§3. Prices, whenever there was no monopoly, came earlier under the influence of competition, and are much more universally subject to it, than rents: but that influence is by no means, even in the present activity of mercantile competition, so absolute as is sometimes assumed. There is no proposition which meets us in the field of political economy oftener than this-that there cannot be two prices in the same market. Such undoubtedly is the natural effect of unimpeded competition; yet everyone knows that there are, almost always, two prices in the same market. Not only are there in every large town, and in almost every trade, cheap shops and dear shops, but the same shop often sells the same article at different prices to different customers: and, as a general rule, each retailer adapts his scale of prices to the class of customers whom he expects. The wholesale trade, in the great articles of commerce, is really under the dominion of competition. There, the buyers as well as sellers are traders or manufacturers, and their purchases are not influenced by indolence or vulgar finery, nor depend on the smaller motives of personal convenience, but are business transactions. In the wholesale markets therefore it is true as a general proposition, that there are not two prices at one time for the same thing: there is at each time and place a market price, which can be quoted in a price-current. But retail price, the price paid by the actual consumer, seems to feel very slowly and imperfectly the effect of competition; and when competition does exist, it often, instead of lowering prices, merely divides the gains of the high price among a greater number of dealers. Hence it is that, of the price paid by the consumer, so large a proportion is absorbed by the gains of retailers; and anyone who inquires into the amount which reaches the hands of those who made the things he buys, will often be astonished at its smallWhen indeed the market, being that of a great city, holds out a sufficient inducement to large capitalists to engage in retail operations, it is generally found a better speculation to attract a large business by underselling others, than merely to divide the field of employment with them. This influence of competition is making itself felt more and more through the principal branches of retail trade in the large towns; and the rapidity and cheapness of transport, by making consumers less dependent on the dealers in their immediate neighborhood, are tending to assimilate more and more the whole country to a large

ness.

town; but hitherto it is only in the great centres of business that retail transactions have been chiefly, or even much, determined by competition. Elsewhere it rather acts, when it acts at all, as an occasional disturbing influence; the habitual regulator is custom, modified from time to time by notions existing in the minds of purchasers and sellers, of some kind of equity or justice.

In many trades the terms on which business is done are a matter of positive arrangement among the trade, who use the means they always possess of making the situation of any member of the body who departs from its fixed customs, inconvenient or disagreeable. It is well known that the bookselling trade was, until lately, one of these, and that notwithstanding the active spirit of rivalry in the trade, competition did not produce its natural effect in breaking down the trade rules. All professional remuneration is regulated by custom. The fees of physicians, surgeons, and barristers, the charges of attorneys, are nearly invariable. Not certainly for want of abundant competition in those professions, but because the competition operates by diminishing each competitor's chance of fees, not by lowering the fees themselves.

Since custom stands its ground against competition to so considerable an extent, even where, from the multitude of competitors and the general energy in the pursuit of gain, the spirit of competition is strongest, we may be sure that this is much more the case where people are content with smaller gains, and estimate their pecuniary interest at a lower rate when balanced against their ease or their pleasure. I believe it will often be found, in Continental Europe, that prices and charges, of some or of all sorts, are much higher in some places than in others not far distant, without its being possible to assign any other cause than that it has always been so: the customers are used to it, and acquiesce in it. An enterprising competitor, with sufficient capital, might force down the charges, and make his fortune during the process; but there are no enterprising competitors; those who have capital prefer to leave it where it is, or to make less profit by it in a more quiet way.

These observations must be received as a general correction, to be applied whenever relevant, whether expressly mentioned or not, to the conclusions contained in the subsequent portions of this Treatise. Our reasonings must, in general, proceed as if the known and natural effects of competition were actually pro

duced by it, in all cases in which it is not restrained by some positive obstacle. Where competition, though free to exist, does not exist, or where it exists, but has its natural consequences overruled by any other agency, the conclusions will fail more or less of being applicable. To escape error, we ought, in applying the conclusions of political economy to the actual affairs of life, to consider not only what will happen supposing the maximum of competition, but how far the result will be affected if competition falls short of the maximum.

The states of economical relation which stand first in order, to be discussed and appreciated, are those in which competition has no part, the arbiter of transactions being either brute force or established usage. These will be the subject of the next four chapters.

Chapter V.-Of Slavery

§ 1. Among the forms which society assumes under the influence of the institution of property, there are, as I have already remarked, two, otherwise of a widely dissimilar character, but resembling in this, that the ownership of the land, the labor, and the capital, is in the same hands. One of these cases is that of slavery, the other is that of peasant proprietors. In the one, the landowner owns the labor, in the other the laborer owns the land. We begin with the first.

