44 
POLITICAL ECONOMY 
to a common unit of expenditure. It declares 
that I shall so disburse my income over a 
given period on bread and tea and milk and 
clothes, that the marginal shillings laid out in 
acquiring each class of these things will be 
productive of the same utility. The truth of 
the law is easily established. Its proof 
proceeds (1) by showing that when a person’s 
income is expended according to the law the 
utility derived from it is maximised, and (2) 
by arguing that each individual will try to 
maximise the satisfaction derived from his 
income. People are not compelled to do the 
best for themselves with the means at their 
disposal, but in the degree in which they are 
reasonable will they attempt to do so and 
succeed in doing so. 
To demonstrate that the utility of income is 
maximised when the law of substitution is 
observed is a trifling task. Suppose that I 
so spend money on milk and bread that 
the last penny spent on bread yields more 
utility than the last penny spent on milk. 
In that case it would evidently be to my 
material well-being, other things being equal, 
to reduce my outlay on milk and increase my 
outlay on bread, because by so acting I should 
secure a utility larger than the one sacrificed. 
Gain could be reaped in this way, by transfer-