Читать книгу Belford's Magazine, Vol II, No. 10, March 1889 - Various - Страница 6

THE COST OF THINGS

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"Papa, why does bread cost so much money?" asks a child, of its father. Perhaps if the father is indifferent, indolent, or ignorant, he may dodge the question and reply, "Because flour is so scarce." But if he is a thinking and observant man, willing to instruct an ignorant child asking a very natural question, he will not content himself with such a reply, for he must have observed that bread is sometimes high when wheat and flour are very plentiful.

By drawing on his experience he will not fail to recall the fact that, in a season when any particular article is in much demand, the price of that article will rise and will continue to rise until the demand for the article induces a supply of it from outside sources.

Let him recall Christmas and Thanksgiving times, when, for instance, turkeys are in demand. If the supply is light, up goes the price of turkeys; and, if the demand increases, the price will continue to rise unless some means are found of supplying the demand. If turkeys flow into the market of a city from the surrounding country, the rise in price is first checked, and then, as the supply increases, the price falls, and the demand being less than the supply, the price goes to its lowest figure. This is in accordance with the recognized law of supply and demand, the relation between the two always establishing the price.

If the demand is greater than the supply, the price will go up; if the supply is greater than the demand, the price will go down. But this state of things can exist only where the inflow of supply and the outflow of demand are free and unrestricted; for if, from any cause, restriction is placed on the inflow, the outflow will be restricted just in the same way. We may liken the operation of the law to what happens when a bent tube with the ends up is filled with water. If, now, more water is poured in at one end, that same amount will flow out at the other. If the whole capacity of the tube at one end is used to supply water, just that amount will run out at the other; but if one-half the tube at the supply end is plugged up, then only one-half the capacity of the tube will run out at the other.

Reverting to the question of the supply of turkeys in a market, let us suppose that a despot, ungoverned by anything but his own will, is in charge of the city when the turkey market is held, and of the surrounding country, and, wishing to have a plentiful supply of turkeys, he issues his ukase that every turkey within ten miles of the town shall, under severe penalties, be sent into market for sale. Is it not plain that the price of turkeys will at once fall, since the supply will at once become greater than the demand? But suppose this despot has turkeys of his own to sell, and hence desires to make his poor people pay the highest price for their turkeys, so that his coffers may be filled with gold. Now, instead of requiring all turkeys to come in under severe penalties, he does everything he can to keep them out, and issues his ukase that none shall come in, under penalty of death to the importer of turkeys. Is it not as plain as it was in the other case, that the price of turkeys will go up, up, up, until the vast majority of men cannot buy at all?

Suppose that, instead of placing an absolute prohibition upon the importation of turkeys, the despot, convinced that people must have turkeys, and having already arranged to buy all he wants himself, makes a law that every turkey coming into the market shall be taxed one dollar for the privilege of bringing it to market. Now, turkeys will come in if there is still a demand for them, but every one that comes in must pay a tax of a dollar; and, if there are any turkeys already in market, a dollar will be added to their price, as well as to the price of those coming in. For no importer proposes to lose the amount of the tax himself, and is bound to make the consumer pay that much additional for his turkey; and a resident turkey-dealer, seeing that imported turkeys are selling for a dollar above the market price, will at once add that to the price of his turkeys, since it is expecting too much of human nature to suppose any man is going to sell his property for less than he can get for it. The result of the despot's tax, therefore, is to raise the local price of turkeys by just the amount of that tax; and, the higher the tax, the higher the price of turkeys will be to the consumer.

In this way the price of any article in a market is established by the relation between the supply and the demand; and this law is inexorable. If the supply is restricted by taxing imports, the price, whilst higher, will still be fixed by the demand made for the article; and this applies to all articles which are salable – flesh and blood, muscle, labor, as well as to bread, meat, etc. In slavery times, when a great demand existed in the cotton-States for slave labor, slaves were imported from the more northern States, where labor was not so valuable, to the more southern ones, where it was more so; and this gave the border States the name of being the "slave-breeding States" of the Union. The increased demand for slaves threatened at one time to reopen the slave trade with Africa; and it is said that some negroes were, in fact, brought into the country. Under these circumstances, had the States (Mississippi, Louisiana, and others) where a demand for slaves existed possessed the power to lay a tax on slaves imported into them, the price of slaves in those States would have been very considerably increased.

The work of hands – labor – is a salable article, just as much as bread or meat, and its price is determined in the same way; not only as regards common labor, but also special kinds of labor. Reverting to the question at the head of this paper, – the price of bread, – let us suppose a community where all the elements of bread-making (flour, yeast, potatoes, etc.) exist in abundance, but where there is but one baker. If the demand for bread is so great that one baker will have to run his bakery night and day to supply the demand, and he can fix his own price, limited only by the number of his customers and their ability to pay (the "demand"), although he can buy his flour and other ingredients cheap, he must pay high wages to his assistants and work hard himself. As the demand for bread increases, its prices will rise until the attention of other bakers is attracted, other bakeries will be established, the supply will more nearly equal the demand, and the price of bread will fall, in accordance with the same law as governed in the case of turkeys; whilst bakers' wages, from the very fact of there being more bakers on the ground, will fall. If, notwithstanding the establishment of more bakeries, the demand still remains greater than the supply, the price of bread will still remain up, and an attempt may be made to import bread from without. If the bakers have influence enough with the law-making power, or with our supposed despot, they will have an import tax placed upon bread to keep up their prices, under the plea of "sustaining domestic industry;" but the amount of this import tax will go into the pockets of the owners of the bakeries, although the wages of their workmen will not be increased, for their wages depend, as has been shown, not on the price of bread, but upon the number of bread-making laborers available. If such laborers increase in number, the wages of the bread-makers may even go very low, though the price of bread (thanks to the import tax) may remain very high. These points are dwelt upon at length for the purpose of exposing the fallacy of a popular delusion – that…

It is a remarkable fact that, whilst many laboring-men are deluded with the idea that taxing articles which they consume or aid in producing tends to keep up their wages or to increase them, they entirely ignore the real reason for low wages, which is nothing more or less than the presence of plenty of labor. Once convinced of the fact that the price of everything, labor included, depends on the inexorable law of supply and demand, they will not be able to resist the conclusion that no importation tax can, by any possibility, affect the price of labor, except an importation tax on labor itself.

This fact seems almost to demonstrate itself; and yet there is no greater delusion in this country, where its falsity is demonstrated every day to anyone observant of the settlement of our vast Western territories. Let anyone go into a Western settlement and note the high price of labor of all kinds, and that it is almost impossible to get a man to do a day's work for love or money; and let him visit the same place a few years later, when perhaps a railroad is running through the place, which in the meantime has grown immensely in population. He will now note the decrease in wages of all kinds. And, if he will go to the same place still later, he will not fail to note a still further decline; for, if the demand continues, labor will, by means of the railroad, flow in to supply it, and the price of labor will fall – for no other reason than that there is plenty of labor to supply the demand. And this lesson is demonstrated over and over again wherever a new settlement is observed. If there is only one bricklayer in the place he can demand his own price, which cannot be affected by the presence of fifty or a hundred carpenters or blacksmiths, nor by a tax on bricks, mortar, or sand.

X.

Belford's Magazine, Vol II, No. 10, March 1889

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