The buyer's price, an the other hand, is fixed by competition. He does not inquire what the article costs, but what are the terms on which he may obtain another to serve in its stead; he addresses himself to various merchants, who offer him the same commodity, and bargains with him who will sell the cheapest; or else he considers which will suit him best, among several articles of a different 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, extends to every country where the mean price established by commerce is no smaller than his. His production is not limited by the consumption of neighbors or countrymen; it is regulated by the whole number of those who, whatever country they inhabit, 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 division of labour incessantly augments its productive 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 light saving; yet, if both are subjects of the same state, the difference in regard to the national interest will not be great. The distress 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 former 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 production 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 expense.
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 countrymen. 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 counties 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, extended 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.
Sale is extended also, and in a more lasting manner, when the cheapness of the thing produced brings it within the reach of a new class of consumers; a very sensible diminution of the price may often produce this effect. Thus glass windows were at one time confined to palaces; they are found at the present time in the meanest huts. Consumption is in that case truly increased; each nation gains doubly by it; manufacturers have extended their labour; the poor have acquired a new enjoyment.
