petition among the buyers increases. Result: a more or less considerable rise in the prices of commodities.
It is well known that the opposite case, with opposite result, happens more frequently. Great excess of supply over demand; desperate competition among the sellers, and a lack of buyers; forced sales of commodities at ridiculously low prices.
But what is a rise, and what a fall of prices? What is a high, and what a low price? A grain of sand is high when examined through the microscope, and a tower is low when compared with a mountain. And if the price is determined by the relation of supply and demand, by what is the relation of supply and demand determined?
Let us turn to the first worthy citizen we meet. He will not hesitate one moment, but, like another Alexander the Great, will cut this metaphysical knot with his multiplication table. He will say to us: “If the production of the commodities which I sell has cost me one hundred dollars, and out of the sale of these goods I make one hundred and ten dollars—within the year, you understand—that’s an honest, sound, reasonable profit. But if in the exchange I receive one hundred and twenty or one hundred and thirty dollars, that’s a higher profit; and if I should get as much as two hundred dollars, that would be an extraordinary, an enormous profit.” What is it, then, that serves this citizen as the standard of his profit? The cost of the production of his commodities. If in exchange for these goods he receives a quantity of other goods whose production has cost less, he has lost. If he receives in exchange for his goods a quantity of other goods whose production has cost more, he has gained. And he reckons the falling or rising of the profit according to the degree at which the exchange value of his
