Capitalism; Imperialism; Saving and investment; Socialism
'What is it that is necessarily meant, when we say that the supply and
the demand are accommodated to one another? It is this: that goods which
have been produced by a certain quantity of labour, exchange for goods
which have been produced by an equal quantity of labour. Let this
proposition be duly attended to, and all the rest is clear.--Thus, if a
pair of shoes is produced with an equal quantity of labour as a hat, so
long as a hat exchanges for a pair of shoes, so long the supply and
demand are accommodated to one another. If it should so happen, that
shoes fell in value, as compared with hats, which is the same thing as
hats rising in value compared with shoes, this would simply imply that
more shoes had been brought to market, as compared with hats. Shoes
would then be in more than the due abundance. Why? Because in them the
produce of a certain quantity of labour would not exchange for the
produce of an equal quantity. But for the very same reason hats would be
in less than the due abundance, because the produce of a certain
quantity of labour in them would exchange for the produce of more than
an equal quantity in shoes.'[225]
Against such trite tautologies, Malthus marshals a twofold argument. He
first draws Mill's attention to the fact that he is building without
solid foundations. In fact, he argues, even without an alteration in the
ratio of exchange between hats and shoes, there may yet be too great a
quantity of _both_ in relation to the demand. This will result in both
being sold at less than the cost of production plus an appropriate
profit.
'But can it be said on this account', he asks, 'that the supply of hats
is suited to the demand for hats, or the supply of shoes suited to the
demand for shoes, when they are both so abundant that neither of them
will exchange for what will fulfil the conditions of their continued
supply?'[226]
In other words, Malthus confronts Mill with the possibility of general
over-production: '... when they are compared with the costs of
production ... it is evident that ... they may all fall or rise at the
same time'.[227]
Secondly, he protests against the way in which Mill, Ricardo and
company are wont to model their postulates on a system of barter: 'The
hop planter who takes a hundred bags of hops to Weyhill fair, thinks
little more about the supply of hats and shoes than he does about the
spots in the sun. What does he think about, then? and what does he want
to exchange his hops for? Mr. Mill seems to be of opinion that it would
show great ignorance of political economy, to say that what he wants is
money; yet, notwithstanding the probable imputation of this great
ignorance, I have no hesitation in distinctly asserting, that it really
is money which he wants....'[228]
For the rest, Malthus is content to describe the machinery by which an
excessive supply can depress prices below the cost of production and so
automatically bring about a restriction of production, and _vice versa_.
Public-domain text, read in full here on John Shaqi.
Reviews
Reviews
No reviews yet
Be the first to share your thoughts on this work.
Elsewhere in the archive
Join the Discussion
Join the discussion
Sign in to leave a comment or review.
Sign InorCreate an account