law indicates. All business and all property are really affected by public interest, for every productive enterprise is helping and every wasteful enterprise is hindering public fare. Without the great inventions and ideas which education brings us, without the peace and good order which government secures, without the arts and sciences which society makes possible, there would be no wealth and no property; indeed, the life of each of us would be brutish. It is, therefore, increasingly the duty of the good citizen to recognize the larger interest of the public and to recognize his own responsibility for the privileges which the public grants. The man who is always thinking of his own rights and seldom or never of the rights of the public shows himself to be a very small man. In early days in the United States it was for the public welfare that each pioneer settler should strike out boldly, cut down the forest, or break up the prairie. He did not need to think much of the public. The citizen today is in a very different situation. Public welfare, as we have seen, has come to require a larger and larger degree of coöperation, communication, and interdependence. Private property is therefore increasingly subject to public control. The only way in which our crowded life can be made a noble and free life is by the larger recognition of the common good. T CHAPTER XXV FAIR PRICE HE question of fairness in business arises in especial importance: If one man is selling an article to another the question is, What is a fair price for the article? If one man works for another the question is, What is a fair wage? If two men are making the same articles and are competing with each other in building up business, or if two workmen are competing for the same job the question is, What is fair competition? It will be seen as we go on that under our present methods of carrying on business, and in the eyes of the law, the first two questions often pass over into the third. What test can be used? fair if both What is a fair price? Is a price "Fair" means, nearly, what is just or equal. A fair price is one that is in some sense equal for buyer parties and seller. If things were all stamped with a mark, agree? as coins are, then it would be easy to tell what a fair exchange would be. To exchange a half-dollar for two quarters, or two five-cent pieces for a dime is fair. But how can it be said whether a bushel of wheat is a fair exchange for a knife, or whether a hat is a fair exchange for a book? The value of these things seems clearly to depend on how much any one wants wheat, or knives, or hats, or books, and also on how easy it is to get them. If you have a knife and Agreement reached by bargaining want wheat, and I have wheat but want a knife, if you have an extra hat but want a book, and I have plenty of books but want a hat, it is usually possible for us to agree on an exchange. If we are both satisfied, what more can be asked? Hence the simplest rule for a fair price is: a fair price is one on which both parties agree. This makes each party the judge of what is fair for him. This is equal, not in the sense that the articles are equal-as two quarters equal one halfbut equal in giving each party something that he wants. But how much wheat shall be given for the knife, and how good a hat shall be given for the book, and in case the two parties do not agree at first how is an agree ment to be reached? The simplest answer to this is, by bargaining. Neither party, perhaps, will get as much as he might like, but if each wants what the other has, some compromise will be found. "Higgling of the market" is the phrase used to describe the process of reaching the compromise price. Boys trade jackknives, and, in the country, men often swap horses on this plan. In the old country store the shopkeeper and farmer's wife would bargain in this way until they agreed on a price for his cloth or her butter. The customer who succeeded in beating down the grocer a few cents on one article felt pleased with his shrewdness and thought he had reached a fair price, while the grocer was equally satisfied, for he knew he could make up for his loss on this article by charging a higher price on some other article. In modern business, however, the method of bargaining in order to reach a fair price by agreement has taken such a different form that it is at first difficult to see where the bargaining and agreement come in. In all the great retail stores, the rule is, one price to all. The element of bargaining and agreement really enters indirectly. For the merchant sets a price at which he thinks he can sell his goods. If they do not sell fast enough at his first price he frequently lowers it. He is bargaining not with one buyer but with the large number of buyers who may take the article if its price suits them. The buyer on his part cannot beat down the merchant directly, but he can try another shop, and if he finds prices no lower he can oftentimes wait before purchasing or until the merchant announces a reduction in prices. In wholesale dealing or in making large contracts there is still a great deal of individual bargaining. The traveling salesman aims to meet the price of his competitors and if necessary go a little lower than their price. ing gives a fair Bargaining and agreement will give a fair price if When bargainthe two parties are equal—that is, equal in bargaining power. This makes the agreement satisfactory, for each is getting what he wants, or, at least, something price nearly like what he wants. The chief factors in making men equal in bargaining power are knowledge, and wealth. Knowledge prevents deception or mistakes; wealth enables a buyer or seller to hold out for a more satisfactory price, instead of being obliged to take the first offer. In the old country store the parties were usually well matched in wits; in a horse trade neither party is usually forced to trade, and so need not seem anxious. But when the two parties are unequal, bargaining When may not give a fair price, even though the parties bargainagree. For in this case the agreement is not what ing does really satisfies the weaker party. The two main sources of weakness are ignorance and need. man who is ignorant of the market may be at fault not give a fair The price for not reading the market quotations and so may blame himself, but if he thinks the other party has deceived him, or has taken advantage of some secret information he is likely to feel that the bargain is unfair. The man who is in great need evidently cannot get as good a bargain as if he could afford to wait. Sometimes a bargain made under such stress does not result in an unfair price, but sometimes it does. We may distinguish three cases: The first case is where gain is involved. The seller may suddenly need money to meet payments on his notes, or to take advantage of a good chance to buy more goods for cash; he advertises a forced sale at a reduced price, and no one considers it unfair to buy at this price; indeed it helps the seller. Or, a building contractor may see an opportunity to secure a good contract to build a mill or bridge if he can buy the iron. He needs the iron and is willing to pay a high price for it. It is not unfair that the iron maker raise the price of iron enough to share in the expected profits from building the bridge. The second case is where the need is not for making a gain but for supporting life. If a wheat crop fails over a large part of the country, is it fair for those who have wheat to raise the price and thus force nearly all to suffer inconvenience, and the poor to suffer actual hardship? If the coal dealers encounter a scarcity of coal because the railroads do not deliver it fast enough to supply the demand, is it fair to raise the price and thereby reap a profit at the expense of hardship to the consumers? People must have bread and heat. Is it fair to take advantage of their necessities for the sake of higher gains? Those who answer "yes" say that charging a higher price is the best way to induce buyers |