WASTE  IN  DISTRIBUTION  AND  IN  MANUFACTURES  7  I
an  excess  of  producing-power,  after  exhibiting  itself  in  a
comparatively  trifling  glut  of  actual  manufactured  goods,
shows  its  “  waste  ”  in  the  form  of  “  unemployed  "  labour
and  capital,  which  operate  in  some  measure  as  a  check
upon  further  application  of  labour  and  capital.  In  the
latter,  no  such  natural  check  is  provided.  Small  quantities ­
  of  capital,  unable  to  enter  manufacture  with  any
reasonable  prospect  of  success,  may  embark  in  distribution,
especially  in  retail  trade,  with  some  hope  of  attracting  to
their  businesses  a  fair  proportion  of  the  trade  of  others.
It  is  not  easy  for  a  new  business  to  succeed  even  in
retail  trade,  but  it  is  less  difficult  than  in  manufacture.
The  same  amount  of  business  may  thus  come  to  be
divided  among  a  larger  number  of  persons.  It  may  even
supply  a  livelihood  to  all,  on  the  single  condition  that  the
margin  of  profit  in  each  sale  is  larger;  which  means,  in  a
period  of  falling  wholesale  prices,  that  retail  prices  fall  more
slowly  and  more  slightly.  It  can  scarcely  be  doubted  that  this
is  a  true  description  of  the  actual  phenomena  exhibited
in  distributive  trade.  The  assumption  commonly  made
by  statesmen,  and  even  by  economists,  that  the  consumer
gains  the  advantage  of  the  full  decline  of  wholesale
prices,  and  that  such  decline  is  therefore  a  matter  of
comparative  indifference,  is  unwarranted.  The  cautious
opinion  expressed  by  J.  S.  Mill  has  been  closely  borne
out  by  the  experience  of  the  last  twenty  years.  “Retail
price,  the  price  paid  by  the  actual  consumer,  seems  to
feel  very  slowly  and  imperfectly  the  effects  of  competition  :
and  where  competition  does  exist,  it  often,  instead  of
lowering  prices,  merely  divides  the  higher  prices  among
a  larger  number  of  dealers.”  *
*  “  Principles  of  Political  Economy,”  vol.  ii„  ch.  iv.  §  3.