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Maths for Economics 3rd Edition Geoff Renshaw Digital
Instant Download
Author(s): Geoff Renshaw
ISBN(s): 9780199602124, 0199602123
Edition: 3
File Details: PDF, 6.22 MB
Year: 2012
Language: english
Maths for Economics
This page intentionally left blank
Maths for
Economics
Third Edition

Geoff Renshaw
with contributions from Norman Ireland

3
 3
Great Clarendon Street, Oxford ox2 6dp
Oxford University Press is a department of the University of Oxford.
It furthers the University’s objective of excellence in research, scholarship,
and education by publishing worldwide in
Oxford New York
Auckland Cape Town Dar es Salaam Hong Kong Karachi
Kuala Lumpur Madrid Melbourne Mexico City Nairobi
New Delhi Shanghai Taipei Toronto
With offices in
Argentina Austria Brazil Chile Czech Republic France Greece
Guatemala Hungary Italy Japan Poland Portugal Singapore
South Korea Switzerland Thailand Turkey Ukraine Vietnam
Oxford is a registered trade mark of Oxford University Press
in the UK and in certain other countries
Published in the United States
by Oxford University Press Inc., New York
© Geoff Renshaw 2012
The moral rights of the author have been asserted
Database right Oxford University Press (maker)
First published 2005
Second edition 2009
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
without the prior permission in writing of Oxford University Press,
or as expressly permitted by law, or under terms agreed with the appropriate
reprographics rights organization. Enquiries concerning reproduction
outside the scope of the above should be sent to the Rights Department,
Oxford University Press, at the address above
You must not circulate this book in any other binding or cover
and you must impose the same condition on any acquirer
British Library Cataloguing in Publication Data
Data available
Library of Congress Cataloging in Publication Data
Data available
Typeset by Graphicraft Limited, Hong Kong
Printed in Italy on acid-free paper by L.E.G.O. S.p.A. – Lavis TN

ISBN 978–0–19–960212–4

1 3 5 7 9 10 8 6 4 2
To my wife, Irene, for her unstinting moral and practical support;
and to my mother and father, to whom I owe everything.
This page intentionally left blank
 vii

Contents

Detailed contents ix
About the author xiv
About the book xv
How to use the book xvii
Chapter map xviii
Guided tour of the textbook features xx
Guided tour of the Online Resource Centre xxii
Acknowledgements xxiv

Part One Foundations

1 Arithmetic 3
2 Algebra 43
3 Linear equations 63
4 Quadratic equations 109
5 Some further equations and techniques 134

Part Two Optimization with one independent variable

6 Derivatives and differentiation 165

7 Derivatives in action 184
8 Economic applications of functions and derivatives 213
9 Elasticity 256

Part Three Mathematics of finance and growth

10 Compound growth and present discounted value 297

11 The exponential function and logarithms 328
12 Continuous growth and the natural exponential function 342
13 Derivatives of exponential and logarithmic functions and their
applications 368

Part Four Optimization with two or more independent variables

14 Functions of two or more independent variables 389

15 Maximum and minimum values, the total differential, and applications 441
16 Constrained maximum and minimum values 479
17 Returns to scale and homogeneous functions; partial elasticities;
growth accounting; logarithmic scales 519
viii
Part Five Some further topics
CONTENTS

18 Integration 551
19 Matrix algebra 577
20 Difference and differential equations 597
W21 Extensions and future directions (on the Online Resource Centre)

Answers to progress exercises 623

Answers to chapter 1 self-test 657
Glossary 658
Index 667
 ix

Detailed contents

About the author xiv 3 Linear equations 63

About the book xv 3.1 Introduction 63
How to use the book xvii 3.2 How we can manipulate equations 64
Chapter map xviii 3.3 Variables and parameters 69
Guided tour of the textbook features xx 3.4 Linear and non-linear equations 69
Guided tour of the Online Resource Centre xxii 3.5 Linear functions 72
Acknowledgements xxiv 3.6 Graphs of linear functions 73
3.7 The slope and intercept of a linear function 75
Part One Foundations 3.8 Graphical solution of linear equations 80
3.9 Simultaneous linear equations 81
1 Arithmetic 3 3.10 Graphical solution of simultaneous linear
1.1 Introduction 3 equations 84
1.2 Addition and subtraction with positive 3.11 Existence of a solution to a pair of linear
and negative numbers 4 simultaneous equations 87
1.3 Multiplication and division with positive 3.12 Three linear equations with three unknowns 90
and negative numbers 7 3.13 Economic applications 91
1.4 Brackets and when we need them 10 3.14 Demand and supply for a good 91
1.5 Factorization 13 3.15 The inverse demand and supply functions 94
1.6 Fractions 14 3.16 Comparative statics 97
1.7 Addition and subtraction of fractions 16 3.17 Macroeconomic equilibrium 102
1.8 Multiplication and division of fractions 20
1.9 Decimal numbers 24 4 Quadratic equations 109
1.10 Adding, subtracting, multiplying, and 4.1 Introduction 109
dividing decimal numbers 26 4.2 Quadratic expressions 110
1.11 Fractions, proportions, and ratios 27 4.3 Factorizing quadratic expressions 112
1.12 Percentages 28 4.4 Quadratic equations 114
1.13 Index numbers 33 4.5 The formula for solving any quadratic
1.14 Powers and roots 35 equation 116
1.15 Standard index form 40 4.6 Cases where a quadratic expression
1.16 Some additional symbols 41 cannot be factorized 117
SELF-TEST EXERCISE 42 4.7 The case of the perfect square 118
4.8 Quadratic functions 120
2 Algebra 43
4.9 The inverse quadratic function 122
2.1 Introduction 43
4.10 Graphical solution of quadratic equations 123
2.2 Rules of algebra 44
4.11 Simultaneous quadratic equations 126
2.3 Addition and subtraction of algebraic
4.12 Graphical solution of simultaneous
expressions 44 quadratic equations 127
2.4 Multiplication and division of algebraic
4.13 Economic application 1: supply and demand 128
expressions 45
4.14 Economic application 2: costs and revenue 131
2.5 Brackets and when we need them 47
2.6 Fractions 49 5 Some further equations and
2.7 Addition and subtraction of fractions 50 techniques 134
2.8 Multiplication and division of fractions 52 5.1 Introduction 134
2.9 Powers and roots 55 5.2 The cubic function 135
2.10 Extending the idea of powers 56 5.3 Graphical solution of cubic equations 138
2.11 Negative and fractional powers 57 5.4 Application of the cubic function in
2.12 The sign of a n 59 economics 141
2.13 Necessary and sufficient conditions 60 5.5 The rectangular hyperbola 142
APPENDIX: The Greek alphabet 62 5.6 Limits and continuity 143
x 5.7 Application of the rectangular hyperbola 8.8 The market demand function 229
in economics 147 8.9 Total revenue with monopoly 231
5.8 The circle and the ellipse 149 8.10 Marginal revenue with monopoly 232
DETAILED CONTENTS

