TRADE-UNIONS 19 



everything capable of increasing the desire for the commodity, 

 or the reluctance to part with it. The action of the law as 

 usually described is true, but partial ; the effect due to a dis- 

 inclination on the part of purchasers to sell at the old price is 

 admitted as a virtual diminution of supply, but this increased 

 price will, it is said, diminish the demand, meaning the number 

 demanded, and so the price may rise, but the number de- 

 manded, as well as the number supplied, will fall ; on the 

 other hand, the demand, meaning either number demanded or 

 desire to purchase, may rise ; this they say will increase the 

 number supplied under the stimulus of an increased price, and 

 the price will rise with an increased number of transactions. 

 No one has ever denied these two actions, both tending to an 

 increase of price but one with an increased trade, the other 

 wirh a diminished trade. How is it that we are not equally 

 familiar with the third case, where the demand, meaning the 

 desire to purchase, increases, and the supply, meaning readiness 

 to sell, diminishes at the same time, so that as before we have 

 an increased price, but this time with neither an increase nor a 

 decrease in the number of transactions ? ' A change of price at 

 any time may be due to increased desire for possession, or in- 

 creased reluctance to sell ; the increased reluctance to sell may 

 increase the desire for possession, or it may diminish this desire ; 

 the action in any one case can only be determined by experi- 

 ment. If the holders of a thousand diamonds refuse to sell 

 except at an average increase of 20 per cent, in price, no one can 

 tell except by experiment whether more or less money will be 

 spent in diamonds next year, nor even whether more or fewer 

 diamonds will be bought. 



To apply this reasoning to labour : Wages, it is said, can 

 only increase by an increase in the demand or by a decrease in 

 the supply ; and decrease in the supply is always interpreted to 

 mean decrease in the number of men in want of employment. 



1 The omission of this case from consideration tends to obscure the fact, 

 that a great change in price may accompany a very small change in the 

 number of transactions, and indeed that change of price has no invariable 

 connection with a change in the number of transactions, unless on the 

 assumption that the quantities A, ,f, and F, all remain constant, which will 

 be sensibly true during any short period. These quantities in the long run 

 all may and do vary, for every commodity. 



c 2 



