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ARTES
LIBRARY
VERITAS
OF THE
UNIVERSITY OF MICHIGAN
FROM THE LIBRARY OF
Professor Karl Heinrich Rau
OF THE UNIVERSITY OF HEIDELBERG
PRESENTED TO THE
UNIVERSITY OF MICHIGAN
BY
Mr. Philo Parsons
OF DETROIT
1871
:

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INQUIRONS
INTO THE
LIBRARY
University of
MICHIGAN
NATURE AND CAUSES
1
OF THE
WEALTH OF NATIONS.
BY
ADAM SMITH, L. L. D.
AND F. R. S. OF LONDON AND EDINBURGH:
ONE OF THE COMMISSIONERS OF HIS MAJESTY'S CUSTOMS
AND FORMERLY
IN SCOTLAND;
PROFESSOR OF MORAL PHILOSOPHY
IN THE UNIVERSITY OF GLASGOW.
VOL I,
BASIL:
Printed and fold by JAMES DECKER.
PARIS, fold by LEVRAULT FRERES, Quai Malaquai.
1 8 0 1.
ADVERTISEMENT
TO THE
THIRD EDITION.
THE firft Edition of the following Work
was printed in the end of the year 1775, and
in the beginning of the year 1776. Through
the greater part of the Book, therefore, when-
ever the preſent ftate of things is mentioned, it
is to be underſtood of the ftate they were in,
either about that time or at fome earlier period,
during the time I was employed in writing the
Book. To the third Edition, however, I have
made feveral additions, particularly to the chap-
ter upon Drawbacks, and to that upon Bounties;
likewiſe a new chapter entitled, The Conclufion
of the Mercantile Syftem; and a new article to the
chapter upon the expenſes of the fovereign. In
all theſe additions, the prefent ftate of things means
always the ftate in which they were during the
year 1783 and the beginning of the year 1784.
ADVERTISEMENT
TO THE
IN
FOURTH EDITION.
N this fourth Edition I have made no alterations
of any kind. I now, however, find myſelf at
liberty to acknowledge my very great obligations
to Mr. HENREY HOP of Amfterdam. To that
Gentleman I owe the moft diftinct, as well as
liberal information, concerning a very intereſting
and important fubject, the Bank of Amſterdam;
of which no printed account had ever appeared
to me fatisfactory, or even intelligible. The
name of that Gentleman is fo well known in
Europe, the information which comes from him
muft do fo much honor to whoever has been fa-
vored with it, and my vanity is fo much in-
tereſted in making this acknowledgment, that I
can no longer refuſe myſelf the pleaſure of pre-
fixing this Advertiſement to this new Edition of
my Book.
CONTENTS
OF THE
FIRST
VOLUM E.
Reflections on the Formation and Diſtribution of Riches, by
Mr. Turgot.
INTRODUTION AND OF
INTRODUTION AND PLAN OF THE
WORK.
Page 1
BOOK I
Of the Cauſes of Improvement in the pro-
ductive Powers of Labor, and of the
Order according to which its Produce is
naturally diſtributed among the different
Ranks of the People.
CHAP. I.
Of the Divifion of Labor.
CHAP
II.
Of the principle which gives occafion to the
Divifion of Labor.
6
ibid.
19
vi
CONTENTS.
CHA P. III.
That the Divifion of Labor is limited by the
Extent of the Market
Page 26
CHAP. IV.
Of the Origin and Ufe of Money
CHAP. V.
Of the real and nominal Price of Commodities,
or of their Price in Labor, and their Price
in Money
CHAP. VI.
Of the component Parts of the Price of Com-
modities
CHAP VII.
Of the natural and market Price of Com-
modities
CHAP. VIII.
33
43
70
82
Of the Wages of Labor
96
CHA P. IX.
Of the Profits of Stock
133
CONTENTS.
vii
CHAP. X.
Of Wages and profit in the different Employ-
ments of Labor and Stock
Page 151
PART I. Inequalities arifing from the Nature
of the Employments themſelves.
152
PART II. Inequalities occafioned by the Policy
of Europe
183
CHAP. X I.
Of the Rent of Land
223
PART I. Of the Produce of Land which al-
ways affords Rent
227
PART II. Of the Produce of Land which
fometimes does, and fometimes does not,
afford Rent
PART III. Of the Variations in the Propor-
tion between the refpective Values of that
Sort of Produce which always affords Rent,
and of that which fometimes does, and fome-
times does not, afford Rent
Digreffion concerning the Variations in the
Value of Silver during the Courfe of the Four
laft Centuries
252
273
Y
Firft Period
Second Period
Third Period
276
i
299
301
viii
CONTENTS.
Variations in the Proportion between the re-
Spective Values of Gold and Silver. Page 330.
Grounds of the Sufpicion that the Value of
Silver fill continues to decreaſe
338
Different Effects of the Progrefs of Improve-
ment upon the real Price of three different
Sorts of rude Produce
339
First Sort
340
Second Sort
343
Third Sort
35g
Conclufion of the Digreffion concerning the
Variations in the Value of Silver
373
Effects of the Progrefs of Improvement upon
the real Price of Manufactures
354
Conclufion of the Chapter
593
REFLECTIONS
REFLECTIONS
ON THE
FORMATION AND DISTRIBUTION
O F
RICHE S.
BY
Mr. TURGOT,
SOMETIME INTENDANT OF THE FINANCES OF FRANCE.