5.9 Application of circle and ellipse in 8.11 Demand, total, and marginal revenue
economics 151 functions with monopoly 234
5.10 Inequalities 152 8.12 Demand, total, and marginal revenue
5.11 Examples of inequality problems 156 with perfect competition 235
5.12 Applications of inequalities in economics 159 8.13 Worked examples on demand, marginal,
and total revenue 236
8.14 Profit maximization 239
Part Two Optimization with one 8.15 Profit maximization with monopoly 240
independent variable 8.16 Profit maximization using marginal cost
and marginal revenue 242
8.17 Profit maximization with perfect competition 244
6 Derivatives and differentiation 165
8.18 Comparing the equilibria under monopoly
6.1 Introduction 165
and perfect competition 246
6.2 The difference quotient 166
8.19 Two common fallacies concerning profit
6.3 Calculating the difference quotient 167
maximization 248
6.4 The slope of a curved line 168
8.20 The second order condition for profit
6.5 Finding the slope of the tangent 170 maximization 248
6.6 Generalization to any function of x 172 APPENDIX 8.1: The relationship between
6.7 Rules for evaluating the derivative of total cost, average cost, and marginal cost 253
a function 173 APPENDIX 8.2: The relationship between
6.8 Summary of rules of differentiation 182 price, total revenue, and marginal revenue 254

7 Derivatives in action 184 9 Elasticity 256

7.1 Introduction 184 9.1 Introduction 256
7.2 Increasing and decreasing functions 185 9.2 Absolute, proportionate, and percentage
7.3 Optimization: finding maximum and changes 257
minimum values 187 9.3 The arc elasticity of supply 259
7.4 A maximum value of a function 187 9.4 Elastic and inelastic supply 260
7.5 The derivative as a function of x 189 9.5 Elasticity as a rate of proportionate change 260
7.6 A minimum value of a function 189 9.6 Diagrammatic treatment 261
7.7 The second derivative 191 9.7 Shortcomings of arc elasticity 263
7.8 A rule for maximum and minimum 9.8 The point elasticity of supply 263
values 192 9.9 Reconciling the arc and point supply
7.9 Worked examples of maximum and elasticities 265
minimum values 192 9.10 Worked examples on supply elasticity 265
7.10 Points of inflection 195 9.11 The arc elasticity of demand 268
7.11 A rule for points of inflection 198 9.12 Elastic and inelastic demand 270
7.12 More about points of inflection 199 9.13 An alternative definition of demand elasticity 272
7.13 Convex and concave functions 206 9.14 The point elasticity of demand 273
7.14 An alternative notation for derivatives 209 9.15 Reconciling the arc and point demand
7.15 The differential and linear approximation 210 elasticities 274
9.16 Worked examples on demand elasticity 275
8 Economic applications of functions 9.17 Two simplifications 277
and derivatives 213 9.18 Marginal revenue and the elasticity of
8.1 Introduction 213 demand 279
8.2 The firm’s total cost function 214 9.19 The elasticity of demand under perfect
8.3 The firm’s average cost function 216 competition 282
8.4 Marginal cost 218 9.20 Worked examples on demand elasticity
8.5 The relationship between marginal and and marginal revenue 284
average cost 220 9.21 Other elasticities in economics 288
8.6 Worked examples of cost functions 222 9.22 The firm’s total cost function 288
8.7 Demand, total revenue, and marginal 9.23 The aggregate consumption function 290
revenue 229 9.24 Generalizing the concept of elasticity 291
 13.3 The derivative of the natural logarithmic xi
Part Three Mathematics of finance function 370
and growth 13.4 The rate of proportionate change, or rate

DETAILED CONTENTS
of growth 371
10 Compound growth and present 13.5 Discrete growth 371
discounted value 297 13.6 Continuous growth 375
10.1 Introduction 297 13.7 Instantaneous, nominal, and effective
10.2 Arithmetic and geometric series 298 growth rates 377
10.3 An economic application 300 13.8 Semi-log graphs and the growth rate again 378
10.4 Simple and compound interest 304 13.9 An important special case 379
10.5 Applications of the compound growth 13.10 Logarithmic scales and elasticity 381
formula 307
10.6 Discrete versus continuous growth 309
10.7 When interest is added more than once Part Four Optimization with two or
per year 309 more independent variables
10.8 Present discounted value 314
10.9 Present value and economic behaviour 316
14 Functions of two or more
10.10 Present value of a series of future receipts 316
independent variables 389
10.11 Present value of an infinite series 319
14.1 Introduction 389
10.12 Market value of a perpetual bond 320
14.2 Functions with two independent variables 390
10.13 Calculating loan repayments 322
14.3 Examples of functions with two
independent variables 393
11 The exponential function and
14.4 Partial derivatives 398
logarithms 328
14.5 Evaluation of first order partial derivatives 401
11.1 Introduction 328
14.6 Second order partial derivatives 403
11.2 The exponential function y = 10x 330
14.7 Economic applications 1: the production
11.3 The function inverse to y = 10x 331
function 411
11.4 Properties of logarithms 333
14.8 The shape of the production function 411
11.5 Using your calculator to find common
14.9 The Cobb–Douglas production function 420
logarithms 333
14.10 Alternatives to the Cobb–Douglas form 425
11.6 The graph of y = log10x 334
14.11 Economic applications 2: the utility function 428
11.7 Rules for manipulating logs 335
14.12 The shape of the utility function 429
11.8 Using logs to solve problems 337
14.13 The Cobb–Douglas utility function 434
11.9 Some more exponential functions 338
APPENDIX 14.1: A variant of the partial
12 Continuous growth and the natural derivatives of the Cobb–Douglas function 439
exponential function 342
12.1 Introduction 342 15 Maximum and minimum values, the
12.2 Limitations of discrete compound growth 343 total differential, and applications 441
12.3 Continuous growth: the simplest case 343 15.1 Introduction 441
12.4 Continuous growth: the general case 346 15.2 Maximum and minimum values 442
12.5 The graph of y = aerx 347 15.3 Saddle points 448
12.6 Natural logarithms 349 15.4 The total differential of z = f(x, y) 452
12.7 Rules for manipulating natural logs 351 15.5 Differentiating a function of a function 457
12.8 Natural exponentials and logs on your 15.6 Marginal revenue as a total derivative 458
calculator 351 15.7 Differentiating an implicit function 460
12.9 Continuous growth applications 353 15.8 Finding the slope of an iso-z section 463
12.10 Continuous discounting and present value 358 15.9 A shift from one iso-z section to another 463
12.11 Graphs with semi-log scale 361 15.10 Economic applications 1: the production
function 465
13 Derivatives of exponential and 15.11 Isoquants of the Cobb–Douglas production
logarithmic functions and their function 468
applications 368 15.12 Economic applications 2: the utility function 470
13.1 Introduction 368 15.13 The Cobb–Douglas utility function 472
13.2 The derivative of the natural exponential 15.14 Economic application 3: macroeconomic
function 369 equilibrium 473
xii 15.15 The Keynesian multiplier 473 18.2 The definite integral 552
15.16 The IS curve and its slope 474 18.3 The indefinite integral 554
15.17 Comparative statics: shifts in the IS curve 475 18.4 Rules for finding the indefinite integral 555
DETAILED CONTENTS

18.5 Finding a definite integral 562

16 Constrained maximum and 18.6 Economic applications 1: deriving the
minimum values 479 total cost function from the marginal
16.1 Introduction 479 cost function 565
16.2 The problem, with a graphical solution 480 18.7 Economic applications 2: deriving total
16.3 Solution by implicit differentiation 482 revenue from the marginal revenue function 567
16.4 Solution by direct substitution 485 18.8 Economic applications 3: consumers’ surplus 569
16.5 The Lagrange multiplier method 486 18.9 Economic applications 4: producers’ surplus 570
16.6 Economic applications 1: cost minimization 490 18.10 Economic applications 5: present value of a
16.7 Economic applications 2: profit maximization 496 continuous stream of income 572
16.8 A worked example 501
16.9 Some problems with profit maximization 502 19 Matrix algebra 577

