THE first edition of the Outlines of Economics, written by Professor Ely, was published in 1893. Four persons coöperated in the preparation of a revised and enlarged edition, which appeared in 1908. This was in many respects a new book, although much matter from the earlier edition was incorporated in it, and although pains were taken to retain the general organization and especially the general point of view of the older volume. The present edition does not differ so much from its predecessor as that differed from the first edition, but it is, nevertheless, the result of a more thoroughgoing revision than is usually given to books of this kind.
Some minor changes have been made in the order in which the chapters appear; two chapters have been omitted; and a chapter on labor legislation has been added. No chapter in the book remains unaltered, and the larger part of Books II and III has been virtually rewritten. While the number of different subjects treated has been slightly reduced, the treatment of the more fundamental subjects has been considerably expanded. Each of us has undertaken the revision of a definite portion of the book and, to secure unity, Professor Young has had general editorial supervision of the revision as a whole.
Some of the changes are such as are necessary by reason of eight years of progress in industrial life, in legislation, and in economic thought. Other changes are the outgrowth of the experience gained in eight years' use of the book in university and college courses. Among the many persons to whom we are indebted for helpful criticisms and suggestions are Dr. John Cummings, Professor H. J. Davenport, Dr. C. S. Duncan, Professor L. C. Gray, Professor J. E. Le Rossignol, Professor
W. C. Mitchell, Professor T. W. Page, Professor F. M. Taylor, Mr. Ray S. Trent, and Professor N. A. Weston.
The instructors in charge of the course in elementary economics at the University of Wisconsin have generously coöperated by submitting carefully prepared lists of definite, well-considered, and pointed suggestions for the betterment of the book. We make grateful acknowledgment to Professors T. K. Urdahl, W. I. King, and H. D. Simpson, and to Messrs. Harry Jerome, A. H. Hansen, J. G. McKay, and F. L. Vaughan.
THE CHARACTERISTICS OF THE PRESENT ECONOMIC SYSTEM
Human and physical conditions of economic activity, 17; Private
enterprise and state activity, 17; Division of labor and exchange,
19; Economic classes, 21; Private property, 21; Trade-marks, copy-
rights, and patents, 23; Inheritance, 24; Contract, 25; Vested in-
terests, 25; Freedom, 26; Competition and markets, 28; Fair
competition, 29; Coöperation, 30; Monopoly, 30; Custom, 31.
CHAPTER III. — THE EVOLUTION OF ECONOMIC SOCIETY
Basis of the economic stages, 33; Direct appropriation, 34;
man, 35; Pastoral stage, 36; Agricultural stage, 37;
economy in England, 37; Handicraft stage, 39; Gilds,
39; Domestic system, 40; Agricultural changes, 41; The mercan-
tile system, 42; Industrial stage, 44; Other classifications, 44.
CHAPTER IV. -THE EVOLUTION OF ECONOMIC SOCIETY (Continued)
Industrial Revolution, 47; England in 1760, 47; Mechanical in-
49; Agricultural changes, 50; Effects of industrial revolu-
Evils of the transition, 52; Competition and laissez-faire, 53; Re-
action against the passive policy, 54; Quality of goods, 55; Pro-
tection of labor, 55; Labor organizations, 57; Extension of govern-
ment enterprise, 58; Summary, 59.
The factory system, 51; Industrial specialization, 2;
CHAPTER VII. ELEMENTARY CONCEPTS
Motives in economic activity, 103; Utility, 105; Free and eco-
nomic goods, 105; Effort and waiting, 106; Risk, 106; Personal
qualities as goods, 107; Wealth and income, 108; Individual and
society, 109; Wealth and value, 109; Capital and other forms of
wealth, 110; Capital goods and capital value, 110; Social and in-
dividual capital, 111; National wealth and national dividend, 111.
Production defined, 116; Production of values, 118; Factors of
production, 119; Saving and capital formation, 122; Production
and sacrifice, 124; Organization of productive factors, 123; The
entrepreneur, 123; Division of labor, 124; Advantages of division
of labor, 126; Effects upon the worker, 127; Territorial division of
labor, 128; Productive organization of the American people, 129.
Consumption defined, 132; Productive and final consumption,
132; Human wants, 133; Law of diminishing utility, 133; Mar-
ginal utility, 135; Subjective value, 137; Economic order of con-
sumption, 139; Future wants, 140; Consumption and saving, 142;
Alleged present consumption of future products, 142; Luxury, 143;
Harmful consumption, 144; Statistics of consumption, 144; Con-
sumption and sacrifice, 146; Cost of production, expense of produc-
tion, and opportunity cost, 148.
CHAPTER XI. VALUE AND PRICE (Continued)
Prices and the expenses of production, 167; Normal price, 169;
Different conditions of supply, 170; Fixed and variable expenses,
174; Joint expenses of production, 179; Surplus of bargaining, 181;
Non-reproducible goods, 182; Retail prices, 182; Public authority
and value, 183; Imputed value, 184; Valuation of production
goods, 185; Other theories of value, 186.
The idea of monopoly, 189; Classification and causes, 193;
Social and natural, 195; Monopoly price, 200; Effect of a tax, 202;
Relation of demand to monopoly price, 203; Class price, 204;
Monopoly price, high price, 205; Monopolies and distribution of
wealth, 207; Public policy toward monopolies, 208.
The meaning of "business," 212; The nature of business units,
212; The business unit in accounting, 213; The individual entre-
preneur, 214; Partnerships, 215; The business corporation, 216;
The corporation charter, 217; Lack of uniformity in state laws,
218; Corporation capital and capitalization, 219; Overcapitaliza-
tion, 221; Form of capitalization, 225; Corporation management,
226; Advantages of the corporation, 228; Social aspects of cor-
porations, 228; Trusts, 230; Causes of combination, 232; Anti-
trust laws, 235; Unfair competition, 239; Public policy towards
industrial combinations, 243; Federal control of Corporations,
245; Industrial combinations in other countries, 245.
Metallic money, 248; Coinage, 249; The meaning of "money,"
250; The media of exchange, 252; The monetary standard, 255;
Seigniorage, 255; Limited coinage, 259; Bimetallism, 260; Bi-
metallism in the United States, 263; The gold-exchange standard,
269; Government paper money, 271; Colonial and Revolutionary
bills of credit, 273; The greenbacks, 273; Fiat money, 278.
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