第1章

\"OnLabour，itsWrongfulClaimsandRightfulDues，itsActualPresentandPossibleFuture\"ByWilliamThomasThornton，PartI，FortnightlyReview，（May，1869），pp。505—18;PartII，（June，1869），pp。680—700。

republishedinDebatesandDissertation（1875），25—85。

PARTI

Mr。Thorntonlongagogaveproofofhiscompetencytothetreatmentofsomeofthemostimportantquestionsofpracticalpoliticaleconomy，bytwoworksofgreatmerit，\"OverPopulationanditsRemedy，\"（1）and\"APleaforPeasantProprietors。\"（2）Ofthelatteroftheseespeciallyitmaybesaid，thatnothingbutthetotalabsence，atthetimeofitspublication，ofanygeneralinterestinitssubject，canaccountforitsnothavingachievedahighreputeandawidecirculation。Thelackofinterestinthesubjecthasnowceased;

opinionisrapidlyadvancinginthedirectionwhichtheauthorfayours;

andanewedition，withitsfactsbroughtdowntothelatestdate，wouldbewelcomedbyadvancedpoliticians，andwouldmateriallycontributetotheformationofanenlightenedjudgmentononeoftheeconomicalquestionsonwhichtruthismostimportant，andprejudicestillmostrife。

Thepresentwork，thoughpopularandattractiveinstyle，isstrictlyscientificinitsprinciplesandreasonings;andistherefore，asmightbeexpected，strictlyimpartialinitsjudgments。Aconsiderablepartofthevolumeisemployedinrefutingtheprinciplesonwhichitisusualtorestthoseclaimsandaspirationsofthelabouringclasses，whichneverthelesstheauthor，onbettergrounds，supports。Noblindpartisanoneithersideofthefeudoflabouragainstcapital，willrelishthebook;butfewpersonsofintelligenceandimpartialitywhoreaditthrough，willlayitdownwithouthavingreasontofeelthattheyunderstandbetterthanbeforesomeofthebearingsofthequestionsinvolvedinthatconflict。

Tothisgreatpracticalmeritaretobeaddedtwoofamoretheoretickind，tothevalueofwhichIamthemorecalledupontobeartestimony，asontheparticularpointstoucheduponinthisdepartmentIshallhavetoexpressmoredifferencethanagreement。First:itcontainsadiscussionofoneofthefundamentalquestionsofabstractpoliticaleconomy（theinfluenceofdemandandsupplyonprice），whichisarealcontributiontoscience，though，inmyestimation，anaddition，andnot，astheauthorthinks，acorrection，tothereceiveddoctrine。Secondly:intheattempttogototheverybottomofthequestion，whatarethejustrightsoflabourononeside，andcapitalontheother，itraisesthegreatissuesrespectingthefoundationofrightandwrong，ofjusticeandinjustice，inamannerhighlyprovocativeofthought。Tolaydownadefinitedoctrineofsocialjustice，aswellasadistinctviewofthenaturallawsoftheexchangeofcommodities，asthebasisforthedeductionsofaworkdevotedtosuchasubjectastheprinciplesandpracticeofTrades—Unionism，wasinseparablefromthethoroughnesswithwhichtheauthorhassoughttodohiswork。

Everyopinionastotherelativerightsoflabourersandemployers，involvesexpresslyortacitlysometheoryofjustice，anditcannotbeindifferenttoknowwhattheory。Neither，again，canitbedecidedinwhatmannerthecombinedproceedingsoflabourersorofemployersaffecttheinterestsofeitherside，withoutaclearviewofthecauseswhichgovernthebargainbetweenthem——withoutasoundtheoryofthelawofwages。

Indeed，atheoryofwagesobtrusivelymeetstheinquirer，atthethresholdofeveryquestionrespectingtherelationsbetweenlabourersandemployers，andiscommonlyregardedasrenderingsuperfluousanyfurtherargument。