1
i
!
!
The following Reflections were firft published in
the Ephémérides Economiques, a French periodi-
cal work; as they are affirmed by the Marquis de
Condorcet, the author's biographer, to be the germe
from which Mr. Adam Smith formed his excellent
treatife on the Wealth of Nations, it is hoped the
curious reader will not be difpleafed to find them
here in an English drefs.
REFLECTIONS
}
ON THE
FORMATION AND DISTRIBUTION
}
O F
RICHES.
§ I.
The impoffibility of the existence of commerce upon the
fuppofition of an equal divifion of lands, where every
man would poffefs only what is neceſſary for his own
Support.
If the land was divided among all the inhabitants of a country,
fo that each of them poffeffed precifely the quantity neceffary
for his fupport, and nothing more, it is evident that all of them
being equal, no one would work for another, neither would
any of them poffefs wherewith to pay another for his labor, for
each perfon having only fuch a quantity of land as was neceffary
to produce a fubfiftence, would confume all he could gather,
and would not have any thing to give in exchange for the labor
of others.
§ 3.
The above hypothefis neither has nor can exift, the
diverſity of foils and multiplicity of wants compel an
exchange of the productions of the earth, against
other productions.
This hypothefis never can have exifted, becaufe the earth.
has been cultivated before it has been divided; the cultivation
itfelf having been the only motive for a divifion, and for that
..
( 4 )
law which fecures to every one his property. For the first
perfons who have employed themſelves in cultivation, have pro-
bably worked as much land as their ftrength would permit, and
confequently more than was neceffary for their own nourishment.
If this ftate could have exifted, it could not poffibly be
durable, each one gathering from his field only a fubfiftence, and
not having wherewith to pay others for their labor, would not be
enabled to fupply his other wants of lodging, clothing &c. &c.
except by the labor of his hands, which would be nearly im-
poffible, as every foil would not produce invariably the fame.
The man whofe land was only fit to produce grain, and would
neither bring forth cotton nor flax, would want linen to clothe
him. Another would have ground proper for cotton, which
would not yield grain. One would want wood for his fire,
and another be deftitute of corn to fupport him. Experience
would foon teach every one what fpecies of productions his land
was best adapted to, and he would confine himſelf to the cultiva-
tion of it, in order to procure himſelf thofe things he ftood in
need of, by an exchange with his neighbours, who, having on
their part acquired the fame experience, would have cultivated
thoſe productions which were beft fuited to their land, and
would have abandoned the cultivation of any other.
$ 3.
The productions of the earth require long and difficult
preparations, before they are made fit to Supply the
wants of man.
The productions which the earth fupplies to fatisfy the wants
of man, will not, for the moft part, adminifter to thofe wants,
in the ftate nature affords them; it is neceffary they should
undergo different operations, and be prepared by art. Wheat
must be converted into flour then into bread; hides muft be
dreffed or tanned; wool and cotton muſt be ſpun; filk muft. be
taken from the cod; hemp and flax must be foaked, peeled,
fpun, and wove into different textures; then cut and fewed
together again to make garments, &6. If the fame man whe
+
1
(5
( 5 )
cultivates on his own land thefe different articles, and who
raiſes them to fupply his wants, was obliged to perform all the
intermediate operations himſelf, it is certain he would fucceed
very badly. The greater part of thefe preparations require care,
attention, and a long experience; all which are only to be
acquired by progreffive labor, and that on a great quantity of
materials. Let us refer, for example, to the preparation of
hides: what laborer can purfue all the particular things neceffary
to thoſe operations, which continue feveral months, fometimes
feveral years? If he is able to do it, can he do it with a fingle
hide? What a lofs of time, of room, and of materials, which
might be employed, either at the fame time or fucceffively, to
tan a large quantity of skins! But should he even fucceed to
tan a fingle skin, he wants one pair of shoes; what will he do
with the remainder? Will he kill an ox to make his pair of
shoes? Will he cut down a tree to make a pair of wooden shoes?
We may fay the fame thing of every other want of every other
man, who, if he was reduced to his field, and the labor of his
own hands, would wafte much time, take much trouble, be
very badly equipped in every refpect, and would alſo cultivate
his lands very ill.
§ 4.
The neceſſity of theſe preparations, brings on the exchange
of productions for labor.
The fame motive which has eftablished the exchange of com-
modity for commodity, between the cultivators of lands of
different natures, has alfo neceffarily brought on the exchange
of commodities for labor, between the cultivators and another
portion of fociety, who shall have preferred the occupation of
preparing and completing the productions of the earth, to the
cultivation of it. Every one profits by this arrangement, for
every one attaching himſelf to a peculiar fpecies of labor, fuc-
ceeds much better therein. The husbandman draws from his
field the greateft quantity it is able to produce, and procures to
himſelf, with greater facility, all the other objects of his wants,
by an exchange of his fuperflux, than he could have done by
( 6 )
!
T
4
his own labor. The shoemaker, by making shoes for the hus
bandman, fecures to himſelf a portion of the harvest of the latter.
Every workman labors for the wants of the workmen of every
other trade, who, on their fide, toil alfo for him.
}
!
$ 5.
over
Pre-eminence of the husbandman who produces,
the artificer who prepares. The husbandman is the
first mover in the circulation of labor: it is he who
caufes the earth to produce the wages of every artificer.
