unique, the antagonism of contending feelings will be purely personal. The market value will be the result of a struggle to discover the strength of the desire to retain possession and of the temptation offered for acquisition. If there be a deficiency in the supply of an indispensable article which must be purchased, the whole supply will be disposed of necessarily. Many will be compelled to reduce their other consumption to escape too severe a sacrifice, and the sellers will be able to establish through the competition of purchasers a raised market value. If, on the contrary, supply is excessive, sellers will be forced to tempt buyers to increased consumption by diminished price. Goods which have ceased to be fashionable will be sold off at very low terms; and fish, at last, may have to be given away.

Then again, the price offered by demand may be unsatisfactory to sellers, and they refuse to sell; thus, beasts are often withheld at a market and driven back home. They never really become supply; by an act of will they are removed from the class of supply. Still more is this the case with wheat, of which a sample only is brought to market; it remains at home; the sample was a mere experiment whether it should pass into supply. There is no intention of taking a lower price than one determined upon beforehand. But these are conditions which are all discovered by actual experiment; they cannot be grouped under any law, for there is no uniform price to govern the feelings of demanders and suppliers and so determine a scientific market value. The ultimate price can be discovered by trial only: in no other way can the strength of the contending feelings be ascertained.

Professor Cairnes could cite other elaborate efforts only as approximative to the law of market price, and he acknowledged that his statement would be utterly unsatisfactory to some economists, whose views in connection with their science were more ambitious than his own. We must come to the same conclusion with Mr Shadwell. We must acknowledge our inability to devise a theory which will satisfactorily account for the phenomena of market value, and must leave them unexplained. We must hold that the fluctuations of the value of commodities cannot be predicted. At the same time I am unable to share Mr Shadwell's confidence that these phenomena conform to law, though we cannot say what it is. The nature of the regulating force, human feeling, in such matters necessarily, as it seems to me, excludes the dominion of law.

It remains to notice some important points connected with supply and demand.

It results from the nature of all trades that all goods on sale are goods offered in exchange for other goods. Every article in every shop or market asks to be exchanged for some other article in some other market. This cardinal fact is disguised by the use of money in exchanging. Money betrayed even so acute a thinker as Mr Mill into the great error of supposing that goods are a demand for money. If that is so, then this demand is little gratified in modern trade. The Clearing House of London alone exchanges goods for goods by the help of pen and paper and figures to an extent enormously greater than all the coin and bank notes in the kingdom. Goods in shops are a demand for other goods. The seller with the money he takes buys other

called the natural value or price, by Adam Smith; by Professor Cairnes and others, the normal price. But it would be a mistake to regard this as anything more than a rough and general statement in relation to temporary fluctuations. It indicates merely average or medium price-that price which a farmer exposed to the influence of the seasons must in the long run obtain, if he is not to be ruined by his business. And one further feature of this normal or natural price must be carefully noticed. Along with the storms which trouble the surface of the market price, there may be going on at the same time a steady set of the tide, upwards or downwards, altering its permanent level. Thus, compared with forty years ago, the natural or average price of wheat has steadily sunk, whilst the winds of good and bad harvests were blowing as usual over the land. What the repeal of the Corn Laws, with the vast area of supply which it won, did for wheat, other influences have done for iron, cotton, and many other commodities. Their natural price is changed; as a rule it stands at a lower figure.

It is very important to trace out more closely the main elements of cost of production. Adam Smith resolves this cost into labour alone ultimately. He describes labour as the real price of everything, what everything costs to the man who wants to acquire it. Ricardo follows in the same path; he lays down labour to be the real foundation of value in exchange. Both these statements are incorrect; they fail in completeness of analysis. Even were the assertion accurate, the word labour is not a well-chosen expression. There are many things which enter into cost of produc

tion which it would be startling to call labour. Labour is a term closely associated with certain classes of society. Workmen of all kinds are called labourers, yet sailors, physicians, barristers, teachers, work very hard, and are never called labourers. The idea, however, contained in the word is accurate; effort is the thing intended to be described by the word labour, but as it is contributed in producing by persons who are not associated by popular language with the class of labourers, a better expression for it may be found as an element of cost of production. That expression is service; it furnishes all the meaning that is desired.

The question has been often asked, Is the skill of the labourer, or rather the expense of his training and education, an item reckoned in exchanging, a part of the cost of production? Mr Danson, following many leading writers, considers "that it has been wisely agreed that we shall refrain from putting any pecuniary valuation upon men. We ignore the money cost of rearing a day labourer to maturity. Yet it is considerable, and consistency seems to require that we should do the same as to the higher but strictly analogous cost of rearing a lawyer or a physician."* It is always with regret that I differ from so distinguished a master of practical Political Economy as Mr Danson; but on this subject I feel unable to go along with this statement. It is perfectly true, as Professor Jevons has remarked, that on the day of exchange, when an article is bought, the purchaser puts no question as to the history of its manufacture. He looks only at it as it stands in the market; he

*

"Lectures on the Political Economy of Daily Life," by J. T. Danson, Liverpool.

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thinks only of its market value on that day. But both the Professor and Mr Danson, by taking their stand on this fact, forget that if the skill and training required for the manufacture of the commodity be not compensated—speaking of its continued production—it will cease to be made. If the cost of the education of the great lawyer and physician is not replaced by their fees, then their learning and their skill will disappear from the world. The highly paid training of the chronometermaker and the painter must be paid for by the buyers, or farewell to accurate chronometers and exquisite pictures. These are practical and very real facts, and they govern the situation. The objection to putting a pecuniary value on a man is a mere sentiment; it has no foundation in the actual constitution of society.

But is service, in the sense of exertion made for another, the whole of what an article costs to a man who wishes to acquire it, all that he has to pay for? There are other matters undeniably to be paid for, before he can get it made for him. In many countries, a tax will have been levied on the materials of which it is composed. Then there may be a natural monopoly— such as a quicksilver mine, or a distinguished vineyard -which imposes its charge on a consumer. Unquestionably the wages given for labour figure most largely in the cost of most articles produced; but the engineer, manager, clerk, and other officers obtain much larger salaries—not for mere labour, but for skill and intelligence. Still more yet, the reward claimed by the capitalist for the use of the funds which his abstinence has provided, has no connection with labour, and must be given by the buyer under the name of interest. All these things