composed the party varied in the price they would give for the deer from one to four skins. The owner of the deer will then obtain four skins for it, though he might gladly have sold it for one. And although the purchaser might have been willing to give five or six skins rather than not obtain the deer, still he will not give more than four, as that, being the highest price offered, is sufficient. In like manner, if any one of the hunting party were to meet with several unconnected Indian traders, a similar competition would then take place among them, and he would get the highest price, or the next to the highest, that any one of them would give. But if two parties were to meet, one having skins and the other venison, the terms on which they would probably barter, would be, by the effect of mutual competition, about midway between the most that one party would give, and the least the other would take.

Here we see the effect of competition, which, although it adds nothing to the intrinsic value of a commodity-makes it in no degree more desirable-yet enables him who possesses it to obtain the highest market price for it, as the competitors are induced to offer that highest price for their own sakes.

The proportion between the quantity of any commodity offered in exchange and the quantity sought to be obtained, that is, between the supply and demand, has a similar bearing on price. The actual demand for any commodity depends on the combined inclination and ability to give other commodities in exchange for .it. But whatever may be the existing proportion between the demand and the supply, any variation in that proportion, whether it be by the increase or decrease of either, affects the price. If the proportion is altered either by adding to the supply or by lessening the demand, the price naturally falls to induce some to purchase it, who could not or would not purchase it at its former price, or those who consumed it before to consume it in greater quantity. If, on the other hand, the proportion is altered by an increased demand or a diminished supply, the price as naturally rises, since some who wish to. purchase it must now do without it, and in the competition that ensues, only those get it who are able and willing to give a higher price for it.

This effect of consumption increasing with a fall of price, and diminishing with its rise, may be illustrated by a cone standing on its base, in which the axis may represent the price, and horizontal sections of it the varying circles of consumption.

If we have been successful in the preceding analysis, it follows that the exchangeable value of every commodity is determined by the number and wealth of those who desire it, the intensity of their desire, and the quantity offered for sale: and that these constituents of price are as uniform and immutable as the nature of man. They have the same operation on the savage and

the civilized man, on the shopkeeper who sells a yard of cloth, and the merchant who disposes of a ship and cargo. They apply as well to the jewels which sparkle in an imperial diadem, as to the earth which is converted into bricks, or the rags that are carried to the paper-mill.

But the principles of price operate so differently on those commodities which may, and on those which cannot be increased by human efforts, that they form two distinct classes, and require a separate consideration.

One class comprehends all articles which are at once useful or agreeable to man, and permanently limited in quantity, either because they are the product of unassisted nature, or of peculiar individual talent, or of circumstances that no longer exist. Of this character are diamonds and other precious stones; statues and pictures by great masters; the produce of particular districts, as Tokay wine, Macouba snuff; some species of game; rare productions of every sort, natural and artificial; some town lots and peculiar sites for building.

As these things cannot be increased at pleasure to meet an increased demand, competition is either confined to those who desire them, or is unequally divided between those who want and those who possess them. It is true that the exchangeable value of these, as of all other commodities, is in proportion to the pleasure they give and the pain or difficulty of procuring theme but here the difficulty arises solely from the conflicting wishes of those who desire them, without regard to the original difficulty or cost of acquiring them: and consequently to this class of commodities Mr. Malthus's doctrine is strictly applicable. Their price depends upon the proportion of the supply to the demand, in the sense in which we have explained these terms; and this is distinctly admitted by Mr. Ricardo.

In the other class, comprehending every product of human art and labour which can be indefinitely multiplied, the price can never long exceed the labour or privation endured in producing them, whatever may be the gratification they afford. In these there is a competition among the producers as well as the consumers, and no one will be willing to give more than this price, when by the effect of such competition, they can be purchased for that price. It is true that variations in the demand or supply of these commodities may occasionally raise their price above this standard, or sink them below it: but every such variation has a tendency to correct itself: for if the price be higher, labour will be drawn from other pursuits to increase the supply, until the price falls to the level of average compensation to the producer; and if the price be below the cost of production, either the diminished supply that will ensue, will bring back the price to the same average, or the commodity will cease to be produced.

Although, then, the market price of the commodities fluctuates with the varying proportion between the demand and supply, yet as this proportion itself principally depends on the cost of production, it follows that the latter may be said to regulate the price; and that the two rules of Malthus and Ricardo are not irreconcilable.

There is, however, a very large description of commodities which partake of the nature of both these classes. Though human labour contributes to their production, and can greatly augment their quantity, yet nature has assigned limits to this increase far within the wants and desires of man. Of this character are the precious metals and many other minerals, and all animal products that are valuable and rare, as ivory, tortoise-shell, furs, ostrich feathers, ambergris, &c. While their price may, in general, be in proportion to the quantity of labour employed in procuring them, yet the amount of that labour is greater or less in proportion to the bounty of nature in furnishing them. Thus, although the prices of gold, silver, and iron may all correspond to the labour expended in working their several mines, yet it is owing to their relative quantities that one pound of gold is worth fifteen pounds of silver, and four or five thousand of iron.