It muft, however, be obferved that the husbandman furnish
ing every one with the moſt important and the moft confiderable
objects of their confumption (I mean their food and the materials
of almost all manufactures) has the advantage of a greater degree
of independence. His labor, among the different ſpecies of labor,
appropriated to the different members of fociety, fupports the
fame pre-eminence and priority; as the procuring his food did
among the different works he was obliged, in his folitary ſtate,
to employ himſelf in, to minifter to his wants of every fort.
This is not a pre-eminence of honor or of dignity, but of
physical necefity. The husbandman can, generally speaking,
fubfift without the labor of other workmen; but no other
workman can labor, if the husbandman does not provide him
wherewith to exift. It is this circulation, which, by à reciprocal
exchange of wants, renders mankind neceffary to each other,
and which forms the bond of fociety: it is then the labor of the
husbandman which gives the first movement. What his induftry
caufes the earth to produce beyond his perfonal wants, is the
only fund for the falaries which all the other members of fociety
receive, in recompence for their toil. The latter, by availing
themfelves of the produce of this exchange, to purchafe in their
turn the commodities of the husbandman, only return to him
precifely what they have received. There is here a very effential
difference between theſe two ſpecies of labors, on which it is、
neceffary to reflect, and to be well affured of the ground they
stand on, before we truft to the innumerable confequences whick
flow from them.
J
1
}
( 7 )
§ 6.
The Salary of the workman is limited by the competition
among thoſe who work for their fubfiftence. He only
gains a livelihood.
The mere workman, who depends only on his hands and his
induftry, has nothing but fuch part of his labor as he is able
to difpofe of. He fells at a cheaper or a dearer price; but this
high or low price does not depend on himfelf alone; it refults
from the agreement he has made with the perfon who employs
him. The latter pays him as little as he can help; as he has
the choice from among a great number of workmen, he prefers
the perſon who works cheapest. The workmen are therefore
obliged to lower their price in oppofition to each other. In every
Species of labor it muft, and, in effect, it does happen, that
the wages of the workman is confined merely to what is neceffary
to procure him a fubfiftence.
1 $ 7..
The husbandman is the only one whofe industry produces
more than the wages of his labor. He therefore, is the
only fource of all riches.
>
The fituation of the husbandman is materially different. The
foil, independent of any other man, or of any agreement, pays
him immediately the price of his toil. Nature does not bargain
with him or compel him to content himfelf with what is
abfolutely neceffary. What she grants is neither limited to his
wants, nor to a conditional valuation of the price of his day's
work. It is a phyfical confequence of the fertility of the foil,
and of juſtice, rather than of the difficulty of the means, which
he has employed to render it fruitful. As foon as the labor of
the husbandman produces more than fufficient for his neceflities,
he can, with the excefs which nature affords him of pure free
will, beyond the wages of his toils, purchaſe the labor of other
members of fociety. The latter in felling to him, only procure
(( 8 )
a livelihood; but the husbandman, befides his fubfiftence, col-
lects an independent and difpofable wealth, which he has not
purchaſed, but can fell. He is, therefore, the only fource of
all thofe riches which, by their circulation, animates the labors
of fociety; becaufe he is the only one whofe labor produces more
than the wages of his toil.
§ 8.
Firft divifion of fociety into two claffes, the one pro-
ductive, or the cultivators, the other ftipendiary, or
the artificers.
Here then is the whole fociety divided, by a neceffity founded
on the nature of things, into two claffes, both induftrious, of
which the one, by its labor, produces, or rather draws from the
earth, riches continually renewing, which fupply the whole
fociety with fubfiftence, and with materials, for all its wants.
The other, employed in giving the faid materials fuch prepara-
tions and forms as render them proper for the uſe of man, fells
to the first perfon his labor, and receives in return a fubfiftence.
The firſt may be called the productive, the latter the ftipendiary claſs.
§ 9.
In the firft ages of fociety, the proprietors could not
be diftinguished from the cultivators.
Hitherto we have not diftinguished the husbandman from the
proprietor of the land; and in the firft origin they were not in
fact diftinguished. It is by the labor of thoſe who have firft
cultivated the fields, and who have inclofed them, to fecure their
harveft, that all land has ceafed to be common to all; and that
a property in the foil has been eftablished. Until focicties have
been established, and until the public ftrength, or the laws,
becoming fuperior to the force of individuals, has been able to
guarantee to every one the tranquil poffeffion of his property
againſt all invafion from without; the property in a field could
only be fecured as it had been acquired, and by continuing to
( 9 )
і
:
cultivate it; he could not have been affured of having his field
cultivated by the help of another perſon; and that perſon taking
all the trouble, could not eafily have comprehended that the whole
harveſt did not belong to him. On the other hand, in this early
age, when every induftrious man could find as much land as he
wanted, he could not be tempted to labor for another. It neceffarily
follows, that every proprietor muft cultivate his own field or
abandon it.
§ 10.
Progrefs of Society: all lands come to have an owner.
But the land begins to people, and to be cleared more and
more. The beft lands are in fuccefs of time fully occupied.
There remains only for thoſe who come laft, nothing but barren
land, rejected by the first occupant: But at last, every fpot has
found a master, and thofe who cannot gain a property therein,
have no other reſource but to exchange the labor of their hands
in fome of the employments of the ftipendiary clafs, for the excefe
of commodities poffeffed by the cultivating proprietor.
§ II.