16.10 Profit maximization by a monopolist 508 19.1 Introduction 577

16.11 Economic applications 3: utility maximization 19.2 Definitions and notation 578
by the consumer 510 19.3 Transpose of a matrix 579
16.12 Deriving the consumer’s demand functions 512 19.4 Addition/subtraction of two matrices 579
19.5 Multiplication of two matrices 580
17 Returns to scale and homogeneous 19.6 Vector multiplication 582
functions; partial elasticities; growth 19.7 Scalar multiplication 583
accounting; logarithmic scales 519 19.8 Matrix algebra as a compact notation 583
17.1 Introduction 519 19.9 The determinant of a square matrix 584
17.2 The production function and returns to scale 520 19.10 The inverse of a square matrix 587
17.3 Homogeneous functions 522 19.11 Using matrix inversion to solve linear
17.4 Properties of homogeneous functions 525 simultaneous equations 589
17.5 Partial elasticities 531 19.12 Cramer’s rule 590
17.6 Partial elasticities of demand 532 19.13 A macroeconomic application 592
17.7 The proportionate differential of a function 534 19.14 Conclusions 594
17.8 Growth accounting 537
17.9 Elasticity and logs 539 20 Difference and differential equations 597
17.10 Partial elasticities and logarithmic scales 540 20.1 Introduction 597
17.11 The proportionate differential and logs 542 20.2 Difference equations 598
17.12 Log linearity with several variables 544 20.3 Qualitative analysis 601
20.4 The cobweb model of supply and demand 605
20.5 Conclusions on the cobweb model 610
Part Five Some further topics 20.6 Differential equations 612
20.7 Qualitative analysis 615
18 Integration 551 20.8 Dynamic stability of a market 616
18.1 Introduction 551 20.9 Conclusions on market stability 619
W21 Extensions and future directions APPENDIX 21.3: The firm’s maximum profit xiii
(on the Online Resource Centre) function with two products
21.1 Introduction APPENDIX 21.4: Removing the imaginary number

DETAILED CONTENTS
21.2 Functions and analysis
21.3 Comparative statics
21.4 Second order difference equations
APPENDIX 21.1: Proof of Taylor’s theorem Answers to progress exercises 623
APPENDIX 21.2: Using Taylor’s formula to relate Answers to chapter 1 self-test 657
production function forms Glossary 658
Index 667
xiv

About the author

Geoff Renshaw was formerly a lecturer and is now

an associate fellow in the Economics Department at
Warwick University. He has lectured mainly in the
areas of international economics, national and inter-
national economic policy, and political economy, but also
taught maths to economists for more than thirty years.
His teaching philosophy has always been to remember
his first encounters with new ideas and techniques,
and keep in mind how difficult they seemed then, even
though they may seem obvious now. Geoff has always
endeavoured to keep things simple and down to earth
and infect his students with his own enthusiasm for
economics.
Geoff was educated at Oxford and the London
School of Economics. Before becoming an academic he
worked in the research department of the Trades Union Congress. Most of his career has been
spent at Warwick University, but he has also taught at Washington University, St Louis, and at
Birmingham University.
He has also been a consultant to the International Labour Organization (a UN agency) and
spent two years in Geneva working on international trade and economic relations between
industrialized and developing countries, in addition to a year in Budapest, where he headed a
project on the Hungarian labour market. Geoff has also consulted for the United Nations
Industrial Development Organization, and has spent time in Vienna and Warsaw working on
the Polish economy.
Geoff has published several books on industrial adjustment, north–south trade and develop-
ment, and multinational corporations.
Outside of economics and politics Geoff enjoys studying the English language, practising
DIY on houses and cars, and thinking up new inventions—none successful as yet. He is mar-
ried with three children.

About the contributor

Norman Ireland has been a professor of economics at the University of Warwick since 1990,
and was Chair of the Department of Economics from 1994 to 1999. He was joint Managing
Editor of the International Journal of Industrial Organization from 1986 to 1992, and is cur-
rently a member of the editorial board of the Journal of Comparative Economics. He has pub-
lished two books in the field of industrial organization and a number of articles across several
fields of economics, but particularly in industrial economics, public economics, and economic
theory. He has always been involved in teaching mathematics for economists, or mathematical
economics, at various levels from first year undergraduate to Master’s level.
 xv

About the book

This book is intended for courses in maths for economics taken in the first year, or in some
cases in the second year, of undergraduate degree programmes in economics whether they be
single honours or combined honours courses. It has its origins in lectures that I gave for many
years to first year economics students at Warwick University.
Students arriving to study economics at British universities are highly diverse in their prior
exposure to both maths and economics. Some have studied maths to the age of 17 or 18 (GCE
AS and A2 level in the UK) and arrive at university with some degree of competence and
confidence in maths. Others have studied maths only to the age of 16 (GCSE level) and many of
these have forgotten, or perhaps never fully understood, basic mathematical techniques. There
are also many students from abroad, whose backgrounds in maths are highly varied. Moreover,
some students beginning economics at university have previously studied economics or
business studies at school, while others have not.
The degree courses taken at university by students of economics are also highly diverse.
In some courses, economics is the sole or main subject. Consequently maths for economics is
prioritized and sufficient space is created in the curriculum to allow it to be explored in some
depth. In other degree courses economics forms only a part, and sometimes a small part, of
a combined-subject programme that includes subjects such as business studies, philosophy,
politics, and international studies. Then, the crowded curriculum often leaves little space for
studying maths for economics.
This diversity, in both students’ prior knowledge of maths and economics and their course
requirements, creates a challenge for anyone attempting to write a textbook that will meet the
needs of as many students and their courses as possible. This book seeks to respond to this chal-
lenge and thereby enable every reader, whether mathematically challenged or mathematically
gifted, and whether they are specializing in economics or not, to realize their true potential in
maths for economics, and thereby develop the tools to study economics more effectively and
more rewardingly.
More specifically, in responding to this challenge I have attempted to give the book four core
structural characteristics:

1 Confidence building
Recognizing that many economics students found maths difficult and unrewarding at school,
and have often forgotten much of what they once knew, part 1 of the book is devoted entirely
to revision and consolidation of basic skills in arithmetic, algebraic manipulation, solving
equations and curve sketching. Part 1 starts at the most elementary level and terminates at
GCSE level or a little above. It should be possible for every student to find a starting point in
part 1 that matches his or her individual needs, while more advanced students can of course
proceed directly to part 2. More guidance on finding the appropriate starting point is given
in the chapter map on pages xviii–xix.

2 Steady learning gradient

Many textbooks in this area develop their subject matter at a rapid pace, thus imposing a steep
learning curve on their readers. This often leaves students with a weak maths background feeling
xvi lost, while even students who are relatively strong in maths sometimes fail to grasp concepts
fully and to understand the economic analysis behind the various techniques and applications
they are learning. To avoid these pitfalls, I have tried to give this book a carefully calibrated
ABOUT THE BOOK

learning gradient that starts from the most basic level but gradually increases in mathematical
sophistication as the book progresses. Consequently, no reader need be lost or left behind, and
hopefully will go beyond a rote-learning approach to mathematics to achieve (perhaps for the
first time) true understanding.

