THE LAW OF PRICES.
[TO THE EDITOR OP THE "SPECTATOR."]
SIB,—Your article on the above subject, in connexion with Mr. Dibblee's book, illustrates the disadvantages of using the same word—here the word "law "—in two different senses. We know clearly what we mean when we say that mechanically what we gain in power we lose in motion; there are no exceptions to that law : it is exact and cannot be evaded. When, how- ever, people not versed in the explanations and provisoes of the economists are told that wages are fixed by a law of supply and demand, they are apt to conclude—and it is a comforting conclusion for employers—that moral considers. tions have no part in the determination of the wage they shall pay, seeing that it is fixed by a law into which moral considerations do not enter. I do not say they really believe this, but they are swayed by the half-belief which they do entertain. To put the matter compactly, the equation " price varies as demand and inversely as supply " is not susceptible. of definite solution, because neither demand nor supply are "independent variables " ; both of them contain price itself as a factor ; it is always demand or supply at a price ; thus the price we wish to ascertain by reference to demand and supply is itself an unknown factor in every term of the equation; the equation does not express a law. Now this unknown factor always involves moral considerations ; it always has relation to human wills ; the employer wants to get his labour as cheap as he can; the employed wishes to sell it at as a high a price as he can; there is an economic limit which the employer cannot transcend ; he must pay his way or stop his work ; there is a corresponding limit which the em- ployed cannot pass; he must have sustenance sufficient or stop his work. Between these limits there is all the wide space in which moral considerations have free play and moral responsibility inevitably intrudes and has intruded. If this is so then those who believe that social evils always originate in moral wrongs must remember that squalor, misery, and want cannot always —nor nearly always—be ascribed to the faults of those who suffer, for on their own theory avarice, injustice, and selfish- ness are bound to entail these very evils on the weak. This is no doubt very obvious, but it is a point often left quite out of sight by those who insist most strongly on the supreme value of the cultivation of character among the poor and on the uselessness of all help that does not directly improve character. If injustice and selfishness is one cause of Social disease then you cannot hope to cure the disease till you attack that cause.—I am, Sir, &c., E. H. B.
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