The proprietors begin to be able to cafe themfelves of the
labor of cultivation, by the help of hired cultivators.
Mean time, fince the earth produces to the proprietor who
cultivates it not a fubfiftence only; not only wherewith to procure
himſelf by way of exchange, what he otherwife wants, but alſo
a confiderable fuperfluity; he is enabled with this fuperfluity,
to pay other men to cultivate his land. And among thoſe who
live by wages, as many are content to labor in this employment
as in any other. The proprietor, therefore, might then be cafed
of the labor of culture, and he foom was fo.
( 10 )
$ 12.
Inequality in the divifion of property: caufes which
render that inevitable.
L
9..
The original proprietors would (as I have already men
tioned) occupy as much land as their ftrength would permit them
to cultivate with their families. A man of greater ſtrength,
more laborious, more attentive about the future, would occupy
more than a man of a contrary character. He whofe family is
the most numerous, having greater wants and more hands,
extends his poffeffions further; this is a firft caufe of inequality.
Every piece of ground is not equally fertile; two men with the
fame extant of land, may reap a very different harveft; this is
a fecond fource of inequality. Property, in defcending from
fathers to their children, divides into greater or lefs portions
according as the defcendants are more or lefs numerous. As one.
generation fucceeds another, fometimes the inheritances again
fubdivide, and fometimes reunite again by the extinction of fome.
of the branches; this is a third fource of inequality. The difference.
of knowledge, of activity, and, above all, the economy of fome,
contrafted with the indolence, inaction, and diffipation of others,
is a fourth principle of inequality, and the moft powerful of
all; the negligent and inattentive proprietor, who cultivates
badly, who in a fruitful year confumes in frivolous things the
whole of his fuperfluity, finds himſelf reduced on the leaft accident
to requeſt affistance from his more provident neighbour, and to
live by borrowing. If by any new accident, or by a continuation
of his negligence, he finds himſelf not in a condition to repay,
he is obliged to have recourfe to new loans, and at laſt has no
other refource but to abandon a part, or even the whole of his
property to his creditor, who receives it as an equivalent; or
to affign it to another, in exchange for other valuables with
which he difcharges his obligation to his creditor.
"
11
لندم
§ 13.
Confequences of this inequality: the cultivator diftinguish.
ed from the proprietor.
Thus is the property in the foil made fubject to purchaſe and
fale: The portion of the diffipating or unfortunate, increaſes the
share of the more happy or wifer proprietor; aud in this infinite
variety of poffeffions, it is not poffible but a great number of
proprietors muft poffefs more than they can cultivate. Befides,
it is very natural for a rich man to wish for a tranquil enjoyment
of his property, and inftead of his employing his whole time in
toilfome labor, he rather prefers giving a part of his fuperfluity
to people to work for him.
§ 14.
Divifion of the produce between the cultivator and pro
prietor. Net produce, or revenue.
By this new arrangement, the produce of the land divides into
two parts. The one comprehends the fubfiftence and the profits
of the husbandman, which are the reward for his labor, and the
condition on which he agrees to cultivate the field of the pro-
prietor. The other which remains, is that independent and
difpofable part, which the earth produces as a free gift to him
who cultivates it, over and above what he has disburfed, and
wages for his trouble; and it is out of this share of the proprietor's,
or what is called the revenue, that he is enabled to live without
labor, and which he can carry where he will.
§ 15.
A new divifion of fociety into three claffes, Cultivators,
Artificers, and Proprietors, or the productive, ftipen
diary and difpofable claffes.
We now behold fociety divided into three branches, the clats
of husbandmen, whom we may denominate cultivators; the clafs
of artificers and others, who work for hire upon the productions
( 12
}
of the earth; and the clafs of proprietors, the only one which,
not being confined by a want of fupport to a particular fpecies
of labor, may be employed in the general fervice of fociety, as
for war,
and the adminiftration of juftice, either by a perſonal
fervice, or by the payment of a part of their revenue, with which
the ſtate may hire others to fill theſe employments. The appel-
lation which fuits the beft with this divifion, for this reaſon, is
that of the diſpoſable claſs.
§ 16.
Refemblance between the two laborious, or not difpof
able claffes.
The two claffes of cultivators and artificers, reſemble each other
in many reſpects, and particularly that thoſe who compose them
do not poffefs any revenue, and both equally fubfift on the wages
which are paid them on the productions of the earth. Both have
alſo this circumftance in common, that they only gain the price
of their labor and their disbursements, and that this price is
nearly the fame in the two claffes. The proprietor agreeing with
thoſe who cultivate his ground to pay them as fmall a part as
poffible of its produce, in the fame manner as he bargains with
the shoemaker to purchaſe his shoes as cheap as he can.
In a
word, neither the cultivator nor the artificer receive more than
a bare recompence for their labor.
§ 17.
Effential difference between the two laborious claffes.
But there is this difference between the two fpecies of labor;
that the work of the cultivator produces not only his own wages,
but alſo that revenue which ferves to pay all the different claffes
of artificers, and other ftipendiaries their falaries; that is to fay,
their parts of the productions of the earth, in exchange for their
labor, and which does not produce any revenue. The proprietor
enjoys nothing but by the labor of the cultivator. He receives from
him his fubfiftence, and wherewith to pay for the labor of the
other ftipendiaries. He has need of the cultivator by the neceffity
(
13 )
arifing from the phyfical order of things, by which neceffity the
earth is not fruitful without labor; but the cultivator has no
need of the proprietor but by virtue of human, conventions, and
of thofe civil laws which have guaranteed to the firft cultivators
and their heirs, the property in the lands they had occupied, even
after they ceafed to cultivate them. But thefe laws can only
fecure to the idle man, that part of the production of his land
which it produces beyond the retribution due to the cultivators.
