Fair price

“ Justice requires there should be a fair proportion between a thing and its price. To exact a price which is beyond the worth of the commodity sold, or to give a sum which is below its due value, is to overreach on the part of either the seller or the buyer. ”

“ At a certain price, a certain number of people will buy a given article. Raise the price of this article without raising the purchasing power and the demand will fall off. This was true from the beginning of human barter and trade, and this will be true down to the last set of human beings who burn the last bit of fuel available upon a cold and exhausted earth. ”

“ But this is to explain value, not by marginal utility alone, but by value as well—a circle. Or, if we leave the standpoint of absolute values, and look at the matter in terms of prices, the same situation presents itself. The price which an individual is willing to pay for a good depends on his income,—which commonly rests on prices—and on the prices he has to pay for other goods which enter into his budget. ”

“ But this variation is not that of the economists, who place in their list of the causes of the variation of values, not only the means of production, but taste, caprice, fashion, and opinion. In short, the true value of a thing is invariable in its algebraic expression, although it may vary in its monetary expression.
2. The price of every product in demand should be its cost in time and outlay—neither more nor less: every product not in demand is a loss to the producer—a commercial non-value. ”

“ In the "Essays on Political Economy," since reprinted as "Munera Pulveris." See p. 10, § 12 of that book, where the passage is printed in italics: "The reader must, by anticipation, be warned against confusing value with cost, or with price. Value is the life-giving power of anything; cost, the quantity of labor required to produce it; price, the quantity of labor which its possessor will take in exchange for it." ”

“ The price is a consideration wholly for the vendor, and the value a consideration wholly for the purchaser. Hence it follows that both value and cost enter into a bargain, even when legitimately made. But value goes solely to determine the demand, and is solely cognizable by the purchaser or consumer—by him who receives; while cost (or burden) goes to determine the price, and is solely cognizable by the seller or producer—by him who renders. ”

“ Again, the quality of a thing that comes into human use is measured by the price given for it, for which purpose money was invented. Therefore, if either the price exceed the quantity of the thing's worth, or conversely the worth of the thing exceed the price, there is no longer the equality of justice; and consequently to sell a thing for more than its worth, or to buy it for less than its worth, is in itself unjust and unlawful.' [2] When two contracting parties make an exchange through the medium of money, the price is the expression of the exchange value in money. ”

“ It is affirmed, however, that cost is the true and value the false measure of price, and the author seeks to establish this by a most logical disquisition and a comparison of the consequences of the two principles in operation.
It is admitted that although value is not the legitimate limit of price, nor even an element in the price, it is nevertheless an element in the bargain. It is the value of the thing to be acquired which determines the purchaser to purchase. ”

“ Before John reached Carsham it was so dark under Sir Henry Smith's large trees that he lighted his lantern, being afraid of missing Mary by the way. Long before he entered the town, he could hear the discordant noises and see the flashing lights of the fair. At the near end of the bridge his hurried steps were suddenly checked by Mary's rushing up to him and clasping her two hands round his arm.
"O John!" she said in a low voice, which trembled on the edge of a sob. "Oh, some good angel's brought you! Have you heard? have you met mother? what shall we do?" ”

“ Some prices are fixed by law and custom, and some incomes are tied by long time contracts. Thus, it will happen, in many cases, that supply and demand for a given good will be unequally affected by a change in the value of money. This means that certain values are tied to the value of money, rising and falling with it, so that the amount of power which some elements in the economic situation are able to exert through supply-price-offer and demand-price-offer are at the mercy of changes in the value of money. ”

“ And this is quite in accordance with customary thought and language: every one who asks for the details of the cost of a thing expects to have a statement of the wages and profits directly involved, and of the material, which again directly involves wages and profits. So far, then, as freely produced commodities are concerned, the general law is that they tend to sell at such a price as will yield on the average the ordinary rate of wages and profits which by industrial competition the occupation can command. ”

“ They were not in the boats, or on the merry-go-rounds, they were not standing about listening to the band near the market-place, they were not to be seen among the ever-thickening crowd that made its way slowly along the line of booths. Mary began to feel lonely, as well as anxious. Some of the ruder people, the strangers, stared at her, and she felt that Carsham Fair was hardly the place for a girl of her age to be wandering about alone. Her presence there would not please John, she knew, any more than Lily's—and if he could see her there alone, he would certainly be angry. ”

“ Since then the value of our money is decreased by its quantity, our consumption increased by universal luxury, and the supplies, which we used to receive from poorer countries, now also grown rich, greatly diminished, the present exorbitant price of all the necessaries of life can be no wonder. ”

“ The buyers must be supposed as studious to buy cheap, as the sellers to sell dear. The values and prices, therefore, to which our conclusions apply, are mercantile values and prices; such prices as are quoted in price-currents; prices in the wholesale markets, in which buying as well as selling is a matter of business; in which the buyers take pains to know, and generally do know, the lowest price at which an article of a given quality can be obtained; and in which, therefore, the axiom is true, that there cannot be for the same article, of the same quality, two prices in the same market. ”

“ In all our discussions we should endeavour, as well as we can, to separate that part of high price, which arises from excess of currency, from that part, which is natural, and arises from permanent causes. ”

