by Hubert D. Henderson M.A.
with an Introduction by J.M. Keynes M.A., C.B.
1922.
The Theory of Economics does not furnish a bodyof settled conclusions immediately applicable to policy.It is a method rather than a doctrine, an apparatus ofthe mind, a technique of thinking, which helps itspossessor to draw correct conclusions. It is not difficultin the sense in which mathematical and scientifictechniques are difficult; but the fact that its modes ofexpression are much less precise than these, rendersdecidedly difficult the task of conveying it correctly tothe minds of learners.
Before Adam Smith this apparatus of thoughtscarcely existed. Between his time and this it has beensteadily enlarged and improved. Nor is there anybranch of knowledge in the formation of which Englishmencan claim a more predominant part. It is notcomplete yet, but important improvements in itselements are becoming rare. The main task of theprofessional economist now consists, either in obtaininga wide knowledge of relevant facts and exercisingskillin the application of economic principles to them, or inexpounding the elements of his method in a lucid,accurate and illuminating way, so that, through hisinstruction, the number of those who can think forthemselves may be increased.
This Series is directed towards the latter aim. Itis intended to convey to the ordinary reader and to theuninitiated student some conception of the general principles of thought which economists now apply toeconomic problems. The writers are not concerned tomake original contributions to knowledge, or even toattempt a complete summary of all the principles of thesubject. They have been more anxious to avoid obscureforms of expression than difficult ideas; and theirobject has been to expound to intelligent readers,previously unfamiliar with the subject, the most significantelements of economic method. Most of theomissions of matter often treated in textbooks areintentional; for as a subject develops, it is important,especially in books meant to be introductory, to discardthe marks of the chrysalid stage before thought hadwings.
Even on matters of principle there is not yet acomplete unanimity of opinion amongst professors.Generally speaking, the writers of these volumes believethemselves to be orthodox members of the CambridgeSchool of Economics. At any rate, most oftheir ideas about the subject, and even their prejudices,are traceable to the contact they have enjoyed with thewritings and lectures of the two economists who havechiefly influenced Cambridge thought for the past fiftyyears, Dr. Marshall and Professor Pigou.
J.M. Keynes.
§1. Theory And Fact 1
§2. The Division Of Labor 3
§3. The Existence Of Order 5
§4. Some Reflections Upon Joint Products 7
§5. Some Reflections Upon Capital 11
§6. The Fundamental Character Of Many EconomicLaws 17
§1. Preliminary Stat