William Stanley Jevons


William Stanley Jevons

William Stanley Jevons, (September 1, 1835 - August 13, 1882), an English economist and logician, was born in Liverpool. Jevons was one of three men to simultaneously advance the so-called "marginal revolution." Working in complete independence of one another—Jevons in Manchester, England; Leon Walras in Laussane, Switzerland; and Carl Menger in Vienna—each scholar developed the theory of marginal utility to understand and explain consumer behavior. The theory held that the utility (value) of each additional unit of a commodity—the marginal utility—is less and less to the consumer. When you are thirsty, for example, you get great utility from a glass of water. Thirst quenched, the second and third glass are less and less appealing. Feeling waterlogged, you will eventually refuse water altogether. "Value," said Jevons, "depends entirely upon utility." This marginal revolution marked the opening of a new period in the history of economic thought.

Contents

All his writings, which were numerous and notable despite his unfortunately short life, reveal his remarkable insights and understanding of a wide ranges of issues. Although the bias regarding class, gender, and race is obvious in Jevons' work, his underlying and driving concern was with the amelioration of society in general and the condition of the working classes in particular. This attitude was inspired by the progressive and Unitarian middle-class background from which Jevons emerged. Throughout his life Jevons pursued with devotion and industry the ideals with which he had set out, and his journal and letters display a noble simplicity of disposition and an unswerving honesty of purpose.

Life

William Stanley Jevons was born in Liverpool, England on September 1, 1835. His father Thomas Jevons (1791–1855) was an iron merchant; his mother Mary Anne Roscoe (1795–1845) grew up in an intellectual and artistic milieu. The railway boom crisis of 1847 caused the bankruptcy of the family firm.

William Stanley Jevons went to University College School in London in 1850, and in 1851 to University College. He studied chemistry under Graham and Williamson, two pioneers in the development of atomic theory and the theory of molecular motion. Another major influence at University College was Augustus De Morgan (1806–1871), with his courses on mathematics and logic. Jevons left University College without completing his degree.

In 1854, he traveled to Melbourne, in order to become an assayer at the Australian mint. Jevons devoted much time to private study. His work covered many different areas: railway policy, meteorology, protection, land policy, cloud formation, gunpowder and lightning, geology, to name a few.

Jevons left Australia in 1859 and returned to University College to complete his education. The early 1860s were important for Jevons' intellectual development, and he reported in his diary that he received significant insights in both economics and logic: a “true comprehension of value” (Black 1981: 120 ) and the “substitution of similars” (Black & Könekamp 1972: 179).

Jevons received his MA degree in 1862, and was awarded the gold medal "in the third branch" which included logic, moral philosophy, political philosophy, history of philosophy, and political economy.

In 1863, Jevons became a tutor at Owens College, Manchester, and in 1865 a lecturer in political economy and logic. He now gave his principal attention to the moral sciences, but his interest in natural science was by no means exhausted: throughout his life he continued to write occasional papers on scientific subjects, and his intimate knowledge of the physical sciences greatly contributed to the success of his chief logical work, The Principles of Science.

In 1867, Jevons married Harriet A. Taylor, and they subsequently had three children. The family moved to London in 1876, on his taking up a chair at University College. Jevons' short life came to an end in 1882, when he drowned near Hastings.

Work

Statistics and mathematics

Like many other logicians of the nineteenth century, Jevons wants to establish clear links between mathematics (mathematical statistics) and logic. He wanted to derive mathematics from logic, which is based on the Laws of Thought, and in doing so he made (a rather controversial) use of mathematical symbols when establishing his logical formalism. Jevons denoted terms by capital letters A, B, C, and so forth, and their negative counterparts by small italic letters a, b, c.

Statisticians in the first part of the nineteenth century were concerned with the collection of data, but not with analysis. In 1863, Jevons published A Serious Fall in the Value of Gold, which investigated the influence of Australian and Californian gold discoveries of 1851 on the value of gold. For this purpose he constructed index numbers making use of the geometric mean. He argued that multiplicative disturbances would be balanced off against each other when using the geometric mean. There was however no empirical verification of this "multiplicative disturbances" hypothesis. But Jevons worked to the limits of his mathematical understanding, and many ideas that he foresaw were not developed until decades after his death.

