184 AN INQUIRY INTO THE NATURAL LAWS WHICH 



cheaper or dearer may be the cause, as well as other articles of pro- 

 duce altering their comparative value. 



We may now rest in the conclusions : 



1st. That the natural tendency of price is towards the equivalence 

 of products of equal amounts of labour. 



2nd. That what may be called the natural price is modified by 

 the abundance or deficiency of supply in relation to the wants of a 

 particular community at a given time, i.e. in proportion to the de- 

 mand. 



3rd. That a special power of producing some object of desire 

 which others cannot produce, or of producing it better and at less 

 cost of labour than others can, enables an individual or class of per- 

 sons to secure an increased price — the measure of which is the price 

 at which others can aiford to sell the same article, if there is a full 

 demand ; or otherwise, just as much below it as will attract all the 

 custom : whilst when the power is exclusive, the price will be the most 

 that a sufficient number of persons to take all that is produced will 

 pay, rather than go without the product. 



The cases under the last head may very properly be termed natural 

 monopolies. They are unavoidable, and involve no grievance ; but 

 they manifestly raise the cost of gratifying some desires and give 

 advantages to some indivividuals ; and we see that their action on 

 prices is the same as that of what really constitutes a monopoly, 

 which is an interference of power to limit to one individual or to a 

 certain class the sale of any particular commodity. It is very im- 

 portant that we should see clearly what happens in this case. It 

 cannot be accounted a doubtful matter ; but it may, notwithstanding, 

 be worth while to illustrate it by applying the principle on a small 

 scale where its operation cannot escape us. 



Let there be a small community, — say of two hundred individuals, 

 — all desiring a certain product of industry, the natural price of which 

 for a given quantity we will express by (^.) Some authority inter- 

 feres, and gives to the man A. B. the exclusive right to deal in the 

 article. Before this event it must have been sold for something about 

 the natural price which would afford the usual return, such as would 

 be obtained in other employments, for the labour required in bringing 

 it to the market ; and if A. B. had demanded a higher price, others 

 would have found the usual return for labour sufficient to induce 

 them to enter into competition, and his trade would have speedily 



