DOI Seite / Zitierlink:
https://doi.org/10.11588/diglit.42346#0259
WHAT IS A FAIR PRICE?
247
In cities that make any pretence of managing their gas
or water plants on a business-like basis, charges for gas and
water rise and fall with cost of the service; in the best mu-
nicipal plants this is the case, and in no municipal plant are
prices advanced as consumption increases and costs drop.
Why should not the same rule obtain in private enter-
prise? Why should not men be encouraged to co-operate
to control the ancient “law” of supply and demand, and
keep prices as constant with relation to cost as cities try
to do in their industries?
XIV
Demand is a desire backed up by the ability to give some-
thing to satisfy the desire—it is a psychological and emo-
tional state; it is a human longing.
Supply is a material, a physical proposition; it is the
physical response to a psychological state, the objective re-
sponse to a subjective condition. There is no such thing as
supply without demand, and there is no such thing as de-
mand without supply.1
No man offers a supply of anything in the market with-
out wanting something for it, and the amount of goods or
services he is willing to part with depends upon the strength
of his desire for what he is to receive, money or the things
money will buy, and not upon the strength of some one
else’s desire for the goods or services in question.
“Supply” and “demand” are commonly discussed as if
two contending and independent forces were forcing the
market this way and that, as if at one period a large quan-
tity of goods was being pushed upon a market devoid of
“demand,” and at another a huge “demand” sprang up in
1 It is needless to say that it is the “effective” demand, defined by
Adam Smith, that is here referred to, as distinguished from vague
desires and vain imaginings that are not backed up by the offer of any-
thing for their satisfaction.
247
In cities that make any pretence of managing their gas
or water plants on a business-like basis, charges for gas and
water rise and fall with cost of the service; in the best mu-
nicipal plants this is the case, and in no municipal plant are
prices advanced as consumption increases and costs drop.
Why should not the same rule obtain in private enter-
prise? Why should not men be encouraged to co-operate
to control the ancient “law” of supply and demand, and
keep prices as constant with relation to cost as cities try
to do in their industries?
XIV
Demand is a desire backed up by the ability to give some-
thing to satisfy the desire—it is a psychological and emo-
tional state; it is a human longing.
Supply is a material, a physical proposition; it is the
physical response to a psychological state, the objective re-
sponse to a subjective condition. There is no such thing as
supply without demand, and there is no such thing as de-
mand without supply.1
No man offers a supply of anything in the market with-
out wanting something for it, and the amount of goods or
services he is willing to part with depends upon the strength
of his desire for what he is to receive, money or the things
money will buy, and not upon the strength of some one
else’s desire for the goods or services in question.
“Supply” and “demand” are commonly discussed as if
two contending and independent forces were forcing the
market this way and that, as if at one period a large quan-
tity of goods was being pushed upon a market devoid of
“demand,” and at another a huge “demand” sprang up in
1 It is needless to say that it is the “effective” demand, defined by
Adam Smith, that is here referred to, as distinguished from vague
desires and vain imaginings that are not backed up by the offer of any-
thing for their satisfaction.