3 Comprehensive explanation
Many textbooks skim briefly over a wide range of mathematical techniques and their economic
applications, leaving students able to solve problems in a mechanical way but feeling frustrated
by their lack of real understanding.
In this book I explain concepts and techniques in a relatively leisurely and detailed way, using
an informal style, trying to anticipate the misconceptions and misunderstandings that the
reader can so easily fall victim to, and avoiding jumps in the chain of reasoning, however small.
Wherever possible, every step is illustrated by means of a graph or diagram, based on the adage
that ‘one picture is worth a thousand words’. Many of the explanations are by means of worked
examples, which most students find easier to understand than formal theoretical explanations.
There is extensive cross-referencing both within and between chapters, making it easy for the
reader to quickly refresh their understanding of earlier concepts and rules when they are re-
introduced later. There is also a glossary which defines all of the key terms in maths and
economics used in the book.

4 Economic applications and progress exercises

As soon as it is introduced, every core mathematical technique is immmediately applied to
an economic problem, but in a way that requires no prior knowledge of economics. While this
is challenging to the reader because it requires grappling with mathematics and economics
simultaneously, I feel that it is essential to renew and reinforce the reader’s motivation.
Additionally, progress exercises have been strategically positioned in every chapter. I regard
these as an integral part of the book, not an optional extra. Their answers are at the end of the
book, while much supplementary material can be found at the book’s Online Resource Centre
(www.oxfordtextbooks.co.uk/orc/renshaw3e/). For more ambitious readers and lengthier
courses, the final part of the book contains some relatively advanced topics, and there is a
further supplementary chapter W21 at the Online Resource Centre.
 xvii

How to use the book

To the student
Of course, the way in which you use this book will be primarily dictated by the requirements
of your course and the instructions of your lecturer or tutor. However, at university you are
expected to undertake a significant amount of independent study, much of which needs to be
self-directed. The chapter map is intended to help you with this. You will see that the book
caters for three levels of prior maths knowledge, labelled A, B, and C in the map. Even if you
don’t feel you fit neatly into any of these categories, studying the flow chart should help you to
choose your own personal route through the book.
Although much effort has gone into making this book as user-friendly as possible, studying
maths and its application to economics can never be light reading. In a single study session of
1–2 hours you should not expect to get through more than a few sections of a single chapter. To
achieve a full understanding you may need to re-read some sections, and even whole chapters.
It is usually better to re-read something that you don’t fully understand, rather than pressing on
in the hope that enlightenment will dawn later. You should always take notes as you read. It also
greatly helps understanding if you work through with pencil and paper all the steps in any chain
of mathematical reasoning. Tedious, but worth the effort. ‘No pain, no gain’ is just as true of
mental exercise as it is of physical exercise.
Above all, it is essential that you attempt the progress exercises at the end of each section,
as this is the only reliable way of testing your understanding. Worked answers to most of the
questions are at the end of the book, with further answers on the book’s website, or Online
Resource Centre, which is at
www.oxfordtextbooks.co.uk/orc/renshaw3e/
There you will also find more exercises with answers, and a wide range of additional material
such as how to use Excel® to plot graphs.

To the lecturer or tutor

At first sight this book may appear excessively long for many courses in maths for economics,
which, in today’s crowded syllabuses, are often quite short. However, this length is deceptive,
for two reasons. First, explanations are quite detailed, facilitating independent study and
thereby economizing on teaching time. For example, at Warwick University those who need to
study part 1 of the book do so as an intensive revision programme, most of which is independ-
ent study, in the first two weeks of term.
Second, the range of material covered between the first and last chapters is so wide that it is
extremely unlikely that any course would find the whole book appropriate for study. Rather,
there are at least three overlapping study programmes within the book, as outlined in the chap-
ter map. If none of these three suggested study programmes is suitable, the map may help you
to design a path through the book that matches your syllabus requirements and the character-
istics of your students.
Please note too that the book’s website, or Online Resource Centre (see address above), con-
tains much useful supplementary material, including a bank of exercises and answers reserved
(by means of a password) for lecturers which can therefore be used for setting tests and exami-
nations. There is also an additional chapter, W21, of more advanced material written by
Professor Norman Ireland (see main contents pages).
xviii

Chapter map: alternative routes through the book

Choose A, B, or C as your starting point, then follow the arrows

(A) You have forgotten (B) You have passed GCSE (C) You have passed AS/A2
almost all of the maths you maths or an equivalent exam maths or equivalent exams
ever knew and want to make taken at age 16+, but you taken at age 17+ and 18+ and
a completely fresh start. have done no maths since are fairly confident in your
and now feel the need for maths knowledge at
some revision. this level.

Part one Foundations

Chapter 1. This starts from the lowest Take the self-test at the end of chapter
possible level and aims to rebuild basic 1; answers are at the end of the book.
knowledge and self-confidence. Be sure If you struggle with this, read chapter 1
to complete the progress exercises and and complete the progress exercises
the self-test at the end of the chapter. before going on.

Chapters 2–5. These revise the algebra component of GCSE maths or equivalent maths
exam taken at age 16+. Chapters 3–5 contain in addition some economic applications.
In chapter 5, sections 5.5–5.9 go a little beyond GCSE maths and you can skip them
if you wish, but be sure to study sections 5.10–5.12 on inequalities as these are important
in economics.

Part two Optimization with one independent variable

Chapters 6 and 7. These introduce differentiation, a powerful mathematical technique widely

used in economics. You may find these chapters a little difficult initially, but hard work at this
stage will pay off later in your studies.

Chapters 8 and 9. These apply to economics the techniques of differentiation learned in chapters 6
and 7. Chapter 8 is concerned with a firm’s costs, the demand for its product and its profit-seeking
behaviour. Chapter 9 is devoted to the concept of elasticity.
If you are joining the book at this point because you have passed AS/A2 maths or equivalent exams,
you will find that you are already familiar with all the pure maths used in these chapters. However,
you may feel the need to browse chapters 6 and 7 for revision purposes. You should also study the
economic applications in chapters 3–5 (see detailed contents pages). This will also help you to tune in
to the book’s notation and style.
 xix
Part three Mathematics of finance and growth

CHAPTER MAP
Chapter 10. This important chapter introduces the Chapters 11–13. These chapters explain
key concept of present discounted value, and also the maths of logarithmic and exponential
how to calculate growth rates, effective interest rates functions, which are used widely in
and repayments of a loan. The maths is fairly simple economics. These concepts are covered in
and mostly covered in the GCSE syllabus, though AS/A2 maths, though less fully. If you find
its economic application will of course be new. you know the maths already, skip to the
This chapter is not closely linked to any other economic applications in sections 11.8,
chapters and can be read at any time. 12.9–12.11, and 13.8–13.10.

Part four Optimization with two or more independent variables

Chapters 14–17. These four chapters are, in a sense, the core of the book. The maths in these
chapters will be new to all students, but is a natural extension of part 3 and you should find it no more
difficult than earlier chapters.
Chapters 14 and 15 introduce functions with two or more independent variables, their derivatives,
and maximum/minimum values. This material, although new to all students, is a natural extension of
chapters 6 and 7 (and earlier chapters).
Chapter 16 explains the Lagrange multiplier, an optimization technique with many important
uses in economics. Chapter 17 introduces some new but quite simple mathematical concepts and
techniques: homogeneous functions, Euler’s theorem, and the proportionate differential.
The economic applications—to cost minimization, profit maximization, and consumer choice
among others—take up about one-half of chapters 14–16, and most of chapter 17.

