EXCHANGE AND MARKETS 39
on these as modified by reciprocal adjustments of
supply.
The problem of the distribution of the product of
industry, between owners of capital, land, labour, and
directing power, is thus somewhat more closely related to
the problem of relative values in international trade, than to
that of the relative values of the products of different
industries in domestic trade, where the free flow of producing
powers between industry and industry can be accepted as
approximately realised.
Let us return to the question of market organisation as
affecting the determination of values. In practice, the
exchange of product for product does not take place directly.
Each product is valued in terms of a common unit of values ;
the values are expressed as prices. This again facilitates
the arrival at a uniform basis of exchanges, a rate governing
all the exchanges of the dealers whose association forms the
market in question. The variation of the utility with the
supply of each of the products, exchanged the one for the
other, was seen to be important in arriving at a basis of
exchange. When sales and purchases for money replace
direct barter, the attention can be confined to the variations
of the utility of one commodity only, the marginal utility of
the money, either to purchaser or to seller, being treated as
unaffected by the extent of exchanges accomplished. This
simplifies the problem, and facilitates the determination of
the rate of exchange, that is, in this case, the price, which
will equate demand and supply in the market.
Markets are, for some commodities, necessarily local.
For others they may, effectively, extend to very distant
places, and, further, supply and demand may be adjusted to
the circumstances of the immediate present, or to those of a
period of some duration. Commodities which are perishable
aeed to be disposed of within a period of time, and for use
within distances, governed by the perishability. Further,
some commodities need to be made to satisfy the fancy of
the buyer, and such fancies may be peculiar, so that the
goods can only be marketed where the user of them is. No
world-wide market can exist for personal services, for