PRESIDENTS ADDRESS-—SECTION F. 133 
And NP+0O 
ie 
= Represents the nominal cost of satisfactions for 
each individual on the average—or it may 
fairly represent the amount of exertion or 
energy expended by human energy. 
Having stated the general effect of obstacles between direct 
producer and consumer as minimising the actual supply of neces- 
sary satisfactions to each consumer where the values of N and P 
and C are constant, it follows inevitably that the amount of satis- 
factions to each individual is in direct correspondence to the 
amount of O; increasing with its decrease, and decreasing with 
its increase. ; 
The effect upon rice, however, is exactly the reverse of this, 
as a definite amount of satisfactions increase in price in correspon- 
dence with the increase in obstacles (OQ), and decrease 
correspondingly with its decrease. 
This law is not invalidated because in particular cases (1) price 
is comparatively low when O is absolutely great, and conversely 
(2), price is comparatively low when O is absolutely small; for 
in every such case there must be corresponding dissimilarity in 
the other elements to explain this effect, ze. -— 
The effect (1) could only happen in cases where either N or P 
is abnormally or relatively great, or C is comparatively small ; 
and similarly the effect (2) could only happen in cases where 
either N or P is abnormally or relatively small or C is com- 
paratively great. 
The failure to grasp these fundamental considerations is the 
chief cause of the blunders in all reasonings connected with 
questions related to the policy of different nations in respect of 
artificial restrictions, hindrances, or facilities in the interchange 
of foreign products. 
To make this matter more clear, it may be advantageous in 
demonstration to set forth a number of examples for the sake of 
illustrating the important truths involved in the effects produced 
where one or all the factors are different in value :— 
(1.) Where soil, climate, or natural utilities are particularly 
advantageous, the value of N is at its best or maxi- 
mum = N” 
(2.) Where skill and energy exist, and are employed to the 
best advantage, the largest results are attained for 
R= Pr 
(3.) Where the smallest number of obstacles occur between 
NP and GC, the largest amount of satisfactions fall to 
the share of C = CO” 
(4.) The most perfect: conditions favourable for effecting the 
highest amount of satisfactions to each individual 
consumer coincide with N™ P™ —Q" 
C 
