134 WHEAT PRODUCTION IN NEW ZEALAND 
wide field, nor consumed so universally for such varying 
purposes as this cereal. On this account a study of the 
determination of the price of wheat is interesting to the 
economist, for the reason that it offers many illustrations 
of conclusions arrived at in abstract expositions of 
market and normal price. In the first place the in- 
fluence of supply and demand as determining factors in 
market value is clearly illustrated. Then again, the 
study affords a typical example of the operation of the 
forces which affect the transition from market price to 
normal price. Further, a good illustration of price 
steadiness resulting from a wide range of production 
will be found in such a discussion. Finally, an excellent 
opportunity is given for a study of the operation of 
speculation ; for on the market for wheat modern specu- 
lation is found in its most highly developed phase. 
2. The Wheat Market. 
Before commencing the main topic of our exposition, 
it is necessary to give a provisional account of markets, 
and discuss briefly the nature of the market for wheat. 
The question of the forces tending to bring about equi- 
librium between demand and supply is fundamentally 
concerned with the general question of markets. 
If we suppose a community where each family or 
group is self-sufficing, little or no exchange takes place 
between the families, and there is no market. Such a 
state of affairs has probably never existed, for however 
primitive a community might be, some bartering is 
highly probable. As the division of labour begins to 
develop, as it did in the English manor in early medieval 
times, the volume of bartering increases. Progress in 
the economic world is ever in the nature of specialisation 
both by product and by process. Every step in special- 
isation by product increases the necessity of markets, 
while specialisation by process increases the need for the 
