4l6 AGRICULTURAL ECONOMICS 



value in money; by the value, or exchange value, of a thing, its general 

 power of purchasing; the command which its possession gives over 

 purchasable commodities in general. 



Before commencing the inquiry into the laws of value and price, 

 I must give warning, once for all, that the cases I contemplate are 

 those in which values and prices are determined by competition alone. 

 In so far only as they are thus determined can they be reduced to any 

 assignable law. The buyers must be supposed as studious to buy 

 cheap as the sellers to sell dear. The values and prices, therefore, 

 to which our conclusions apply are mercantile values and prices; such 

 as are quoted in prices-current; prices in the wholesale markets, in 

 which buying as well as selling is a matter of business; in which the 

 buyers take pains to know, and generally do know, the lowest price 

 at which an article of a given quality can be obtained; and in which, 

 therefore, the axiom is true, that there cannot be for the same article, 

 of the same quality, two prices in the same market. Our propositions 

 will be true in a much more qualified sense of retail prices; the prices 

 paid in shops for articles of personal consumption. For such things 

 there often are not merely two, but many prices, in different shops, 

 or even in the same shop; habit and accident having as much to do 

 in the matter as general causes. Purchases for private use, even by 

 people in business, are not always made on business principles: the 

 feelings which come into play hi the operation of getting and in that 

 of spending their income are often extremely different. Either from 

 indolence, or carelessness, or because people think it fine to pay and 

 ask no questions, three-fourths of those who can afford it give much 

 higher prices than necessary for the things they consume; while the 

 poor often do the same from ignorance and defect of judgment, want 

 of time for searching and making inquiry, and not infrequently from 

 coercion, open or disguised. 



In all reasoning about prices, the proviso must be understood, 

 "supposing all parties to take care of their own interest." Inatten- 

 tion to these distinctions has led to improper applications of the 

 abstract principles of political economy, and still oftener to an undue 

 discrediting of those principles, through their being compared with a 

 different sort of facts from those which they contemplate, or which 

 can fairly be expected to accord with them. 



That a thing may have any value in exchange, two conditions 

 are necessary. It must be of some use; that is, it must conduce to 

 some purpose, satisfy some desire. No one will pay a price, or part 



