ThelastobjectionofMr。Thorntontothereceivedtheory，andtheonethathelaysmoststressupon，is，thatitassumes\"thatgoodsareofferedforsaleunreservedly，andthatdealersarealwayscontenttoletthemgoforwhattheywillfetch。\"This，however，heobserves，——
Isscarcelyever——nay，mightalmostbesaidtobeabsolutelynever——thefact。Withonenotableexception，thatoflabour，commoditiesarealmostneverofferedunreservedlyforsale;scarcelyeverdoesadealerallowhisgoodstogoforwhattheywillimmediatelyfetch——scarcelyeverdoesheagreetothepricewhichwouldresultfromtheactualstateofsupplyanddemand，or，inotherwords，tothepriceatwhichhecouldimmediatelysellthewholeofhisstock。Imaginethesituationofamerchantwhocouldnotaffordtowaitforcustomers，butwasobligedtoacceptforacargoofcorn，orsugar，orsundries，thebestofferhecouldgetfromthecustomerswhofirstpresentedthemselves;orimagineajeweller，orweaver，ordraper，orgrocer，obligedtoclearouthisshopwithintwenty—fourhours。Thenearestapproachevermadetosuchapredicamentisthatofabankrupt’screditorssellingofftheirdebtor’seffectsataproverbially’tremendoussacrifice;’andeventheyare，comparativelyspeaking，abletotaketheirtime。Butthebehaviourofadealerunderordinarypressureisquitedifferentfromthatofabankrupt’sassignees。Hefirstaskshimselfwhatisthebestpricewhichislikelytobepresentlygiven，notforthewhole，butforsomeconsiderableportionofhisstock，andhethenbeginsselling，eitheratthatpriceoratsuchotherpriceasprovesupontrialtobethebestobtainableatthetime。Hissupplyofgoodsisprobablyimmenselygreaterthanthequantitydemandedatthatprice，butdoeshethereforelowerhisterms？Notatall，andhesellsasmuchashecanatthatprice，andthen，havingsatisfiedtheexistingdemand，hewaitsawhileforfurtherdemandtospringup。Inthiswayheeventuallydisposesofhisstockformanytimestheamounthemusthavebeenfaintoacceptifhehadattemptedtoselloffallatonce。Acorndealerwhointhecourseofaseasonsellsthousandsofquartersofwheatatfiftyshillingsperquarter，orthereabouts，wouldnotgettwentyshillingsaquarterif，assoonashiscornshipsarrived，hewasobligedtoturnthecargoesintomoney。Agloverwho，bywaitingforcustomers，willnodoubtgetthreeorfourshillingsapairforalltheglovesinhisshop，mightnotgetsixpenceapairifheforcedthemonhiscustomers。Buthowisitthathemanagestosecurethehigherprice？Simplybynotsellingunreservedly，simplybydecliningthepricewhichwouldhaveresultedfromtherelationsbetweenactualsupplyandactualdemand，andbysettinguphisgoodsatsomehigherprice，belowwhichherefusestosell。（pp。55—6。）
IconfessIcannotperceivethattheseconsiderationsaresubversiveofthelawofdemandandsupply，northatthereisanygroundforsupposingpoliticaleconomiststobeunawarethatwhensupplyexceedsthedemand，thetwomaybeequalisedbysubtractingfromthesupplyaswellasbyaddingtothedemand。Reservingapriceis，toallintentsandpurposes，withdrawingsupply。Whennomorethanfortyshillingsaheadcanbeobtainedforsheep，allsheepwhoseownersaredeterminednottosellthemforlessthanfiftyshillingsareoutofthemarket，andformnopartatallofthesupplywhichisnowdeterminingprice。Theymayhavebeenofferedforsale，buttheyhavebeenwithdrawn。Theyareheldback，waitingforsomefuturetime，whichtheirownerhopesmaybemoreadvantageoustohim;andtheywillbeanelementindeterminingthepricewhenthattimecomes，orwhen，ceasingtoexpectit，orobligedbyhisnecessities，heconsentstosellhissheepforwhathecanget。