8 
THE COMMON SENSE OF POLITICAL ECONOMY 
In all this there is nothing revolutionary or startling, but 
it will be found that a connected and systematic exposition of 
these truths will call into question much that still holds its 
place in text-books of Political Economy. It will be sufficient 
here to indicate, without any attempt to justify or elaborate, 
some of the main conclusions that will be reached. 
We shall have to abandon the favourite diagrammatic 
method by which prices, whether market or normal, are 
indicated by the intersection of a curve of demand and a 
curve of supply, or a curve of demand and a curve of cost of 
production. We shall call for a revision of the whole theory 
of increasing and diminishing returns as usually expounded, 
and this will be seen to involve either the abandonment or 
the restatement of much ingenious theory that has been based 
on the supposed phenomena presented by industries subject to 
the law of diminishing returns. 
In close connection with the subject just mentioned, we 
shall have to note that certain general truths, of universal 
application, which were first observed and formulated in rela 
tion to land, have been mistaken for specific characteristics of 
that particular factor of production. This has produced a 
perfect spawn of errors, misconceptions, and misnomers, which 
will long continue to infest economic thought. I have tried 
to indicate with perfect precision the specific source of these 
errors. 
And finally, the general principles of our investigation will 
involve (less directly, but not less inevitably) an abandonment 
of the so-called Quantity Law in the study of finance, and 
some ■ readjustment, at least, in the usual statement of the 
nature of foreign trade and the phenomena of bill-broking. 
All this controversial matter has been as far as possible 
avoided in the First Book of this treatise, which aims at 
simple and direct construction, with the minimum of polemical 
reference to current terminology or theory. And it is my 
hope that, whatever may be the verdict passed by experts on 
the Second Book, the First may be found to have some inde 
pendent value, which may be acknowledged even by those who 
dispute the legitimacy of the inferences subsequently drawn 
from the principles it expounds. 
Finally, in a brief Third Book I have endeavoured to shew