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never seen or constructed a figure in which the (so-called) supply curve cuts the demand curve in three places, twice from below and once from above, understands the significance of the proviso contained in the above extract, and also perceives that a point of the unstable equilibrium, which that proviso excludes, must come between the two points of stable equilibrium which it allows to pass, Professor Chapman may call him as a witness in support of his assertion that it is "perfectly easy" to represent such conceptions effectively in non-mathematical language. Fiat experimentum. I would not for the world prejudge it.

The implications of the first sentence quoted above need more lengthened consideration. As interpreted by Professor Chapman's work, at any rate, they involve an approval of Dr. Marshall's deliberate (and very chivalrous) method of minimising and disguising to the utmost extent possible the revolutionary character of the new methods of which he is so eminent an exponent. This attempt to preserve as much as possible of the old terminology, and the traditional divisions and contrasts, in the face of the new principles, and to show how much substantial truth the admittedly imperfect statements of earlier writers contained is one of the leading characteristics of Dr. Marshall's work; and it stands in marked contrast with the somewhat truculent announcement made by Jevons to his brother, “In the last few months I have, fortunately, struck out what I have no doubt is the true Theory of Economy, so thorough-going and consistent, that I cannot now read other books on the subject without indignation." To find fault with Professor Chapman's handbook involves something very like a contention that, of the two, Jevons's indignation is likely to inspire a more fruitful treatment than Dr. Marshall's reverence !

And, indeed, the truth is that Professor Chapman constantly enunciates trenchant generalisations which cut across the classical traditions and reduce to mere practical differences of stress what they had taken as theoretical differences of principle; and then forgoes all the simplifications these generalisations suggest in order to preserve as primary the distinctions which they have really reduced to a secondary position.

Thus on p. 172 we read, “Workpeople have a value to the employer because ... they create what has . a value to the consumers. . . Similarly, the value of every other agent in production is the transmitted value of what it adds to production at the margin.” Now cost of production” is simply the sum of the market values of the agents or factors of production, and their

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values are confessedly nothing but elements in the value of the product, dependent in its turn wholly upon the relative estimate formed by the consumers of that product in relation to others; and yet “cost price” is made throughout Professor Chapman's book to figure as an independent and, in a sense, antagonistic force, generating curves of "supply price” co-ordinate with the curves of “demand price,” from which, on his own showing, they must derive the whole of their vitality. Indeed, the most ingenious and original chapter in the book is devoted to an elaborate attempt to work out a complete parallelism between the two. It is perfect as a piece of deductive reasoning, but it rests upon the startling assumption that every firm has unrestricted command of capital and of markets, and determines its output solely on consideration of the dimensions best suited to "the strength of its central organs” (p. 81).

(p. 81). At the end of his study Professor Chapman seems to confess that his initial hypothesis is quite remote from the facts. Could he not have remained in close touch with those facts throughout his investigation if he had carried the great principle he announces boldly through? He would then, surely, have treated the whole direction of resources to ends as a continuous selection between alternatives, guided throughout by a weighing of the significance of the anticipated results, in which the "cost" of adopting any alternative is simply the relinquishing of some other alternative ; reward and sacrifice alike being measured and determined by the ultimate significance of the respective products, as anticipated by the producers; the points at which things are bought and sold simply registering the relative success or failure of the anticipations under which the alternatives were selected, and tending to correct them.

In the same way Professor Chapman perceives quite clearly that the conception of “diminishing returns"

diminishing returns” was originally arrived at by treating one of the factors (land) as constant, and applying successive "doses” of the other factors to it; and also that this method is equally applicable to any other factor (labour, for example), and further, that whereas “labour” in the mass is incapable of rapid increase, yet it may be diverted from one purpose to another to an indefinite extent, and that the same holds of land ; and likewise that one factor of production may change its proportion to another and yet the two “doses” thus differently composed may be equated; and that all values of factors of production are derived from the value of their products. Nevertheless, he maintains the old dictum that rent does not enter into cost, keeps the distinction between increasing and

diminishing returns as nearly as possible in its old place, and practically excludes land from his general formula of distribution. He defines rent as payment for differential values of any kind (whether of land or labour, for instance), and would admit apparently that it does not correspond to what the farmer pays his landlord any more than to what a rich man pays a fashionable surgeon, and yet he treats it in direct connection with land, and in doing so seems to conceal as far as he can all the theoretical identities he has recognised between land and other agents of production, burying them under insistence upon differences in degree which he utilises to maintain distinctions that no longer rest upon principle.

But it will be perceived that all this is a tilt against the authorised and current treatment of the subject, and not a criticism of Professor Chapman's book specifically at all. Granted that accepted methods are on the whole satisfactory, this book may be taken as an exposition that leaves nothing to be desired. Apart from all controvertible or controverted matter, too, it is particularly admirable in its insistence on the fact that “it is the impalpable subjective things in life, without a price, which give exchangeable goods their value” (p. 164), and in the firmness with which this central principle is held in the luminous and judicious survey of "problems of distribution” which closes the volume.

