ABSTRACT
The product of a business, or an industry, will, it appears, vary in the amount of economic welfare it contains, according as the total cost or disutility of producing and the utility of consuming it are high or low. The amounts on both sides of the equation will evidently vary with the distribution of the productive cost and the consumptive utility. The maximum wealth, or welfare, attaching to a stock of goods will involve such a distribution of the productive energy as will yield the minimum of painful or injurious effort on the one hand, and such a distribution of the consumptive ulility as will yield the maximum of pleasurable or serviceable consumption. The true principle of ‘economy’ is thus expressed in the maxim “From each according to his powers, to each according to his needs,” for this would assign the lowest aggregate cost and the highest aggregate utility to any product. The art of political economy should evidently be directed to the contrivance of methods for the fullest possible application of this principle. But when we come to subjective costs and utilities, satisfactions, and dissatisfactions, how far is it possible to aggregate them by additions, or by setting off one against another? And in such a process, so far as it is possible, what part is played by margins or surpluses?