Jevons' use of statistics in the social sciences was inspired by Adolphe Quetelet. Jevons distinguished between a "mean" (the approximation of a definite existing quantity) and an "average" or "fictitious mean" (an arithmetical average). The fictitious mean is important, since it allows us to "conceive in a single result a multitude of details." For instance, Jevons equated aggregate and average consumption: provided that the community under consideration is large enough, the average consumption of the aggregate community will vary continuously due to price changes, whereas individual behavior is strongly affected by accidents.

If all individuals had exactly the same features (those relevant for consumption), then the average laws of supply and demand would be equal to the conduct of every individual. If however the "powers, wants, habits, and possessions" of different people were widely different, then the average would not represent "the character of any existing thing." The accidents would cancel each other out and a certain "typical" consumer would emerge. Although this is clearly a case of a fictitious mean, it would not be less useful: "the movements of trade and industry depend upon averages and aggregates, not upon the whim of individuals."

Jevons thus recognized that people are not homogeneous and that it would be wrong to create "representative agents" depicting individual behavior. In the case of large aggregates however, disturbing causes would cancel each other out. Here Jevons brought in the large number argument. If however specific policy questions are at stake, the heterogeneity of different societal subgroups has to be accounted for. Jevons used the concept of "character" in order to bridge the gap between universal theory and characteristics of specific subgroups in society.

Theory of utility

Jevons arrived quite early in his career at the doctrines that constituted his most characteristic and original contributions to economics and logic. The theory of utility, which became the keynote of his general theory of political economy, was practically formulated in a letter written in 1860. He referred to, namely, that the degree of utility of a commodity is some continuous mathematical function of the quantity of the commodity available. This idea, together with the implied doctrine that economics is essentially a mathematical science, took more definite form in a paper on "A General Mathematical Theory of Political Economy," written for the British Association in 1862. This paper does not appear to have attracted much attention either in 1862 or on its publication four years later in the Journal of the Statistical Society; and it was not until 1871, when the Theory of Political Economy appeared, that Jevons set forth his doctrines in a fully developed form.

The theory of marginal utility was, around 1870, being independently developed on somewhat similar lines by Carl Menger in Austria and Leon Walras in Switzerland, but this in no way detracts from the great importance of the service which Jevons rendered to English economics by his fresh discovery of the principle, and by the way in which he ultimately forced it into notice.

In his reaction from the prevailing view he sometimes expressed himself without due qualification: the declaration that value depends entirely upon utility, lent itself to misinterpretation. But a certain exaggeration of emphasis may be pardoned in a writer seeking to attract the attention of an indifferent public. The Marginal revolution, which would reshape economics, had been started.

It should also be noted that Jevons did not explicitly distinguish between the concepts of ordinal and cardinal utility. Cardinal utility implies that each utility from each good can be measured as exactly as weight could. While ordinal utility implies that the utility of a particular can be compared to the utility of another and ranked according to which good provided the most utility. Although, Jevons never explicitly makes the distinction it is obvious that he preferred the concept of an ordinal utility.

Jevon’s logical treatises

Jevons published Elementary Lessons on Logic in 1870, which soon became the most widely read elementary textbook on logic in the English language. In the meantime he was engaged upon a much more important logical treatise, which appeared in 1874 under the title of The Principles of Science. In this work Jevons embodied the substance of his earlier works on pure logic and the substitution of similars; he also developed the view that induction is simply an inverse employment of deduction; he treated in a luminous manner the general theory of probability, and the relation between probability and induction; and his knowledge of the various natural sciences enabled him throughout to relieve the abstract character of logical doctrine by concrete scientific illustrations, often worked out in great detail.

Jevons' Logic Piano

Jevons, for instance, introduced the logical alphabet—a series of combinations that can be formed with a given set of terms. For instance, A and B produce the four combinations AB, Ab, aB, and ab. Using the logical alphabet, logic becomes simply an exercise of fully developing all terms and eliminating the contradictory terms. However, when the amount of letters increases, the amount of possible combinations becomes considerable. Jevons considers some techniques and devices to facilitate these endeavors, such as a "Logical slate" (the logical alphabet engraved upon a school writing slate).

Nevertheless, when more than six terms are involved, it becomes almost impossible to solve the problem. To facilitate this kind of reasoning Jevons developed a logical abacus, or "piano," which operated on simple mechanical principles. It can be seen as one of the first computers.