Part five Some further topics

There are four chapters in this part, each of which can be studied independently of one another and
of the rest of the book. All chapters contain economic applications.
Chapter 18 introduces the mathematical technique of integration, with some applications to
economics. The maths will be familiar if you have taken AS/A2 maths, but will also be well within the
capacity of any student who has progressed this far in the book.
Chapter 19 is concerned with matrix algebra, which some students of AS/A2 maths will have met
before, but which again will be fairly readily understood by any sufficiently motivated student.
Chapter 20 introduces difference and differential equations, which will be new to all students but
which are in part merely an extension of work in chapter 13.
Finally, chapter 21 develops three relatively advanced topics as a taster for students who want
to carry their study of mathematical economics further. Owing to space constraints this chapter is
located on the book’s Online Resource Centre www.oxfordtextbooks.co.uk/orc/renshaw3e/.
Other documents randomly have
different content
never expressed in words and his dislike of his father took the form
of contempt that he had made so bad a second marriage. The new
woman in the house seemed such a poor stick. The house was
always dirty and the children, some other man’s children, were
always about under foot. When the two men who had been working
in the fields came into the house to eat, the food was badly cooked.
The father’s desire to have God make him, in some mysterious
way a Methodist minister continued and, as he grew older, the son
had difficulty keeping back certain sharp comments upon life in the
house, that wanted to be expressed. “What was a Methodist minister
after all?” The son was filled with the intolerance of youth. His father
was a laborer, a man who had never been to school. Did he think
that God could suddenly make him something else and that without
effort on his own part, by this interminable praying? If he had really
wanted to be a minister why had he not prepared himself? He had
chased off and got married and when his first wife died he could
hardly wait until she was buried before making another marriage.
And what a poor stick of a woman he had got.
The son looked across the table at his step-mother who was afraid
of him. Their eyes met and the woman’s hands began to tremble.
“Do you want anything?” she asked anxiously. “No,” he replied and
began eating in silence.
One day in the spring, when he was working in the field with his
father, he decided to start out into the world. He and his father were
planting corn. They had no corn-planter and the father had marked
out the rows with a home-made marker and now he was going
along in his bare feet, dropping the grains of corn and the son, with
a hoe in his hand, was following. The son drew earth over the corn
and then patted the spot with the back of the hoe. That was to
make the ground solid above so that the crows would not come
down and find the corn before it had time to take root.
All morning the two worked in silence, and then at noon and when
they came to the end of a row, they stopped to rest. The father
went into a fence corner.
 The son was nervous. He sat down and then got up and walked
about. He did not want to look into the fence corner, where his
father was no doubt kneeling and praying—he was always doing that
at odd moments—but presently he did. Dread crept over him. His
father was kneeling and praying in silence and the son could see
again the bottoms of his two bare feet, sticking out from among low-
growing bushes. Tom shuddered. Again he saw the heels and the
cushions of the feet, the two ball-like cushions below the toes. They
were black but the instep of each foot was white with an odd
whiteness—not unlike the whiteness of the belly of a fish.
The reader will understand what was in Tom’s mind—a memory.
Without a word to his father or to his father’s wife, he walked
across the fields to the house, packed a few belongings and left,
saying good-bye to no one. The woman of the house saw him go
but said nothing and after he had disappeared, about a bend in the
road, she ran across the fields to her husband, who was still at his
prayers, oblivious to what had happened. His wife also saw the bare
feet sticking out of the bushes and ran toward them screaming.
When her husband arose she began to cry hysterically. “I thought
something dreadful had happened, Oh, I thought something
dreadful had happened,” she sobbed.
“Why, what’s the matter,—what’s the matter?” asked her husband
but she did not answer but ran and threw herself into his arms, and
as the two stood thus, like two grotesque bags of grain, embracing
in a black newly-plowed field under a grey sky, the son, who had
stopped in a small clump of trees, saw them. He walked to the edge
of a wood and stood for a moment and then went off along the
road. Afterward he never saw or heard from them again.