In this system all the produce belongs to the landlord. The food and other necessaries of his laborers are part of his expenses. The laborers possess nothing but what he thinks fit to give them, and until he thinks fit to take it back: and they work as hard as he chooses, or is able, to compel them. Their wretchedness is only limited by his humanity, or his pecuniary interest. With the first consideration, we have on the present occasion nothing to do. What the second in so detestable a constitution of society may dictate, depends on the facilities for importing fresh slaves. If full-grown able-bodied slaves can be procured in sufficient numbers, and imported at a moderate expense, self-interest will recommend working the slaves to death, and replacing them by importation, in preference to the slow and expensive process of breeding them. Nor are the slave-owners generally backward in learning this lesson. It is notorious that such was the practice in our slave colonies, while the slave trade was legal; and it is said to be so still in Cuba.

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When, as among the ancients, the slave-market could only be supplied by captives either taken in war, or kidnapped from thinly scattered tribes on the remote confines of the known world, it was generally more profitable to keep up the number by breeding, which necessitates a far better treatment of them; and for this reason, joined with several others, the condition of slaves, notwithstanding occasional enormities, was probably much less bad in the ancient world than in the colonies of modern nations. The Helots are usually cited as the type of the most hideous form of personal slavery, but with how little truth, appears from the fact that they were regularly armed (though not with the panoply of the hoplite) and formed an integral part of the military strength of the State. They were doubtless an inferior and degraded caste, but their slavery seems to have been one of the least onerous varieties of serfdom. Slavery appears in far more frightful colors among the Romans, during the period in which the Roman aristocracy was gorging itself with the plunder of a newly conquered world. The Romans were a cruel people, and the worthless nobles sported with the lives of their myriads of slaves with the same reckless prodigality with which they squandered any other part of their ill-acquired possessions. Yet, slavery is divested of one of its worst features when it is compatible with hope: enfranchisement was easy and common: enfranchised slaves obtained at once the full right of citizens, and instances were frequent of their acquiring not only riches, but latterly even honors. By the progress of milder legislation under the Emperors, much of the protection of law was thrown round the slave, he became capable of possessing property, and the evil altogether assumed a considerably gentler aspect. Until, however, slavery assumes the mitigated form of villanage, in which not only the slaves have property and legal rights, but their obligations are more or less limited by usage, and they partly labor for their own benefit; their condition is seldom such as to produce a rapid growth either of population or of production.

§ 2. So long as slave countries are underpeopled in proportion to their cultivable land, the labor of the slaves, under any tolerable management, produces much more than is sufficient for their support; especially as the great amount of superintendence which their labor requires, preventing the dispersion of the population, insures some of the advantages of combined labor.

Hence, in a good soil and climate, and with reasonable care of his own interests, the owner of many slaves has the means of being rich. The influence, however, of such a state of society on production, is perfectly well understood. It is a truism to assert, that labor extorted by fear of punishment is inefficient and unproductive. It is true that in some circumstances, human beings can be driven by the lash to attempt, and even to accomplish, things which they would not have undertaken for any payment which it could have been worth while to an employer to offer them. And it is likely that productive operations which require much combination of labor, the production of sugar for example, would not have taken place so soon in the American colonies, if slavery had not existed to keep masses of labor together. There are also savage tribes so averse from regular industry, that industrial life is scarcely able to introduce itself among them until they are either conquered and made slaves of, or become conquerors and make others so. But after allowing the full value of these considerations, it remains certain that slavery is incompatible with any high state of the arts of life, and any great efficiency of labor. For all products which require much skill, slave countries are usually dependent on foreigners. Hopeless slavery effectually brutifies the intellect; and intelligence in the slaves, though often encouraged in the ancient world and in the East, is in a more advanced state of society a source of so much danger and an object of so much dread to the masters, that in some of the States of America it is a highly penal offence to teach a slave to read. All processes carried on by slave labor are conducted in the rudest and most unimproved manner. And even the animal strength of the slave is, on an average, not half exerted. The unproductiveness and wastefulness of the industrial system in the Slave States are instructively displayed in the valuable writings of Mr. Olmsted. The mildest form of slavery is certainly the condition of the serf, who is attached to the soil, supports himself from his allotment, and works a certain number of days in the week for his lord. Yet there is but one opinion on the extreme inefficiency of serf labor. The following passage is from Professor Jones,* whose "Essay on the Distribution of Wealth" (or rather on Rent), is a copious repertory of valuable facts on the landed tenures of different countries:

Essay on the Distribution of Wealth and on the Sources of Taxation." By the Rev. Richard Jones. Page 50.