POLITICAL ECONOMY AS A MORAL SCIENCE. 



325 



and which in its more definite shape stimulates 

 rapid production. Both of these are imperfect 

 symbols, the use of which generates confusion ; 

 we might perhaps talk of " labor " without mis- 

 conception, though after all it is of mental energy 

 and of moral energy that we must think when we 

 use the term, rather than of mere msucular pow- 

 er. Attention to these forces of human nature 

 will assist us i« other parts of the subject 



The importance of energy and patience for 

 the production of wealth are obvious, but there 

 are still some who think the appropriation of 

 natural gifts mere robbery. It does not lie with- 

 in our province to justify it on general grounds ; 

 nor need we content ourselves with the assertion 

 that private property is a fact, and must be taken 

 as such ; rather we may say it is a fact which has 

 justified itself, for it is a prerequisite without 

 which exchange can scarcely exist at all. The 

 benefits that have accrued from trade would have 

 been impossible unless for the prior admission 

 of the principle — that the possessor of goods 

 may use his own judgment about what he does 

 with them. In the communal stage, exchange 

 must be almost wholly unknown, and as a matter 

 of fact the traveler in India has often consider- 

 able difficulty in obtaining the simplest and most 

 abundant articles in a village where this phase 

 still lingers, and where appropriation is not yet 

 developed. There is no need to repeat the com- 

 mon demonstration that neither party loses by 

 an exchange, and that generally speaking both 

 parties gain, in order to prove the benefits which 

 it can confer in satisfying human wants. Only 

 let us beware of overlooking the recognition of 

 the rights to appropriate and to dispose of one's 

 possessions as one sees Jit, on which the whole 

 system depends. 



The latter gives us a clew to the whole subject 

 of exchange. In the simplest case of barter, the 

 man who is content to wait and who is least 

 anxious for the exchange is at an enormous ad- 

 vantage in obtaining favorable terms; and the 

 important thing to notice in every instance of 

 exchange is the judgment of the less eager pos- 

 sessor as to the time to sell and the rate at which 

 to sell : this really determines that the exchange 



I. Circumstances which affect the judgment of the seller. 



shall take place at all. We have heard enough 

 of the "mechanism of exchange," and the equa- 

 tion of supply and demand ; it is perfectly ob- 

 vious that the quantity supplied at a given rate 

 equals the quantity demanded at that rate at each 

 moment of buying and selling; but, after all, this 

 is a mere description of the fact, not an explana- 

 tion. If anybody understands the matter better 

 for having it thus described, by all means let us 

 formulate it thus, and draw our diagrams to ex- 

 press it more obviously. It is still true that the 

 explanation lies deeper ; there is an equation at 

 each moment of exchange, but what equates it ? 

 The possessor of the article chiefly sought for 

 supplies it in such a quantity and at such a rate 

 as he deems likely to satisfy the demand, or it 

 may be to create a demand. He judges of the 

 sources from which the article may be drawn, of 

 the probable desire of the buyer or the public to 

 possess it, and having considered these things to 

 the best of his ability, he offers the article at a 

 given rate : if he has made a mistake either as to 

 the sources of supply or the wishes of the buyers, 

 he is forced to alter his terms. 



In ignoring this power of judgment it seems 

 to me that current political economy has once 

 more landed itself in a difficulty, through striving 

 at too great precision. In the actual trade of the 

 world, there cannot be this definite weighing of 

 supply and demand ; the equation holds for a 

 moment, and in the next transaction there is a 

 slightly modified equation ; there is movement,, 

 change throughout the whole market, and busi- 

 ness capacity lies in estimating these changes, in 

 catching the first signs of them or reading any 

 indication of a possible alteration in the sources 

 of supply or in the probable demand. If this is 

 the main element in the actual fact of exchange, 

 it must also be the central idea in our science if 

 it is to explain, not merely to describe; and the 

 best explanation will be found, not in analyzing 

 the conduct of competing units, but hi trying to 

 classify the motives at work in the mind of the 

 man of greatest business capacity or of best judg- 

 ment. Without pretending to any completeness, 

 we may arrange the principal motives in such 

 form as this : 



1. Sources of supply. 



2. Conditions of supply. 



3. Probable demand with 



a. No increase possible. 



b. Increase at increased cost. 

 Increase at diminished cost. 



a. increased 



b. diminished 



a. A monopoly. 



b. A partial monopoly. 



c. Open competition. c. 



II. Circumstances resulting from the misjudgment of another seller 



price. 



1. To consumer. 



2. To other possessors. 



3. To himself. 



