Studies in Economics

Abstract

DR. SMART is favourably known in the economic world by his admirable translations of the writings of the Austrian school; and in these “Studies” the characteristic doctrines of that school furnish no small part of the theoretic apparatus. The exclusive emphasis laid on that side of the theory of value, the elaboration of which is connected in this country chiefly with the name of Jevons—the side of demand, that is, with its controlling factor of marginal utility—is faithfully reproduced by Dr. Smart; and, like the teachers, whose disciple he frankly acknowledges himself to be, he is disposed to treat as “secondary” and “derivative” that influence of cost of production as governing supply, and, through supply, determining value, to which the older English economists, such as Ricardo and Mill, assigned predominant stress. He describes the Austrian theory as the “current” and “dominant” theory; and, while he sometimes accords a hesitating recognition to Conceptions which seem to conflict with this exclusive emphasis, his attitude even here appears to be in reality one of doubtful acceptance rather than hearty concurrence. To the writer of this review the later, like the older emphasis, seems mistaken; and the comprehensive attitude of Prof. Marshall, who treats the two sides of supply and demand as mutually determining, appears to be more closely in accord with the facts; and in this impression he is strengthened by the difficulties encountered by Dr. Smart in some of these “Studies” from an unwillingness to allow to cost of production a coordinate influence with that of marginal utility in determining value. On Prof. Marshall's hypothesis the facts seem to fall naturally into their place, but by the Austrians and by Dr. Smart they appear to be forced artificially into a strained position. To this theoretic equipment Dr. Smart has added the valuable qualification of a first-hand acquaintance with the facts of business life; and the advantage of this intimate knowledge is evident in many parts of his book. It consists of three main sections, one devoted to studies in wages, the second to studies in currency, and the third to studies in consumption. Of these the first seems to us the most valuable; and the reason consists in the fact that Dr. Smart's business experience brings a strong admixture of practical sagacity to bear on such matters of concrete interest as a “living wage,” the “sliding scale,” and “women's wages.” He owns in his preface to a proneness, not unnatural in a business man, to “lose himself in the fallacy of the particular instance”; and we are not sure that he has in the course of these “Studies” always avoided this fallacy. But he never fails to be interesting and suggestive, and he is, with rare exceptions, uniformly lucid; and these are qualities as admirable as they are rare in combination. The economic student and— in a more especial degree—the practical man, will find material for profitable reflection in the careful perusal of these interesting “Studies.”