Journal Article On Decreasing Cost and Comparative Cost: A Rejoinder Get access Frank H. Knight Frank H. Knight The University of Iowa Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 39, Issue 2, February 1925, Pages 331–333, https://doi.org/10.2307/1884880 Published: 01 February 1925
One type of study is concerned with the relation between price and consumers' demand, 503. — Illustrated in the study of potatoes, 505. — Price data should relate to a specific market, 508. — Allowance must be made for effects of other forces, 509. — Demand must be expressed in terms of rates and must cover all uses, 512. — Elasticity depends on market point at which it is measured, 512. — A second and more common type of study is concerned with “ speculators'” demand, 518. — Cannot be expressed in terms of rates, 519. — But may yield some knowledge of consumers' demand, 521. — Current “demand and supply” can rarely be measured satisfactorily, 522. — A modification of the second type of study gives better results, 524. — The two types compared, 525. — Relation between theoretical and empirical demand curves, 526. — Three divergent statistical results, 529. — Determining the true relationship, 536.
I. Introductory, 571. — II. There is opposition, not between static and dynamic conditions, but only between static and dynamic conceptions, 572. — III. Evolutionary or non-reversible processes distinguished from those which are wave-like or reversible, 575. — IV. Some considerations on the characteristic processes in a capitalistic society, 578.
Some Fallacies in the Interpretation of Social Costs: A Reply Get access Frank D. Graham Frank D. Graham Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 39, Issue 2, February 1925, Pages 324–330, https://doi.org/10.2307/1884879 Published: 01 February 1925
I. Subject and methods of the inquiry: Industries covered and questions asked, 1. — A pre-war period selected, 7. — Arrangement of the returns by classes and groups, 9. — II. Stock ownership by executives: Their salaries, 11. — Extent to which executives hold stock in large concerns, 12. — In moderate and small concerns, 14. — Stockholdings by relatives or friends of the executives, 18. — Executive salaries, by classes and groups, 19. — Fixity of salaries; only in the long run adjusted to corporate earnings, 20. — Proportion of management expense to capital, 23. — Proportion in close corporations and in those widely owned, 27. — Rarity of arrangements for bonus or profit-sharing, 28. — III. Earnings and surpluses, for all classes, 30. — For the first class, 33. — For the second class, 34. — Earnings in the first class more regular but less high, 35. — Dividends and surpluses, 37. — Significance of surplus, 39. — IV. The theory of profits: Contrast between American and European practice, 40. — Two views on theory: the one regarding business profits as a form of wages, the other as distinct from wages, 40. — American practice in accord with the second view, 42. — European practice, especially on the Continent, implies more nearly the first view: The tantième, 43. — The merits and demerits of the two practices, 48. — Conclusion, 59.
Knight on the limited scope of scientific method in economics, 156. — Wolfe on functional economics, 159. — Bye's defence of pure science, 161. — Clark's pragmatic views, 161. — Mills on the logic of statistics, 163. — Weld and Mills's canons, 167. — Tugwell on experimental thinking, 168. — Slichter's indictment of the competitive system, 171. — Mitchell's position on the relation of psychology to economics, 173. — The postulates of economics, 179. — Institutional economics, 182.
Elasticity of demand and flexibility of prices. — Relative cost of production and relative efficiency of organization, 359. — Laws of relative cost and relative return as contrasted with laws of cost and laws of return, 360. — Typical equations to the law of supply, 364. — The statistical derivation of the law of supply, 367. — A moving equilibrium of demand and supply, 368.
The basic difficulty in economic theory is the philosophical problem of the meaning of explanation in connection with human behavior. I. Motive or desire in human conduct is the analogue of force in mechanics, 375. II. Is force real or merely symbolic, leaving movement (behavior in the case of human beings) the only fact open to description or study? 379. — This question is merely formal in physics, for we know forces by their effects alone, and hence unambiguously if at all; but in the realm of conduct, we know motives in ourselves directly and in others by communication, in addition to inferring them from observed behavior, and the two sources of information disagree considerably. III–IV. The intellectually embarrassing but unescapable fact of purposiveness, in thought as well as conduct, 386. — V. The place of motives and their treatment in economics, which has to be critical as well as descriptive and logical, — a branch of esthetics and ethics as well as of science, 400. — VI. The objective of economic activity and the point of view of social criticism of the economic order, 406.