An Inquiry into the Principles of Political Oeconomy (Vol. 1 of 2): Being an essay on the science of domestic policy in free nations. In which are particularly considered population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxesSteuart, James, Sir
History
An Inquiry into the Principles of Political Oeconomy (Vol. 1 of 2): Being an essay on the science of domestic policy in free nations. In which are particularly considered population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxes
Steuart, James, Sir
Economics
This case can only happen, when the commodity is not a matter of great
necessity, or even of great use; since the desire of procuring it is not
sufficient to engage the buyers to raise their price; unless, indeed,
this difference should proceed from the ease of providing the same, in
other markets, as cheap as formerly. This last is a dangerous
circumstance, and loudly calls for the attention of the statesman. He
must prevent, by all possible means, the desertion of the market, by a
speedy supply for all the demand, and must even perhaps give
encouragements to manufacturers, to enable them to diminish the prices
fixed by the regular standard. This is the situation of a nation which
is in the way of losing branches of her foreign trade; of which
afterwards.
Whatever therefore be the consequence of the actual preponderancy of the
scale of demand; that is, whether it tend to raise profits, or to
discredit the market; the statesman’s care should be directed
immediately towards making the balance come even of itself, without any
shock, and that as soon as possible, by increasing the supply. For if it
be allowed to stand long in this overturned state, natural consequences
will operate a forced restitution; that is, the rise in the price, or
the call of a foreign market, will effectually cut off a proportional
part of the demand, and leave the balance in an equilibrium,
disadvantageous to trade and industry.
In the former case, the manufacturers were forced to starve, by an
unnatural restitution, when the relative profit and loss of individuals
balanced one another. Here the manufacturers are inriched for a little
time, by a rise of profits, relative to the loss the nation sustains, by
not supplying the whole demand. This results from the competition of
their customers; but so soon as these profits become _consolidated_ with
the intrinsic value, they will cease to have the advantage of profits,
and, becoming in a manner necessary to the existence of the goods, will
cease to be considered as advantageous. These forced restitutions then,
brought about, as we have said, by selling goods below their value, by
cutting off a part of the demand, or by sending it to another market,
resembles the operation of a carrier, who sets his ass’s burden even, by
laying a stone upon the lightest end of it. He however loses none of his
merchandize; but the absurdity of the statesman is still greater, for he
appears willingly to open the heavy end of the load, and to throw part
of his merchandize into the high-way.
Public-domain text, read in full here on John Shaqi.
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