National Wealth

Wealth is, in all countries, distributed in every degree of gradation, from the populous level of mediocrity to the solitary pinnacle of extreme affluence.

Accordingly, the products most generally desirable are really demanded by a limited number only, because they alone have wherewithal to obtain them; and even their ability may be more or less according to cir- cumstances. Whence it may be further concluded, that the same product or products may be in greater demand at a lower scale of price, and when attainable by less productive exer- tion, although nowise increased in utility, merely because accessible to a greater number of consumers; and, on the con- Each class of productive agency has a current price peculiar to itself. If the productive agency exerted in the production of a bushel of wheat can obtain for itself but 1-15 of its own product, it will be entitled to no more than 1-15 of the value of any other product obtainable by exchange for that quantity of wheat; for instance to 1-15 of a dollar= and so of other products.

Thus it is obvious, that the current value of productive exertion is founded upon the value of an infinity of products comtrary, less in demand at a higher scale of price, because accessible to a smaller number. are the causes of a general nature, that limit the demand for each product, and for all products in general.

Suppose that, in a severe winter, a method should be hit upon of manufacturing knit-waistcoats of woollen at 2 dollars each; probably all who should have 2 dollars left, after satisfying more urgent wants, would provide themselves with these waistcoats; but those who should have but a dollar and a half left must still go without. If the same article could be pro- duced at one dollar and a half, these latter also might all be provided and become consumers; and the consumption would be still further extended, if they should be produced at one dollar only. In this manner, products formerly within reach of the rich alone have been made accessible to almost every class of society, as in the case of stockings. In respect to supply, it consists of the whole of any commod- ity which the owners for the time being be disposed to part with for an equivalent, in other words, to sell at the current rate, and not merely of what is actually on sale at the time. The whole of this is also called the circulating or floating stock. Yet, strictly speaking, no commodity is in circulation, except during the act of transit from the seller to the pur- chaser, which is almost instantaneous. But the bare act of tran- sit has no influence on the terms of the bargain, to which it is commonly subsequent; it is a mere matter of executive detail. The point of real importance is, the inclination of the owner to part with the object of property. A commodity is in circu- lation, whenever it is in quest of a purchaser, which it may be in the most urgent need of, without altering its locality in the least. Thus, the stock in a shop or warehouse is in circulation; thus too, lands, rent-charges, houses, and the like, are said to be in circulation, and the expression is intelligible enough. Even industry is some. times in circulation and sometimes not, according as it is either in quest of employment, or al- ready employed.

When a product is raised in price, whether by taxation or otherwise howsoever, the contrary effect is experienced; the number of its consumers is reduced; for it can only be ob- tained by such as can afford to pay for it; and the ability to purchase is not increased by the same causes, that operate to raise the price. Thus, in England, the great majority of the population is wholly precluded from the consumption of vi- nous liquors, and of many other articles; for their attainment involves so large a sacrifice of products, or of productive agency, that those only can attempt it, who have a great deal of either to spare. In such cases, not only is the number of consumers diminished, but the consumption of each consumer is reduced also. Though a consumer of coffee may not be compelled, by a rise of its price, to relinquish that beverage altogether, he must at all events curtail the amount of his con- sumption; which is then like that of two individuals, of whom one discontinues, and the other remains able and willing to continue the use of the article. For the same reason, an object ceases to be in circulation, tile moment it is set apart, either for consumption or for export to an. other market, or accidentally destroyed, or withdrawn by the caprice of its owner, or held back at a price, which amounts to a refusal to sell.

Inasmuch as supply consists of those commodities only, which are to be had at the current price or ordinary rate of the mar- ket, a commodity raised by the cost of production above that level, will cease to be produced, or to form part of the supply. Wherefore, the supply will be more abundant, when the cur- rent price is high, and more scanty when that price has de- clined.

In commercial speculation, as the purchaser does not buy for his own consumption, he proportions his purchases to what he expects to sell.

Since, then, the quantity he can sell depends upon the price he can afford to sell at, he will buy less according as the price rises, and more according as it falls. Besides these universal and permanent limitations of supply ana demand, there are others of a casual and transient nature, which always operate concurrently with the former. In poor countries, objects of even the commonest use, and of inferior price, frequently exceed the means of a great propor- tion of the population. There are countries, where shoes, though cheap, are out of reach of most of the inhabitants. The price of this commodity does not fall to a level with the means of the people; because that level is still below the bare cost of production.

But, shoes of leather not being absolutely necessary to existence, those who are unable to procure these, wear wooden shoes, (sabots) or go barefoot.

When this is unhappily the case with an article of primary necessity, part of the population must perish, or at least cease to be renewed. These The prospect of an abundant vintage will lower the price of all the wine on hand, even before a single pipe of the ex- pected vintage has been brought to market; for the supply is brisker, and the sale duller, in consequence of the anticipa- tion.

The dealers are anxious to dispose of their stock in hand, in fear of the competition of the new vintage; while the con- sumers, on the other hand, retard their fresh purchases, in the expectation of gaining in price by the delay.

A large arrival and immediate sale of foreign articles all at once, lowers their price, by the relative excess of supply above demand.

On the contrary, the expectation of a bad vintage, or the loss of many consumption; that is to say, a diminution of the prosperity of the community, which consists in production and consump- tion. Even the produce already existing is not so properly consumed as it should be.

For, in the first place, the proprietor withholds it as much as possible from the market. In the next, it passes into the hands, not of those who want it most, but of those who have most avidity, cunning, and dishonesty; and often with the most flagrant disregard of natural equity and humanity.

