Researches into the Mathematical Principles of the Theory of Wealth

Apr 24, 2008

This article is a reprint of Chapters VII and IX of Augustin Cournot, Researches into the Mathematical Principles of the Theory of Wealth (N.T. Bacon trans.) (New York: Augustus M. Kelley, 1971) (1838). Chapter VII: Of the Competition of Producers 43. Every one has a vague idea of the effects of competition. Theory should have attempted to render this idea more precise; and yet, for lack of regarding the question from the proper point of view, and for want of recourse to symbols (of which the use in this connection becomes indispensable), economic writers have not in the least improved on proper notions in this respect. These notions have remained as ill-defined and ill-applied in their works, as in popular language. . . .

[ . . . ]Chapter IX: Of the Mutual Relations of Producers 55. Very few commodities are consumed in just the form in which they left the hands of the first producer. Ordinarily the same raw material enters into the manufacture of several different products, which are more directly adapted to consumption; and reciprocally several raw materials are generally brought together in the manufacture of each of these products. It is evident that each producer of raw materials must try to obtain the greatest possible profit from his business. Hence it is necessary to inquire according to what laws the profits, which are made by all the producers as a whole, are distributed among the individuals in consequence of the law of consumption for final products.

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