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may be presumed that we want above one-third of the common produce. If we should want five-tenths or half the common produce, the price would rise to near five times the common rate.

Whether this estimate is accurate has been a matter of dispute, but the important fact is not doubted that price ascends far faster than supply falls short.

The sufferings caused by such violent rises of price were fearfully aggravated by the folly of human legislation. The obvious resource against the uncertainties of the seasons was plainly to extend, as widely as possible, the area from which supplies might be regularly drawn. The broader the fields, and the more diverse the climates, from which a people derives its means of existence, incomparably the greater will be their security against starvation, as also against the social and political disorders to which famine so easily leads. But legislators ruled it otherwise.

Artificial contraction of the supply of food would have been bad enough for a people, who in ordinary seasons could protect themselves from want, but applied to a country which at all times could not raise sufficient food for its inhabitants, was the very climax of perverseness. Duties were imposed on corn, not for the sake of obtaining revenue, but avowedly with the object of impeding importation. was this all. The method adopted reached the acme of absurdity. A prohibitory duty was laid on corn, but as the consciousness could not be escaped, that a season might come when starvation would be at hand, it was enacted that if the price reached a certain figure, the ports should be opened and all duty removed. Thus

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the growth of supplies abroad for England was converted into gambling, as were also the operations of merchants. There were traders whose custom it was when harvest time approached, to send inspectors round the country with small square hollow frames within which they enclosed from many fields ears of wheat. The ears were gathered, the grains in each counted, and an estimate made of the probable yield per acre. If the prospect looked gloomy straightway large orders for the purchase of corn were sent abroad. The merchant took the chance of a great gain or a great loss. Could an actual desire to keep a people short of bread, and to prevent corn from being grown abroad for its support, have devised a more effectual plan for accomplishing its object? How could foreign farmers sow their fields with wheat for England under such a system?

One point more remains. In civilised countries purchasing in retail shops at the prices asked is substituted for bargaining as in the East, and for the higgling of the market as for cattle at fairs. The principle relied upon for protecting society from lying at the mercy of the shopkeepers is competition, but, as Mr Mill saw, it is a far weaker force in retail than in wholesale business. As we have already seen, there are many prices for the same goods in the same town, often in the same shop through different doors. Either from habit, or fashion, or dislike of trouble, customers persevere in purchasing where they well know the price to be excessive. still greater defect seems inseparable from retail business. When cost of production rises, shopkeepers are swift to raise prices, and reasonably so, but when

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the opposite fact occurs, and they buy their goods on cheaper terms from the wholesale houses, their power in resisting a reduction of their prices to what fair dealing demands is wonderful. The lowering process is slow indeed. No shopkeeper likes to be the first to adapt his rates to altered cost of production, and buyers are weak in applying compulsion. The dealers are a combined body, purchasers a mass of single individuals, mostly too busy to carry on a battle for small purchases. Thus the state of supply and demand is set at defiance. It was mainly the strength and success of this onesided management of the market, this quickness to rise and this slowness' to fall, which called co-operative stores into existence, and they may have a greatness in the future which retail dealers would be wise to think upon in time.

These observations bring us again to the perpetual moral that exchanges and their conditions cannot be reduced to scientific rule. The personal element with all its fitful variations of fairness, intelligence, habit, greed, good nature, dislike of trouble, is ever mighty over prices. Supply and demand is checked by many other forces, though in the main it is the strongest force of all.

CHAPTER IV.

CAPITAL.

WE have seen that cost of production is composed of all the compensations given for services rendered to consumers, that is for providing materials and with them making the commodities which they require and purchase. Amongst these elements of cost, wages and profits occupy prominent places. We are thus brought to inquiring into the nature of production and the instruments by which it is accomplished.

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Producing or making is achieved by the use of man's faculties, bodily and mental; that is by labour. To make or, more broadly, to perform a service, is to labour; and this is an act of exertion of human powers. In every case there must be an effort of body. thought of the captain who directs the movements of the man at the wheel cannot be communicated without moving his lips or his hands. The inventor who multiplies wealth by his genius must speak or write. But mind is seldom if, indeed, it is ever absent, even in the performance of mechanical motions; and it plays an enormous part in the productiveness of the labourer. Man both possesses in himself, and is surrounded by a physical world full of endless capabilities of yielding useful results, that is, results which gratify desire. The intelligence which guides labour, from the knowledge

how to make and handle a spade to science over all its vast range, is the mighty power bestowed on man for the creation of the innumerable products which are summed up in the word civilisation. Thought is the commanding force in transforming the physical elements of the world into things fitted to satisfy human desire. One conclusion follows from this truth. As thought takes a share in all labour, to think in producing is to labour. Even when no movement of the body is employed, the thought of the engineer, the chemist, the designer of forms, the inventor of machines, even before word is spoken or written, is labour. Common use has appropriated the term labourers to those who are known as workmen, and this usage must be respected by a Political Economy whose sphere is the every-day life of men. But it is essential to recognise that those who contribute thought to labour are as real labourers as those who contribute bodily strength and action. The thought which produced the steam engine, the compass, and the electric telegraph is amongst the greatest of forces that ever laboured to create wealth and satisfactions for mankind.

Labour, it is obvious, varies prodigiously in severity and productiveness. The hodman who climbs ladders with bricks upon his head performs very hard work, yet the transfer of bricks from the ground to the scaffolding is, though indispensable, in itself a very small service. The great chemist who carries on experiments in his laboratory may not be heavily taxed with bodily effort, yet he may make a discovery laden with infinite utility. Economists have pushed the distinctions between labourers still further; they have raised

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