“ If, again, I over-estimate the cost to me, and ask a price greater than your estimate of the value to you, there is no bargain, and I have lost the opportunity of earning a price measured by the real cost of the performance, so that the cost of my mistake again falls on me; while, the market being open, and a thorough adjust ment of supply to demand being established, others will make a juster estimate, whose services you will procure and you will suffer no inconvenience. Competition will regulate any disposition on my part to overcharge. ”

“ Every moment the curtain of dusk seemed to descend lower and lower above that flaring street; the shadows, the dark corners, the crowd that thickened perpetually—all made it harder from moment to moment to find what was lost. And yet—"They must be found!" said Mary to herself: though she wondered how long her brain would bear the bewilderment, the pushing, the noise and clamour in which this search had to be carried on.
If she could only see or speak to some respectable person with a grain of feeling and sense! But alas! as a rule, such persons were not to be met with at Carsham Fair. ”

“ Mary was looking out of her kitchen door. She had heard John talking to some one in the forge, and had seen the light little figure in the doorway, and guessed very well who it was, though she had not seen Lily since the terrible day of Carsham Fair, when the child was the innocent cause of the greatest sorrow of her life. But she bore no malice for that now; she was far too happy as a woman to find it worth while remembering the troubles of a girl, and she could not have been married more than six years to John without catching something of his wide, generous, simple way of looking at life. ”

“ There is, however, another point, and a still more important one, bearing on this matter of purchase, than the keeping down of122 prices to a rational standard. And that is, that you pay your prices into the hands of living men, and do not pour them into coffins. ”

“ But in the course of generations, with further development of trade and markets, this conception of price by degrees gave way to or passed over into the modern presumption that any article of value is worth what it will bring; until, when the era of handicraft and petty trade merges in the late-modern régime of investment and machine industry, it has become the central principle of pecuniary relations that price is a matter to be arranged freely between buyer and seller on the basis of bargain and sale. ”

“ On the contrary, many persons are claiming that the market price fixed by competition is usually unjust. A better principle, a more fundamental principle, [Pg 22] one that really strikes its roots down into justice itself, would be to say that a just price is one that will yield a just return to all concerned—the actual laborers who produce the commodities, the clerks in the stores that distribute them, wages of management to the entrepreneurs concerned, and interest on the capital invested. ”

“ That prima facie, the market price, that is to say, the price that is ever resulting from freedom in competition, is the right price; the one that will restrict over production and at the same time stimulate the needed production in times of scarcity. ”

“ In a society where the actual producer sells directly to the Consumer, where there is no production on an enormous scale employing hundreds and thousands of hands who have no voice in fixing the price of the product, then the price reached by the higgling of the market is likely to be just. ”

“ Outside the railings Granny Pierce came hobbling along in her shabby cloak, wild grey locks escaping under her old sun-bonnet. No one else seemed to be astir in the quiet village street: everybody now was gone to the fair.
"Good afternoon, Granny," said Mrs. Randal, in her kind voice. "Have you seen my little girl or Mary Alfrick?"
"They be never gone without your knowledge, be they?" said the old woman.
"What do you mean?" asked Mrs. Randal, a faint flush rising in her pale face. "Gone where?"
"To Carsham Fair, to be sure. They're young, and it's the right place for 'em. ”

“ If we attempt to ascertain the changes in the cost of production of any commodity from the changes in its money price, the conclusion will require to be corrected by the best allowance we can make for the intermediate changes in the cost of the production of money itself. ”

“ They would rather leave it, and get such goods as they wanted, than take a lower price in cash, and that has got to be the rule. They are very fond of getting the highest nominal value; and I can show from my books that, as a rule, I give the full price for each article which we charge in selling them, and have only a profit on the goods we give in exchange. ”

“ Mary came a step nearer, and they all three gazed with deep interest at the little creature on John's knee. She sat upright, staring from one woman to the other—Mrs. Randal's worn face and spectacles, the grave yet attractive look of Mary's earnest eyes. The shawl had fallen back from her little white flannel dress, her fair curls were ruffled, the small face and hands and feet were stained with mud and rain. Round her neck hung a tiny gold locket on a piece of discoloured blue ribbon. ”

“ The price in selling.—If we adhere to the principles of political economy, the price in selling is entirely free: it depends exclusively upon the agreement between the vender and the buyer, and as it is said, on the relation between the supply and demand. Nothing more unjust than the intervention of the law in commercial relations. If the buyer buys at such or such a price, however high, it is that he still finds it to his interest to buy even at that rate. ”

“ This class are incited by their own interest to purchase at low prices and sell at high prices. Thus, their competition in the former case raises prices, and lowers them in the latter.681 In all lower stages of civilization, the custom of making offers and beating down in price plays a great part, while where culture is higher, the system of fixed prices (but not by government) gains ground continually. ”

“ Much of their reasoning goes no farther than to explain one price in terms of other prices. If we attempt to explain the money price of a finished product in terms of the money prices of its raw materials and other money costs of prices of production, it is clear that we merely shift the problem. We have still to explain these antecedent prices. ”

“ It has been said, that the price of a manufacture is to be known by the expence of living of the workman, the sum it costs him to bring his work to perfection, and his reasonable profit. We are now to examine what it is, which in all countries must determine the standard prices of these articles of the first necessity; since the value of them does necessarily influence that of all others. ”

“ If, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their respective values, it is nonsense to suppose that profit, not in individual cases, but the constant and usual profits of different trades, spring from the prices of commodities, or selling them at a price over and above their value. ”