PHILIP H. WICKSTEED

The Laws of Supply and Demand. By G. B. DIBBLEE.

(London: Constable and Co. 1912. Pp. 289.)

This is a pugnacious book. It presents, in its author's words, “nothing less than a direct assault on the orthodox theory of political economy as established by early English economists.” No emendations, however thorough, will suffice. The whole structure must be "swept away." "Infinite and reverent modifications of obvious errors have been used to buttress it up, but they were unnecessary, and they ought not to save it now.” Such is the challenge. The author writes from the point of view of a business man, irritated by the unreality of the economic theories he imbibed at college. To do justice to his position it is necessary to quote his explanation in full :

“My present study is not founded so much on a rather limited reading as on twenty years of reflection and experience in more than one kind of business in three countries. The result is,

unfortunately, a certain amount of unfairness on my part in delivering apparently random criticisms on a body of economic doctrines rather vaguely indicated as the orthodox English school, without selecting any particular author or book or even any precise argument, except in the case of Mill's law of value. It is equally true that the later defenders and modifiers of these doctrines have been neglected in these pages, and no notice has been taken of the number of cases where criticisms have been accepted and embodied and attacks skilfully parried. If this work were put forward as primarily scientific, such omissions would be indefensible; yet since its object is practical, and as in order to be practical one must be brief, concentrated, and concerned chiefly with exposition rather than with criticism or controversy, I have been obliged to neglect the unessential. I consider the modern modifications of the old school unessential. The old school stands unreplaced. Its original language is still current, and the men between forty and fifty, who guide the actual currents of business, know no other."

This explanation does not suffice to avert the criticism which it anticipates. Among the "attacks" which have been “parried " are many which Mr. Dibblee himself labours in this volume, generally through some misconceptions of the nature of the doctrines attacked. Again, the criticisms which “have been accepted and embodied " include a number of Mr. Dibblee's own; and as when he expounds them he evidently attaches to them great importance, it is not easy to see why they should be dismissed as "unessential" when they become the accepted modifications of orthodoxy. His answer seems to be that business men are not aware of these modifications, but still talk "the original language.” But this, though a good reason for increasing the blame attached to the old doctrines, is a bad reason for demanding the abolition of the new, and a still worse reason for refusing to take notice of the new. If Mr. Dibblee could have his way, and abolish the old orthodoxy root-and-branch, would business men cease to talk the old language? The truth is they would talk the old language whatever the new might be. One is almost surprised in face of this to find Mr. Dibblee throw in his lot with the practical men in their controversy with the economists. For it is the practical men, and not the economists, who still mutter the old formulæ which are the principal objects of his ire. In particular, the remark of the New York lawyer, with which the book opens, that the tariff could have no influence on prices, because they were regulated by supply and demand, is an

absurdity to which no economist who has ever existed could bave given utterance.

It is not quite clear for what audience this book is intended. It is true that we are told, “It was not for economists that this discussion was primarily undertaken. It is rather to be described as a practical investigation of principles underlying the habits of business men." But there is no inconsistency between these two aims. The economist may well be grateful for the acute analysis of the habits of business men which Mr. Dibblee provides. And it is difficult to see how he can hope to obtain readers outside the ranks of economists. In spite of the repudiation in the passage quoted earlier of "scientific" or "controversial ” intention, the book is essentially controversial. The starting point of each argument is the criticism of some economic doctrines treated frequently in an allusive way. When he leaves controversy behind, the author propounds formal theorems with more elaborateness and precision than lucidity. His difficult style and technical, even mathematical, language are fitted far better for "scientific” than for the “practical” reader. From the point of view of “exposition” it would be difficult to imagine a worse book.

But it is a book which is well worth the consideration of those economists who have the patience for winnowing the wheat from a plentiful admixture of chaff, and can suppress their irritation at the unfairness of many of the writer's attacks upon them. For Mr. Dibblee fails altogether to understand the point of view of the ordinary economist. He himself quite frankly deals with the problems as they present themselves to the business man; and along this line he contributes many valuable suggestions. But the haste in drawing conclusions, and the proneness to exaggerate the importance of the points on which he fastens, qualities which are the inevitable counterpart of the inspiring zest with which he throws himself into his task, and the freshness and independence of his treatment, lead him to forget that there is another point of view from which economic problems can profitably be studied. The point of view of the State or society, which economists for the most part adopt, is in several ways different from that of the business man. For one thing, it involves a longer period of time, and it is over the question of time that Mr. Dibblee comes most conspicuously to grief. He fails entirely to appreciate the conception of the “long run," a phrase for which he has the most absolute contempt. Economists will be surprised to learn that this phrase arose out of a kindly, but

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