modities, for whose sake alone, all exchanging, all making and producing, all buying and selling, all wholesale dealers and their proceedings, exist. Of what possible importance can it be that wholesale dealers have one price only determined by competition-not that this assumption is true-if a man encounters in the same street different prices for the same clothes, or meat, or haberdashery in different shops? Nay, if one may believe common report, for different customers or customers entering the shop by different doors. Of what use is Political Economy to a man who tells him about some law of wholesale prices, but leaves him at the mercy of the whims or cunning of the shopkeepers of whom he must buy? He would say, and with justice, that the retail dealers and their ways are real life for him; and that wholesale dealers with their scientific laws, if they have any, are only part of a distant machinery. He would think that the pursuit after science in such regions would be waste of time; and such laws pure imagination.

Many economists have striven to establish competition as the scientific law of exchange; but their efforts as yet have not met with success. Mr Mill's confession, that competition is not the ruler of retail trade, is decisive of the fact that human nature will not and does not take its stand absolutely on competition. Men, in buying and selling, are not uniformly governed by the desire of making as large a gain, or saving as much money as possible, however much this principle is fondly laid down by Economists, as the one foundation of their science. There are indestructible elements in human nature which come into play here

as disturbing forces. the cheapest, though they generally strive most vigorously to sell in the dearest market. It is not ignorance of Political Economy which misleads them into error; it is their own carelessness, indifference or laziness. Fancy acts on the feelings of buyers or a long habit of dealing at a particular shop-kindly feelings for a tradesman, a strong dislike of the trouble which the pursuit of cheapness imposes. Who has not witnessed the endless cases of wilful determination to persist in buying of some particular dealer, though people know perfectly well that he refuses to come down in his prices when the value of his goods has fallen in the general market. Then on the side of the seller, a feeling of moderation often exercises a powerful sway, or a love of a reputation for fair dealing, or esteem for the good opinion of the neighbourhood, or contentment with reasonable profits. Moral forces have and ought to have power to influence conduct in economical, as well as in every other department of human life.

Men will not uniformly buy in

The grand idea of constructing a science of Political Economy on a law of human nature, that men will steadily pursue what most promotes their interest through the agency of competition, rests on a foundation of sand. It is no answer to reply that Political Economy concerns itself solely with the most efficient methods of accumulating wealth. If such is its vocation, it will never explain the manifold diversities of human conduct with respect to wealth. It has to deal with beings whose moral nature cannot be separated from any portion of their existence. To reap always the largest harvest of gain, by strict adherence to the most money-making

methods, is not practical human life, and never ought to be. But let there be no misunderstanding here. I do not insinuate that the man who is the keenest trader, the shrewdest observer of the state of supply and demand, who wins every practicable, but yet honestly attainable penny, who has the skill to ascertain the really lowest price, and the will to obtain it, is an offender against morality. What is here intended is that by the side of the motive of self-interest, there are other feelings and forces which do, and ever will, modify human conduct. Hence arises the certainty that no scientific laws as to how men will act in determining prices, in buying and selling, in dealing with demand and supply, are possible. Fixed rules cannot be laid down, which upon deductive principles shall teach buyers and sellers what is the state of supply and demand, and what ultimate prices will be its consequence, and which will make those ultimate prices to prevail. Economic teaching can give tendencies only, but to explain them clearly is itself knowledge of great importance.

On the other hand no one can dispute the strong, often violent tendency to competition which prevails in almost every branch of trade. The larger the scale on which business is carried on, the farther removed producers are from ultimate consumers, the more powerful is this tendency, because personal feeling has a far narrower scope, The competition becomes of the keenest, when the struggle breaks out between nation and nation. What has been recently written on the rivalry between the iron manufacturers of England and America strikingly illustrates its force.

Of the power of feeling to disturb a scientific

determination of prices, the war between capital and labour-for it is nothing less-as waged in England and in so many other countries, furnishes a most vivid illustration. Strikes and lock-outs, closed factories and impoverished workmen, profits arrested and machinery injured by want of use, loss and distress attest the energy with which the reasonable and natural process of exchange, in the very teeth of scientific teaching, is resisted. Science has little to say in foretelling the ultimate issue of a particular strike. How helpless is it to guide an employer whether it will be safe for him to engage in a long contract. With such volcanic forces rumbling under ground, who can estimate what will be the state of supply and demand, what the conditions of exchange, what will be the cost of production, in what direction prices will move? Economists may deplore the obstinacy with which the claim to science is despised, and grand formulated tables for ascertaining coming commercial weather are disregarded, but the feelings of men's souls, the varying importance attached to reward compared with the sacrifice entailed by effort, and the passions of the human heart will break in like tornadoes, and scatter all scientific determination of market-values to the winds.

Let us now return to the question, What determines the rates of exchange? What are the forces which act on feeling to fix its sense of value? On this great subject we may learn much that is highly useful, but the preceding remarks will prepare us for not expecting scientific laws.

We have seen that every exchange is the consequence of two desires and two efforts or sacrifices. The object exchanged for money must possess utility for the

purchaser, however trivial or absurd that utility may be, otherwise he will not buy; there will be no exchange. As Mr Danson remarks, the final decision whether there shall be an exchange rests with the buyer. Secondly, for a purchase effort is required for the acquisition of the useful object. This is called by some writers difficulty of attainment. A man who can procure a thing— such as water or air, under ordinary circumstanceswithout trouble, will not give money for it. These are the two necessary elements of value in exchange, of market-value or price, utility and difficulty of attainment. But as has already been shown, in the meaning of Adam Smith's formula, value in use and value in exchange, value is not destroyed, because no purchaser can be found. There are valuable things, things valued which are not saleable as well as others that are.

We are thus brought to the conditions and circumstances which act on value in exchange. The articles which are exchanged, which are bought and sold, divide themselves into two classes. The first class comprises things which are unique or rare, which cannot be multiplied at will, which generally are not consumed at once but endure, commonly with increased value. Belonging to this class are special diamonds, old pictures or statues by great artists, beautiful porcelain, fine sites for building and the like. In the first instance their cost of production had to be defrayed, but once produced, they acquire special values with which their original cost has little connection.

The second class is composed of the great bulk of commodities which are required for the support of human life in a civilized country. They are made for