About Tom’s woman adventure—he told it as I have told you the

story of his departure from home, that is to say in a fragmentary
way. The story, like the one I have just tried to tell, or rather
perhaps give you a sense of, was told in broken sentences, dropped
between long silences. As my friend talked I sat looking at him and I
will admit I sometimes found myself thinking he must be the
greatest man I would ever know. “He has felt more things, has by
his capacity for silently feeling things, penetrated further into human
life than any other man I am likely ever to know, perhaps than any
other man who lives in my day,” I thought—deeply stirred.
And so he was on the road now and working his way slowly along
afoot through Southern Ohio. He intended to make his way to some
city and begin educating himself. In the winter, during boyhood, he
had attended a country school, but there were certain things he
wanted he could not find in the country, books, for one thing. “I
knew then, as I know now, something of the importance of books,
that is to say real books. There are only a few such books in the
world and it takes a long time to find them out. Hardly anyone
knows what they are and one of the reasons I have never married is
because I did not want some woman coming between me and the
search for the books that really have something to say,” he
explained. He was forever breaking the thread of his stories with
little comments of this kind.
All during that summer he worked on the farms, staying
sometimes for two or three weeks and then moving on and in June
he had got to a place, some twenty miles west of Cincinnati, where
he went to work on the farm of a German, and where the adventure
happened that he told me about that night on the park bench.
The farm on which he was at work belonged to a tall, solidly-built
German of fifty, who had come to America twenty years before, and
who, by hard work, had prospered and had acquired much land.
Three years before he had made up his mind he had better marry
and had written to a friend in Germany about getting him a wife. “I
do not want one of these American girls, and I would like a young
woman, not an old one,” he wrote. He explained that the American
girls all had the idea in their heads that they could run their
husbands and that most of them succeeded. “It’s getting so all they
want is to ride around all dressed up or trot off to town,” he said.
Even the older American women he employed as housekeepers were
the same way; none of them would take hold, help about the farm,
feed the stock and do things the wife of a European farmer expected
to do. When he employed a housekeeper she did the housework and
that was all.
Then she went to sit on the front porch, to sew or read a book.
“What nonsense! You get me a good German girl, strong and pretty
good-looking. I’ll send the money and she can come over here and
be my wife,” he wrote.
The letter had been sent to a friend of his young manhood, now a
small merchant in a German town and after talking the matter over
with his wife the merchant decided to send his daughter, a woman
of twenty-four. She had been engaged to marry a man who was
taken sick and had died while he was serving his term in the army
and her father decided she had been mooning about long enough.
The merchant called the daughter into a room where he and his wife
sat and told her of his decision and, for a long time she sat looking
at the floor. Was she about to make a fuss? A prosperous American
husband who owned a big farm was not to be sneezed at. The
daughter put up her hand and fumbled with her black hair—there
was a great mass of it. After all she was a big strong woman. Her
husband wouldn’t be cheated. “Yes, I’ll go,” she said quietly, and
getting up walked out of the room.
In America the woman had turned out all right but her husband
thought her a little too silent. Even though the main purpose in life
be to do the work of a house and farm, feed the stock and keep a
man’s clothes in order, so that he is not always having to buy new
ones, still there are times when something else is in order. As he
worked in his fields the farmer sometimes muttered to himself.
“Everything in its place. For everything there is a time and a place,”
he told himself. One worked and then the time came when one
played a little too. Now and then it was nice to have a few friends
about, drink beer, eat a good deal of heavy food and then have
some fun, in a kind of way. One did not go too far but if there were
women in the party someone tickled one of them and she giggled.
One made a remark about legs—nothing out of the way. “Legs is
legs. On horses or women legs count a good deal.” Everyone
laughed. One had a jolly evening, one had some fun.
Often, after his woman came, the farmer, working in his fields,
tried to think what was the matter with her. She worked all the time
and the house was in order. Well, she fed the stock so that he did
not have to bother about that. What a good cook she was. She even
made beer, in the old-fashioned German way, at home—and that
was fine too.
The whole trouble lay in the fact that she was silent, too silent.
When one spoke to her she answered nicely but she herself made
no conversation and at night she lay in the bed silently. The German
wondered if she would be showing signs of having a child pretty
soon. “That might make a difference,” he thought. He stopped
working and looked across the fields to where there was a meadow.
His cattle were there feeding quietly. “Even cows, and surely cows
were quiet and silent enough things, even cows had times.
Sometimes the very devil got into a cow. You were leading her along
a road or a lane and suddenly she went half insane. If one weren’t
careful she would jam her head through fences, knock a man over,
do almost anything. She wanted something insanely, with a riotous
hunger. Even a cow wasn’t always just passive and quiet.” The
German felt cheated. He thought of the friend in Germany who had
sent his daughter. “Ugh, the deuce, he might have sent a livelier
one,” he thought.
It was June when Tom came to the farm and the harvest was on.
The German had planted several large fields to wheat and the yield
was good. Another man had been employed to work on the farm all
summer but Tom could be used too. He would have to sleep on the
hay in the barn but that he did not mind. He went to work at once.
And anyone knowing Tom, and seeing his huge and rather
ungainly body, must realize that, in his youth, he might have been
unusually strong. For one thing he had not done so much thinking as
he must have done later, nor had he been for years seated at a
desk. He worked in the fields with the other two men and at the
meal time came into the house with them to eat. He and the
German’s wife must have been a good deal alike. Tom had in his
mind certain things—thoughts concerning his boyhood—and he was
thinking a good deal of the future. Well, there he was working his
way westward and making a little money all the time as he went,
and every cent he made he kept. He had not yet been into an
American city, had purposely avoided such places as Springfield,
Dayton and Cincinnati and had kept to the smaller places and the
farms.
After a time he would have an accumulation of money and would
go into cities, study, read books, live. He had then a kind of illusion
about American cities. “A city was a great gathering of people who
had grown tired of loneliness and isolation. They had come to realize
that only by working together could they have the better things of
life. Many hands working together might build wonderfully, many
minds working together might think clearly, many impulses working
together might channel all lives into an expression of something
rather fine.”
I am making a mistake if I give you the impression that Tom, the
boy from the Ohio farm, had any such definite notions. He had a
feeling—of a sort. There was a dumb kind of hope in him. He had
even then, I am quite sure, something else, that he later always
retained, a kind of almost holy inner modesty. It was his chief
attraction as a man but perhaps it stood in the way of his ever
achieving the kind of outstanding and assertive manhood we
Americans all seem to think we value so highly.
At any rate there he was, and there was that woman, the silent
one, now twenty-seven years old. The three men sat at table eating
and she waited on them. They ate in the farm kitchen, a large old-
fashioned one, and she stood by the stove or went silently about
putting more food on the table as it was consumed.
At night the men did not eat until late and sometimes darkness
came as they sat at table and then she brought lighted lamps for
them. Great winged insects flew violently against the screen door
and a few moths, that had managed to get into the house, flew
about the lamps. When the men had finished eating they sat at the
table drinking beer and the woman washed the dishes.
The farm hand, employed for the summer, was a man of thirty-
five, a large bony man with a drooping mustache. He and the
German talked. Well, it was good, the German thought, to have the
silence of his house broken. The two men spoke of the coming
threshing time and of the hay harvest just completed. One of the
cows would be calving next week. Her time was almost here. The
man with the mustache took a drink of beer and wiped his mustache
with the back of his hand, that was covered with long black hair.
Tom had drawn his chair back against the wall and sat in silence
and, when the German was deeply engaged in conversation, he
looked at the woman, who sometimes turned from her dish-washing
to look at him.
There was something, a certain feeling he had sometimes—she, it
might be, also had—but of the two men in the room that could not
be said. It was too bad she spoke no English. Perhaps, however
even though she spoke his language, he could not speak to her of
the things he meant. But, pshaw, there wasn’t anything in his mind,
nothing that could be said in words. Now and then her husband
spoke to her in German and she replied quietly, and then the
conversation between the two men was resumed in English. More
beer was brought. The German felt expansive. How good to have
talk in the house. He urged beer upon Tom who took it and drank.
“You’re another close-mouthed one, eh?” he said laughing.
Tom’s adventure happened during the second week of his stay. All
the people about the place had gone to sleep for the night but, as
he could not sleep, he arose silently and came down out of the hay
loft carrying his blanket. It was a silent hot soft night without a
moon and he went to where there was a small grass plot that came
down to the barn and spreading his blanket sat with his back to the
wall of the barn.
 That he could not sleep did not matter. He was young and strong.
“If I do not sleep tonight I will sleep tomorrow night,” he thought.
There was something in the air that he thought concerned only
himself, and that made him want to be thus awake, sitting out of
doors and looking at the dim distant trees in the apple orchard near
the barn, at the stars in the sky, at the farm house, faintly seen
some few hundred feet away. Now that he was out of doors he no
longer felt restless. Perhaps it was only that he was nearer
something that was like himself at the moment, just the night
perhaps.
He became aware of something, of something moving, restlessly
in the darkness. There was a fence between the farm yard and the
orchard, with berry bushes growing beside it, and something was
moving in the darkness along the berry bushes. Was it a cow that
had got out of the stable or were the bushes moved by a wind? He
did a trick known to country boys. Thrusting a finger into his mouth
he stood up and put the wet finger out before him. A wind would dry
one side of the warm wet finger quickly and that side would turn
cold. Thus one told oneself something, not only of the strength of a
wind but its direction. Well, there was no wind strong enough to
move berry bushes—there was no wind at all. He had come down
out of the barn loft in his bare feet and in moving about had made
no sound and now he went and stood silently on the blanket with his
