Principles of Political Economy

The Principles of Political Economy, was one of the most important texts on the subject of economy at that time. It is broken up into five books; Production, Distribution, Exchange, Influence of the Progress of Society on Production and Influence of Government. This version is an abridged text book edited by J. Laurence Laughlin, and was used at the college level.


By : John Stuart Mill (1806 - 1873) and J. Laurence Laughlin (1850 - 1933)

01 - Preface



02 - Introductory, A Sketch of the History of Political Economy, part 1



03 - Introductory, A Sketch of the History of Political Economy, part 2



04 - Preliminary Remarks



05 - Book I, Chapter I: Of the Requisites of Production



06 - Book I, Chapter II: Of Unproductive Labor



07 - Book I, Chapter III: Of Capital



08 - Book I, Chapter IV: Fundamental Propositions Respecting Capital, part 1



09 - Book I, Chapter IV: Fundamental Propositions Respecting Capital, part 2



10 - Book I, Chapter V: On Circulating and Fixed Capital



11 - Book I, Chapter VI: Of Causes Affecting the Efficiency of Production



12 - Book I, Chapter VII: Of the Law of the Increase of Labor



13 - Book I, Chapter VIII: Of the Law of the Increase of Capital



14 - Book I, Chapter IX: Of the Law of the Increase of Production From Land



15 - Book I, Chapter X: Consequences of the Foregoing Laws



16 - Book II, Chapter I: Of Property



17 - Book II, Chapter II: Of Wages



18 - Book II, Chapter III: Of Remedies for Low Wages



19 - Book II, Chapter IV: Of the Differences of Wages in Different Employments



20 - Book II, Chapter V: Of Profits



21 - Book II, Chapter VI: Of Rents



22 - Book III, Chapter I: Of Value



23 - Book III, Chapter II: Ultimate Analysis of Cost of Production



24 - Book III, Chapter III: Of Rent, in its Relation Value



25 - Book III, Chapter IV: Of Money



26 - Book III, Chapter V: Of the Value of Money, as Dependent on Demand and Supply



27 - Book III, Chapter VI: Of the Value of Money, as Dependent on Cost of Production



28 - Book III, Chapter VII: Of a Double Standard and Subsidiary Coins



29 - Book III, Chapter VIII: Of Credit, as a Substitute for Money



30 - Book III, Chapter IX: Influence of Credit on Prices



31 - Book III, Chapter X: Of an Inconvertible Paper Currency, part 1



32 - Book III, Chapter X: Of an Inconvertible Paper Currency, part 2



33 - Book III, Chapter XI: Of Excess of Supply



34 - Book III, Chapter XII: Of Some Peculiar Cases of Value



35 - Book III, Chapter XIII: Of International Trade



36 - Book III, Chapter XIV: Of International Values



37 - Book III, Chapter XV: Of Money Considered as an Imported Commodity



38 - Book III, Chapter XVI: Of the Foreign Exchanges



39 - Book III, Chapter XVII: Of the Distribution of Precious Metals Through the Commercial World



40 - Book III, Chapter XVIII: Influence of the Currency on the Exchanges and on Foreign Trade



41 - Book III, Chapter XIX: Of the Rate of Interest



42 - Book III, Chapter XX: Of the Competition of Different Countries in the Same Market



43 - Book III, Chapter XXI: Of Distribution, as Affected by Exchange



44 - Book IV, Chapter I: Influence of the Progress of Industry and Population on Values and Prices



45 - Book IV, Chapter II: Influence of the Progress of Industry and Population on Rents, Profits and Wages



46 - Book IV, Chapter III: Of the Tendency of Profits to a Minimum



47 Book IV, Chapter IV: Consequences of the Tendency of Profits to a Minimum, and the Stationary State



48 - Book IV, Chapter V: On the Possible Futurity of the Laboring-Classes



49 - Book V, Chapter I: On the General Principles of Taxation



50 - Book V, Chapter II: Of Direct Taxes



51 - Book V, Chapter III: Of Taxes on Commodities, or Indirect Taxes, part 1



52 - Book V, Chapter III: Of Taxes on Commodities, or Indirect Taxes, part 2



53 - Book V, Chapter IV: Comparison Between Direct and Indirect Taxes



54 - Book V, Chapter V: Of a National Debt



55 - Book V, Chapter VI: Of the Interference of Government Grounded on Erroneous Theories, part 1