The cultivator, confined as he is, to the ftipend for his labor
ftill preferves that natural and phyfical priority which renders
him the first mover of the whole machine of fociety, and which
caufes both the fubfiftence and wealth of the proprietor, and
the falaries paid for every other fpecies of labor, to depend on
his induftry. The artificer, on the contrary, receives his wages
either of the proprietor or of the cultivator, and only gives them
in exchange for his work, an equivalent for his ftipend, and
nothing more.
?
Thus, although the cultivator and artificer neither of them
gain more than a recompence for their toil, yet the labor of
the cultivator produces befides that recompence, a revenue to
the proprietor, while the artificer does not produce any revenue
either for himſelf or others.
$ 18.
This difference authorizes another diftinction, into the
productive and barren claffes.
We may then diftinguish the two claffes not diſpoſable into
the productive claſs, which is that of the cultivators, or the
Sterile clafs, which comprehends all the other ſtipendiary members
of ſociety.
§ 19.
How the proprietors may draw a revenue from their lands.
The proprietors who do not cultivate their lands themſelves,
may adopt different methods of cultivating them, or make different
agreements with thofe who cultivate them.
( 14 )
§ 20.
First method: cultivation by laborers wages.
They may, in the first place, pay men by the day or the year,
to work their fields, and referve to themfelves the whole of their
produce; this includes a fuppofition that the proprietor pays all
advances, both for feed and the wages of the laborers, until
after the harvest. But this method requires great labor and
affiduity, on the part of the proprietor, who alone can direct
his men in their labor, fee that they employ their time well,
and watch over their fidelity, that they shall not carry away
any part of the produce. It is true that he may pay a man of
more knowledge, and whofe fidelity he knows, who, in quality
of manager and conductor, may direct the workmen, and keep
an account of the produce; but he will be always ſubject to
fraud. Befides, this method is extremely expenfive, unleſs a
large population, or want of employ in other fpecies of labor,
Forces workmen to content themſelves with very low falaries.
§ 21.
Second manner: cultivation by slaves.
In times not very diftant from the origin of fociety, it was
almoft impoffible to find men willing to work on the lands of
another, becaufe all the land not being as yet occupied, thofe
who were willing to labor, preferred the clearing of new lands,
and the cultivating them on their own account; this is pretty
much the cafe in all new colonies.
In this fituation violent men then conceived the expedients
of obliging other men by force to labor for them. They have
employed slaves. Thefe latter have had no juftice to look for,
from the hands of people, who have not been able to reduce
them to slavery without violating all the laws of humanity.
Mean time, the phyfical law of nature fecures to them their
part of the productions which they have raiſed; for the maſter
muft neceffarily nourish them, in order to profit by their labor.
But this ſpecies of recompence is confined to mere neceffaries
for their fubfiftence.
K
( 15 )
This abominable cuftom of slavery has formerly been univerfal
and has fpread over the greateft part of the globe. The principal
object of the wars carried on by the ancients was, to carry off
slaves, whom the conquerors either compelled to work for them,
or fold to others. This fpecies of thieving, and this trade, ftill
continues, attended with all its cruel circumſtances, on the
coaft of Guinea, where the Europeans encourage it by going
thither to purchaſe negroes for the cultivation of their Ameri-
can colonies.
The exceffive labors to which the greedy mafters force their
slaves, caufes many of them to perish; and it becomes neceffary
to keep up the number requifite for cultivation, that this trade
should fupply annually a very large quantity. And as war
is the principal fource which fupplies this commerce, it is evident
that it can fubfift no longer than the people continue divided
into very finall nations, who are inceffantly plundering each
other, and every ftrict is at continued war with its neighbours.
Let England, France, and Spain carry on the moft cruel hofti-
lities, the frontiers alone of each ſtate will be the only part
invaded, and that in a few places only. All the rest of the
country will be quiet, and the fmall number of prifoners they
could make on either fide, would be but a weak refource for the
cultivation of each of the three nations.
§ 22.
Cultivation by slaves cannot fubfift in great focieties.
Thus when men are formed into great focieties, the recruits
of slaves are not fufficiently numerous to fupport the confump-
tion which the cultivation requires. And although they fupply
the labor of men by that of beafts, a time will come, when the
lands cannot be worked by slaves. The practice is then continued
only for the interior work of the houſe, and in the end it is
totally abolished, becauſe in proportion as nations become
polished, they form conventions for the exchange of prifoners
of war. Thefe conventions are the more readily made, as every
individual is very much interefted to be free from the danger
of falling into a state of slavery.
{
16 )
§ 23.
Sicvery annexed to the land, fucceeds to slavery properly
fo called.
The defcendants of the firft slaves, attached at firft to the
Cultivation of the ground, change their condition. The interior
peace among nations, not leaving wherewith to fupply the
commerce with too great a confumption of slaves, the mafters
are obliged to take greater care of them. Thoſe who were born
in the houſe, accuftomed from their infancy to their fituation,
revolt the lefs at it, and their mafters have lefs need to employ
rigor to reſtrain them. By degrees the land they cultivate be-
comes their country, they become a part of the nation, a fami-
liarity enſues, and in the end, they experience confidence and
humanity on the part of their masters.