Inthemeanwhile，thepricehasbeendeterminedwithoutanyreferencetohiswithheldstock，anddeterminedinsuchamannerthatthedemandatthatpriceshall（ifpossible）beequaltothesupplywhichthedealersarewillingtopartwithatthatprice。Theeconomistswhosaythatmarketpriceisdeterminedbydemandandsupplydonotmeanthatitisdeterminedbythewholesupplywhichwouldbeforthcomingatanunattainableprice，anymorethanbythewholedemandthatwouldbecalledforthifthearticlecouldbehadforanoldsong。Theymeanthat，whateverthepriceturnsouttobe，itwillbesuchthatthedemandatthatprice，andthesupplyatthatprice，willbeequaltooneanother。TothispropositionMr。Thorntonshowsanundeniableexceptioninthecaseofadealerwhoholdsoutforapricewhichhecanobtainforapartofhissupply，butcannotobtainforthewhole。Inthatcase，undoubtedly，thepriceobtainedisnotthatatwhichthedemandisequaltothesupply;butthereasonisthesameasinoneofthecasesformerlyconsidered;becausethereisnosuchprice。Attheactualpricethesupplyexceedsthedemand;atafarthinglessthewholesupplywouldbewithheld。Suchacasemighteasilyhappenifthedealerhadnocompetitiontofear;noteasilyifhehad:
butonnosuppositiondoesitcontradictthelaw。ItfallswithintheonecaseinwhichMr。Thorntonhasshownthatthelawisnotfulfilled——namely，whenthereisnopricethatwouldfulfilit;eitherthedemandorthesupplyadvancingorrecedingbysuchviolentskips，thatthereisnohaltingpointatwhichitjustequalstheotherelement。
DoIthenmeantosaythatMr。Thorntonisentirelywronginhisinterpretationofthecaseswhichhesuggests，andhaspointedoutnoimperfectioninthecurrenttheory？Evenifitwereso，itwouldnotfollowthathehasrenderednoservicetoscience。\"Thereisalwaysabenefitdonetoanydepartmentofknowledgebydiggingabouttherootsofitstruths。（4）Scientificlawsalwayscometobebetterunderstoodwhenablethinkersandacutecontroversialistsstirupdifficultiesrespectingthem，andconfrontthemwithfactswhichtheyhadnotyetbeeninvokedtoexplain。ButMr。
Thorntonhasdonemuchmorethanthis。Thedoctrinehecontroverts，thoughtrue，isnotthewholetruth。Itisnottheentirelawofthephenomenon;
forhehasshown，andhasbeenthefirsttoshow，thattherearecaseswhichitdoesnotreach。Andhehas，ifnotfullydefined，atleastindicated，thecauseswhichgoverntheeffectinthoseexceptionalcases。Ifthereisafaulttobefoundwithhim，itisonethathehasincommonwithallthoseimproversofpoliticaleconomybywhomnewandjustviews\"havebeenpromulgatedascontradictionsofthedoctrinespreviouslyreceivedasfundamental，insteadofbeing，whattheyalmostalwaysare，developmentsofthem;\"（5）thealmostinvariableerrorofthosepoliticaleconomists，forexample，whohavesetthemselvesinoppositiontoRicardo。
Letus，byMr。Thornton’said，endeavourtofixourideasrespectingthatportionofthelawofpricewhichisnotprovidedforbythecommontheory。Whentheequationofdemandandsupplyleavesthepriceinpartindeterminate，becausethereismorethanonepricewhichwouldful~lthelaw;neithersellersnorbuyersareundertheactionofanymotives，derivedfromsupplyanddemand，togivewaytooneanother。Muchwill，inthatcase，dependonwhichsidehastheinitiativeofprice。ThisiswellexemplifiedinMr。Thornton’ssupposedDutchauction。Thecommoditymightgonohigherthaneighteenshillingsiftheofferscamefromthebuyers’side，butbecausetheycomefromthesellerthepricereachestwentyshillings。Now，Mr。