Itislaiddownthatwages，byanirresistiblelaw，dependonthedemandandsupplyoflabour，andcaninnocircumstancesbeeithermoreorlessthanwhatwilldistributetheexistingwages—fundamongtheexistingnumberofcompetitorsforemployment。Thosewhoarecontenttosetoutfromgenerally—receiveddoctrinesasfromself—evidentaxioms，aresatisfiedwiththis，andinquirenofurther。Butthosewhousetheirownunderstanding，andlookcloselyintowhattheyassentto，areboundtoaskthemselveswhetherorinwhatsensewagesdodependonthedemandandsupplyoflabour，andwhatismeantbythewages—fund。

Theauthorofthisworkhasaskedhimselfthesequestions;andwhileheis，ashiswritingsgiveevidence，wellversedinpoliticaleconomy，andisabletoholdhisgroundwiththebestinfollowingouteconomicallawsintotheirmoreobscureandintricateworkings，hehasbecomeconvincedthatthebarrierwhichseemstoclosetheentranceintooneofthemostimportantprovincesofeconomicalandsocialinquiry，isashadowwhichwillvanishifwegoboldlyuptoit。Heisofopinionthateconomistshavemistakenthescientificlawnotonlyofthepriceoflabour，butofpricesingeneral。Itisanerror，hethinks，thatprice，orvalueinexchange，dependsonsupplyanddemand。

Thereisonesense，inwhichthispropositionofMr。Thorntonwouldbeassentedtobyalleconomists;theynoneofthemconsidersupplyanddemandtobetheultimateregulatorsofvalue。（3）Thatcharacter，theyhold，belongstocostofproduction;alwayssupposingthecommoditytobeaproductoflabour，andnaturalorartificialmonopolytobeoutofthequestion。Subjecttotheseconditions，allcommodities，inthelongrunandontheaverage，tendtoexchangeforoneanother（and，thoughthispointisalittlemoreintricate，tendalsotoexchangeformoney）intheratioofwhatitcosts，inlabourandabstinence，toproducethearticlesandtobringthemtotheplaceofsale。Butthoughtheaveragepriceofeverything，thepricetowhichtheproducerlooksforwardforhisremuneration，mustapproximatelyconformtothecostofproduction，itisnotsowiththepriceatanygivenmoment。Thatisalwaysheldtodependonthedemandandsupplyatthemoment。Andtheinfluenceevenofcostofproductiondependsonsupply;fortheonlythingwhichcompelsprice，ontheaverage，toconformtocostofproduction，isthatifthepriceiseitheraboveorbelowthatstandard，itisbroughtbacktoiteitherbyanincreaseorbyadiminutionofthesupply;though，afterthishasbeeneffected，thesupplyadjustsitselftothedemandwhichexistsforthecommodityattheremuneratingprice。Thesearethelimitswithinwhichpoliticaleconomistsconsidersupplyanddemandasthearbitersofprice。ButevenwithintheselimitsMr。Thorntondeniesthedoctrine。

Likeallfaircontroversialists，Mr。Thorntondirectshisattackagainstthestrongestformoftheopinionheassails。Hedoesnotmuchconcernhimselfwiththeinfantineformofthetheory，inwhichdemandisdefinedasadesireforthecommodity，orasthedesirecombinedwiththepowerofpurchase;orinwhichpriceissupposedtodependontheratiobetweendemandandsupply。Itistobehopedthatfewarenowdwellinginthislimbusinfantum。Demand，tobecapableofcomparisonwithsupply，mustbetakentomean，notawish，norapower，butaquantity。Neitherisitatanytimeafixedquantity，butvarieswiththeprice。Nordoesthepricedependonanyratio。Thedemandandsupplytheory，whenrightlyunderstood——indeedwhencapableofbeingunderstoodatall——signifies，thattheratiowhichexistsbetweendemandandsupply，whenthepricehasadjusteditself，isalwaysoneofequality。Ifatthemarketpricethedemandexceedsthesupply，thecompetitionofbuyerswilldriveupthepricetothepointatwhichtherewillonlybepurchasersforasmuchasisofferedforsale。If，onthecontrary，thesupply，beinginexcessofthedemand，cannotbealldisposedofattheexistingprice，eitherapartwillbewithdrawntowaitforabettermarket，orasalewillbeforcedbyofferingitatsuchareductionofpriceaswinbringforwardnewbuyers，ortempttheoldonestoincreasetheirpurchases。Thelaw，therefore，ofvalues，asaffectedbydemandandsupply，isthattheyadjustthemselvessoasalwaystobringaboutanequationbetweendemandandsupply，bytheincreaseoftheoneorthediminutionoftheother;themovementofpricebeingonlyarrestedwhenthequantityaskedforatthecurrentprice，andthequantityofferedatthecurrentprice，areequal。Thispointofexactequilibriummaybeasmomentary，butisneverthelessasreal，asthelevelofthesea。

