Abstract: The "Natural" Price of Natural Ice in America, 1880-1910
Adam Smith's concept of "natural price," the price of a good's raw materials and labor without producer profit, illustrates the way that many American consumers saw natural ice during the industry's heyday. Because ice cost nothing to manufacture and was nearly everywhere each winter, customers did not understand price fluctuations. In response, ice harvesters and dealers began a dialogue with consumers, explaining their cost structure and the vicissitudes of the market. Among the factors they cited for charging higher prices were weather, rising demand, and the need to make a profit to stay in business. By educating consumers, they helped the buying public to accept that the interaction of supply and demand determines the price of goods, not some innate feeling for the worth of a good based on its perceived costs. The impact of this dialogue illustrates the influence of culture on pricing across industries.