CHAPTEE  IV
 

               THEORY OF EXCHANGE



       Importance of Exchange in Economics.

Exchange is so important  a  process in the maximis¬

ing of utility  and  the saving of labour, that some

economists have regarded their science as treating of

this operation alone.   Utility arises from commodities

being brought in suitable quantities and at the proper

times into  the  possession of  persons  needing them;

and it is by exchange, more than any other means,

that this is  effected.  Trade  is not indeed the only

method of  economising :  a single individual may gain

in utility by a proper consumption  of the stock  in

his possession.  The best employment of labour and

capital by a single person is  also a question discon¬

nected from that of exchange, and which must yet be

treated in the science.  But, with these exceptions, I

am perfectly willing to agree with the  high  import¬

ance attributed to exchange.

    It is  impossible  to have a correct  idea of the

science of Economics without  a perfect comprehension