icular country will increase the total supply of
capital available for the businesses of that country, since capital
has in modern times acquired a considerable migratory power. In the
case of labor, we cannot go so far as this; but here, too, there is no
doubt that an increase in the remuneration offered in any particular
occupation will attract an increased labor supply (always supposing,
of course, that "other things are equal"). No similar difficulty
arises for land, labor or capital, as regards the effect of
price-changes on demand; while for ordinary commodities there is no
such difficulty on the side either of demand or of supply. Hence the
only qualification which the strictest accuracy would require us in
this connection to attach to our statement of Law II is the
postscript:--

"Except that, in the case of land, the aggregate supply is
unalterable; while in the case of capital or labor we cannot be
sure how price-changes will affect the aggregate supply."

Much significance attaches to these exceptions, as later will appear.

Sec.6. _The Disturbances of Monetary Changes_. But let us still keep a
critical eye on Law II, and submit it to another flashlight from our
practical experience. The recent world war made us all acutely aware
of a remarkable rise in the price of almost everything, which yet did
not seem to diminish appreciably the demand. The explanation of this
paradox is not difficult to find. There was an immense increase in the
volume of nominal purchasing power, due to a complex set of causes, of
which "currency inflation" may be taken as the symbol. Now perhaps we
are entitled to assume the absence of such currency changes as part of
the "other things being equal" which is always understood as
implied. But it is rash to take this particular assumption for
granted, more especially in these days. Already people are too apt to
speak as though the trade depression (which as these pages are written
holds us in its grip) cannot pass away until pre-war prices are
restored, ignoring altogether the great and probably permanent
increase in nominal purchasing power which the war has left behind
it. It would be safer, therefore, to add explicitly to Law II the
reservation, "Assuming that there is no change in the general volume
of purchasing power."

Monetary and allied questions will form the subject of the second
volume of this series. It must not be supposed that our general laws
have no