Jevons' general theory of induction was a revival of the theory laid down by William Whewell, but it was put in a new form and was free from some of the non-essential adjuncts which rendered Whewell's exposition open to attack. The work as a whole was one of the most notable contributions to logical doctrine that appeared in Britain in the nineteenth century.

His Studies in Deductive Logic, consisting mainly of exercises and problems for the use of students, was published in 1880. In 1877, and the following years Jevons contributed to the Contemporary Review some articles on John Stuart Mill, which he had intended to supplement by further articles, and eventually publish in a volume as a criticism of Mill's philosophy. These articles and one other were republished after Jevons' death, together with his earlier logical treatises, in a volume, entitled Pure Logic, and other Minor Works. It is, however, clear that Jevons' strength lay in his power as an original thinker rather than as a critic; and he will be remembered by his constrictive work as logician, economist, and statistician.

Philosophy of Economics

Jevons seems to be a mathematical, deductive economist. Market prices are derived directly from a series of fundamental motive forces, such as "the mechanics of utility and self-interest." Markets are depicted in the most abstract fashion and economic agents are perfectly rational, perfectly foresighted, and in possession of perfect information.

A perfectly rational human being would anticipate future feelings and include discounted future utility in his calculations. However, this ability varies according to certain circumstances, as there are "the intellectual standing of the race, or the character of the individual" (Jevons 1879, 34).

The ability of foresight depends on the state of civilization: the class or race with the most foresight will work most for the future, because a powerful feeling for the future is the main incentive to industry and saving. Moreover, even the "quality" of tastes increases with every improvement of civilization. Jevons' conception of an economic agent should therefore be altered according to the institutional setting in which the agent appears (the class or race to which the individual belongs).

But his theory contains "representative individuals," who behave in the way required by the theory. All economic actors do not have to behave in exactly the same way, but disturbing causes would balance and therefore the "representative individual" may be an appropriate model for the theory. The theory is however indeterminate in cases when more information is required. For example, it is unclear whether an increase in the real wage rate, proportionate to an increase in labor productivity, results in increased or reduced hours of work.

More information about the "character" of the person under consideration is required: whereas learned professionals might be expected to work more severely, common laborers might prefer idleness over labor and prefer greater "ease" in the case of rising real incomes. Irish laborers are said to be responsible for the higher mortality rates in several districts, because Jevons considered the Irish to be a race that would become more easily subject to drunkenness. The proper place of women is the home: women with children younger than three years should not be allowed to work, as this would only give rise to a neglect of the children, and would encourage the men to choose to idleness. In all these cases, the characters of laborers, Irish people, or women are taken for granted, and are not in need of further explanation. The Victorian middle-class is used as a yardstick for evaluation.

Implications of Jevon’s views

Although the bias regarding class, gender, and race is obvious in Jevons' work, it should be noted that he was concerned with the amelioration of society in general and the condition of the working classes in particular. This attitude was inspired by the progressive and Unitarian middle-class background from which Jevons emerged.

In The Principles of Science Jevons devotes a (short) section on the theory of evolution, followed by a section on the possibility of divine interference (Jevons 1874, 761-769).

Jevons embraces Herbert Spencer’s idea that the homogenous is unstable and differentiates itself in the process of evolutionary development. This explains why a variety of human institutions and characters emerged. He recognizes that evolutionary theory has not been proved, but nevertheless he adheres to its truthfulness.

The scientific basis of Jevons' economics is utilitarianism and the mechanics of utility and self-interest; like many Unitarians this scientific belief is combined with an emphasis on active interventionism directed towards more possibilities for self-improvement; and evolutionary theory does not only show that there should be development towards the "good" and the "happy," but also that there will be such a development (at least in Jevons' interpretation).

Jevons refutes the claims of some “sentimental writers” who regard economics as a “dismal science,” because its scope is restricted to wealth. These authors depict economics as a mechanical and miserable body of theories, whereas they hold true that a moral science should be concerned with sympathies, feelings, and duties. Jevons uses an analogy from the natural sciences to refute this opinion: division of labor implies that some people investigate the mechanical aspects of iron, while other researchers devote their time to the study of its electrical or magnetic aspects.

Legacy

Throughout his life, Jevons pursued with devotion and industry the ideals with which he had set out, and his journal and letters display a noble simplicity of disposition and an unswerving honesty of purpose. His writings reveal his remarkable insights and understanding of a wide ranges of issues.