ItisthisdoctrinewhichMr。Thorntoncontests:andhismodeofcornbatingitisbyadducingcaseaftercaseinwhichhethinkshecanshowthatthepropositionisfalse;mostofthecasesbeing，onthefaceofthem，altogetherexceptional;butamongthemtheycover，inhisopinion，nearlythewholefieldofpossiblecases。

Thefirstcase，whichispresentedasthetypeofaclass，ratherthanforitsintrinsicimportance，isthatofwhatiscalledaDutchauction。

Whenaherringormackerelboathasdischargedonthebeach，atHastingsorDover，lastnight’stakeoffish，theboatmen，inordertodisposeoftheircargo，commonlyresorttoaprocesscalledDutchauction。Thefisharedividedintolots，eachofwhichissetupatahigherpricethanthesalesmanexpectstogetforit，andhethengraduallylowershisterms，untilhecomestoapricewhichsomebystanderiswillingtopayratherthannothavethelot，andtowhichheaccordinglyagrees。Supposeononeoccasionthelottohavebeenahundredweight，andthepriceagreedtotwentyshillings。If，onthesameoccasion，insteadoftheDutchformofauction，theordinaryEnglishmodehadbeenadopted，theresultmighthavebeendifferent。Theoperationwouldthenhavecommencedbysomebystandermakingabid，whichothersmighthavesuccessivelyexceeded，untilapricewasarrivedatbeyondwhichnoonebuttheactualbiddercouldaffordorwasdisposedtogo。Thatsumwouldnotnecessarilybetwentyshillings;

verypossiblyitmightbeonlyeighteenshillings。Thepersonwhowaspreparedtopaytheformerpricemightverypossiblybetheonlypersonpresentpreparedtopayevensomuchasthelatterprice;andifso，hemightgetbyEnglishauctionforeighteenshillingsthefishforwhichatDutchauctionhewouldhavepaidtwentyshillings。Inthesamemarket，withthesamequantityoffishforsale，andwithcustomersinnumberandeveryotherrespectthesame，thesamelotoffishmightfetchtwoverydifferentprices。

（Thornton，pp。47—8。）

Thisinstance，thoughseeminglyatrivial，isreallyarepresentativeoneandahundredcasescouldnotshow，betterthanthisdoes，whatMr。

Thorntonhasandwhathehasnotmadeout。Hehasprovedthatthelawoftheequalisationofsupplyanddemandisnotthewholetheoryoftheparticularcase。Hehasnotprovedthatthelawisnotstrictlyconformedtointhatcase。Inordertoshowthattheequilisationofsupplyanddemandisnotthelawofprice，whathehasreallyshownisthatthelawis，inthisparticularcase，consistentwithtwodifferentprices，andisequallyandcompletelyfulfilledbyeitherofthem。Thedemandandsupplyareequalattwentyshillings，andequalalsoateighteenshillings。Theconclusionoughttobe，notthatthelawisfalse，forMr。Thorntondoesnotdenythatinthecaseinquestionitisfulfilled;butonly，thatitisnottheentirelawofthephenomenon。Thephenomenoncannothelpobeyingit，butthereissomeamountofindeterminatenessinitsoperation——acertainlimitedextentofvariationispossiblewithintheboundsofthelaw;andastheremustbeasufficientreasonforeveryvariationinaneffect，theremustbeasupplementarylaw，whichdeterminestheeffect，betweenthelimitswithinwhichtheprincipallawleavesitfree。Whoevercanteachusthissupplementarylaw，makesavaluableadditiontothescientifictheoryofthesubject;andweshallseepresentlythatinsubstance，ifnotstrictlyinform，Mr。Thorntondoesteachit。Evenifhedidnot，hewouldhaveshownthereceivedtheorytobeincomplete;buthewouldnothave，norhashenow，shownittobeinthesmallestdegreeincorrect。

