Essays on some unsettled Questions of Political Economy — John Stuart Mill — John Shaqi
Essays on some unsettled Questions of Political Economy
John Stuart Mill · en
This perpetual non-employment of a large proportion of capital, is the
price we pay for the division of labour. The purchase is worth what it
costs; but the price is considerable.
Of the importance of the fact which has just been noticed there are
three signal proofs. One is, the large sum often given for the goodwill
of a particular business. Another is, the large rent which is paid for
shops in certain situations, near a great thoroughfare for example,
which have no advantage except that the occupier may expect a larger
body of customers, and be enabled to turn over his capital more quickly.
Another is, that in many trades, there are some dealers who sell
articles of an equal quality at a lower price than other dealers. Of
course, this is not a voluntary sacrifice of profits: they expect by the
consequent overflow of customers to turn over their capital more
quickly, and to be gainers by keeping the whole of their capital in more
constant employment, though on any given operation their gains are less.
The reasoning cited in the earlier part of this paper, to show the
uselessness of a mere purchaser or customer, for enriching a nation or
an individual, applies only to the case of dealers who have already as
much business as their capital admits of, and as rapid a sale for their
commodities as is possible. To such dealers an additional purchaser is
really of no use; for, if they are sure of selling all their commodities
the moment those commodities are on sale, it is of no consequence whether
they sell them to one person or to another. But it is questionable
whether there be any dealers in whose case this hypothesis is exactly
verified; and to the great majority it is not applicable at all. An
additional customer, to most dealers, is equivalent to an increase of
their productive capital. He enables them to convert a portion of their
capital which was lying idle (and which could never have become
productive in their hands until a customer was found) into wages and
instruments of production; and if we suppose that the commodity, unless
bought by him, would not have found a purchaser for a year after, then
all which a capital of that value can enable men to produce during a
year, is clear gain--gain to the dealer, or producer, and to the
labourers whom he will employ, and thus (if no one sustains any
corresponding loss) gain to the nation. The aggregate produce of the
country for the succeeding year is, therefore, increased; not by the
mere exchange, but by calling into activity a portion of the national
capital, which, had it not been for the exchange, would have remained
for some time longer unemployed.