A scarcity of corn occurs; the price rises in consequence; yet still it is possible, that the labourer, by re- doubling his exertions, or by an increase of wages, may earn wherewithal to buy it at the market price.

In the mean time, the magistrate fixes corn at half its natural price= what is the consequence?

Another consumer, who had already provided himself, and consequently would have bought no more corn had it remained at its natural price, gets the start of the labourer, and now, from mere superfluous precaution, and to take advantage of the forced cheapness, adds to his own store that portion, which should have gone to the labourer.

The one has a double provision, the other none at all.

The sale is no longer regulated by the wants and means, but by the superior activity of the purchasers. It is, therefore, not surprising, that a maximum of price on commodities should aggravate their scarcity.

cargoes on the voyage, will raise prices above the cost of production.

Moreover, there are some particular products, which nature or human institutions have subjected to monopoly, and thus prevented from being supplied in equal abundance with those of a similar description. Of this kind are the wines of particular and celebrated vineyards, the soil of which cannot be extended by the extended demand. So the postage of letters is, in most countries, charged at a monopoly-price.

Finally, whatever be the general or particular causes, that operate to determine the relative intensity of supply and de- mand, it is that intensity, which is the ground-work of price on every act of exchange; for price, it will be remembered, is merely the current value estimated in money.

The demand for all objects of pleasure, or utility, would be unlimited, did not the difficulty of attainment, or price, limit and circum- scribe the supply. On the other hand, the supply would be infinite, were it not restricted by the same circumstance, the price, or difficulty of attainment= for there can be no doubt, that whatever is producible would then be produced in unlimited quantity, so long as it could find purchasers at any price at all.

Demand and supply are the opposite extremes of the beam, whence depend the scales of dearness and cheapness; the price is the point of equilibrium, where the momentum of the one ceases, and that of the other begins.

A law, that simply fixes the price of commodities at the rate they would naturally obtain, is merely nugatory, or serves only to alarm producers and consumers, and consequently to derange the natural proportion between the production and the demand; which proportion, if left to itself, is invariably established in the manner most favourable to both.

This is the meaning of the assertion, that, at a given time and place, the price of a commodity rises in proportion to the increase of the demand and the decrease of the supply, and vice versa; or in other words, that the rise of price is in direct ratio to the demand, and inverse ratio to the supply.

Hope, fear, malevolence, benevolence, in short, every human passion or virtue may influence the scale of price. But it is the province of moral science to estimate the intensity of their effect upon actual price in every instance, which is the only thing we are here to attend to.

Neither need we advert to the operation of the causes of a nature purely political, that may operate to raise the price of a product above the degree of its real utility. For these are of the same class with actual robbery and spoliation, which come under the department of criminal jurisprudence, although they may intrude themselves into the business of the distribution of wealth.

The functions of national government, which is a class of industry, whose result or product is consumed by the governed as fast as it is produced, may be too dearly paid for, when they get into the hands of usurpation and tyranny, and the people be compelled to contribute a larger sum than is necessary for the maintenance of good government.

This is a parallel case to that of a producer without competitors, whether he have got rid of them by force, or by accidental circumstances.

He may raise his product to what price he will, even to the extreme limit of the consumer’s ability, if his monopoly be seconded by author-

The utility of an object, or, what is the same thing, the desire to obtain it, may possibly be unable to raise its price to a level with its cost of production. In this case it is not produced, because its production would cost more than the product would be worth.

Probably the price that caviar 6 would fetch

at Paris would hardly equal the charge of producing it there; for it is so little in request there, that it scarcely would bring the lowest price that it could be procured for, and consequently it is not produced; but elsewhere, it is both produced and consumed in great quantities.

When the price of any object is legally fixed below the charges of its production, the production of it is discontinued, be- cause nobody is willing. to labour for a loss= those, who before earned their livelihood by this branch of production, must die of hunger, if they find no other employment; and those, who could have purchased the product at its natural price, are obliged to go without it.

The establishment of the fixed rate, or maximum, is a suppression of a portion of production and industry, and in that distinguished by the general name of capital, is far more sacred and indisputable, than in the remaining class of natural powers and agents.

The industrious faculties of man, his intelligence, muscular strength, and dexterity, are peculiar to himself and inherent in his nature. And capital, or accumulated produce, is the mere result of human frugality and forbearance to exercise the faculty of consuming, which, if fully exerted, would have destroyed products as fast as they were created, and these never could have been the existing property of any one; wherefore, no one else, but he who has practised this self-denial, can claim the result of it with any show of justice.

Frugality is next of kin to the actual creation of products, which confers the most unquestionable of all titles to the property in them.

ity. But it is the province of the political philosopher, and not of the political economist, to teach us how this evil may be avoided.

In like manner, although it be the province of ethics, or of the knowledge of the moral qualities of man, to teach the means of ensuring the good conduct of mankind, in their mutual relations, yet, whenever the intervention of a superhuman power appears necessary to effect this purpose, those who assume to be the interpreters of that power must be paid for their service.

If their labour be useful, its utility is an immaterial product, which has a real value; but, if mankind be nowise improved by it, their labour not being productive of utility, that portion of the revenues of society, devoted to their maintenance, is a total loss; a sacrifice with out any return.

With the most earnest wish to confine myself within my subject it is impossible to avoid sometimes touching upon the confines oi policy and morality, were it only for the purpose of marking out their points of contact.

These several sources of production are some of them alienable, as land, implements of arts, &c.; and some inalienable, as personal faculties. Some also are consumable, as are all the items of floating capital; others, inconsumable, as land.

Some, too, there are, that are neither alienable nor consumable, yet are capable of destruction, as the human faculties, intellectual and corporeal, which vanish with human existence.