Thorntonhaswellpointedoutthatthiscase，thoughexceptionalamongauctions，isnormalasregardsthegeneralacourseaoftrade。Asageneralrule，theinitiativeofpricedoesrestwiththedealers，andthecompetitionwhichmodifiesitisthecompetitionofdealers。（6）When，therefore，severalpricesareconsistentwithcarryingoffthewholesupply，thedealersaretolerablycertaintoholdoutforthehighestofthoseprices;fortheyhavenomotivetocompetewithoneanotherincheapness，therebeingroomforthemallatthehigherprice。Ontheotherhand，thebuyersarenotcompelledbyeachother’scompetitiontopaythathigherprice;for（since，bysuppositionthecaseisoneinwhichafallofpricedoesnotcallforthanadditionaldemand）ifthebuyersholdoutforalowerpriceandgetit，theirgainmaybepermanent。Theprice，inthiscase，becomessimplyaquestionwhethersellersorbuyersholdoutlongest;
anddependsontheircomparativepatience，oronthedegreeofinconveniencetheyarerespectivelyputtobydelay。
Bythistime，Ithink，anacutereader，whoseestowardswhatresultsacourseofinquiryistendingbeforetheconclusionisdrawn，willbegintoperceivethatMr。Thornton’simprovementsinthetheoryofprice，minuteastheyappearwhenreducedtotheirrealdimensions，andunimportantastheymustnecessarilybeinthecommoncaseinwhichsupplyanddemandarebutdisturbingcauses，andcostofproductionthereallawofthephenomenon，maybeofverygreatpracticalimportanceinthecasewhichsuggestedthewholetrainofthought，theremunerationoflabour。Ifitshouldturnoutthatthepriceoflabourfallswithinoneoftheexceptedcases——thecasewhichthelawofequalitybetweendemandandsupplydoesnotprovidefor，becauseseveralpricesallagreeinsatisfyingthatlaw;wearealreadyabletoseethatthequestionbetweenoneofthosepricesandanotherwillbedeterminedbycauseswhichoperatestronglyagainstthelabourer，andinfavouroftheemployer。For，astheauthorobserves，thereisthisdifferencebetweenthelabourmarketandthemarketfortangiblecommodities，thatincommoditiesitistheseller，butinlabouritisthebuyer，whohastheinitiativeinfixingtheprice。Itistheemployer，thepurchaseroflabour，whomakestheofferofwages;thedealer，whoisinthiscasethelabourer，acceptsorrefuses。Whateveradvantagecanbederivedfromtheinitiativeis，therefore，onthesideoftheemployer。Andinthatcontestofendurancebetweenbuyerandseller，bywhichalone，intheexceptedcase，thepricesofixedcanbemodified，itisalmostneedlesstosaythatnothingbutaclosecombinationamongtheemployedcangivethemevenachanceofsuccessfullycontendingagainsttheemployers。
Itwillofcoursebesaid，thatthesespeculationsareidle，forlabourisnotinthatbarelypossibleexceptedcase。Supplyanddemanddoentirelygovernthepriceobtainedforlabour。Thedemandforlabourconsistsofthewholecirculatingcapitalofthecountry，includingwhatispaidinwagesforunproductivelabour。Thesupplyisthewholelabouringpopulation。
Ifthesupplyisinexcessofwhatthecapitalcanatpresentemploy，wagesmustfall。Ifthelabourersareallemployed，andthereisasurplusofcapitalstillunused，wageswillrise。Thisseriesofdeductionsisgenerallyreceivedasincontrovertible。Theyarefound，Ipresume，ineverysystematictreatiseonpoliticaleconomy，myowncertainlyincluded。Imustpleadguiltytohaving，alongwiththeworldingeneral，acceptedthetheorywithoutthequalificationsandlimitationsnecessarytomakeitadmissible。（7）
Thetheoryrestsonwhatmaybecalledthedoctrineofthewagesfund。
Thereissupposedtobe，atanygiveninstant，asumofwealth，whichisunconditionallydevotedtothepaymentofwagesoflabour。Thissumisnotregardedasunalterable，foritisaugmentedbysaving，andincreaseswiththeprogressofwealth;butitisreasoneduponasatanygivenmomentapredeterminedamount。Morethanthatamountitisassumedthatthewages—receivingclasscannotpossiblydivideamongthem;thatamount，andnoless，theycannotbutobtain。Sothat，thesumtobedividedbeingfixed，thewagesofeachdependsolelyonthedivisor，thenumberofparticipants。Inthisdoctrineitisbyimplicationaffirmed，thatthedemandforlabournotonlyincreaseswiththecheapness，butincreasesinexactproportiontoit，thesameaggregatesumbeingpaidforlabourwhateveritspricemaybe。
