaps the most convenient course, as it certainly is that most in accordance with English tradition, to include some account of the growth of population in numbers and character as a part of the general discussion of production.

IV.I. 4 SS 2. It is not possible at this stage to do more than indicate very slightly the general relations between demand and supply, between consumption and production. But it may be well, while the discussion of utility and value is fresh in our minds, to take a short glance at the relations between value and the dis utility or discommodity that has to be overcome in order to obtain those goods which have value because they are at once desirable and difficult of attainment. All that can be said now must be provisional; and may even seem rather to raise difficulties than to solve them: and there will be an advantage in having before us a map, in however slight and broken outline, of the ground to be covered. IV.I. 5 While demand is based on the desire to obtain commodities, supply depends mainly on the overcoming of the unwillingness to undergo 'discommodities. ' These falls generally under two heads: -labour and the sacrifice involved in putting off consumption.

It must suffice here to give a sketch of the part played by ordinary labour in supply. It will be seen hereafter that remarks similar, though not quite the same, might have been made about the work of management and the sacrifice which is involved (sometimes, but not always) in that waiting which is involved in accumulating the means of production. IV.I. 6 The discommodity of labour may arise from bodily or mental fatigue, or from its being carried on in unhealthy surroundings, or with unwelcome associates, or from its occupying time that is wanted for recreation, or for social or intellectual pursuits. But whatever be the form of the discommodity, its intensity nearly always increases with the severity and the duration of labour. IV.I. 7 Of course much exertion is undergone for its own sake, as for instance in mountaineering, in playing games and in the pursuit of literature, of art, and of science; and much hard work is done under the influence of a desire to benefit others 2.

But the chief motive to most labour, in our use of the term, is the desire to obtain some material advantage; which in the present state of the world appears generally in the form of the gain of a certain amount of money. It is true that even when a man is working for hire he often finds pleasure in his work: but he generally gets so far tired before it is done that he is glad when the hour for stopping arrives. Perhaps after he has been out of work for some time, he might, as far as his immediate comfort is concerned, rather work for nothing than not work at all; but he will probably prefer not to spoil his market, any more than a manufacturer would, by offering what he has for sale much below its normal price. On this matter much will need to be said in another volume. IV.I. 8 In technical phrase this may be called the marginal dis utility of labour. For, as with every increase in the amount of a commodity its marginal utility falls; and as with every fall in that desirableness, there is a fall in the price that can be got for the whole of the commodity, and not for the last part only; so the marginal dis utility of labour generally increases with every increase in its amount.

IV.I. 9 The unwillingness of anyone already in an occupation to increase his exertions depends, under ordinary circumstances, on fundamental principles of human nature which economists have to accept as ultimate facts. As Jevons remarks 3, there is often some resistance to be overcome before setting to work. Some little painful effort is often involved at starting; but this gradually diminishes to zero, and is succeeded by pleasure; which increases for a while until it attains a certain low maximum; after which it diminishes to zero, and is succeeded by increasing weariness and craving for relaxation and change. In intellectual work, however, the pleasure and excitement, after they have once set in, often go on increasing till progress is stopped of necessity or by prudence. Everyone in health has a certain store of energy on which he can draw, but which can only be replaced by rest; so that if his expenditure exceed his income for long, his health becomes bankrupt; and employers often find that in cases of great need a temporary increase of pay will induce their workmen to do an amount of work which they cannot long keep up, whatever they are paid for it.

One reason of this is that the need for relaxation becomes more urgent with every increase in the hours of labour beyond a certain limit. The disagreeableness of additional work increases; partly because, as the time left for rest and other activities diminishes the agreeableness of additional free time increases. IV.I. 10 Subject to these and some other qualifications, it is broadly true that the exertions which any set of workers will make, rise or fall with a rise or fall in the remuneration which is offered to them. As the price required to attract purchasers for any given amount of a commodity, was called the demand price for that amount during a year or any other given time; so the price required to call forth the exertion necessary for producing any given amount of a commodity, may be called the supply price for that amount during the same time. And if for the moment we assumed that production depended solely upon the exertions of a certain number of workers, already in existence and trained for their work, we should get a list of supply prices corresponding to the list of demand prices which we have already considered. This list would set forth theoretically in one column of figures various amounts of exertion and therefore of production; and in a parallel column the prices which must be paid to induce the available workers to put forth these amounts of exertion 4.

IV.I. 11 But this simple method of treating the supply of work of any kind, and consequently the supply of goods made by that work, assumes that the number of those who are qualified for it is fixed; and that assumption can be made only for short periods of time. The total numbers of the people change under the action of many causes. Of these causes only some are economic; but among them the average earnings of labour take a prominent place; though their influence on the growth of numbers is fitful and irregular. IV.I. 12 But the distribution of the population between different trades is more subject to the influence of economic causes.

In the long run the supply of labour in any trade is adapted more or less closely to the demand for it: thoughtful parents bring up their children to the most advantageous occupations to which they have access; that is to those that offer the best reward, in wages and other advantages, in return for labour that is not too severe in quantity or character, and for skill that is not too hard to be acquired. This adjustment between demand and supply can however never be perfect; fluctuations of demand may make it much greater or much less for a while, even for many years, than would have been just sufficient to induce parents to select for their children that trade rather than some other of the same class. Although therefore the reward to be had for any kind of work at any time does stand in some relation to the difficulty of acquiring the necessary skill combined with the exertion, the disagreeableness, the waste of leisure, etc. involved in the work itself; yet this correspondence is liable to great disturbances. The study of these disturbances is a difficult task; and it will occupy us much in later stages of our work.

But the present Book is mainly descriptive and raises few difficult problems. IV.I. 13 BIBLOGRAPHYReference Resources: Adolf Wagner, 'On Marshall's Principles of Economics' (soc sci. mcmaster. ca) Quarterly Journal of Economics, volume 5, 1891, pp. 319-38. Adolf Wagner, 'On Marshall's Principles of Economics' (en. bris. ac. uk) Quarterly Journal of Economics, volume 5, 1891, pp. 319-38. F.Y. Edgeworth, Review of the Second Edition of Marshall's Principles of Economics (soc sci. mcmaster. ca) Economic Journal, volume 1, 1891, pp. 611-17 F.Y. Edgeworth, Review of the Second Edition of Marshall's Principles of Economics (. edu. au) Economic Journal, volume 1, 1891, pp. 611-17 F.Y. Edgeworth, Review of the Third Edition of Marshall's Principles of Economics (soc sci. mcmaster. ca) The Economic Journal, volume 5, 1895, pp. 585-9. F.Y. Edgeworth, Review of the Third Edition of Marshall's Principles of Economics (. edu. au) The Economic Journal, volume 5, 1895, pp. 585-9. A.C. Pigou, Review of the Fifth Edition of Mashall's Principles of Economics (soc sci. mcmaster. ca) The Economic Journal, volume 17, 1907, pp. 532-5 A.C. Pigou, Review of the Fifth Edition of Mashall's Principles of Economics (. edu. au) The Economic Journal, volume 17, 1907, pp. 532-5 Reference Sites: web.