The Online Library of Liberty

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• Introduction, By Henry Higgs
• Previous Editions, By Henry Higgs
• Essay On the Nature of Trade In General
• Part One
• Part I, Chapter I: Of Wealth
• Part I, Chapter II: Of Human Societies
• Part I, Chapter III: Of Villages
• Part I, Chapter IV: Of Market Towns
• Part I, Chapter V: Of Cities
• Part I, Chapter VI: Of Capital Cities
• Part I, Chapter VII: The Labour of the Husbandman Is of Less Value Than That of the Handicrafts-man
• Part I, Chapter VIII: Some Handicrafts-men Earn More, Others Less, According to the Different Cases and Circumstances
• Part I, Chapter IX: The Number of Labourers, Handicraftsmen and Others, Who Work In a State Is Naturally Proportioned to the Demand For Them
• Part I, Chapter X: The Price and Intrinsic Value of a Thing In General Is the Measure of the Land and Labour Which Enter Into Its Production
• Part I, Chapter XI: Of the Par Or Relation Between the Value of Land and Labour
• Part I, Chapter XII: All Classes and Individuals In a State Subsist Or Are Enriched At the Expense of the Proprietors of Land
• Part I, Chapter XIII: The Circulation and Exchange of Goods and Merchandise As Well As Their Production Are Carried On In Europe By Undertakers, and At a Risk
• Part I, Chapter XIV: The Fancies, the Fashions, and the Modes of Living of the Prince, and Especially of the Landowners, Determine the Use to Which Land Is Put In a State and Cause the Variations In the Market-prices of All Things
• Part I, Chapter XV: The Increase and Decrease of the Number of People In a State Chiefly Depend On the Taste, the Fashions, and the Modes of Living of the Proprietors of Land
• Part I, Chapter XVI: The More Labour There Is In a State the More Naturally Rich the State Is Esteemed
• Part I, Chapter XVII: Of Metals and Money, and Especially of Gold and Silver
• Part Two
• Part Ii, Chapter I: Of Barter
• Part Ii, Chapter II: Of Market Prices
• Part Ii, Chapter III: Of the Circulation of Money
• Part Ii, Chapter IV: Of Further Reflection On the Rapidity Or Slowness of the Circulation of Money In Exchange
• Part Ii, Chapter V: Of the Inequality of the Circulation of Hard Money In a State
• Part Ii, Chapter VI: Of the Increase and Decrease In the Quantity of Hard Money In a State
• Part Ii, Chapter VII: Continuation of the Same Subject
• Part Ii, Chapter VIII: Further Reflection On the Same Subject
• Part Ii, Chapter IX: Of the Interest of Money and Its Causes
• Part Ii, Chapter X: Of the Causes of the Increase and Decrease of the Interest of Money In a State
• Part Three
• Part Iii, Chapter I: Of Foreign Trade
• Part Iii, Chapter II: Of the Exchanges and Their Nature
• Part Iii, Chapter III: Further Explanations of the Nature of the Exchanges
• Part Iii, Chapter IV: Of the Variations In the Proportion of Values With Regard to the Metals Which Serve As Money
• Part Iii, Chapter V: Of the Augmentation and Diminution of Coin In Denomination
• Part Iii, Chapter VI: Of Banks and Their Credit
• Part Iii, Chapter VII: Further Explanations and Enquiries As to the Utility of a National Bank
• Part Iii, Chapter VIII: Of the Refinements of Credit of General Banks
• Richard Cantillon and the Nationality of Political Economy, By W. Stanley Jevons
• Life and Work of Richard Cantillon, By Henry Higgs
• Appendix a
• Appendix B: Bibliography

Part II, Chapter II

Of Market Prices

Suppose the Butchers on one side and the Buyers on the other. The price of Meat will be settled after some altercations, and a pound of Beef will be in value to a piece of silver pretty nearly as the whole Beef offered for sale in the Market is to all the silver brought there to buy Beef.

This proportion is come at by bargaining. The Butcher keeps up his Price according to the number of Buyers he sees; the Buyers, on their side, offer less according as they think the Butcher will have less sale: the Price set by some is usually followed by others. Some are more clever in puffing up their wares, other in running them down. Though this method of fixing Market prices has no exact or geometrical foundation, since it often depends upon the eagerness or easy temperament of a few Buyers or Sellers, it does not seem that it could be done in any more convenient way. It is clear that the quantity of Produce or of Merchandise offered for sale, in proportion to the demand or number of Buyers, is the basis on which is fixed or always supposed to be fixed the actual Market prices; and that in general these prices do not vary much from the intrinsic value.

Let us take another case. Several maîtres d'hôtels [at Paris] have been told to buy green Peas when they first come in. One Master has ordered the purchase of 10 quarts5 for 60 livres, another 10 quarts for 50 livres, a third 10 for 40 livres and a fourth 10 for 30 livres. If these orders are to be carried out there must be 40 quarts of green Peas in the Market. Suppose there are only 20. The Vendors, seeing many Buyers, will keep up their Prices, and the Buyers will come up to the Prices prescribed to them: so that those who offer 60 livres for 10 quarts will be the first served. The Sellers, seeing later that no one will go above 50, will let the other 10 quarts go at that price. Those who had orders not to exceed 40 and 30 livres will go away empty.

If instead of 40 quarts there were 400, not only would the Maîtres d'hôtels get the new Peas much below the sums laid down for them, but the Sellers in order to be preferred one to the other by the few Buyers will lower their new Peas almost to their intrinsic value, and in that case many Maîtres d'hôtels who had no orders will buy some.

It often happens that Sellers who are too obstinate in keeping up their price in the Market, miss the opportunity of selling their Produce or Merchandise to advantage and are losers thereby. It also happens that by sticking to their prices they may be able to sell more profitably another day.

Distant Markets may always affect the prices of the Market where one is: if corn is extremely dear in France it will go up in England and in other neighbouring Countries.

[5.]1 litron = 2 1/3 pints. Postlethwayt has "measures." [N.B. Higgs has translated "litron" as "quart."—Econlib Ed.]