John Maynard Keynes commented on Jevons' The Theory of Political Economy (1866) that it was a "simple, lucid, unfaltering [work], chiseled in stone where Marshall knits in wool" (Keynes, 131). Alfred Marshall said of his work in economics that it "will probably be found to have more constructive force than any, save that of Ricardo, that has been done during the last hundred years." At the time of his death he was engaged upon an economic work that promised to be at least as important as any that he had previously undertaken. It would be difficult to exaggerate the loss which logic and political economy sustained through the accident by which his life was prematurely cut short.

He was a prolific writer, and at the time of his death he occupied the foremost position in England both as a logician and as an economist. Acknowledging his greatness after his death:

It is in his essays on the application of economics to the theory of governmental action that his full greatness is best seen. There is no other work of the kind which is to be compared to them for originality, for suggestiveness, and for wisdom...Jevons was a man as remarkable for modesty of character and generous appreciation of the labours of others as for unwearied industry, devotion to work of the highest and purest kind, and thorough independence and originality of thought. (Royal Society of London 1983).

Harro Maas (2005) noted that Jevons' work owed much to joint meetings between economists and physicists on measurement. He approvingly quotes J. M. Keynes's characterization of Jevons as "the prying eyes" that peered into statistical data with the tools and patience of the natural scientist:

Jevons showed that deliberations designed to maximize utility by analyzing the marginal increments of utility to be derived from economic actions could be described as mathematical functions and has been credited with introducing the calculus to the discipline. ... he was the pivotal figure in laying the foundation of modern economics as a natural science (Maas 2005).

Major publications

  • Jevons, W. S. The Social Cesspools of Sydney No. 1.—The Rocks. The Sydney Morning Herald, October 7, 1858, typescript provided by Michael V. White[1858].
  • Jevons, W. S. 1863b. "Notice of a General Mathematical Theory of Political Economy." Report of the British Association for the Advancement of Science, Cambridge, 158-159.
  • Jevons, W. S. The Coal Question. York: Augustus M. Kelley, [1865, 1906], 1965.
  • Jevons, W. S. [1866]. "Brief Account of a General Mathematical Theory of Political Economy." in The Theory of Political Economy. New York: Augustus M. Kelley, 1965, pp. 303-314.
  • Jevons, W. S. "The Substitution of Similars." in [1890] Pure Logic and Other Minor Works. Bristol: Thoemmes, [1869], 1991
  • Jevons, W. S. Elementary Lessons in Logic: Deductive and Inductive. 1870
  • Jevons, W. S. The Theory of Political Economy. First Edition. London and New York: MacMillan and Co., 1871
  • Jevons, W. S. The Principles of Science: A Treatise on Logic and Scientific Method. Kessinger Publishing, [1874], 2007 ISBN 9781430487753
  • Jevons, W. S. Money and the Mechanism of Exchange. London: Kegan Paul, Trench, Trübner & Co. 1875
  • Jevons, W. S. [1879, 1957], 1965. The Theory of Political Economy. Fifth Edition. New York: Augustus M. Kelley, [1878], 2001
  • Jevons, W. S. The State in Relation to Labour. London: MacMillan, [1882, 1910], 1968
  • Jevons, W. S. Methods of Social Reform. New York: Augustus M. Kelley, [1883], 1965
  • Jevons, W. S. Investigations in Currency and Finance. London: MacMillan, [1884], 1909
  • Jevons, W. S. The Principles of Economics. London: MacMillan, [1905] 2005. ISBN 9780543848062
  • Jevons, W. S. Collected Economic Writings. 9 Volumes. London: Palgrave/MacMillan, 2001

References

  • Black, R. D. C., and R. Könekamp (eds.). Papers and Correspondence of William Stanley Jevons Volume I: Biography and Personal Journal. London and Basingstoke: MacMillan, 1972. ISBN 9780678070116
  • Black, R. D. C. (ed.). Papers and Correspondence of William Stanley Jevons Volume VII: Papers on Political Economy. London and Basingstoke: MacMillan. 1981.
  • Keynes J. M. The Collected Writings of John Maynard Keynes, Volumes I to XXX. London: Macmillan, 1971-1989.
  • Maas, H. William Stanley Jevons and the Making of Modern Economics. (Historical Perspectives on Modern Economics.) New York, Cambridge University Press, 2005. ISBN 9780521827126
  • Royal Society of London. Proceedings of the Royal Society of London. (35). 1883.

External links

All links retrieved May 8, 2014.

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