We consider all rude produce to be of this mixed character, since its production not only requires additional labour, but the proportion of supply to demand is steadily diminishing, according to the progress of population; and in any given place it fluctuates with the variations of the seasons; and consequently, we do not think that the price of corn and other productions of the earth is entirely regulated by the labour expended in producing them, and that even in manufactured articles, the rule of Mr. Ricardo, though approximating to the truth, is more or less affected, so far as the value of the raw material enters into their price.

It must be recollected that labour furnishes, for any species of commodities, only a relative measure of value; and that it varies in different countries, and even in the same country, according to the progress of population. It is higher in this country than in Europe, and higher in Europe than in China, its price being inversely as the density of population. When tried by any test, it is worse remunerated now, than it was some centuries ago in England. From this progressive fall in the price of labour and the progressive rise in the price of raw produce, we are compelled to differ from the new theory of rent, which, although it owes not its origin to Mr. Ricardo, has derived its chief celebrity and its ablest support from his pen, and to which our author, in common with most subsequent writers on political economy, has assented.

This theory is thus stated by Mr. Ricardo:

"If all land had the same properties, if it were boundless in quantity, and uniform in quality, no charge could be made for its size, unless where it posessed peculiar advantages of situation. It is only then, because land is of different qualities, with respect to its productive powers, and because, in the progress of population, land of an inferior quality, or less advantageously situated, is called into cultivation, that rent is ever paid for the use of it. When, in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land.

When land of the third quality is taken into cultivation, rent immediately commences on the second, and it is regulated as before, by the difference in their productive powers. At the same time, the rent of the first quality will rise.” &c.

Now, it seems to us, that this is mistaking a collateral circumstance for a cause. Rent is not paid on good land, because inferior land is taken into cultivation, but inferior lands are cultivated with profit, because the best lands are incumbered with a rent, which their proprietors were previously able to obtain, by reason of the increased demand for the means of subsistence by a growing population, and which subsistence they alone can furnish.

After the appropriation of lands, which doubtless takes place as soon as men resort to the cultivation of the earth, and probably before, those who hold them will be willing to exchange the surplus produce they yield, beyond what is wanted for their own consumption, for the products of the labour of those who were without land; and this class would readily exchange their labour for the means of subsistence.

The terms on which this exchange would take place, would, like every other, be regulated by the proportion between the supply and the demand. At first, neither the one nor the other would be great. There would then be neither the skill, nor the unremitting labour, nor the wants, which in the advanced stages of society, give such a spring both to supply and demand. Most men would be both cultivators and manufacturers, as their occasions required. But when, here and there, one chose to follow the occupation of a smith or a tailor, a mason or a wheelwright, either because he had no land, or had peculiar expertness in these employments, he would probably get as much raw produce for his labour, as the same labour would bring, if exercised in husbandry. He could not get much more, for if he did, labour would soon be drawn from making raw produce to his employment, which would lessen its profits; and it would be to the interest of the cultivator, who had a surplus, to give him that much. It would, in fact, be an exchange of labour of equal portions, though of different species. This, then, is the minimum price at which raw produce can be exchanged for labour, and the maximum price of labour, compared with corn. It supposes a sparse but rapidly increasing population, little division of labour, and no rent.

As by the progress of population, the number of those who are without land will be constantly increasing, and they cannot dispense with its produce even for a day, there will be an increased competition among them to obtain it. More and better commodities will be manufactured, to tempt the owners of land to make a larger surplus, and to enable the others to obtain that surplus. The labourer can no longer receive the same wages, that is, the same portion of raw produce, as before. The demand is continually increasing in proportion to the supply, until, by the continued operation of the same causes, he is finally brought to give a day's labour for a day's subsistence for himself and a small family. Less than that he cannot long take; for if he did, population must decline, and the price of labour consequently rise. This is the maximum price of the produce of the land, and the minimum price of labour.

Now, between these extremes, the prices of labour and raw products vary according to circumstances; and the proportion which in any country exists between them, depends partly on the kind of food which habit has made necessary, but principally on the density of population. When that is very thin in proportion to the fertility of the country, labour is highest; and lowest when population is most dense: and this additional quantity of labour which the proprietors of the land can obtain for the same quantity of provisions, is the foundation of rent, which is indeed merely its representative. In the earlier stages of society, if the land is very fertile, a man may receive for a week's labour as much corn as will furnish him with bread for a year: such is actually the case, in many parts of our Western Country. But as population advances, he may be obliged to give the labour of several months, as in Europe, or of a whole year, as in China, to obtain the same quantity of provisions.

In the course of this progress, the quantity of raw produce is all the while increasing, but not in proportion to the increasing numbers: more land is taken into cultivation, and less is left for forest, pasturage, pleasure-grounds, &c. But the same portion of land is continually supporting a greater number. This is effected by two causes. One is by a more careful and skilful husbandry, which augments the production of the land, and the other is the diminished consumption of the labourer. When he is rewarded with all or nearly all he could raise on fertile land, as we have seen is the case in the early stage of population, his consumption is very great. He uses animal food very liberally-is wasteful and improvident. He is, however, gradually obliged to leave many of his indulgences to the wealthy few-to substitute vegetable food for animal-first, that which is derived from the seeds of plants, as wheat, barley, and finally, something yet cheaper and more abundant, as potatoes. Although the demand for food