§ 24.
Valjalage fucceeds to slavery, annexed to the land,
and the slave becomes a proprietor. Third method:
alienation of land for a certain fervice.
The adminiſtration of an eftate, cultivated by slaves, requires
2 careful attention, and an irkſome refidence. The mafter fecures
to himſelf a more free, more eafy, and more fecure enjoyment
of his property, by interefting his slaves in the cultivation of
it, and by abandoning to each of them a certain portion of land,
on condition of their paying him a portion of their produce.
Some have made this agreement for a time, and have only left
their ferfs, or slaves, a precarious and revocable poffeffion.
Others have affigned them lands in perpetuity, retaining an
annual rent, payable either in provifions or in money, and
requiring from the poffeffors certain fervices. Thoſe who received
theſe lands, under the condition preſcribed, became proprietors
and free, under the name of tenant, or vaffal; and the ancient
proprietors, under the title of lords, referved only the right of
exacting payment of the rent, and other ftipulated duties. Thus
affairs have happened in the greater part of Europe.
§ 25.
( 17 )
§ 25.
S
Fourth method: partial colonization.
Thefe lands rendered free at the expenfe of rent, may yet
change mafters, may divide or reunite by means of fucceffions
and fales; and fuch a vaffal may in his turn have more than
he can cultivate himſelf. In general the rent to which thoſe
lands are fubject, is not fo large, but that by cultivating them
well, the cultivator is enabled to pay all advances, and expenſes,
procure himſelf a fubfiftence, and befides, an excefs of pro-
ductions which form a revenue. Henceforth the proprietary
vaffal becomes defirous of enjoying this revenue without labor,
and to have his lands alfo cultivated by others. On the other
hand, the greater part of the lords grant out thofe parts of their
poffeffions only, which are the leaft within their reach, and
retain thoſe they can cultivate with the leaft expenfe. The
cultivation by slaves not being practicable, the first method that
offers, and the moft fimple, to engage free men to cultivate
lands which do not belong to them, was, to refign to them a
portion of their produce, which would engage them to cultivate
them better than thofe husbandmen who are employed at a fixed
falary. The most common method has been to divide it into
equal parts, one of which belonged to the cultivator and the
other to the proprietor. This has given place to the name (in
France) of métayer (medictarius) or cultivator for half produce.
In arrangements of this kind, which take place throughout the
greatest part of France, the proprietor pays all contingencies;
that is to fay, he provides at his expenfe, the cattle for labor,
ploughs, and other utenfils of husbandry, feed, and the ſupport
of the cultivator and his family, from the time the latter enters
into the metairie until the firft harvest.
§ 26.
Fifth method: Renting, or letting out the land.
Rich and intelligent cultivators, who judged to what per-
fection an active and well directed cultivation, for which neither
labor nor expenſe were ſpared, would raife the fruitfulneſs of
( 18 )
"
land, judged with reafon that they would gain more, if the
proprietors should confent to abandon, for a certain number of
years, the whole of the harvest, on condition of receiving an-
nually a certain revenue, and to be free of all expenſes of
cultivation. By that they would be affured that the increaſe
of productions, which their expenſes procured, and their labor,
would belong entirely to themfelves. The proprietor, on his
fide, would gain thereby, Ift, a more tranquil enjoyment of his
revenue, fince being freed from the care of advances, and of
keeping an account of the produce; 2d, a more equal enjoy-
ment, fince he would receive every year the fame and a more
certain price for his farm; becauſe he would run no risk of
lofing his advances; and the cattle and other effects with which
the farmers had ftocked it, would become a fecurity for his
payment. On the other hand, the leafe being only for a fmall
number of years, if his tenant paid him too little, he could
augment it at the expiration thereof.
§ 27.
The laft method is the most advantageous of all, but
it fuppofes the country already rich.
This method of fecuring lands is the most advantageous both
to proprietors and cultivators. It is univerfaily eftablished where
there are any rich cultivators, in a condition to make the ad-
vances neceffary for the cultivation. And as the rich cultivators
zre in a fituation to beltow more labor and manure upon the
ground, there refults from thence a prodigious augmentation in
the productions, and in the revenue of the land.
In Picardy, Normandy, the environs of Paris, and in moft
of the provinces in the north of France, the lands are cultivated
by farmers; in thofe of the fouth by the métayers. Thus the
northern are incomporably richer and better cultivated than the
fouthern provinces.
( 19 )
§ 28.
Recapitulation of the feveral methods of making lands
productive.
I have just mentioned five different methods by which pro-
prietors are enabled to eafe themſelves of the labor of the cul-
tivation, and to make their land productive, by the hands of
others.
1. By workmen paid at a fixed falary.
2. By slaves.
3. By ceding their lands for a rent.
4. By granting to the cultivator a determined portion, which
is commonly half the produce, the proprietor paying the advances
neceffary for the cultivation.
5. By letting their land to farmers, who undertake to make
all the neceffary advances, and who engage to pay to the pro-
prietors, during the number of years agreed on, a revenue
equal to its value.
