Page:Popular Science Monthly Volume 8.djvu/607

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The difficulty underlying these two economical theories is the same, as I understand it. Mr. Thornton, and in a certain degree the political economists also, convert supply and demand into two entities. Take his illustration (page 59):

Here he assigns a metaphysical limit to supply, and yet admits only a portion of the mental process by which that limit is reached. The fact that the buyers can afford to pay only £50 has little to do with the price paid. The cause which influences their mental action is, that they know there are plenty of other horses they can buy at £50, though there is only one at hand. Economically, the absent horses enter into the supply nearly as effectively as the one present. This supply, present and absent, affects the minds of both buyer and seller, and limits the price; the limit is not a metaphysical one, imposed by the competition of sellers alone, as Mr. Thornton would have us believe, and as he directly says elsewhere. We must bear in mind that Mr. Thornton has been partially approved by Mill and Prof. Cairns, in considering the weight of his theories. In the relations of capital and labor, he assumes that capitalists have the same control of the market-price of labor which he conceives sellers to have in ordinary trade; hence the necessity of trades-unionism to resist this control, which could not be governed by the economical forces of the market; and hence the above formula of supply and demand. Mr. Warren's error is essentially the same. In his view, the price of labor is regulated by a