The producer establishes his price according to what the merchandise has cost, including his profit, which ought to be proportional to what might he obtained in any other kind of industry. The price must be sufficient to repay the workmen's wages, the rent of the land, or the interest on the fixed capitals employed in production, the raw materials wrought by him, with all the expenses of transport, and all the advances of money. When all these reimbursements, calculated at the mean rate of the coun t•y, are themselves repaid by the last purchaser, the pro duction may continue on the same footing. If the profits rise above the mean rate, the producer will extend his en terpi izcs; he will employ new hands and fresh capital, and, striving to benefit by this extraordinary profit, he will soon reduce it to the common level. If the buyer, on the other hand, pays a price too low for compensating all the pro ducer's reimbursements, the latter will, of course, seek to reduce his production, but this change will not be so easy as the other. The workmen employed by him, rather than abandon what gains their bread, consent to work at a lower price; for less even than the necessaries of life. Fixed capitals, moreover, cannot be put to another use; he will content himself with a smaller profit, and continue to work with them till they produce next to nothing. Lastly, the manufactdrer himself must live by his industry, and never willingly abandons it : he is ever disposed to attri bute the decline of his last year's trade to accidental causes; and the less he has gained, the less is he willing to retire limn business. Thus production continues almost always longer than demand, unless the manufacturer has, of his own accord, renounced his business to attempt a new one.
The buyer's price, on the other hand, is fixed by com petition. He does not inquire what the article costs, hut what are the terms on which he may obtain another to serve in its stead ; he addresses himself to various mer chants, who offer him the same commodity, and bargains with him who will sell cheapest; or else he considers which will suit him best, among several articles of a dif ferent nature, but capable of being substituted for each other. As each is occupied solely with his own private interest, each tends to the same object : all the buyers, on one hand, all the sellers on the other, act as if in concert : the sums asked, and the sums offered, are brought to an equilibrium, and the mean price is established.
The seller's price should enable him to reproduce the artIcle sold, with a profit, under the same condition, in the same place. His market, therefore, csItends to every country where the mean price established by commerce is not smaller than his. His production is not limited by the con sumption of neighbours or countrymen; it is regulated by the whole number of those who, whatever country they in habit, find an advantage in purchasing his goods, or for whom his producing price is not superior to the buying price. It is this which properly constitutes the extent of
market.
As the divisioil of labour incessantly augments its pro ductive powers, and the increase of capitals daily obliges the merchant to seek new employment for industry, and try new manufactures, the producer feels no interest more pressing than that of extending his market. If he cannot find new places of sale, it will neither suit him to enlarge his manufactory, when his capital has been increased by saving, nor to improve-his fabrication by'performing more work with the same machinery, or the same number of hands. The whole progress of his fortune depends on the progress of his sale." Among the causes which augment this sale, the first is the discovery of such an economy in labour as may enable the manufacturer to sell cheaper than his brethren, and to get possession of their custom : he will sell more, but they will sell less. The consumers will make a slight saving; yet, if both are subje:..ts of the same state, the difference in regard to the national interest will not be great. The dis tress of those producers, who have lost their custom, and who, probably, will lose a considerable part of their capital by selling their wares too cheap, and abandoning their for mer machinery, will perhaps counterbalance the profit of purchasers.
As policy is wont to comprise the obligation of social duties within the circle of our countrymen, the mutual rivalship of foreign producers has more openly displayed itself. They have striven to exclude each other from the markets, where they came in competition, by selling at a cheaper rate. Every national discovery, which allows the producers of one country to sell cheaper than those of other countries, inevitably increases the former's produc tion at the latter's expense; and the profit of this saving is shared between producers who extend their market, and consumers who provide for their wants at a smaller ex pense. Yet if a single manufacturer has succeeded in making this saving, which extends his market ; or if the exclusive use of it is secured to him by patent, his coun trymen, also manufacturers, against whom he has made this successful competition, must support all the loss of it, whilst himself and the foreign consumer share all the profit. In an age, when communication among different countries is easy, when all the sciences are applied to all the arts, discoveries are soon divined and copied, and a nation cannot long retain an advantage in manufacturing which it owes but to a secret ; so that the market, extend ed for a moment by a fall in the price, is very soon shut up ; and if the general consumption is not increased, the production is not so either.