ABSTRACT
This work is a study of the organisation of industry and commerce in its bearing upon social problems and upon human life. The derivation and the current use of the terms “Economy” “Political Economy,” and “Economics” suggest that we should approach the problems of the industrial administration of resources f rom the field of domestic and personal administration to which we all have access. Every purchase being a virtual selection and involving a choice between alternatives is made in obedience to impulses and is guided by principles which are equally applicable to other acts of selection and choice. To understand them we must study the psychology of choice. The price of a thing is an indication of the range of alternatives open to the purchaser, and is a special case of “terms on which alternatives are offered to us.” We are constantly weighing apparently heterogeneous objects of desire against each other and selecting between them according to the terms on which we can secure them. All these things that we balance against and compare with each other, whether they can be had for money or not, may ideally be arranged on a scale of relative significance in our minds.
