Economic Principles

Max Hirsch

[Significant chapters from the book by Max Hirsch, published in Australia, 1896]

PREFACE BY MAX HIRSCH
Melbourne, 1 January, 1896

It is gradually becomining clear to most thinking men that the political battles of the present and of the near future are being fought and will be fought on the field of economics. Social questions are everywhere attracting growing attention. The undue poverty of the masses and the unmerited riches of the few are more clearly seen to arise from laws which interfere with the natural distribution of wealth, i.e.: "That distribution which gives wealth to those who make it, and secures wealth to those who save it." The same laws are also strongly suspected of reducing the amount of wealth which otherwise would be made. It is, therefore, of the utmost importance that the last results of Political Economy -- of the science which deals with the production, distribution and consumption of wealth -- should be made accessible to the masses upon whose action future political developments depend.

This little book is written for the purpose of serving as a guide to those who intend to study Political Economy, and as a summary of its more important results for others, who may not have time or inclination for a detailed study. For the former, especially, it is important to possess an exposition of guiding principles, by which detailed arguments can be measured and their cogency tested. To the latter it may recommend itself by its brevity.

Lest it be assumed that the definitions and conclusions here sete forth have received the stamp of authority, I have to confess that in many instances they differ from accepted teaching. Wherever this is the case, I have supplied what appears to me full reasons for my divergent view.

If this booklet causes its readers to look more hopefully into the future; if it reveals to them a way out of the marasmus into which modern society has fallen through its disregard of justice; if it proves that the fullest harmony prevails between ethics and economics, it will fulfil the dearest hopes of its author.

Chapter 1 / Definition of Terms Political Economy / Production / Land / Labor / Wealth Capital Capital and Abstinence Cost of Production / Profit / Law of Diminishing Return Law of Increasing Return / Relation Between Increase of Population and Cost of Production / Relation Between Wages and Cost of Production Problem of Distribution / Competition / Rent Statics of Rent / Dynamics of Rent Economic Function of Rent / Wages / Statics of Wages / Dynamics of Wages / Reward for Services Interest / Statics of Interest / Dynamics of Interest Monopolies and Monopoly Charges Justification of Interest Chapter 6 / Consumption Purpose of Production / Accumulation of Wealth / Fallacy of Saving Spurious Thrift / Small Importance of Accumulated Wealth / Importance of Consumption / Savings of the Rich Taxes / Incidence of Taxation / Taxes on Commodities / Excise and Revenue Duties Some Further Effects of the Taxation of Commodities / Taxes on Property / Taxes on Incomes Taxation in Relation to Governmental Functions / Ethics of Public Revenue Primary Source of Public Revenue Primary Source of Public Revenue (continued)