Whatismore;whenwelookintotheconditionsrequiredtomakethecommontheoryinadequate，wefindthat，inthecaseatleastwhichwehavenowexamined，theincompletenessitstandsconvictedofamountstoanexceedinglysmallmatter。Toestablishit，Mr。Thorntonhadtoassumethatthecustomerwhowaspreparedtopaytwentyshillingsforahundredweightoffish，wastheonlypersonpresentwhowaswillingtopayevensomuchaseighteenshillings。Inotherwords，hesupposedthecasetobeanexceptiontotherule，thatdemandincreaseswithcheapness:andsincethisrule，thoughgeneral，isnotabsolutelyuniversal，heisscientificallyright。Ifthereisapartofthescalethroughwhichthepricemayvarywithoutincreasingordiminishingthedemand，thewholeofthatportionofthescalemayfulfiltheconditionofequalitybetweensupplyanddemand。Buthowmanysuchcasesreallyexist？Amongafewchafferersonthebeachofasmallfishingport，suchacase，thougheventhereimprobable，isnottotallyoutofthequestion。Butwherebuyersarecountedbythousands，orhundreds，orevenscores;inanyconsiderablemarket——and，farmore，inthegeneralmarketoftheworld——itisthenextthingtoimpossiblethatmoreofthecommodityshouldnotbeaskedforateveryreductionofprice。Thecaseofprice，therefore，whichthelawoftheequalisationdoesnotreach，isonewhichmaybeconceived，butwhich，inpractice，ishardlyeverrealised。

ThenextexamplewhichMr。Thorntonproducesofthefailureofsupplyanddemandasthelawofprice，isthefollowing:——

Supposetwopersonsatdifferenttimes，orindifferentplaces，tohaveeachahorsetosell，valuedbytheownerat£50;andthatintheonecasetherearetwo，andintheotherthreepersons，ofwhomeveryoneisreadytopayo650forthehorse，thoughnooneofthemcanaffordtopaymore。Inbothcasessupplyisthesame，viz。，onehorseat£50;

butdemandisdifferent，beinginonecasetwo，andintheotherthree，horsesat£50。Yetthepriceatwhichthehorseswillbesoldwillbethesameinbothcases，viz。，£50。（p。49。）

Thelawdoesfailinthiscase，asitfailedintheformer，butforadifferentreason;not，asintheformercase，becauseseveralpricesfulfiltheconditionequallywell，butbecausenopricefulfilsit。At£50thereisademandfortwiceorthreetimesthesupply;at£50。

0s。0¼d。thereisnodemandatall。Whenthescaleofthedemandforacommodityisbrokenbysoextraordinaryajump，thelawfailsofitsapplication;not，Iventuretosay，fromanyfaultinthelaw，butbecausetheconditionsonwhichitsapplicabilitydependsdonotexist。

Ifthepeculiaritiesofthecasedonotpermitthedemandtobeequaltothesupply，leavingitonlythealternativeofbeinggreaterorless，greaterorlessitwillbe;andallthatcanbeaffirmedis，thatitwillkeepasneartothepointofequalityasitcan。Insteadofconflictingwiththelaw，thisistheextremecasewhichprovesthelaw。Thelawis，thatthepricewillbethatwhichequalisesthedemandwiththesupply;andtheexampleprovesthatthisonlyfailstobethecasewhenthereisnopricethatwouldfulfilthecondition，andthateventhen，thesamecauses，stilloperating，keepthepriceatthepointwhichwillmostnearlyfulfilit。Isitpossibletohaveanymorecompleteconfirmationofthelaw，thanthatinordertofindacaseinwhichthepricedoesnotconformtothelaw，itisnecessarytofindoneinwhichthereisnopricethatcanconformtoit？

