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rent of the land, the wages of the labour, and CHA P. the profits of the ftock employed in raifing, preparing, and bringing it to market, according to their natural rates, the commodity is then fold for what may be called its natural price.
The commodity is then fold precifely for what it is worth, or for what it really cofts the perfon who brings it to market; for though in common language what is called the prime coft of any commodity does not comprehend the profit of the person who is to fell it again, yet if he fells it at a price which does not allow him the ordinary rate of profit in his neighbourhood, he is evidently a lofer by the trade; fince by employing his flock in fome other way he might have made that profit. His profit, befides, is his revenue, the proper fund of his fubfiftence. As, while he is preparing and bringing the goods to market, he advances to his workmen their wages, or their fubfiftence; fo he advances to himself, in the fame manner, his own fubfiftence, which is generally fuitable to the profit which he may reasonably expect from the fale of his goods. Unless they yield him this profit, therefore, they do not repay him what they may very properly be faid to have really coft him.
Though the price, therefore, which leaves him this profit, is not always the lowest at which a dealer may fometimes fell his goods, it is the loweft at which he is likely to fell them for any confiderable time; at leaft where there is perfect liberty, or where he may change his trade as often as he pleases.
The actual price at which any commodity is commonly fold is called its market price. It may either be above, or below, or exactly the fame with its natural price.
The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which muft be paid in order to bring it thither. Such people may be called the effectual demanders, and their demand the effectual demand; fince it may be fufficient to effectuate the bringing of the commodity to market. It is different from the abfolute demand. A very poor man may be faid in fome fenfe to have a demand for a coach and fix; he might like to have it; but his demand is not an effectual demand, as the commodity can never be brought to market in order to fatisfy it.
When the quantity of any commodity which is brought to market falls fhort of the effectual demand, all those who are willing to pay the whole value of the rent, wages, and profit, which must be paid in order to bring it thither, cannot be fupplied with the quantity which they want. Rather than want it altogether, fome of them will be willing to give more. A competition will immedi ately begin among them, and the market price will rife more or lefs above the natural price, according as either the greatness of the deficiency, or the wealth and wanton luxury of the competitors, happen to animate more or less the eagerness of
of the competition. Among competitors of equal C HA P. wealth and luxury the fame deficiency will generally occafion a more or less eager competition, according as the acquifition of the commodity happens to be of more or lefs importance to them. Hence the exorbitant price of the ne, ceffaries of life during the blockade of a town or in a famine.
When the quantity brought to market exceeds the effectual demand, it cannot be all fold to those who are willing to pay the whole value of the rent, wages and profit, which must be paid in order to bring it thither. Some part must be fold to those who are willing to pay lefs, and the low price which they give for it must reduce the price of the whole. The market price will fink more or lefs below the natural price, according as the greatness of the excefs increases more or lefs the competition of the fellers, or according as it happens to be more or less important to them to get immediately rid of the commodity. The fame excefs in the importation of perifhable, will occafion a much greater competition than in that of durable commodities; in the importation of oranges, for example, than in that of old iron.
When the quantity brought to market is juft fufficient to fupply the effectual demand and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the fame with the natural price. The whole quantity upon hand can be difpofed of for this price, and cannot be difpofed of for more. The G 3
BOOK Competition of the different dealers obliges them I. all to accept of this price, but does not oblige them to accept of lefs.
The quantity of every commodity brought to market naturally fuits itself to the effectual demand. It is the intereft of all those who employ their land, labour, or ftock, in bringing any commodity to market, that the quantity never fhould exceed the effectual demand; and it is the intereft of all other people that it never fhould fall fhort of that demand.
If at any time it exceeds the effectual demand, fome of the component parts of its price muft be paid below their natural rate. If it is rent, the intereft of the landlords will immediately prompt them to withdraw a part of their land; and if it is wages or profit, the intereft of the labourers in the one cafe, and of their employers in the other, will prompt them to withdraw a part of their labour or ftock from this employment. The quantity brought to market will foon be no more than fufficient to fupply the effectual demand. All the different parts of its price will rife to their natural rate, and the whole price to its natural price.
If, on the contrary, the quantity brought to market fhould at any time fall fhort of the effectual demand, fome of the component parts of its price must rise above their natural rate. If it is rent, the intereft of all other landlords will naturally prompt them to prepare more land for the raifing of this commodity; if it is wages or profit, the intereft of all other labourers and
dealers will foon prompt them to employ more c H A P. labour and stock in preparing and bringing it to market. The quantity brought thither will soon be fufficient to fupply the effectual demand. All the different parts of its price will foon fink to their natural rate, and the whole price to its natural price.
The natural price, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating. Different accidents may fometimes keep them fufpended a good deal above it, and fometimes force them down even fomewhat below it. But whatever may be the obftacles which hinder them from fettling in this center of repofe and continuance, they are conftantly tending towards it.
The whole quantity of industry annually employed in order to bring any commodity to market, naturally fuits itself in this manner to the effectual demand. It naturally aims at bringing always that precife quantity thither which may be fufficient to fupply, and no more than fupply, that demand.
But in fome employments the fame quantity of industry will in different years produce very different quantities of commodities; while in others it will produce always the fame, or very nearly the fame. The fame number of labourers in husbandry will, in different years, produce very different quantities of corn, wine, oil,` hops, &c. But the fame number of spinners and weavers will every year produce the fame or very nearly the fame quantity of linen and woollen