LAWS OF SUPPLY AND DEMAXD 97 



succession of profits reaped by the producers of food, of raw 

 materials, and of tools each of these profits depending solely 

 on the desires or fancied necessities of each class of labourers. 

 Thus the power of bargaining actually tends to increase the cost 

 of production, and thus the apparent paradox is justified. 



While, however, we find that, both in a given market and on 

 an average of years, the power of bargaining will enable a seller 



btain higher prices, this does not assist us in determining 

 what those prices shall be. The first law of demand and supply 



- -;-5 no help, since it requires for its operation that men's minds 

 shall be already determined ; the second law, when applied to 

 labour, brincrs us to the Malthusian doctrine, and when misnn- 



* 



derstood. to the erroneous wages-fund theory. It is true that if 

 the number of labourers be increased, without a corresponding 

 increase in the demand at a price, probably wages will fall ; it is 

 also true that if the maximum of available capital be not in- 

 creased, probably the demand at a price will not increase, and 

 therefore it is true that if the population of a country increases 

 r than at a certain rate, determined by the increase of wealth, 

 probably wages will fall. But all these truths help us little. 

 Certainly, we cannot a priori determine the fit proportion be- 

 tween land and population. Many countries are poor, and 

 afford bad wages, when thinly populated or semi-savage ; and 

 are rich, giving good wages, when thickly populated. Nor can 



ix a ratio between increase of population and increase of 

 wealth. If the population be a productive one, the more it 

 increases the better, until the limit to food production in the 

 world be reached. Only the labourer who. by want of education 

 or natural gifts, is able to produce less than he requires, im- 

 poverishes a country ; and I see no reason to suppose that as 



uny man. born in the most thickly-populated country, need 

 be in this condition. It is often said that to produce is useless 

 if there be no demand, but it is no real production of wealth 

 if the thing made be not wealth, that is, if it is not wanted ; 

 the producer, falsely so called, is producing a wrong thin or ; 

 demand is limited by production as much as production by 

 demand. The demander can only demand in virtue of his pos- 



ng or having produced what others want, and hence if all 

 re truly skilled, demand and the power of production would 



VOL. n. H 



