Adding Up
Income: An Introduction to Economics. By A.C.Pigou. (Macmillan. 5s.) STARTING in Chapter I with the problems of defining and measuring the national income, the writer sets out to provide an elementary guide to the central problems of economics and to show how at least in theory the allocation of resources and the prices of goods are determined by a system of simultaneous relationships. The book, which originally formed a series of lectures to engineering students at Cambridge, is well arranged as a summary of what economics is all about. Chapter II deals briefly with the influences operating in a closed economy to determine the potential income—such as the resources available, the division of labour, the existence of a legal system, and knowledge and inventiveness. The following chapter indicates the advantages to be derived from trade with other countries and the circumstances in which the prima facie arguments in favour of free trade break down. Part of the chapter is con- cerned with a discussion of Britain's foreign trade position at the present time. The fourth chapter starts from the distribution of employment in different industries, and seeks to explain how this distribution comes about. Chapter V takes up the role of the Government in production, and shows how certain economic activi- ties must be performed by public authokties, and how far their inter- vention in fields in which they are not themselves prodwers is likely to be beneficial to the community. The sixth chapter deals with the factors controlling the level of activity as a whole, while the seventh and last is concerned with the distribution of income and the reasons why it is as it is.
The author is, as one would expect, largely successful in his task. The style is clear and the problems are reduced to their simplest terms ; indeed, in many cases they are intentionally over- simplified. Much could be attained in an exposition of this kind by the judicious use of a little algebra, but, though this possibility is noted at several points, the traditional literary form of exposition has been followed. Also, though there are some facts and figures in this book, they do not occupy an 'important place in what the book has to reach. There is a tendency, as in the handling of index numbers (p. 14), to decry the juggling with symbols " in- volved in, say, measuring changes in real income, and to return with relief (p. 15) to the fact that some statements can be made about the factors determining potential income without quantifying any- thing. Thus the content of the book after the first chapter is not very different from that of a similar book written from the more traditional standpoint of the laws of supply and demand. J. It. N. STONE.
Previous page
