of some Doctrines of Political Economy. 201 



A defect in the harvest of ,7, raises the price of corn ^. 



_1 45 

 i« 10- 



There can be little doubt that this table is at least so far 

 true, that the increase of the price is much more rapid than 

 the diminution of the supply. And according to this table the 

 increase of the price varies according to no simple power of the 

 defect of the supply. It would be easy to find the law by 

 which the increase of price may depend on the defect and the 

 square of the defect of supply, so as nearly to satisfy the above 

 data; but it is not necessary for our purpose to go into this 

 detail. In most cases which we shall consider, the diminution 

 of supply and the increase of price, or the contrary events, will 

 be small; and in these instances we cannot be far wrong in 

 assuming the following Axiom. 



Axiom 4. The increase of price is proportional to the de- 

 ficiency of the supply. 



Accordingly the fraction which expresses the deficiency must 

 be multiplied by some constant number, in order to give us the 

 fraction which expresses the increase of price. In the table just 

 mentioned, ^defect of supply gives ^ increase of price. It may 

 therefore perhaps be assumed, that up to the magnitude of ^ , the 

 increase of price is three times the deficiency of supply. Thus a de- 

 ficiency of ^ would increase the prices ~ , and so on. I shall 

 however use the general number e instead of 3 in most cases. 



It is manifest, that whatever more accurate data we may here- 

 after obtain for establishing the law of this dependence, the increase 

 of price ceteris paribus must be a. function of the defect of supply, 

 and may be in this manner introduced into the calculation. 



10. But there is also another view of the law of price, which 

 it is necessary to consider. No article will be permanently pro- 



Vol. III. Part I. C c 