Of theſe five methods, the firft is too expenfive, and very
feldom practiſed; the fecond is only uſed in countries as yet
ignorant and barbarous; the third is rather a means of procuring
a value for, than abandoning of the property, by a credit on
the land, fo that the ancient proprietor is no longer any thing
more than a mere creditor.
The two laft methods of cultivation are the moſt common,
that is, the cultivation by métayers in the poor, and by farmers
in the richer countries.
§ 29.
Of capitals in general, and of the revenue of money.
There is another way of being rich without labor, and with-
out poffeffing lands, of which I have not yet ſpoken, of which
it is neceffary to explain the origin and connexion with other
parts of the fyftem of diſtribution of riches in fociety, of which
I have juft drawn the outlines. This confifts in living by what
is called the revenue of money, or of the intereft which is
paid for the loan thereof.
{
20 )
$ 30.
Of the use of gold and filver in commerce,
Gold and filver are two fpecies of merchandize, like others
and lefs valuable than many of them, becauſe they are of no
ufe for the real wants of life. To explain how theſe two metals
are become the reprefentative pledges of every fpecies of riches;
how they influence the commercial markets, and how they enter
into the compofition of fortunes, it is neceffary to go back
again and return to our firft principles.
§ 31..
Rife of commerce. Principle of the valuation of com
mercial things.
Reciprocal wants firft introduced exchanges of what we pof-
feffed for what we ftood in need of; one fpecies of provifion
was bartered for another, or for labor. In exchanging it is
neceffary that each party is convinced of the quality and quantity
of every thing exchanged. In this agreement it is natural that
every one should defire to receive as much as he can, and to
give as little; and both being equally mafters of what they
have to barter, it is in their own breafts to balance the attach-
ment he has to the thing he gives with the defire he feels to
poffefs that which he is willing to receive, and confequently
to fix the quantity of each of the exchanged things. If the two
perfons do not agree, they must relax a little on one fide or
the other, either by offering more or being content with lefs.
I will fuppofe that one is in want of corn and the other of
wine; and that they agree to exchange a bushel of corn for fix
pints of wine. It is evident that by both of them one bushel
of corn and fix pints of wine are looked upon as exactly equi-
valent, and that in this particular exchange, the price of a
bushel of corn is fix pints of wine, and the price of fix pints
of wine is one bushel of corn. But in another exchange be-
tween other men, this price will be different, according as one
or the other of them shall have a more or lefs preffing want
of one commodity or the other, and a bushel of corn may be
(
21 )
exchanged against eight pints of wine, while another bushel
shall be bartered for four pints only. Now it is evident, that
not one of theſe three prices can be looked on as the true price of
a bushel of corn, rather than the others; to each of the dealers,
the wine he has received was equivalent to the corn he had
given. In a word fo long as we confider each exchange inde-
pendent of any other, the value of each thing exchanged has
no other meaſure than the wants or defires of one party weighed
with thofe of the other, and is only fixed by their agreement.
§ 32.
How the current value of the exchange of merchandise
is eftablished.
Meantime it happens that many individuals have wine to
difpofe of to thofe who poffefs corn. If one is not willing to
give more than four pints for a bushel, the proprietor of the
corn will not exchange with him, when he shall know that
another will give fix or eight pints for the fame bushel. If
the former is determined to have the corn, he will be obliged
to raiſe his price equal to what is offered by others. The fellers
of wine profit on their fide by the competition among the fellers
of corn.
No one refolves to part with his property before he
has compared the different offers which are made to him of the
commodity he ftands in need of, and then he accepts of the beft
offer. The value of wine and corn is not fixed by the two
proprietors with refpect to their own wants and reciprocal
abilities, but by a general balance of the wants of all the fellers
of corn, with thofe of all the fellers of wine. For thoſe who
will willingly give eight pints of wine for a bushel of corn,
will
give but four when they shall know that a proprietor of corn
is willing to give two bushels for eight pints. The medium price
between the different offers and the different demands, will
become the current price to which all the buyers and fellers
will conform in their exchanges; and it will be true if we fay
that fix pints of wine will be to every one the equivalent for a
bushel of corn, that is, the medium price, until a diminution of
fupply on one fide, or of demand on the other, canfes a variation.
ļ
}
t
( 22 )
§ 33.
Commerce gives all merchandize à current value with
respect to any other merchandize, from whence it
follows that all merchandize is the equivalent for a
certain quantity of any other merchandize, and may
be looked on as a pledge to reprefent it.
Corn is not only exchanged for wine, but alſo for any object
which the proprietors of the corn may ftand in need of; as,
wood, leather, woollen, cotton, &c. it is the fame with wine
and every other particular fpecies. If a bushel of corn is equi-
valent to fix pints of wine, and a sheep is equivalent to three
bushels of corn, the fame sheep will be equivalent to eighteen
pints of wine. He who having the corn, wants the wine, may,
without inconvenience, exchange his corn for a sheep, in order
afterwards to exchange the sheep for the wine he ftands in need of.
$ 34.
Every merchandise may ferve as a fcale or common
meafure, by which to compare the value of any other.
