"Nature works for us gratuitously; and when she supplies us with articles in such abundance, that no labour is required toprocure them, those articles, however useful they may be, have not exchangeable value: but no sooner does the labour ofman become necessary to procure us the enjoyments of any commodity, than that commodity acquires a value; either a priceis paid for it in money, or other things are given in exchange for it.Light, air, and water are the free and bountiful gifts ofnature, but if a man constructs a lamp, we must pay for the light it diffuses; if we are indebted to his labour.for a ventilator,or even a fan, we pay for the air they procure us; and when water is conveyed through pipes into our houses, raised bypumps, or brought to us in any manner by the art of man, a price is paid for it.
"Utility may therefore be considered as the sole cause of value in use, whilst value in exchange may be produced by anycircumstance which renders the possession of' an object so difficult of attainment, and at the same time so desirable, thatmen are willing to give something in exchange for it.Thus not only utility but beauty, curiosity, fashion, rarity, and manyother qualities may create exchangeable value; and it is to this value that, in political economy, we chiefly confine ourattention."Demand and Supply Price, that is Market Price, as has been said, depends upon Demand and Supply.In what manner, by what law does it sodepend? if the supply increase, in what proportion will the price fall? If the supply diminish, in what proportion will the pricerise?
With a view to answer this question commodities have been divided into three classes.
(1) Those of which the supply cannot be increased at allancient statues, pictures, special wines, as Johannisburg.
In these the price depends entirely on the demand.As an example we may take what Mr M ill quotes, p.523.
This topic is happily illustrated by Mr De Quincey.`Walk into almost any possible shop, buy the first article you see; whatwill determine its price? In ninety-nine cases out of a hundred, simply the element Ddifficulty of attainment.The otherelement, U, or intrinsic utility, will be perfectly inoperative.Let the thing (measured by its uses) be, for your purposes, worthten guineas, so that you would rather give ten guineas than lose it; yet, if the difficulty of producing it be only worth oneguinea, one guinea is the price which it will bear.But still not the less, though U is inoperative, can U be supposed absent?
By no possibility; for if it had been absent, assuredly you would not have bought the article even at the lowest price.U actsupon you, though it does not act upon the price.On the other hand, in the hundredth case, we will suppose thecircumstances reversed: you are on Lake Superior in a steam-boat, making your way to an unsettled region 8oo miles a headof civilization, and consciously with no chance at all of purchasing any luxury whatsoever, little luxury or big luxury, for thespace of ten years to come.One fellow passenger, whom you will part with before sunset, has a powerful musical-snuffbox:
