418 AGRICULTURAL ECONOMICS 



cost; if more is wanted, it must be produced at a greater cost. To 

 this class, as has been often repeated, agricultural produce belongs, 

 and generally all the rude produce of the earth; and this peculiarity 

 is a source of very important consequences, one of which is the 

 necessity of a limit to population, and another, the payment of rent. 



First, of things absolutely limited in quantity, it is commonly 

 said that their value depends upon their scarcity. Others say, with 

 somewhat greater precision, that the value depends on the demand 

 and the supply. But what is meant by demand? Not the mere 

 desire for the commodity. A beggar may desire a diamond; but his 

 desire, however great, will have no influence on the price. Writers 

 have, therefore, distinguished the wish to possess, combined with the 

 power of purchasing, and call it efectual demand. It is then said that 

 the value depends upon the ratio between the effectual demand and 

 the supply. 



But again, the quantity demanded is not a fixed quantity, even 

 at the same time and place it varies according te the value; if the 

 thing is cheap, there is usually a demand for more of it than when it 

 is dear. The demand, therefore, partly depends on the value. But 

 it was before laid down that the value depends on the demand. From 

 this contradiction how shall we extricate ourselves ? How solve the 

 paradox of two things each depending upon the other ? 



Meaning, by the word "demand," the quantity demanded, and 

 remembering that this is not a fixed quantity, but in general varies 

 according to the value, let us suppose that the demand at some par^ 

 ticular time exceeds the supply; that is, there are persons ready to 

 buy; at the market value, a greater quantity than is offered for sale. 

 Competition takes place on the side of the buyers, and the value 

 rises: but how much? In the ratio (some may suppose) of the 

 deficiency: if the demand exceeds the supply by one- third, the value 

 rises one- third. By no means; for when the value has risen one- 

 third, the demand may still exceed the supply; there may, even at 

 that higher value, be a greater quantity wanted than is to be had; 

 and the competition of buyers may still continue. If the article is a 

 necessary of life, which, rather than resign, people are willing to pay 

 for at any price, a deficiency of one-third may raise the price to double, 

 triple, or quadruple. Or, on the contrary, the competition may cease 

 before the value has risen in even the proportion of the deficiency. 

 A rise, short of one-third, may place the article beyond the means 

 or beyond the inclinations of purchasers to the full amount. At 



