Principles of Political Economy, Vol. 1Roscher, Wilhelm
History
Principles of Political Economy, Vol. 1
Roscher, Wilhelm
Economics
It is quite otherwise, in the case of indispensable goods, as for
instance, wheat. When there is a want of such an article, men prefer to
dispense with all other articles, to some extent, rather than to practice
frugality in bread; and all the more, as bread is not so much used as
consumed rapidly, while clothes and metallic articles last a long time.
And even after an over-abundant harvest, leaving voluntary waste out of
the question, consumption is increased by a finer separating of the flour,
an increase in the amount of corn fed to cattle, and the distillation of
spirits. Hence, demand and supply by no means run in parallel lines at
every moment; and indispensable articles tend to greater perturbations in
price than those which can be dispensed with.(617)(618) The price of
grain, especially, varies in a ratio very different from the inverse ratio
of the amount of the harvest;(619) although a formula therefor expressed
in figures, like that of Gregory King, can never be applicable
universally.(620) Farmers must everywhere and always withhold a certain
amount of their harvest for seed, for home use etc., from the market. Only
absolute necessity can induce them to draw on the quantity thus laid by.
But the ratio of this part to the whole is very different in different
countries.(621) In the higher stages of civilization, where payment in
money has taken the place of payment in produce, and all other kinds of
payment, and where the cultivator of the ground pays the wages of his
laborers almost exclusively in money, so that they, like all others,
purchase what bread they require in the market; a given deficit in the
harvest must be spread over a much larger market supply; and prices,
therefore, remain much less affected than in the lower stages of
civilization.(622) And so, it is clear that a like bad harvest must affect
prices very differently, if there be a large importation or exportation of
the means of subsistence, and if several bad harvests, or several harvests
yielding more than the average have preceded.
In another respect yet, the price of indispensable commodities is very
sensitive, because here the mere fear of a future want of them has a far
deeper and wider influence, than has the fear of want of articles of
luxury. No matter how good the wheat crop may have been, if the weather
afterwards interferes with its harvesting, the price of wheat, in
countries in which the spirit of speculation is on the alert, will
certainly rise, because the prospect of the future crop then becomes
somewhat doubtful.(623)
Section CIV.
Influence Of Purchaser’s Solvability On Prices.
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