Butisthisatruerepresentationofthematteroffact？Doestheemployerrequiremorelabour，ordofreshemployersoflabourmaketheirappearance，merelybecauseitcanbeboughtcheaper？Assuredly，no。Consumersdesiremoreofanarticle，orfreshconsumersarecalledforth，whenthepricehasfallen:buttheemployerdoesnotbuylabourforthepleasureofconsumingit;hebuysitthathemayprofitbyitsproductivepowers，andhebuysasmuchlabourandnomoreassufficestoproducethequantityofhisgoodswhichhethinkshecanselltoadvantage。Afallofwagesdoesnotnecessarilymakehimexpectalargersaleforhiscommodity，nor，therefore，doesitnecessarilyincreasehisdemandforlabour。
Tothisitmaybereplied，thatthoughpossiblyhemayemploynomorelabourinhisownbusinesswhenwagesarelower，yetifhedoesnot，thesameamountofcapitalwillbenolongerrequiredtocarryonhisoperations;
andashewillnotbewillingtoleavethebalanceunemployed，hewillinvestitinsomeothermanner，perhapsinajointstockcompany，orinpublicsecurities，whereitwilleitherbeitselfexpendedinemployinglabour，orwillliberatesomeotherperson’scapitaltobesoexpended，andthewholeofthewages—fundwillbepayingwagesasbefore。
Butistheresuchathingasawages—fund，inthesensehereimplied？
Existsthereanyfixedamountwhich，andneithermorenorlessthanwhich，isdestinedtobeexpendedinwages？
Ofcoursethereisanimpassablelimittotheamountwhichcanbesoexpended;itcannotexceedtheaggregatemeansoftheemployingclasses。
Itcannotcomeuptothosemeans;fortheemployershavealsotomaintainthemselvesandtheirfamilies。But，shortofthislimit，itisnot，inanysenseoftheword，afixedamount。
Inthecommontheory，theorderofideasisthis。Thecapitalist’specuniarymeansconsistoftwoparts——hiscapital，andhisprofitsorincome。Hiscapitaliswhathestartswithatthebeginningoftheyear，orwhenhecommencessomeroundofbusinessoperations:hisincomehedoesnotreceiveuntiltheendoftheyear，oruntiltheroundofoperationsiscompleted。
Hiscapital，exceptsuchpartasisfixedinbuildingsandmachinery，orlaidoutinmaterials，iswhathehasgottopaywageswith。Hecannotpaythemoutofhisincome，forhehasnotyetreceivedit。Whenhedoesreceiveit，hemaylaybyaportiontoaddtohiscapital，andassuchitwillbecomepartofnextyear’swages—fund，buthasnothingtodowiththisyear’s。
Thisdistinction，however，betweentherelationofthecapitalisttohiscapital，andhisrelationtohisincome，iswhollyimaginary。Hestartsatthecommencementwiththewholeofhisaccumulatedmeans，allofwhichispotentiallycapital:andoutofthisheadvanceshispersonalandfamilyexpenses，exactlyasheadvancesthewagesofhislabourers。Heofcourseintendstopaybacktheadvanceoutofhisprofitswhenhereceivesthem;
andhedoespayitbackdaybyday，ashedoesalltherestofhisadvances;
foritneedsscarcelybeobservedthathisprofitismadeashistransactionsgoon，andnotatChristmasorMidsummer，whenhebalanceshisbooks。Hisownincome，then，sofarasitisusedandexpended，isadvancedfromhiscapitalandreplacedfromthereturns，paripassuwiththewageshepays。
