Principles of Political Economy, Vol. 2Roscher, Wilhelm
General
Principles of Political Economy, Vol. 2
Roscher, Wilhelm
Economics
The greater number of such crises are doubtless special; that is, it is
only in some branches of trade that supply outweighs demand. Most
theorists deny the possibility of a general glut, although many
practitioners stubbornly maintain it.[216-1] J. B. Say relies upon the
principle that in the sale of products, as contradistinguished from
gifts, inheritances, etc., payment can always be made only in other
products. If, therefore, in one branch there be so much supplied that
the price declines; as a matter of course, the commodity wanted in
exchange will command all the more, and, therefore, have a better vent.
In the years 1812 and 1813, for instance, it was almost impossible to
find a market for dry goods and other similar products. Merchants
everywhere complained that nothing could be sold. At the same time,
however, corn, meat and colonial products were very dear, and,
therefore, paid a large profit to those who supplied them.[216-2] Every
producer who wants to sell anything brings a demand into the market
exactly corresponding to his supply. (_J. Mill._) Every seller is _ex vi
termini_ also a buyer; if, therefore production is doubled, purchasing
power is also doubled. (_J. S. Mill._) Supply and demand are in the last
analysis, really, only two different sides of one and the same
transaction. And as long as we see men badly fed, badly clothed, etc.,
so long, strictly speaking, shall we be scarcely able to say that too
much food or too much clothing has been produced.[216-3]
[Footnote 216-1: When those engaged in industrial pursuits
speak of a lasting and ever-growing over-production, they
have generally no other reason for their complaints than the
declining of the rate of interest and of the undertaker's
profit which always accompany an advance in civilization.
Compare _J. S. Mill_, Principles, III, ch. 14, 4. However,
the same author, I, 403, admits the possibility of something
similar to a general over-production.]
[Footnote 216-2: _Say's_ celebrated Théorie des Débouchés,
called by McCulloch his chief merit, Traité, I, ch. 15. At
about the same time the same theory was developed by _J.
Mill_, Commerce defended, 1808. _Ricardo's_ express
adhesion, Principles, ch. 21. Important germs of the theory
may be traced much farther back: _Mélon_, Essai politique
sur le Commerce, 1734, ch. 2; _Tucker_, On the
Naturalization Bill, 13; Sketch of the Advance and Decline
of Nations, 1795, 182.]
[Footnote 216-3: Precisely the same commercial crisis, that
of 1817 seq., which more than anything else led _Sismondi_
to the conclusion that too much had been produced in all
branches of trade, may most readily be reduced to _Say's_
theory.
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