Adulteration, as John Bright frankly declared, is a form of competition. It is also a form of rascality and fraud. It is a device for retaining profits for the seller, but it is seriously to the disadvantage of the consumer.
This form of competition, then, has to be put to the debit of competition.
And the absence of this form of competition has to be put to the credit of the State or the Municipal supply. For since the State or Municipality has no competitor to displace, it never descends to the baseness of adulteration.
The London County Council would not build jerry houses for the citizens, nor supply them with tea leaves for tea, nor logwood and water for port wine.
The sale of wooden nutmegs is a species of enterprise confined exclusively to the private trader. It is a form of competition, but never of commercial co-operation. It is peculiar to non-Socialism: Socialists would abolish it entirely.
We come now to the third device of the private trader in competition: the employment of commercial travellers and advertisement.
Of two firms selling similar goods, of equal quality, at equal prices, that firm will do the larger trade which keeps the greater number of commercial travellers and spends the greater sum upon advertisement.
But travellers cost money, and advertising costs money. And so we find that travellers and advertisements add to the cost of distribution.
Therefore competition, although by underbidding it has a limited tendency to lower the prices of goods, has also a tendency to increase the price in another way.
If Brown lowers the price of his soap the user of soap is the gainer. But if Brown increases the cost of his advertisements and his staff of travellers, the user is the loser, because the extra cost has to be paid for in the price of soap.