Again:——

Whenatradesmanhasplaceduponhisgoodsthehighestpricewhichanyonewillpayforthem，thepricecannot，ofcourse，risehigher，yetthesupplymaybebelowthedemand。Agloverinacountrytown，ontheeveofanassizebail，havingonlyadozenpairsofwhiteglovesinstore，mightpossiblybeabletogettenshillingsapairforthem。Hewouldbeabletogetthisiftwelvepersonswerewillingtopaythatpriceratherthannotgotothebail，orthangoungloved。Buthecouldnotgetmorethanthis，eventhough，whilehewasstillhigglingwithhisfirstbatchofcustomers，asecondbatch，equallynumerousandneithermorenorlesseager，shouldenterhisshop，andoffertopaythesamebutnotahigherprice。Thedemandforgloves，whichatfirsthadbeenjustequaltothesupply，wouldnowbeexactlydoubled，yetthepricewouldnotriseabovetenshillingsapair。Suchabundanceofproofissurelydecisiveagainstthesuppositionthatpricemustrisewhendemandexceedssupply。（pp。51—2。）

Here，again，theauthorisobligedtosupposethatthewholebodyofcustomers（twenty—fourinnumber）placetheextremelimitofwhattheyarewillingtopayratherthangowithoutthearticle，exactlyatthesamepoint——anexactrepetitionofthehypothesisaboutthehorsewhoisestimatedat£50，andnotafarthingmore，byeveryonewhoiswillingtobuyhim。Thecaseisjustpossibleinaverysmallmarket——practicallyimpossibleinthegreatmarketofthecommunity。But，wereiteversofrequent，itwouldnotimpugnthetruthofthelaw，butonlyitsall—comprehensiveness。

Itwouldshowthatthelawisonlyfulfilledwhenitsfulfilmentis，inthenatureofthings，possible，andthattherearecasesinwhichitisimpossible;butthateventherethelawtakeseffect，uptothelimitofpossibility。

Mr。Thornton’snextpositionis，thatiftheequalisationtheorywereliterallytrue，itwouldbeatruthofsmallsignificance，because——

Evenifitweretruethatthepriceultimatelyresultingfromcompetitionisalwaysoneatwhichsupplyanddemandareequalised，stillonlyasmallproportionofthegoodsofferedforsalewouldactuallybesoldatanysuchprice，sinceadealerwilldisposeofasmuchofhisstockashecanatahigherprice，beforehewilllowerthepriceinordertogetridoftheremainder。（p。53。）

Thisisonlysayingthatthelawinquestionresemblesothereconomicallawsinproducingitseffectsnotsuddenly，butgradually。Thoughadealermaykeepuphispriceuntilbuyersactuallyfalloff，oruntilheismetbythecompetitionofrivaldealers，stillifthereisalargersupplyinthemarketthancanbesoldontheseterms，hispricewillgodownuntilitreachesthepointwhichwillcallforthbuyersforhisentirestock;

andwhenthatpointisreacheditwillnotdescendfurther。Alawwhichdeterminesthatthepriceofthecommodityshallfall，andfixestheexactpointwhichthefallwillreach，isnotjustlydescribedas\"atruthofsmallsignificance\"merelybecausethedealers，notbeingdeadmatter，butvoluntaryagents，mayresistforatimetheforcetowhichtheyatlastsuccumb。Limitationssuchastheseaffectalleconomicallaws，butareneverconsideredtodestroytheirvalue。Aswellmightitbecalledaninsignificanttruththatthereisamarketpriceofacommodity，becauseacustomerwhoisignorant，orinahurry，maypaytwiceasmuchforthethingashecouldgetitforatanothershopafewdoorsfartheroff。