Page:The Economic Journal Volume 1.djvu/638

 616 THE ECONOMIC JOURNAL very lunch his economies, and lnarketing his outputs on nearly the Sallie terlns as before nore than double his profits ? The reason is that there are not lnany industries obeying the Law of Increasing Return in which the producer has equally good access to the whole of a large lnarket. ' When we are considering an individual producer we lnUSt couple his supply curve not with the general demand curve for his colnmodity in a wide lnarket but with the particular delnand CUl'Ve of his own special market.' In the case of industries to which this limitation does not apply it often happens that the tendency of large firms to drive out small ones has already gone so far as to exhaust lnost of the strength of those forces by which it was originally prolnoted. There reinsin, however, a few industries to which neither of these explanations apply. Such industries are ' in so transitional a state that for the tilne there is nothing to be gained by trying to apply the statical theory of equilibriuln of normal demand and supply to them.' In fact, the mathematical inethod, which has so long been our guide, appears to break down at this stage, and we are left to the hope of such future ilnprovement in our analytical llethods as lnay enable us to cope with the complex phenolhens of 'organic growth' (page 496). We shotlid convey an erroneous impression of the reissued work if we dwelt altogether on its abstract side. The predilection which the author, in a passage above quoted, expresses for that part is not exclusive. His interest ' is centred in Book v. ;' but its circuln- ference circles hlnanity. His heart is in the highlands of the subject; but not for the mere pleasure of an intellectual chase. From tlle heights of abstraction unexpected views of the way of conduct are obtained; and the paths of fallacy are exposed. The readers of the first edition will relnelnber how froin aerial speculations about the Law of Increasing Returns, new Illnits of the practical principle of laisser-faire were discerned. It was shown that free coinpetit/on does not necessarily conduce to maxilnuln gain. But we are now concerned only with the additions and alterations made in the second edition. We should accordingly obselwe ill con- nection with the Law of Increasing Returns that the relation of this law to that of decreasing returns is rehandled ill the last chapter of the book devoted to'Supply or Production' (Book iv., chap. xiii.). But we do not find that the author has substantially l1odified his cheerful doctrine, that 'ilnproved organization tends to dilninish or even override any increased resistance which Nature lay offer to raisilg increased anounts of raw produce.' Tle older eCOllOlliStS used to say that population tended to press upon the lneans of subsistence; the lnore careful explaining that the verb 'to tend' has a Sol't of reveysible signification. A balloon, it has been said, tends to rise; it also tends to fall. Still it makes a differece whether yo eplmsize the forner or the latter tendency. The statelnent of the copound law becomes lore buoyant when Prof. Marshall makes the 1)rincipal seltelce, ' An incre;;se of population, acconpanied by an equal increase in the natcrial sources of enjoyment and aids to productiol, is likely to