technical term market price, and at another time with its direct antithesis,—that is, may coincide indifferently with A or with non-A; with what color of decency could a man make actual price and market price to be convertible terms; that is, essentially united, and yet by necessity at times essentially opposed?

Adam Smith it was who first brought up the distinction of market value. What did he mean by it? He meant value of any article as adfected (purposely I use the algebraic term) by the state of the market, disturbed from its equilibrium. He was not ignorant that no quantity of an article, whether in excess or in defect, could ever mainly fix the price: the cost it is only that could do that; but the quantity in the market would, if not level to the demand, be a coefficient in regulating that price. Sometimes this quantity might be a great deal too much for the demand; sometimes it might be a great deal too little; and, accordingly, as either case happened, it would (by raising or by depressing) modify the simple result obtained from the cost. Having thus set up a term, viz. market value, to express cost value as adfected by quantity in excess or in defect, next he looked out for a contradictory term, (viz. natural value,) in order to express cost value as it is not adfected by quantity in excess or in defect.

These two terms, therefore, express the two opposite poles of a law. They indicate always an agency of law. But the terms actual value, or value in a market, express only a fact. When you speak of the actual value, meaning in good English the present or existing value, you cannot but be aware that it might coincide equally with the cost price as adfected by quantity, or with. the cost price as not adfected by the quantity; that is, with technical market price, or with technical natural

price, (which is non-market price.) The actual price of a coach-horse, for instance, "sixteen hands high, grand action, six years old," will generally turn out to be a "market price" in the true technical sense; for horses never travel entirely out of that circle: they are always somewhat in excess or in defect. And the reason of this is, that the breeding of horses cannot adapt itself fast enough to the oscillations in the demand. It is not until an oscillation in one direction has begun to make itself felt steadily in the prices, that it is assumed to be certain, and acted upon; and by that time it is too late to countermand the scale of arrangements which has already been in action through four years back. Hence, in horses, or wherever it is impossible to equate the supply abruptly with an altered state of the demand, large elongations occur, this way or that, between the oscillating market price (reflecting the cost adfected by the quantity) and the steady central price, or natural price, (reflecting the cost only, without regard to quantity.) On the other hand, whilst horses are perhaps always at market value, boots and shoes are never known to bear a market value. Some variation may occur slowly in the price of hides, and therefore of leather. This, however, is not much, where no changes happen in the course of foreign trade, and none in the duties. As to the manufactured article, there is so little reason for supplying it in any variable ratio, and shoemakers are notoriously such philosophic men, and the demand of the public is so equable, that no man buys shoes or boots at any other than the steady natural price. The result of this difference is seen in the two orders of men, shoemakers and horse-dealers. The horse-dealer is always too clever; whilst it is in no scorn, but in thankful remembrance of such men as Jacob Boehmen, &c., that Mr.

Coleridge and many others have declared the shoemakers' craft to be the most practically productive of meditation amongst men: This has partly been ascribed to its sedentary habits; but much more, I believe, depends upon the shoemaker's selling always at natural, never at unnatural or market price; whilst the unhappy horse-dealer, being still up to his lips in adfected price, and absolutely compelled to tamper with this price, naturally gets the habit of tampering with the buyer's ignorance, or any other circumstance that shapes the price to his wishes.

Market price, therefore, is so far from meaning the rude idea of price in a market, that such a term would never have been introduced as a technical distinction, except expressly for the purpose of contradicting that rude idea. This, it was felt, might or might not happen to include the double affections of cost and quantity. But what the economist wanted was a term that always should, and must include them; and, observe, no sooner has he got his term, trimmed it, fought for it, than instantly he unsettles it from its foundation. With one Alnaschar kick he destroys the whole edifice upon which he has employed himself so painfully.

But is this confusion of the idea the worst result

from the defeated doctrine? By no means. A crazy maxim has got possession of the whole world; viz. that price is, or can be, determined by the relation between supply and demand. The man who uses this maxim does not himself mean it. He cannot say, "I think thus; you think otherwise." He does not think thus. to extract price for wheat from the simple relation of the supply to the demand. Suppose the supply to be by one tenth part beyond the demand, what price will that indicate for eight imperial bushels of the best red wheat, weighing sixty-four pounds a bushel? Will the

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price be a shilling, or will it be a thousand pounds? You guess at the first would be too little, and the second too much. Perhaps so; but what makes you guess this? Why, simply, your past experience. You fancy yourself ascertaining the price by the relation of supply to demand, and, in fact, you are ascertaining it by privately looking for the cost in past years; the very thing that you had pledged yourself to dispense with.

Now, mark how a man does really proceed in solving such a problem. He finds upon inquiry that an excess in the supply of wheat by one tenth, will cause a depreciation perhaps by one sixth: the accident of excess has told to the extent of a sixth. But of what? A sixth of what? Manifestly, a sixth upon the last price of wheat. The pretended result, that could be known by knowing the mere amount of excess, now turns out to be a mere function of the former cost, previous to the depreciation. But that price includes the whole difficulty; for always the price of wheat will express the cost in the first place, as the principal (oftentimes the sole) element. This call c. Then, secondly, the other (the movable) element of the price will represent any modification upon this C, by means of too much or too little wheat in the market. This modifying element of quantity call Q; and then any existing price in any particular corn-market will always be c + q in the case where there is a deficiency; always c Q in the case where there is an always c (i. e. a mononomial) in the case where there is neither deficiency nor excess, consequently where market price does not take place, but, on the contrary, the price which contradicts market price, or, in Adam Smith's language, natural price.

excess;

Thus it is shown, by pursuing the problem to the last, that every possible case of technical market value

(that is, not value in a market, but value in a market whose equilibrium has been disturbed) cannot by possibility rest upon a single law, (whether cost on the one hand, or relation of supply to demand on the other,) but of necessity upon two laws; briefly, that it must be a Binomial. It is scandalous and astonishing that Adam Smith, the introducer of this important distinction, should himself be the first, in very many cases, to confound it with its own formal antithesis. It is still more scandalous that Ricardo-actually making war upon the logic of Adam Smith, and founding his theory upon a much severer logic should equally have confounded the law of market value with the direct contradiction to that law. Both did so under the misleading of a verbal equivocation 28 in the term "market;" and the possibility of this equivocation would be banished henceforth by substituting for "market value" the term Binomial value.

CHAPTER III.

WAGES.

THERE are four elements in the condition of every working body, which (like so many organs of a complex machine) must eternally operate by aiding or by thwarting each other. According to the social circumstances at the time given, these elements must act either in the same direction or in different directions; and conformably to the modes of combining the action under four