Ifwechoosetocallthewholeofwhathepossessesapplicabletothepaymentofwages，thewages—fund，thatfundisco—extensivewiththewholeproceedsofhisbusiness，afterkeepinguphismachinery，buildingsandmaterials，andfeedinghisfamily;anditisexpendedjointlyuponhimselfandhislabourers。Thelessheexpendsontheone，themoremaybeexpendedontheother，andviceversa。Thepriceoflabour，insteadofbeingdeterminedbythedivisionoftheproceedsbetweentheemployerandthelabourers，determinesit。Ifhegetshislabourcheaper，hecanaffordtospend，moreuponhimself。Ifhehastopaymoreforlabour，theadditionalpaymentcomesoutofhisownincome;perhapsfromthepartwhichhewouldhavesavedandaddedtocapital，thusanticipatinghisvoluntaryeconomybyacompulsoryone;perhapsfromwhathewouldhaveexpendedonhisprivatewantsorpleasures。Thereisnolawofnaturemakingitinherentlyimpossibleforwagestorisetothepointofabsorbingnotonlythefundswhichhehadintendedtodevotetocarryingonhisbusiness，butthewholeofwhatheallowsforhisprivateexpenses，beyondthenecessariesoflife。Thereallimittotheriseisthepracticalconsideration，howmuchwouldruinhim，ordrivehimtoabandonthebusiness:nottheinexorablelimitsofthewages—fund。
Inshort，thereisabstractedlyavailableforthepaymentofwages，beforeanabsolutelimitisreached，notonlytheemployer’scapital，butthewholeofwhatcanpossiblyberetrenchedfromhispersonalexpenditure;
andthelawofwages，onthesideofdemand，amountsonlytotheobviousproposition，thattheemployerscannotpayawayinwageswhattheyhavenotgot。Onthesideofsupply，thelawaslaiddownbyeconomistsremainsintact。Themorenumerousthecompetitorsforemployment，thelower，caeterisparibus，willwagesbe。ItwouldbeacompletemisunderstandingofMr。Thorntontosupposethatheraisesanyquestionaboutthis，orthathehasrecededfromtheopinionsenforcedinhisformerwritingsrespectingtheinseparableconnectionoftheremunerationoflabourwiththeproportionbetweenpopulationandthemeansofsubsistence。
ButthoughthepopulationprincipleanditsconsequencesareinnowaytouchedbyanythingthatMr。Thorntonhasadvanced，inanotherofitsbeatingsthelabourquestion，consideredasoneofmereeconomics，assumesamateriallychangedaspect。Thedoctrinehithertotaughtbyallormosteconomists（includingmyself），whichdeniedittobepossiblethattradecombinationscanraisewages，orwhichlimitedtheiroperationinthatrespecttothesomewhatearlierattainmentofarisewhichthecompetitionofthemarketwouldhaveproducedwithoutthem，——thisdoctrineisdeprivedofitsscientificfoundation，andmustbethrownaside。TherightandwrongoftheproceedingsofTrades’Unionsbecomesacommonquestionofprudenceandsocialduty，notonewhichisperemptorilydecidedbyunbendingnecessitiesofpoliticaleconomy。
Ihavestatedthisargumentinmyownway，whichisnotexactlyMr。
Thornton’s;butthereasoningisessentiallyhis，though，inapartofit，Ihaveonlybeenanticipatedbyhim。IhavealreadyshowninwhatI
considerhisexpositionoftheabstractquestiontobefaulty。Ithinkthattheimprovementhehasmadeinthetheoryofpriceisacaseofgrowth，notofrevolution。Butinitsapplicationtolabour，itdoesnotmerelyaddtoourspeculativeknowledge;itdestroysaprevailingandsomewhatmischievouserror。Ithasmadeitnecessaryforustocontemplate，notasanimpossibilitybutasapossibility，thatemployers，bytakingadvantageoftheinabilityoflabourerstoholdout，maykeepwageslowerthanthereisanynaturalnecessityfor;andèconverso，thatifwork—peoplecanbycombinationbeenabledtoholdoutsolongastocauseaninconveniencetotheemployersgreaterthanthatofariseofwages，arisemaybeobtainedwhich，butforthecombination，notonlywouldnothavehappenedsosoon，butpossiblymightnothavehappenedatall。ThepowerofTrades’。Unionsmaythereforebesoexercisedastoobtainforthelabouringclassescollectively，bothalargershareandalargerpositiveamountoftheproduceoflabour;