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Adventures in Philosophy |
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by Antoine Augustine Cournot
The abstract idea of wealth or of value in exchange, a definite idea, and consequently susceptible of rigorous treatment in combinations, must be carefully distinguished from the accessory ideas of utility, scarcity, and suitability to the needs and enjoyments of mankind, which the word wealth still suggests in common speech. These ideas are variable, and by nature indeterminate, and consequently ill suited for the foundation of a scientific theory. The division of economists into schools, and the war waged between practical men and theorists, have arisen in large measure from the ambiguity of the word wealth in ordinary speech, and the confusion which has continued to obtain between the fixed, definite idea of value in exchange, and the ideas of utility which every one estimates in his own way, because there is no fixed standard for the utility of things. It has sometimes happened that a publisher, having in store an unsalable stock of some work, useful and sought after by connoisseurs, but of which too many copies were originally printed in view of the class of readers for whom it was intended has sacrificed and destroyed two-thirds of the number, expecting to derive more profit from the remainder than from the entire edition. There is no doubt that there might be a book of which it would be easier to sell a thousand copies at sixty francs, than three thousand at twenty francs. Calculating in this way, the Dutch Company is said to have caused the destruction in the islands of the Sound of a part of the precious spices of which it had a monopoly. Here is a complete destruction of objects to which the word wealth is applied because they are both sought after, and not easily obtainable. Here is a miserly, selfish act, evidently opposed to the interests of society; and yet it is nevertheless evident that this sordid act, this actual destruction, is a real creation of wealth in the commercial sense of the word. The publisher's inventory will rightly show a greater value for his assets; and after the copies have left his hands, either wholly or in part, if each individual should draw up his inventory in commercial fashion, and if all these partial inventories could be collated to form a general inventory or balance sheet of the wealth in circulation, an increase would be found in the sum of these items of wealth. On the contrary, suppose that only fifty copies exist of a curious book, and that this scarcity carries up the price at auction to three hundred francs a copy. A publisher reprints this book in an edition of a thousand copies, of which each will be worth five francs, and which will bring down the other copies to the same price from the exaggerated value which their extreme scarcity had caused. The 1050 copies will therefore only enter for 5250 francs into the sum of wealth which can be inventoried, and this sum will thus have suffered a loss of 9750 francs. The decrease will be even more considerable if (as should be the case) the value of the raw materials is considered, from which the reprints were made, and which existed prior to the reprinting. Here is an industrial operation, a material production, useful to the publisher who undertook it, useful to those whose products and labor it employed, useful even to the public if the book contains valuable information, and which is nevertheless a real destruction of wealth, in the abstract and commercial meaning of the term.
Excerpted from Researches into the Mathematical Principles of the Theory of Wealth, by Antoine Augustine Cournot |
Recherches sur les principes mathematiques de la theorie des richesses, by Antoine Augustine Cournot Mathematical Principles of the Theory of Wealth (Task Force Report,) Researches into the Mathematical Principles of the Theory of Wealth (Reprints of Economic Classics)
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