men make a bargain and exchange equal values, for they are honest and would not cheat each other, and yet both make a profit! Where does their profit come from? Some foolish people think that merchants make their profits by buying in the cheapest market and selling in the dearest. In other words, by cheating or taking advantage of each other. This is evidently a mistake. A merchant may, of course, make an extra profit by taking advantage of his neighbor. In that event his neighbor loses as much as he has made. But the regular profits of the merchant are realized when he buys and sells goods at their fair prices. That is why all hands are making money. Otherwise the capitalists would be preying on each other and one would gain just as much as the other would lose. Wealth would merely circulate among the different members of the class but there would be no net gain. What would the merchant class live on? They could no more live on each other's losses than they could by taking in each other's washing. But the capitalist class does manage to live and thrive and even accumulate and amass large stores of wealth. Where, then, does the capitalist class get it?
Other explanations offered are that the merchant by buying and selling enhances the value of the article sold and that the enhanced value is the merchant's profit; or that the merchant's profit is a reward for services as middle-man between producer and consumer. This last proposition is beside the point for the reason that it is not a question of ethics with which we are concerned, as to whether the merchant deserves what he gets, but a pure question of mechanics: how, and wherefrom, he gets it. Nor does the explanation that the merchant "enhances" the value of an article, that is creates new value, by selling it, answer the question: Where and how did he get it? How is the value of a thing "enhanced" by a mere change of hands? Its natural qualities remain the same. The uses to which it can be put remain the same. Where was this value before the merchant got it? Who produced it, and why did its producer
