Fairs and Markets, Turgot

"The word fair, which is derived from forum, a public square, was originally synonymous with that of market, and is still so in certain respects. Both signify a gathering of sellers and buyers at a set time and place, but the word fair seems to present the idea of a more numerous, more solemn, and consequently, less common gathering. The use of these two words in ordinary language appears to be determined by this distinction, which is immediately perceptible, but which itself arises from a less obvious, and as it were, more radical difference between these two things. This will be developed further.

It stands to reason that sellers and buyers cannot gather together at certain times and places without an attraction or an interest which compensates for, or which even exceeds the expenses of the journey and of the transportation of the produce and merchandise. Without this attraction, each would remain at home. The stronger it is, the longer the transportation which the produce can support, the more numerous and solemn the gathering of merchants and customers will be, and the more the district which has this gathering as its centre, can be extended. The natural course of trade in itself is enough to fashion this gathering and to increase it up to a certain point. The competition of the sellers limits the price of the produce, and the price of the produce in turn limits the number of sellers. Indeed, since all trade must support the person who undertakes it, it is essential that the number of sales compensates the merchant for the low profit which he makes on each sale, and that, consequently, the number of merchants is proportioned to the current number of consumers, so that each merchant is matched by a certain number of the latter. Recognizing this, I assume that the price of a commodity is such that in order to support the trade in it, it has to be sold in a market of three hundred families. It is obvious that three villages, each containing only one hundred families, will be able to support only a single merchant of this commodity. This merchant will probably live in that village of the three where the largest number can gather most conveniently and at the least expense, because this curtailment of expenses will give the merchant who is established in this village an advantage over those who would be tempted to set up business in any of the others. But several types of commodities would probably be in the same category and the merchant of each of these commodities would set up in the same place because of the curtailment of the expenses and because someone who needs two types of commodities prefers making one journey to making two; it is really as if he were paying less for each piece of merchandise. Once a place has become notable because of this self-same gathering together of different trades, it becomes more and more important, because all artisans who are not confined to the country side by the nature of their work, and all those whose wealth permits them to be idle, assemble there to obtain the conveniences of life. The competition of buyers draws the merchants in the hope of sales, and several of them set up business to deal in the same commodities. The competition of the merchants draws buyers in the hope of a good bargain, and both of them continue to increase in turn up to the point where for the remote buyers, the disadvantage of the distance offsets the cheapness of the commodities caused by competition, and even what custom and force of habit add to the attraction of a good bargain. In this manner different centers of commerce, or markets, are naturally formed, to which correspond an equal number of districts or departments of various sizes, according to the nature of the commodities, the relative ease of communications and the condition and relative size of the population. And such is, by the way, the most important and the most common origin of small market towns and cities." [página 81]