96 POLITICAL ECONOMY 



salesman to sell a moderate quantity at a good price than a 

 large quantity at a bad price. It may be more advantageous to 

 labourers that a moderate number should be employed at good 

 wages than a large number at bad wages. 



It is said that when men have this power they abuse it, 

 and will set so high a reserved price on their labour, as ulti- 

 mitely to stop the purchase of it altogether, or at least diminish 

 it so far as to injure both themselves and capitalists. Self- 

 interest is the natural remedy for this. We do not object to 

 fishmongers setting a reserved price on fish, although they may 

 so diminish the consumption as materially to injure both them- 

 selves and the community. The only motive by which the 

 demands of a fishmonger are kept within reason is that of self- 

 interest, and precisely the same motive may be trusted to in the 

 case of a combination of labourers, unless they are so foolish as 

 to be unable to perceive the consequences of their own actions 

 a case which is quite possible, though rarer than is imagined. 1 



Thus we find that the power of bargaining given to the 

 labourer does tend to raise wages ; but thab it may diminish the 

 number of labourers employed, and often does so. 



It will be very rationally asked : How is this statement con- 

 sistent with the doctrine that price, and consequently wages, 

 depend ultimately on the cost of production ? The explanation 

 of the apparent inconsistency is to be found in the fact that the 

 cost of production is itself not a fixed material thing, but depends 

 on men's desires and will in a great measure. The cost of pro- 

 duction is the cost at which a man thinks it worth his while to 

 produce the article ; this depends on his desires and opinions, 

 and is affected by a vast number of circumstances. If he has a 

 reserve fund, so that he need not perish should he cease to 

 produce, the immediate motive to produce is very much weak- 

 ened, and he will not think it worth his while to produce except 

 at a higher profit to himself ; and when it is said that the cost 

 of production regulates the price, in that cost must be included 

 the profit to the producer. Indeed, if we analyse the cost of 

 production, it will be found to consist solely of the sum of a 



1 In the ordinary method of purchasing at shops we have an example of 

 buyers trusting to the competition of sellers only, and paying whatever is 

 asked, within a limit. 



