prosperity, such as the world has never seen, will follow in its course. Like the rain from heaven, it sheds its blessing on the just and on the unjust. A man has only to pay exclusive regard to his own interests, and to be totally oblivious of the interests of every one around him, and he will infallibly ensure the good of all. The purely selfish man is a benefactor to his species in spite of himself. "A gain to each is a gain to all," as Bastiat tersely puts it. "The grand, the noble theorem, expounded by political economists, is this," says Mr. Newman, "that the laws of the market which individual interests generate, are precisely those which tend best to the universal benefit."1. McCulloch even goes so far as to blame Adam Smith for not speaking in more glowing terms of his favourite principle; for not saying, in fact, that in promoting such branches of industry as are most advantageous to themselves, individuals "necessarily promote such as are, at the same time, most advantageous to the public. But the blame was quite undeserved, for Adam Smith said very much in effect what McCulloch blamed him for not saying. "The effort of every man to better his condition" is, according to Adam Smith," so powerful a principle that it alone, and without any assistance, is capable of carrying society to wealth and prosperity." This is putting the matter quite strong enough, surely; but if self-interest be so "2 1 Lectures on Political Economy, p. 63. 2 Principles of Political Economy. Introduction. omnipotent, and withal, so beneficent a principle, it must obviously have been a mistake to endow mankind with other dispositions that might interfere with it. The sentiments of justice, courage, fortitude, benevolence, and such like, which we affect to value so much, would, in such a case, not only be unnecessary, but, so far as they interfere with the beneficent operation of selfinterest, positively pernicious. cordance man's This dogma, on examination, scarcely accords with modern scientific ideas of man's nature. Those Not in acwho adopt it have lost sight of the fact, that with the man is endowed with a constitution which laws of subjects him to the operation of other laws nature. besides those which, we are gravely told, are neither mental nor physical, but are for the occasion termed economic. The human organism being composed of certain physical elements, is subject to the operation of physical laws, as, for instance, the law of gravitation, and the law of chemical affinity; it is also subject to organic laws, as those of nutrition, of reproduction, of growth, and decay; it is also subject to mental laws, as those of cogitation and volition. Mental laws do not supersede organic laws, nor do organic supersede physical laws, but each class operates in its own sphere, simultaneously and independently. To say, therefore, that self-interest-the desire of wealth, or the desire, of every man to better his condition, or by whatever name it is called-is alone sufficient to lead individuals and nations to wealth and prosperity, is D 1 equivalent to saying not only that a single motive is to supersede all other impulses, desires, or sentiments whatever, but all physical and organic forces as well, so far at least as the economic well-being of mankind is concerned. Nor with facts. But, further, those who contend for the sufficiency of self-interest in industrial action seem to forget that some people desire to prosper, and appear indeed for a while to prosper, at other people's expense; that, in fact, there are thieves and cheats in the world; that a large, and even respectable, so far as respectability now goes, section of the community make their living, and even fortunes and titles, by making and selling fabrics that are guaranteed not to wear, by making and selling goods that are short of their proper weight or measure, and by making and selling adulterated food, drink, and even drugs that kill when they ought to cure. As the so-called laws of Political Economy, as expounded by this school, are simply an exposition of the mode in which self-interest operates, I propose, in the two following chapters, to discuss at some length the tendency of this force. CHAPTER IV. DEMAND AND SUPPLY. Difference this and tion. DEMAND and Supply is different from Competition, though they are generally spoken of as one and the same thing. Strictly speaking, Demand and Supply between indicates the relation between a buyer and a competiseller, or between a seller and a buyer, whereas Competition indicates the relation between two or more buyers and a seller, or two or more sellers and a buyer. Demand and Supply has reference to the exchange of two articles between two or more persons; Competition has also reference to exchange,, but is complicated by demand on the part of two or more persons for the same article. Demand and Supply is a simple process of exchange; Competition is a double process, as there is first the struggle among competitors for the article and afterwards the exchange of it. Thus, when one person desires to buy an article and another desires to sell, exchange is said to be regulated by Demand and Supply; but when two or more persons desire to buy the same article, and only one person desires to sell, the two or more buyers have first to settle their differences amongst themselves, and subsequently with the seller, and thus exchange becomes complicated by the element of Competition. Meaning Here it may be necessary to explain the meaning of the terms Demand and Supply. By Demand of the term Mill understands the "desire combined with a Demand. power to purchase," or, as Adam Smith called it, "effectual demand," and by Supply, "the quantity of any commodity offered for sale." But why should we speak of "effectual demand" any more than of “effectual supply"? In every case of sale and purchase there is an act of exchange, and in every act of exchange both parties to it stand in the same relation to each other, and both are supposed to be mutually benefited by the transaction. A beggar, says Adam Smith, may desire a diamond, but his desire would not be effectual if he had not the means of purchasing it; and this reasoning is endorsed by both Mill and Thornton. Practically, however, a desire must always be considered as combined with a power. The desire of the beggar for the diamond would be "effectual demand" if no one desired to possess it but himself. The desire, to be "effectual," must be capable of satisfying the desire of the holder, and nothing more, and a beggar may be as capable of doing this as any one else. 'Effectual demand" is a demand on the one side that is related to a demand on the other; 66 1 Principles, vol. i. book iii. ch. ii. 3. |