Once again the most perfectly contrived Utopia would be compelled to pay to the unorganized coöperation of our epoch the sincerest flattery of imitation. §6. _The Fundamental Character of many Economic Laws_. But again perhaps a word of warning may be desirable. There is much controversy in these days about something called "Capitalism" or "The capitalist system." When these words are used with any precision, they usually refer to the arrangement so prevalent at present, whereby the ownership and sole ultimate control of a business rests with those who hold its stocks and shares. There is much to be said upon the merits and demerits of this system; something will perhaps be said upon the matter in the fifth volume of this series; but I shall not discuss it here. Nothing that I have said so far has any real bearing on it whatsoever; to suppose that it has, is indeed to miss the whole point of this chapter. The order, which I have sought to reveal, pervading and moving the most diverse phenomena of the economic world, would be a far less noteworthy and impressive thing were it merely the peculiar product of capitalism. Merchant adventurers, companies, and trusts; Guilds, Governments and Soviets may come and go. But under them all, and, if need be, in spite of them all, the profound adjustments of supply and demand will work themselves out and work themselves out again for so long as the lot of man is darkened by the curse of Adam. CHAPTER II THE GENERAL LAWS OF SUPPLY AND DEMAND §1. _Preliminary Statement of Three Laws_. The recognition of order in any branch of natural phenomena is but the prelude to the formulation of a set of laws, the simpler as the order is more universal, which describe, and as we say, explain it. Thus the perception of the even, elliptical courses of the heavenly bodies led to the statement of the law of gravitation and the laws of motion. In economics, similar laws have long since been enunciated, and have proved themselves such valuable instruments for the understanding of the daily problems of the workaday world, that they have been woven into the texture of our ordinary speech and thought. I have already touched upon them in the preceding chapter. But it is now desirable to set them out in order, in the most concise and formal manner possible. LAW I. When, at the price ruling, demand exceeds supply, the price tends to rise. Conversely when supply exceeds demand the price tends to fall. LAW II. A rise in price tends, sooner or later, to decrease demand and to increase supply. Conversely a fall in price tends, sooner or later, to increase demand and to decrease supply. LAW III. Price tends to the level at which demand is equal to supply.