Editing John Locke (section)

====On price theory====
Locke's general theory of value and price is a [[supply and demand|supply-and-demand]] theory, set out in a letter to a member of parliament in 1691, titled ''Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money''.<ref>{{Citation |first=John |last=Locke |year=1691 |url=http://www.marxists.org/reference/subject/economics/locke/contents.htm |title=Some Considerations on the consequences of the Lowering of Interest and the Raising of the Value of Money |publisher=Marxists |access-date=4 July 2007 |archive-date=24 March 2015 |archive-url=https://web.archive.org/web/20150324135856/https://www.marxists.org/reference/subject/economics/locke/contents.htm |url-status=live }}.</ref> In it, he refers to supply as ''quantity'' and demand as [[Economic rent|''rent'']]: "The price of any commodity rises or falls by the proportion of the number of buyers and sellers ... that which regulates the price ... [of goods] is nothing else but their quantity in proportion to their rent." The [[quantity theory of money]] forms a special case of this general theory. His idea is based on "money answers all things" ([[Ecclesiastes]]) or "rent of money is always sufficient, or more than enough" and "varies very little". Locke concludes that, as far as money is concerned, the [[demand for money|demand for it]] is exclusively regulated by its quantity, regardless of whether the demand is unlimited or constant. He also investigates the determinants of demand and supply. For [[Supply (economics)|supply]], he explains the value of goods as based on their [[scarcity]] and ability to be [[Exchange value|exchanged]] and [[Consumption (economics)|consumed]]. He explains [[demand]] for goods as based on their ability to yield a flow of income. Locke develops an early theory of [[Capital (economics)|capitalisation]], such as of land, which has value because "by its constant production of saleable [[Commodity|commodities]] it brings in a certain yearly income". He considers the demand for money as almost the same as demand for goods or land: it depends on whether money is wanted as [[medium of exchange]]. As a medium of exchange, he states that "money is capable by exchange to procure us the necessaries or conveniences of life", and for [[loanable funds]] "it comes to be of the same nature with land by yielding a certain yearly income ... or interest".