back against the wall of the barn.
The movement among the bushes was growing more distinct but
it wasn’t in the bushes. Something was moving along the fence,
between him and the orchard. There was a place along the fence, an
old rail one, where no bushes grew and now the silent moving thing
was passing the open space.
It was the woman of the house, the German’s wife. What was up?
Was she also trying dumbly to draw nearer something that was like
herself, that she could understand, a little? Thoughts flitted through
Tom’s head and a dumb kind of desire arose within him. He began
hoping vaguely that the woman was in search of himself.
 Later, when he told me of the happenings of that night, he was
quite sure that the feeling that then possessed him was not physical
desire for a woman. His own mother had died several years before
and the woman his father had later married had seemed to him just
a thing about the house, a not very competent thing, bones, a hank
of hair, a body that did not do very well what one’s body was
supposed to do. “I was intolerant as the devil, about all women.
Maybe I always have been but then—I’m sure I was a queer kind of
country bumpkin aristocrat. I thought myself something, a special
thing in the world, and that woman, any women I had ever seen or
known, the wives of a few neighbors as poor as my father, a few
country girls—I had thought them all beneath my contempt, dirt
under my feet.
“About that German’s wife I had not felt that way. I don’t know
why. Perhaps because she had a habit of keeping her mouth shut as
I did just at that time, a habit I have since lost.”
And so Tom stood there—waiting. The woman came slowly along
the fence, keeping in the shadow of the bushes and then crossed an
open space toward the barn.
Now she was walking slowly along the barn wall, directly toward
the young man who stood in the heavy shadows holding his breath
and waiting for her coming.
Afterwards, when he thought of what had happened, he could
never quite make up his mind whether she was walking in sleep or
was awake as she came slowly toward him. They did not speak the
same language and they never saw each other after that night.
Perhaps she had only been restless and had got out of the bed
beside her husband and made her way out of the house, without
any conscious knowledge of what she was doing.
She became conscious when she came to where he was standing
however, conscious and frightened. He stepped out toward her and
she stopped. Their faces were very close together and her eyes were
large with alarm. “The pupils dilated,” he said in speaking of that
moment. He insisted upon the eyes. “There was a fluttering
something in them. I am sure I do not exaggerate when I say that
at the moment I saw everything as clearly as though we had been
standing together in the broad daylight. Perhaps something had
happened to my own eyes, eh? That might be possible. I could not
speak to her, reassure her—I could not say, ‘Do not be frightened,
woman.’ I couldn’t say anything. My eyes I suppose had to do all the
saying.”
Evidently there was something to be said. At any rate there my
friend stood, on that remarkable night of his youth, and his face and
the woman’s face drew nearer each other. Then their lips met and he
took her into his arms and held her for a moment.
That was all. They stood together, the woman of twenty-seven
and the young man of nineteen and he was a country boy and was
afraid. That may be the explanation of the fact that nothing else
happened.
I do not know as to that but in telling this tale I have an
advantage you who read cannot have. I heard the tale told,
brokenly, by the man—who had the experience I am trying to
describe. Story-tellers of old times, who went from place to place
telling their wonder tales, had an advantage we, who have come in
the age of the printed word, do not have. They were both story
tellers and actors. As they talked they modulated their voices, made
gestures with their hands. Often they carried conviction simply by
the power of their own conviction. All of our modern fussing with
style in writing is an attempt to do the same thing.
And what I am trying to express now is a sense I had that night,
as my friend talked to me in the park, of a union of two people that
took place in the heavy shadows by a barn in Ohio, a union of two
people that was not personal, that concerned their two bodies and
at the same time did not concern their bodies. The thing has to be
felt, not understood with the thinking mind.
 Anyway they stood for a few minutes, five minutes perhaps, with
their bodies pressed against the wall of the barn and their hands
together, clasped together tightly. Now and then one of them
stepped away from the barn and stood for a moment directly facing
the other. One might say it was Europe facing America in the
darkness by a barn. One might grow fancy and learned and say
almost anything but all I am saying is that they stood as I am
describing them, and oddly enough with their faces to the barn wall
—instinctively turning from the house I presume—and that now and
then one of them stepped out and stood for a moment facing the
other. Their lips did not meet after the first moment.
The next step was taken. The German awoke in the house and
began calling, and then he appeared at the kitchen door with a
lantern in his hand. It was the lantern, his carrying of the lantern,
that saved the situation for the wife and my friend. It made a little
circle of light outside of which he could see nothing, but he kept
calling his wife, whose name was Katherine, in a distracted
frightened way. “Oh, Katherine. Where are you? Oh, Katherine,” he
called.
My friend acted at once. Taking hold of the woman’s hand he ran
—making no sound—along the shadows of the barn and across the
open space between the barn and the fence. The two people were
two dim shadows flitting along the dark wall of the barn, nothing
more and at the place in the fence where there were no bushes he
lifted her over and climbed over after her. Then he ran through the
orchard and into the road before the house and putting his two
hands on her shoulders shook her. As though understanding his
wish, she answered her husband’s call and as the lantern came
swinging down toward them my friend dodged back into the
orchard.
The man and wife went toward the house, the German talking
vigorously and the woman answering quietly, as she had always
answered him. Tom was puzzled. Everything that happened to him
that night puzzled him then and long afterward when he told me of
it. Later he worked out a kind of explanation of it—as all men will do
in such cases—but that is another story and the time to tell it is not
now.
The point is that my friend had, at the moment, the feeling of
having completely possessed the woman, and with that knowledge
came also the knowledge that her husband would never possess her,
could never by any chance possess her. A great tenderness swept
over him and he had but one desire, to protect the woman, not to
by any chance make the life she had yet to live any harder.
And so he ran quickly to the barn, secured the blanket and
climbed silently up into the loft.
The farm hand with the drooping mustache was sleeping quietly
on the hay and Tom lay down beside him and closed his eyes. As he
expected the German came, almost at once, to the loft and flashed
the lantern, not into the face of the older man but into Tom’s face.
Then he went away and Tom lay awake smiling happily. He was
young then and there was something proud and revengeful in him—
in his attitude toward the German, at the moment. “Her husband
knew, but at the same time did not know, that I had taken his
woman from him,” he said to me when he told of the incident long
afterward. “I don’t know why that made me so happy then, but it
did. At the moment I thought I was happy only because we had
both managed to escape, but now I know that wasn’t it.”
And it is quite sure my friend did have a sense of something. On
the next morning when he went into the house the breakfast was on
the table but the woman was not on hand to serve it. The food was
on the table and the coffee on the stove and the three men ate in
silence. And then Tom and the German stepped out of the house
together, stepped, as by a prearranged plan into the barnyard. The
German knew nothing—his wife had grown restless in the night and
had got out of bed and walked out into the road and both the other
men were asleep in the barn. He had never had any reason for
suspecting her of anything at all and she was just the kind of woman
he had wanted, never went trapsing off to town, didn’t spend a lot
of money on clothes, was willing to do any kind of work, made no
trouble. He wondered why he had taken such a sudden and violent
dislike for his young employee.
Tom spoke first. “I think I’ll quit. I think I’d better be on my way,”
he said. It was obvious his going, at just that time, would upset the
plans the German had made for getting the work done at the rush
time but he made no objection to Tom’s going and at once. Tom had
arranged to work by the week and the German counted back to the
Saturday before and tried to cheat a little. “I owe you for only one
week, eh?” he said. One might as well get two days extra work out
of the man without pay—if it were possible.
But Tom did not intend being defeated. “A week and four days,”
he replied, purposely adding an extra day. “If you do not want to
pay for the four days I’ll stay out the week.”
The German went into the house and got the money and Tom set
off along the road.
When he had walked for two or three miles he stopped and went
into a wood where he stayed all that day thinking of what had
happened.
Perhaps he did not do much thinking. What he said, when he told
the story that night in the Chicago park, was that all day there were
certain figures marching through his mind and that he just sat down
on a log and let them march. Did he have some notion that an
impulse toward life in himself had come, and that it would not come
again?
As he sat on the log there were the figures of his father and his
dead mother and of several other people who had lived about the
Ohio countryside where he had spent his boyhood. They kept doing
things, saying things. It will be quite clear to my readers that I think
my friend a story teller who for some reason has never been able to
get his stories outside himself, as one might say, and that might of
course explain the day in the wood. He himself thought he was in a
sort of comatose state. He had not slept during the night before
and, although he did not say as much, there was something a bit
mysterious in the thing that had happened to him.
There was one thing he told me concerning that day of dreams
that is curious. There appeared in his fancy, over and over again, the
figure of a woman he had never seen in the flesh and has never
seen since. At any rate it wasn’t the German’s wife, he declared.
“The figure was that of a woman but I could not tell her age,” he
said. “She was walking away from me and was clad in a blue dress
covered with black dots. Her figure was slender and looked strong
but broken. That’s it. She was walking in a path in a country such as
I had then never seen, have never seen, a country of very low hills
and without trees. There was no grass either but only low bushes
that came up to her knees. One might have thought it an Arctic
country, where there is summer but for a few weeks each year. She
had her sleeves rolled to her shoulders so that her slender arms
showed, and had buried her face in the crook of her right arm. Her
left arm hung like a broken thing, her legs were like broken things,
her body was a broken thing.
“And yet, you see, she kept walking and walking, in the path,
among the low bushes, over the barren little hills. She walked
vigorously too. It seems impossible and a foolish thing to tell about
but all day I sat in the woods on the stump and every time I closed
my eyes I saw that woman walking thus, fairly rushing along, and
yet, you see, she was all broken to pieces.”
THE MAN WHO BECAME A WOMAN
 THE MAN WHO BECAME A WOMAN

