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Show 76 ON THE NATURE AND [ CH. II. there is not the slightest ground for supposing that any variation of price \iVOuld take place. If, for instance, all the con1n1odities that are consun1ed in this country, \vhether agricultural or manufactured, could be produced, during the next ten years, '~rithout labour, and yet could only be supplied exactly in the san1e quantities as they "'ould be in a natural state of things; then, supposing the 'vills and the powers of the purchasers to remain the .san1e, there cannot be a doubt that all prices \VOU ld also remain the san1e. But, if this be allo\ved, it follo,vs, that the relation of the supply to the den1and, either actual or contingent, is the don1inant principle in the detern1ination of prices \V hether market or natural, and that the cost of production can do nothing but in subordination to it, that is, merely as this cost affects actually or contingently the relation \vhich the supply bears to the demand. It is not however necessary to resort to imaginary cases in order to fortify this conclusion. Actual experience shew'"s the principle in the clearest light. In the \Vell known instance, noticed by Adam Smith, of the insufficient pay of curates, not\vithstanding all the efforts of the legislature to raise it,* a striking proof is afforded that the permanent price of an article is determined by the demand and supply, and not by the cost of production. The real cost of production would, in this case, be n1ore likely to be increased than di1ninished by the '$ 'Vealth of Nations, Book I. c. x. p. 202. 6th edit. SEC. III.] :MEASURES OF VALUE. 77 subscriptions of benefactors ; but being paid by others and not by the individuals themselves, it does not regulate and 1in1it the supply; and this supply, on account of such encouragen1ent, becoming and continuing abundant, the price is and must always be low, whatever may be the real cost of the education given. The effects of the poor-rates in lowering the wages of labour present another practical instance of the same kind. It is not probable that public n1oney should be more economically managed than the incon1e of individuals. Consequently the cost of rearing a family cannot be supposed to be diminished by parish assistance; but, a part of the expense being borne by the public, a price of labour adequate to the maintenance ·of a certain family is no longer a necessary condition of its supply; and as, by means of parish rates, this supply can be obtained without such wages, the real co~ts of supplying labour no longer regulate its pnce. In fact, in every kind of bounty upon production, the same effects must necessarily take place; and just in proportion as such bounties tend to lower prices, they shew that prices depend upon the supply con1pared with the demand, and not upon the costs of production. But the n1ost striking instance \Vhich can \vell be conceived to she'v that the cost of production only influences the prices of con1n1odi6es as it regulates their supply, is continually before our eyes, {n the artificial value \vhich is given to Bank notes, by |