56 - Book V, Chapter VI: Of the Interference of Government Grounded on Erroneous Theories, part 2


An experience of five years with Mr. Mill's treatise in the class-room not only convinced me of the great usefulness of what still remains one of the most lucid and systematic books yet published which cover the whole range of the study, but I have also been convinced of the need of such additions as should give the results of later thinking, without militating against the general tenor of Mr. Mill's system; of such illustrations as should fit it better for American students, by turning their attention to the application of principles in the facts around us; of a bibliography which should make it easier to get at the writers of other schools who offer opposing views on controverted questions; and of some attempts to lighten those parts of his work in which Mr. Mill frightened away the reader by an appearance of too great abstractness, and to render them, if possible, more easy of comprehension to the student who first approaches Political Economy through this author. Believing, also, that the omission of much that should properly be classed under the head of Sociology, or Social Philosophy, would narrow the field to Political Economy alone, and aid, perhaps, in clearer ideas, I was led to reduce the two volumes into one, with, of course, the additional hope that the smaller book would tempt some readers who might hesitate to attack his larger work. In consonance with the above plan, I have abridged Mr. Mill's treatise, yet have always retained his own words; although it should be said that they are not always his consecutive words. Everything in the larger type on the page is taken literally from Mr. Mill, and, whenever it has been necessary to use a word to complete the sense, it has been always inserted in square brackets. All additional matter introduced by me has been printed in a smaller but distinctive type. The reader can see at a glance which part of the page is Mr. Mill's and which my own.

It has seemed necessary to make the most additions to the original treatise under the subjects of the Wages Question; of Wages of Superintendence; of Socialism; of Cost of Production; of Bimetallism; of the Paper Money experiments in this country; of International Values; of the Future of the Laboring-Classes (in which the chapter was entirely rewritten); and of Protection. The treatment of Land Tenures has not been entirely omitted, but it does not appear as a separate subject, because it has at present less value as an elementary study for American students. The chapters on Land Tenures, the English currency discussion, and much of Book V, on the Influence of Government, have been simply omitted. In one case I have changed the order of the chapters, by inserting Chap. XV of Book III, treating of a standard of value, under the chapter treating of money and its functions. In other respects, the same order has been followed as in the original work.

Wherever it has seemed possible, American illustrations have been inserted instead of English or Continental ones.

To interest the reader in home problems, twenty-four charts have been scattered throughout the volume, which bear upon our own conditions, with the expectation, also, that the different methods of graphic representation here presented would lead students to apply them to other questions. They are mainly such as I have employed in my class-room. The use and preparation of such charts ought to be encouraged. The earlier pages of the volume have been given up to a “Sketch of the History of Political Economy,” which aims to give the story of how we have arrived at our present knowledge of economic laws. The student who has completed Mill will then have a very considerable bibliography of the various schools and writers from which to select further reading, and to select this reading so that it may not fall wholly within the range of one class of writers. But, for the time that Mill is being first studied, I have added a list of the most important books for consultation. I have also collected, in Appendix I, some brief bibliographies on the Tariff, on Bimetallism, and on American Shipping, which may be of use to those who may not have the means of inquiring for authorities, and in Appendix II a number of questions and problems for the teacher's use.

In some cases I have omitted Mr. Mill's statement entirely, and put in its stead a simpler form of the same exposition which I believed would be more easily grasped by a student. Of such cases, the argument to show that Demand for Commodities is not Demand for Labor, the Doctrine of International Values, and the Effect of the Progress of Society on wages, profits, and rent, are examples. Whether I have succeeded or not, must be left for the experience of the teacher to determine. Many small figures and diagrams have been used throughout the text, in order to suggest the concrete means of getting a clear grasp of a principle.

In conclusion, I wish to acknowledge my indebtedness to several friends for assistance in the preparation of this volume, among whom are Professor Charles F. Dunbar, Dr. F. W. Taussig, Dr. A. B. Hart, and Mr. Edward Atkinson.

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