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Show ON THE NATUREAND ( CH. II. as applied to monopolized commodities, and the market prices of all other comrnodi6es for a limited period.. He would allow, therefore, that the deficiency of any article in a market would occa~ion a great de1nand for it, compared ,vith the supply, and raise its price, although in this case less than usual of the article must be purchased by the consun1ers. Detnand, in this sense, is obviously quite different from the sense in \Vhich Mr. Ricardo had before used the term. The one implies extent of consumption, the other intensity of detnand, or the will and power to n1ake a greater sacrifice in order to obtain the object \Vanted. It is in this latter sense alone that demand raises prices ; and tn y sole object in this section is to shew that, whenever we talk of detnand and supply as influencing prices, whether n1arket or natural, the terms should always be understood in the sense in \vhich lVIr. Ri .. cardo and every other person has hitherto understood them, when speaking of co1nmodities bought . and sol9 in 'l. market. SECTION III. Of the Cost of P1'oduction as it affects Exchangeable Value. IT may be said, perhaps, that even accordino- to the _view gi~en of demand and supply in the ~recedtng section, the permanent prices of a o-reat mass of co~moditie~ will be determined b; the cost of their production. This is true, if we in~ SEC. III.] I 1\-IEASURES OF VALUE. 73 elude all the component parts of price stated by Adam Stnith, though not if we consider only those stated by Mr. Ricardo. But, in reality, the t\vo . sys~ems, one of "vhich accounts for the prices of the great mass of comn1odities by the cost of their production, and the other accounts for the prices of all commodities, under all circumstances, permanent as well as ten1porary, by the relation of the den1and to the supply, though they touch each other necessarily at a greater number of points, have an essentially different origin, and require, therefore, to be very carefully distinguished. In all the transactions o_f barga·in and sale there is evidently a p~·inciple in constant operation, vvhich can determine, and does actually detern1ine, the prices of con1n1odities, quite independently of any considerations of cost, or of the quantity of labour and capital employed upon their production. .l\.nd this is found to operate, not only pern1anently upon that class of comn1odities \v-h1ch n1ay be considered as monopolies, but temporarily and immediately upon all comtnodities, and strikingly and pre-eminently so upon all sorts of ra\v produce. It has never been a rnatter of don bt that the principle of supply and den1and detern1ines exclusively, and very regularly and accurately, the prices of n1onopolized con1modities, without any reference to the cost of their production; and our daily and uniform experience shews us that the prices of raw products, particularly of those which are tnost affected by the seasons, are at the mornent of their sale determined al \Vays by the higgling of |
