Discussion on R.M. Johnston's paper

Mr. A. J. Ogilvy said:—Mr. Johnston's opening statement (condensed) is that cost of production, not demand and supply, primarily determined prices. Later, he qualified that by excluding things the cost of which was determined by scarcity alone, confining it to things -which could be increased (indefinitely, I suppose), and where competition operated without restraint. In short that, just as south of the tropics the wind would always blow from the west if there were no land to disturb, and just as every planet's orbit would describe an ellipse if there were no other planets to perturb, so price would always represent cost of production measured in labour if there were no natural scarcity or artificial interference. Mr. Johnston has proved this conclusively, but the case thus qualified seems so plain from the mere statement of it that one was surprised to hear that it required proof, and I suspect that the dispute, where there is any, arises from neither party quite understanding the other's position ; for the law of demand and supply and cost of production are not rivals at all, but each is the complement of the other.