Supply (economics)

“ VII. Every commodity of which the supply can be indefinitely increased by labour and capital, exchanges for other things proportionally to the cost necessary for producing and bringing to market the most costly portion of the supply required. ”

“ There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. ”

“ Manufacturing industry increases its produce in proportion to the demand, and the price falls; but the produce of land cannot be so increased; and a high price is still necessary to prevent the consumption from exceeding the supply. ”

“ Because this phenomenon of over-supply, and consequent inconvenience or loss to the producer or dealer, may exist in the case of any one commodity whatever, many persons, including some distinguished political economists, have thought that it may exist with regard to all commodities; that there may be a general over-production of wealth; a supply of commodities in the aggregate, surpassing the demand; and a consequent depressed condition of all classes of producers. ”

“ You say demand and supply regulates value [sic] ; this I think is saying nothing, and for the reason I have given in the beginning of this letter: it is supply which regulates value [228] , and supply is itself controlled by comparative cost of production. Cost of production, in money, means the value of labour as well as profits. Now, if my commodity be of equal value with yours, its cost of production must be the same. But cost of production is, with some deviations, in proportion to labour employed. ”

“ Besides, a person engaging in the production of any kind of goods, can, as a rule, only seldom directly investigate the relation between supply and demand. Generally, he can do no more than compare the market price of the commodity with the cost at which he can produce it. ”

“ Products will henceforth be exchanged in exact ratio to the labor time they have cost. Whatever may be the proportion between supply and demand, the exchange of commodities will be always as if they had been produced proportionately to the demand. ”

“ The economists who discovered that demand created supply soon had to limit the proposition to "effective demand," which turned out, in the final analysis, to mean nothing more than supply itself; and this holds good in politics, morals, and all other departments as well: the actual supply is the measure of the effective demand; and the mere aspirations and professions produce nothing. ”

“ The internal actions constituting social functions, exemplify the general principle no less clearly. Supply and demand are continually being adjusted throughout all industrial processes; and this equilibration is interpretable in the same way as preceding ones. The production and distribution of a commodity, is the expression of a certain aggregate of forces causing special kinds and amounts of motion. The price of this commodity, is the measure of a certain other aggregate of forces expended by the labourer who purchases it, in other kinds and amounts of motion. ”

“ On the other hand, if any production cannot be largely extended so that the supply in market barely meets the requirements of purchasers, the tendency of normal values is toward the cost of the most costly part of the product required to meet wants. ”

“ Cairnes213 fitly says: “The supply of a commodity always tends to adapt itself to the demand at the normal price. I may here say briefly that by the normal price of a commodity I mean that price which suffices, and no more than suffices, to yield to the producers what is considered to be the average and usual remuneration on such sacrifices as they undergo.” ”

“ That the remuneration of the labor of a country is mainly governed by the relations between demand and supply is an inexorable fact. In view of the international mobility of capital, the main distinctive factor in the demand for the labor of a particular country is the supply of natural resources, which it knows how to use. Where the natural resources are great relatively to the population, there wages will rule high; where the converse is true, wages will rule low. ”

“ The principle, that value is proportional to cost of production, being consequently inapplicable, we must revert to a principle anterior to that of cost of production, and from which this last flows as a consequence,—namely, the principle of demand and supply. ”

“ It is simply commodities. Each person's means of paying for the productions of other people consists of those which he himself possesses. All sellers are inevitably and ex vi termini buyers. Could we suddenly double the productive powers of the country, we should double the supply of commodities in every market; but we should, by the same stroke, double the purchasing power.
[pg 367] Everybody would bring a double demand as well as supply; everybody would be able to buy twice as much, because every one would have twice as much to offer in exchange. ”

“ But we should never forget that there is no service or commodity produced by man, however essential it may seem, the demand for or the supply of which might not be reduced to nothing, if the price were sufficiently raised on the one hand, or lowered on the other. ”

“ General supply consists in the commodities offered in exchange for other commodities; general demand likewise, if no money exists, consists in the commodities offered as purchasing power in exchange for other commodities. That is, one can not increase the demand for certain things without increasing the supply of some articles which will be received in exchange for the desired commodities. Demand is based upon the production of articles having exchange value, in its economic sense ”

“ The whole quantity of industry annually employed in order to bring any commodity to market, naturally suits itself in this manner to the effectual demand. It naturally aims at bringing always that precise quantity thither which may be sufficient to supply, and no more than supply, that demand. ”

“ The opinion that the price of commodities depends solely on the proportion of supply to demand, or demand to supply, has become almost an axiom in political economy, and has been the source of much error in that science. ”

“ The definition which confines wealth to the things which cannot be acquired or produced without labour, differs little from mine, which confines it to things limited in supply. Whatever must be obtained by labour is necessarily limited in supply, the supply of labour itself being limited; and, on the other hand, there are, in fact, scarcely any, if there be any, commodities limited in supply and capable of transfer, which can be obtained without some labour. ”

“ As for the supply, that will always rise with facility to the amount of the demand; except in cases where nature has set limits, universal or local, or meddling statesmen have interposed their foolish restraints.' The Pamphleteer, xvii. ”

“ A commodity may no doubt, in some contingencies, yield a rent even under the most disadvantageous circumstances of its production: but only when it is, for the time, in the condition of those commodities which are absolutely limited in supply, and is therefore selling at a scarcity value ”

“ The price of the one species of commodities varies only with the variations in the demand; that of the other varies not only with the variations in the demand, but with the much greater, and more frequent, variations in the quantity of what is brought to market, in order to supply that demand. ”

“ These farmers were right, however, in realizing that in order to boost the market they had to limit the supply of the product. The law of supply and demand always works. It works to the advantage of him who can limit the supply or can increase the demand. ”

“ For, even if we leave foreign competition out of account, and consider, as it were, labor throughout the world as a whole, the demand for labor is by no means inelastic. It is derived along with the demand for the other agents of production in the manner described in Chapter V. As was there shown, the greater the supply of the other agents of production, the greater is likely to be the demand for labor ”

“ In other words, the farmer, who is subject directly to the law of supply and demand, may get greatly diminished prices for what he has to sell and be required to pay undiminished prices for what he has to buy. ”

“ In your valuable article of to-day on the strike of the colliers, while you lay down the true and just law [33] respecting all such combinations, you take your stand, in the outset, on a maxim of political economy, which, however trite, stands yet—if I am not deceived—in need of much examination and qualification. "Labor," you say, like every other vendible commodity, "depends for its value on the relation of supply to demand." ”

“ In the only remaining and by far most comprehensive class of cases, in which the Supply of Commodities and Services and Credits can be readily and indefinitely increased to meet enhanced Demand, and easily withdrawn from market and stored when Demand declines, each rise and fall of market-rate tends to be speedily checked through the mere action of Supply ”

“ Whether there will be a greater permanent supply of the commodity after its production has been cheapened, depends on quite another question, namely, on whether a greater quantity is wanted at the reduced value. Most commonly a greater quantity is wanted, but not necessarily. ”

“ Whether we were dealing with the price of an ordinary commodity, with joint products, land or capital, we came across relationships which seemed altogether more fundamental than our present industrial system ”

“ The Laws of Supply and Demand may be thus stated: a rise of price tends to produce a greater supply and a less demand; a fall of price tends to produce a less supply and a greater demand. Conversely, an increase of supply or a decrease of demand tends to lower price, and a decrease of supply or an increase of demand to raise price. ”