DEMAND 
53 
things being equal, the destruction of a large 
monetary surplus connected with one com 
modity is likely to mean greater real loss 
than the destruction of a smaller surplus 
connected with another thing. In the “ other 
things being equal is impounded such a 
proviso as the following, that each of the two 
things is consumed in bulk by the same 
class or by different classes in about the same 
proportions. 
This conclusion will instantly suggest some 
of the uses that can be made of the doctrine of 
consumers’ surplus. In taxation, for a given 
gain on the part of the Government, one tax 
may wipe out more consumers’ surplus than 
another tax. The one that wipes out least is, 
of course, to be preferred, other things being 
equal. Hence we may deduce that it is well, 
in the absence of strong reasons to the contrary, 
to avoid the taxation of things the demand 
for which is highly elastic, because, when 
demand is of this kind, a small tax will largely 
reduce the consumption and so the consumers’ 
surplus. It is an equally legitimate inference 
that the taxation of things strongly subject to 
increasing returns (which will be explained in 
the next chapter) is to be avoided, because the 
taxation of such things raises price by sub 
stantially more than the amount of the tax,