12. (Continued) low prices are harmful to merchants who,
(have to) trade at low prices58
This is because, as we have stated before,59 profit and livelihood result from the crafts or from commerce. Commerce means the buying of merchandise and goods, storing them, and waiting until fluctuation of the market brings about an increase in the prices of (these goods). This is called profit (ribh). It provides a profit (kasb) and a livelihood for professional traders. When 60 the prices of any type of goods, victuals, clothing material, or anything else (that may bring in) capital, remain low and the merchant cannot profit from any fluctuation of the market affecting these things, his profit and gain stop if the situation goes on for a long period. Business in this particular line (of goods) slumps, and the merchant has nothing but trouble. No (trading) will be done, and the merchants lose their capital.
This may be exemplified in the instance of grain. While it remains cheap, the condition of all farmers and grain producers who have to do with any of the various stages of grain production is adversely affected, the profit they make being small, insignificant, or non-existent. They cannot increase their capital, or they find (the increase) to be small. They have to spend their capital. Their condition is adversely affected, and they are reduced to poverty and indigence. This then, in turn, affects the condition of millers, bakers, and all the other occupations that are connected with grain from the time it is sown to the time it can be eaten. Likewise, the condition of soldiers is adversely affected. Their sustenance is provided by the ruler in the form of grain from farmers, through the grant of fiefs. Thus, (when the prices of agricultural products are low) the income from taxation 61 is small, and soldiers are unable to render the military service for which they exist and for which they receive sustenance from the ruler. Thus, (the ruler) discontinues their sustenance, and heir condition is adversely affected.
Likewise, while the prices of sugar and honey remain low, everything connected with (these commodities) is adversely affected, and the merchants who deal in it stop trading. The same is the case with clothing (material), while prices remain low. Thus, prices that are too low destroy the livelihood of the merchant who trades in any particular type of low-priced (merchandise). The same applies to prices that are too high. Occasionally and rarely, they may bring an increase in capital as a result of hoarding (some particular merchandise) and the large profit that goes with (hoarding), but it is medium prices and rapid fluctuations of the market that provide people with their livelihood and profit.
This insight has a bearing upon customs established among civilized people. Low prices for grain, and of other things that are traded, are praised, because the need for grain is general and people,62 the rich as well as the poor, are compelled to buy food. Dependent people constitute the majority of people in civilization. Therefore, (low prices for foodstuffs) are of general usefulness, and food, (at least) as far as this particular kind of food (namely, grain) is concerned, weighs more heavily than commerce.63
God "gives sustenance. He is strong and solid." 64