Essentials of Economic Theory

Industrial growth changes the conditions under which people earn wages, invest capital and buy goods. John Bates Clark examines those changes in a study of economic theory intended to supplement introductory textbooks. He distinguishes the forces that would govern prices, wages and interest in a stable economy from the effects of expanding population, accumulated capital, improved production methods and changing consumer wants. His argument links these abstract principles to questions of industry and public policy.

Concrete examples show how lower costs can alter both demand and employment. Cheaper steel may replace other building materials, while cheaper machinery can extend the uses of industrial tools. Clark also sets out to consider monopoly, railroad charges, trade unions and disputes between employers and workers. Readers interested in the history of economic ideas can follow how he connects theories of value and distribution with the practical problems of a growing industrial economy.