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1" Ihr len l of Ihc highi:1I hi"drr,. and fa lo defeend by
d'·Jrm. in proponion ~s dUl1and r."k. . T hu. we m, y
f:,y wilh pr(lpricly. lh:ll deln, nu eornm01lly bceomcs
gn ,l, in proponion as priees link. By Ihis oper'linn.
th,! tmdm IVill profit as Il1l1eh as pnflihlc, and fell off as
mueh 01' d1l ir good, as Ihe pror,,, will permit.
1l"1Ih" ¡.IJn , il1 :t ncIV difeuvered eOl1ntly, is not po·
¡¡Iie. a, it both difeovm a eovcloufncfs and a wan! of
f,¡ith in Ihe mereh.nts, and alfo thmws open Ihc feerm
of thd r tIade lO thule who ought lO be kept ignoranl of
Ihem.
Lct us next fuppofe, that lhe large profits of our mero
ehan" Olall be dilcovered by orhcrs, \Vho arrivc at lhe
fame ports in a fepar:ttc intercll, ami IVho <ntn into no
eombinalion \Vhieh might prevent the natoral clfells of
eompet,tion.
Lel the Ihte of demand aOlong the natives he filppo,
fed Ihe f., me as formerly. bOlh as to heixhl and creal·
nrJi, in eonfequenee o( the opemion of the tlilferenl
principies, \vhieh mighl havc indueed our merehants to
rollolV one or other of the plans we have been dcferi.
bing; we mufl however lIill fuprore, thal they have
been ealeful la pr,fervc eonr.dcrablc profi" upon ercry
branch.
If \Ve fu ppofe the inhabilants lO have inmafcd in
numbrrs, wealth . and tafle for fuperfluity, finee the lart
voyª~e, demand will be (ound "ther on the rifing hand.
Up"n lhe arrival of the OlerehapIs in eompclition wilh
Ihe former, both will olfer la (ale: but if both
the fanle priw, it is very natural to fuppofe. Ihat the
former dealm IVill ob"in a preferenee ; as. cttluj¡ pari.
{¡IIJ, il is alIV.lys an advantage to know and lO be known.
T he IJlt eomers, thcrefore, have no other way len la
eounler·balanee this ad..nlage, but tOlower Iheir primo
This is a new phenomenon: here thc fa ll of priees is
nnt volllnt.lry as fOlmerly; nor eonfenled la (roOl cxpe·
dieney; no! oIVing 10 a f,ilure of demand, but to the in·
¡illenee of a new principie of eontmeree, to wit, a dou·
ble eompetition, whieh we fhall now ex.mine.
O[ DOI/b/c COl/lpcliliol/.
WIIEN COInfelili." is mllch flronger on one fide of
the eonmll t'tanon the other, it is e.llledjim/,It. This is
the fpeeics 01' eompetition ,dlieh is implied in Ihe mm
high do"and, or \Vhen il is thal d'/IIand raijo
pl'ic,¡.
D,,,I'/, com/" Iili.n is, when, in a degree, it
takts place on both fides of the eonme'! at once. or vi·
brms alternately (rom nne to the other. This is what
refhai ns prices to Ihe aJequm value o( mcrchandize.
T he great di(fleu lty is 10 diUinr,uilh clearly bellVeen
the principies 01' demalld. alld thofe of c"/IIprtilion:
lme then follo\Vs the prinripll "ifftrenees hellVeen the
t\VO, relatively 10 Iht e/fetls Ihey prodllee fev.:rally in
the mereanlilc eontratl o( buying and feHing, whieh we
here exprefs Ihon ly by the lvord c01/lrafl.
Simpl, d'lIIand is \VI", brings the qualltity of a e?m·
modily 10 market. M.lny demand, whn do not buy;
Dtany offer, \Vho do not fdl. This dcmand is ealled
guat or flllall; il is faid 10 i"maf', to a"gmenl, to
E R e E.
f,,,dl ; anel is expreffed by thefe anJ olhcr fynonimou!
terms, whieh mark an allgmcntation or diminution of
quantity. ¡Ii thi~ fpeeiel, two people never demand
the fame thing, bUl a pan of the fame thing, or Ihiog.
quite alike.
CO'llp.und dnnalld is the principIe whieh raifes prieC9,
anel never e.n IlIdkc the:n ; beeaure in tlti, eafe more
lh,n ooe "emands the very fame Ihing. lt is fole!y ap.
plieable lO the buyers, in relation lO Ihe priee they olfer~ '
This Jemand is ealled high or 101lJ, and is faid 10 rijr,
lOfn ll, to "./l1li, tojill~, and is expreffed by thefe aod
ollter fynonintous tcrms.
Sill/pl, cOl/lpetiti,n, when belween buyers, is Ihe
fame as COllIp.1I11I1or high detnand; bUI dilfers from it in
1'0 far, as this m,y equaily take place arilOng· fellm,
whieh comp,ul/d J'IIIOl/d eannot; and then il works a
eontrary ,ffetl: it makes priees ji»l, and js fynonimou.
with I~IV delll'/IId: it is tltis eompetition whieh. ovenurn.
the halance of work and dentando
J)ollhl, compeliri," is what is underaood lo lake place
jn al¡noH every operation of trade; it is this \Vhieh pre.
vents their exeenive rife of priees; it is this \Vhieh pre–
vents their exeeflive fa ll. Whiled'l/hlt colllp,liri.n pre–
vails, the balAnce is perfell, trade and induary Oourifh.
The eapilal diflinllion, therefore. betIVeen the lerm.
d"••nd and c01llp,ritiw is, tha! d'lIIand i, eonflantly re.
lalive tOthe buyers; and IVhen money is not the priee,
as in barter, thcn it is relative to that fide up'on whieh
the grealen cO/llp'liri.. is found. .
We therefore fay, with re~ard lOpricu, demand js
high or 101lJ. With reg;¡rd IDIh, 9"anlirj of lIIerchal/.
dize, deftJand is grtOt or fina /!. With regard l. como
P,litiDII, it is always ealled great or fillall, J1rang or
'1/1(01-
Competilion is, with cqual propriety, applieable la
both partiel in theeontrall. Acolllpt/ition among buyers
is a proper expreflion; a ","petilion among fellm, who
have themerehandize, is full y as eafily underllood, tho'
it be not quite fo Uriking, for reafons whieh an example
will make plain.
You come tOa fai r, whereyou find a great ..riety of
every kind of merehandize, in the poffeflion of d,lfmnt
merehants. Thefe, by offering theirgoods to fale, con·
nit\\te a mit eompetition; every one of themwifhes tO
fell in prrferenee to another, and at the fame time wlth
the bell adv~ntage to himrelf.
The buyers begin, by eheapning al every fhop. The–
fira priee ,fked m;¡rks the covelOufnefs of the feller; the
fira priee olfered, the "a riee of the buyer. From Ihis
opemion eompelition begins to work its eifeas on both
r.des. anel (o beeomes double. The prioeiples whieh in·
fluenee litis opewion are nolV 10 be ded~eed .
It is imponible to fuppofe thefame degree of cagernefs,
either 10 buy or to lell. .mong feveral merehants; be·
caufe the degree of eagelnefs is exaélly in pruportion tu
their view of profit; antl as thefe mull neeefT,rily be in·
fllleneed and rCJ:u lated by difFercnt circumnanccs, thal
buyer, who has the befl profpell of felling again with
prolit, obliges him, whofe profpell is not fo good, 10
eonttnt himfelf with lefs; and that feller, who has
bought lO lhe ben advantage, obliges him, \Vho p"i,¡
dearer