TRADE-UNIONS 15 



and supply alone, let us first see what that law means as applied 

 to some given commodity. 



A thousand equal diamonds are offered for sale ; a thousand 

 purchasers equally desire them : what will be the price of 

 diamonds ? A thousand eggs have been imported to a henless 

 island ; a thousand islanders would like to have them for break- 

 fast : what will be the price of eggs ? No economist has 

 hitherto stated the law of demand and supply so as to allow this 

 calculation to be made. 



Let us examine more nearly what is meant by ' demand ' 

 and ' supply.' The word demand is used in two distinct sen- -. 

 and the confusion arising from these two meanings lies at the 

 bottom of much bad reasoning. Supply is almost always used 

 to signify ' the quantity offered for sale,' and can be expressed 

 or measured by a number. Thus the supply of eggs is the 

 number of eggs ; the supply of land the number of acres in the 

 market. When the demand is said to be equal to the supply, 

 men mean that all of the commodity offered for sale is bought, 

 and that no more would have been bought had it been offered. 

 In this sense demand also means a quantity measured by a 

 number ; as Mill says, ' A ratio between demand and supply is 

 only intelligible if by demand we mean the quantity demanded.' 

 But the word demand, as popularly used, signifies a desire ; and 

 when 100 eggs are sold each day at 2d. each, instead of Id., the 

 demand is said to have increased ; and so correct would this 

 language be in any other than in a highly technical sense, that 

 correct reasoning will be impossible so long as this ambiguous 

 word is used to signify the quantity demanded. The quantity 

 demanded depends on the price at which the goods can be 

 purchased ; and the demand in the sense of a desire may oe 

 measured by value as expressed in money. Thus, in a place 

 where 1,000 eggs per diem are sold at 2d. each, the desire for 

 eggs maybe said to be twice as strong as in a place where 1,000 

 eggs will fetch daily Id. a piece only. Again, the number sup- 

 plied, popularly called the supply, must not be confounded with 

 the readiness to sell the commodity in question. We may say 

 that the people who sell the 1,000 eggs at Id. are twice as ready 

 to part with or supply eggs as those who sell them at 2d. The 

 equality between demand and supply means equality between 



