William Stanley Jevons - Practical Economics

Practical Economics

It was not, however, as a theorist dealing with the fundamental data of economic science, but as a brilliant writer on practical economic questions, that Jevons first received general recognition. A Serious Fall in the Value of Gold (1863) and The Coal Question (1865) placed him in the front rank as a writer on applied economics and statistics; and he would be remembered as one of the leading economists of the 19th century even had his Theory of Political Economy never been written. Amongst his economic works may be mentioned Money and the Mechanism of Exchange (1875), written in a popular style, and descriptive rather than theoretical, but wonderfully fresh and original in treatment and full of suggestiveness, a Primer on Political Economy (1878), The State in Relation to Labour (1882), and two works published after his death, namely, Methods of Social Reform and Investigations in Currency and Finance, containing papers that had appeared separately during his lifetime. The last-named volume contains Jevons's speculations on the connection between commercial crises and sunspots. He was engaged at the time of his death upon the preparation of a large treatise on economics and had drawn up a table of contents and completed some chapters and parts of chapters. This fragment was published in 1905 under the title of The Principles of Economics: a fragment of a treatise on the industrial mechanism of society, and other papers.

In The Coal Question, Jevons covered a breadth of concepts on energy depletion that have recently been revisited by writers covering the subject of peak oil. For example, Jevons explained that improving energy efficiency typically reduced energy costs and thereby increased rather than decreased energy use, an effect now known as the Jevons paradox. The Coal Question remains a paradigmatic study of resource depletion theory. Jevons's son, H. Stanley Jevons, published an 800-page follow-up study in 1915 in which the difficulties of estimating recoverable reserves of a theoretically finite resource are discussed in detail.

In a relatively minor work, "Commercial Crises and Sun-Spots", Jevons analyzed business cycles, proposing that crises in the economy might not be random events, but might be based on discernible prior causes. To clarify the concept, he presented a statistical study relating business cycles with sunspots. His reasoning was that sunspots affected the weather, which, in turn, affected crops. Crops changes could then be expected to cause economic changes. Subsequent studies have found no evidence for the hypothesis that the sun influences the business cycle. On the other hand, sunny weather has a small but significant positive impact on stock returns, probably due to its impact on traders' moods.