STOCK SPECULATION—DANGERS AND BENEFITS 153
Adjusting Prices to Values.—We have seen that the occa-
sion for a successful speculation comes only when a disparity
exists between the price and the value of some commodity or
enterprise. The principle is exactly the same, although, of
course, on a smaller scale, with a speculation in the stock mar-
ket, or with the founding of a new industry, wherein a large
potential value seems creatable for a small price. It is this
fundamental fact with regard to speculation which led Justice
Holmes of the United States Supreme Court to remark,
“Speculation is the self-adjustment of society to the probable.”
The speculator, therefore, as M. Bloch, the French economist,
has declared, renders an economic service every time his specu-
lation succeeds. For this service, when he succeeds in render-
ing it, the speculator of course obtains a profit, and this profit,
considering the profound economic benefits of speculation, is
as well deserved as any other.
One logical deduction from the premises stated above is
that unsuccessful speculation is economically harmful, and this
ls in many practical ways true. But such speculation is always
kept from becoming an excessive economic harm for the simple
reason that the speculators suffer losses and are penalized for
running counter to the trend of true values
American Fondness for New Legislation.—It is impos-
sible to legislate speculation either out of existence or into abso-
lute harmlessness to the individual speculator.® Probably more
than any people on earth, Americans have contracted the habit
of rushing headlong into statute-making. That so many ill-
considered and superficial attempts to inaugurate the millen-
nium with a new law are actually enacted, is emphatically more
our own fault than that of our elected representatives, whom,
nevertheless, we invariably blame for the whole affair later
when the law is found impossible or else dangerous in its
enforcement. However we may rail at Washington or the
state capitals, most of the uneconomic and useless statutes
3 See Appendix Vd.