M Y father was a retail druggist in our town, out in Nebraska, which

was so much like a thousand other towns I’ve been in since that
there’s no use fooling around and taking up your time and mine
trying to describe it.
Anyway I became a drug clerk and after father’s death the store
was sold and mother took the money and went west, to her sister in
California, giving me four hundred dollars with which to make my
start in the world. I was only nineteen years old then.
I came to Chicago, where I worked as a drug clerk for a time, and
then, as my health suddenly went back on me, perhaps because I
was so sick of my lonely life in the city and of the sight and smell of
the drug store, I decided to set out on what seemed to me then the
great adventure and became for a time a tramp, working now and
then, when I had no money, but spending all the time I could loafing
around out of doors or riding up and down the land on freight trains
and trying to see the world. I even did some stealing in lonely towns
at night—once a pretty good suit of clothes that someone had left
hanging out on a clothesline, and once some shoes out of a box in a
freight car—but I was in constant terror of being caught and put into
jail so realized that success as a thief was not for me.
The most delightful experience of that period of my life was when
I once worked as a groom, or swipe, with race horses and it was
during that time I met a young fellow of about my own age who has
since become a writer of some prominence.
 The young man of whom I now speak had gone into race track
work as a groom, to bring a kind of flourish, a high spot, he used to
say, into his life.
He was then unmarried and had not been successful as a writer.
What I mean is he was free and I guess, with him as with me, there
was something he liked about the people who hang about a race
track, the touts, swipes, drivers, niggers and gamblers. You know
what a gaudy undependable lot they are—if you’ve ever been
around the tracks much—about the best liars I’ve ever seen, and not
saving money or thinking about morals, like most druggists,
drygoods merchants and the others who used to be my father’s
friends in our Nebraska town—and not bending the knee much
either, or kowtowing to people, they thought must be grander or
richer or more powerful than themselves.
What I mean is, they were an independent, go-to-the-devil, come-
have-a-drink-of-whisky, kind of a crew and when one of them won a
bet, “knocked ’em off,” we called it, his money was just dirt to him
while it lasted. No king or president or soap manufacturer—gone on
a trip with his family to Europe—could throw on more dog than one
of them, with his big diamond rings and the diamond horse-shoe
stuck in his necktie and all.
I liked the whole blamed lot pretty well and he did too.
He was groom temporarily for a pacing gelding named Lumpy Joe
owned by a tall black-mustached man named Alfred Kreymborg and
trying the best he could to make the bluff to himself he was a real
one. It happened that we were on the same circuit, doing the West
Pennsylvania county fairs all that fall, and on fine evenings we spent
a good deal of time walking and talking together.
Let us suppose it to be a Monday or Tuesday evening and our
horses had been put away for the night. The racing didn’t start until
later in the week, maybe Wednesday, usually. There was always a
little place called a dining-hall, run mostly by the Woman’s Christian
Temperance Associations of the towns, and we would go there to eat
where we could get a pretty good meal for twenty-five cents. At
least then we thought it pretty good.
I would manage it so that I sat beside this fellow, whose name
was Tom Means and when we had got through eating we would go
look at our two horses again and when we got there Lumpy Joe
would be eating his hay in his box-stall and Alfred Kreymborg would
be standing there, pulling his mustache and looking as sad as a sick
crane.
But he wasn’t really sad. “You two boys want to go down-town to
see the girls. I’m an old duffer and way past that myself. You go on
along. I’ll be setting here anyway, and I’ll keep an eye on both the
horses for you,” he would say.
So we would set off, going, not into the town to try to get in with
some of the town girls, who might have taken up with us because
we were strangers and race track fellows, but out into the country.
Sometimes we got into a hilly country and there was a moon. The
leaves were falling off the trees and lay in the road so that we kicked
them up with the dust as we went along.
To tell the truth I suppose I got to love Tom Means, who was five
years older than me, although I wouldn’t have dared say so, then.
Americans are shy and timid about saying things like that and a man
here don’t dare own up he loves another man, I’ve found out, and
they are afraid to admit such feelings to themselves even. I guess
they’re afraid it may be taken to mean something it don’t need to at
all.
Anyway we walked along and some of the trees were already bare
and looked like people standing solemnly beside the road and
listening to what we had to say. Only I didn’t say much. Tom Means
did most of the talking.
Sometimes we came back to the race track and it was late and the
moon had gone down and it was dark. Then we often walked round
and round the track, sometimes a dozen times, before we crawled
into the hay to go to bed.
 Tom talked always on two subjects, writing and race horses, but
mostly about race horses. The quiet sounds about the race tracks
and the smells of horses, and the things that go with horses,
seemed to get him all excited. “Oh, hell, Herman Dudley,” he would
burst out suddenly, “don’t go talking to me. I know what I think. I’ve
been around more than you have and I’ve seen a world of people.
There isn’t any man or woman, not even a fellow’s own mother, as
fine as a horse, that is to say a thoroughbred horse.”
Sometimes he would go on like that a long time, speaking of
people he had seen and their characteristics. He wanted to be a
writer later and what he said was that when he came to be one he
wanted to write the way a well bred horse runs or trots or paces.
Whether he ever did it or not I can’t say. He has written a lot, but
I’m not too good a judge of such things. Anyway I don’t think he
has.
But when he got on the subject of horses he certainly was a
darby. I would never have felt the way I finally got to feel about
horses or enjoyed my stay among them half so much if it hadn’t
been for him. Often he would go on talking for an hour maybe,
speaking of horses’ bodies and of their minds and wills as though
they were human beings. “Lord help us, Herman,” he would say,
grabbing hold of my arm, “don’t it get you up in the throat? I say
now, when a good one, like that Lumpy Joe I’m swiping, flattens
himself at the head of the stretch and he’s coming, and you know
he’s coming, and you know his heart’s sound, and he’s game, and
you know he isn’t going to let himself get licked—don’t it get you
Herman, don’t it get you like the old Harry?”
That’s the way he would talk, and then later, sometimes, he’d talk
about writing and get himself all het up about that too. He had some
notions about writing I’ve never got myself around to thinking much
about but just the same maybe his talk, working in me, has led me
to want to begin to write this story myself.
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