It follows from hence, that in a country where the commerce
is very brisk, where there are many productions and much con-
fumption, where there are great fupplies and a great demand
for all forts of commodities, every fort will have a current price,
having relation to every other fpecies, that is to fay, that a
certain quantity of one will be of equal value to a certain quantity
of all others. Thus the fame quantity of corn which is worth
eighteen pints of wine, is alfo the value of a sheep, a piece of
leather, or a certain quantity of iron; and all theſe things have
in the tranfactions of trade an equal value: To exprcfs or make
known the value of any particular thing, it is evident that it
is fufficient to announce the quantity of any other known pro-
duction which will be looked on as an equivalent for it. Thus
to make known what a piece of leather of a certain fize is worth,
we may fay indifferently, that it is worth three bushels of corn,
or eighteen pints of wine. We may by the fame method
( 23 )
exprefs the value of a certain quantity of wine, by the number
of sheep or bushels of corn it will bring in trade.
We fee by this, that every fpccies of commodity that can be.
an object of commerce, may be meaſured, as I may fay, by
each other, that every one may ferve as a common mea fure
or fcale of compariſon to defcribe the value of every other fpecies,
and in like manner every merchandize becomes in the hands of
him who poffeffes it, a means to procure all others
univerfal pledge.
$ 35.
a fort of
Every Species of merchandize does not prefent a Scale
equally commodious. It is proper to prefer in ufe,
Such as not being fufceptible of any great alteration
in quality, have a value principally relative to the
number and quantity.
But although all merchandize has effentially this property of
reprefenting any other, is able to ferve as a common meafure,
to express their value, and an univerſal pledge to procure all of
them by way of exchange, yet all cannot be employed with
the fame degree of facility to thefe two ufes. The more fuf-
ceptible any merchandize is to change its value by an alteration
in its quality, the more difficult it is to make it a fcale of re-
ference for the value of others. For example if eighteen pints
of wine of Anjou are equivalent in value to a sheep, eighteen
pints of Cape wine may be equivalent to eighteen sheep. Thus
he who to exprefs the value of a sheep, would fay it is worth
eighteen pints of wine, would employ an equivocal language,
and would not communicate any precife idea, at leaſt until he
addid fome explanation, which would be very inconvenient.
Weare, therefore, obliged to chufe for a ſcale of comparifon,
fuch commodities as being more commonly in ufe, and confequent-
ly of a value more generally known, are more like cach other,
and of which confequently the value has more relation to the
quantity, than the quality.
( 24 )
$ 36.
For want of an exact correspondence between the value
and the number or quality, it is fupplied by a medium
valuation, which becomes a Species of real money.
"
In a country where there are only one race of sheep, we may
eafily take the value of a fleece or of a sheep by the common
method of valuation, and we may fay that a barrel of wine, or
a piece of ftuff, is worth a certain number of fleeces or of sheep.
There is in reality fome inequality in sheep, but when we want
to fell them, we take care to estimate that inequality, and to
reckon (for example) two lambs for one sheep. When it is
neceffary to treat of the relative value of other merchandize, we
fix the common value of a sheep of middling age and quality,
as the fymbol of unity. In this view the enunciation of the valuș
of sheep, becomes an agreed language, and this word one sheep,
in the language of commerce, fignifies only a certain value,
which, in the mind of him who underſtands it, carries the idea
not only of a sheep, but as a certain quantity of every other
commodity, which are eſteemed equivalent thereto, and this ex-
preffion is more applicable to fictitious and abftract value, than
to the value of a real sheep; that if by chance a mortality happens.
among the sheep, and that to purchafe one of them you muſt
give double the quantity of corn or wine that was formerly given,
we shall rather fay, that one sheep is worth two sheep, than
change the expreffion we have been accustomed to for all other
valuations.
§ 37.
Examples of medium valuations which become an ideal
expreffion for value.
There exift, in the commerce of every nation, many examples
of fictitious valuations of merchandize, which are, as w/ may
fay, only a conventional language to exprefs their value. Thus
the cooks of Paris, and the fishmongers who furnish great nouſes,
(25
}
generally fell by the piece. A fat pullet is efteemed one piece, a
chicken half a piece, more or lefs, according to the ſeaſon; and
fo of the reft. In the negro trade in the American colonies,
they fell a cargo of negroes at the rate of fo much per negro, an
Indian piece.
The women and children are valued, fo that, for
example, three children, or one woman and two children are
reckoned as one head of negro. They increaſe or diminish the
value on account of the ftrength or other quality of the slaves,
fo that certain slaves, are reckoned as two heads of negroes.
The Mandingo negroes, who carry on a trade for gold duft
with the Arabian merchants, bring all their commodities to a
fictitious fcale, which both parties call macutes, fo that they tell
the merchants that they will give them fo many macutes in gold.
They value thus in macutes the merchandize they receive, and
bargain with the merchants upon that cvaluation. Thus in
Holland they reckon by bank florins, which is only a fictitious
money, and which in commerce is fometimes of greater, fome-
times of lefs value than the coin which is denominated a florin.
$ 38.
All merchandize is a repreſentative pledge of every obje&
of commerce, but more or less commodious for ufe, as
it poffeffes a greater or lefs facility to be tranfported,
and to be preferved without alteration.
The variation in the quality of merchandize, and in the dif-
ferent prices in proportion to that quality, which renders them
more or lefs proper than others to ferve as a common meafure,
is alſo more or lefs an impediment to their being a repreſentative
pledge of every other merchandize of equal value. Neverthelefs
there is alfo, as to this laft property, a very effential difference
between the different fpecies of merchandize. It is (for example)
evident, that a man who poffeffes a piece of linen, is more
certain of procuring for it, when he pleafes, a certain quantity
of corn, than if he had a barrel of wine of equal value; the
wine being fubject to a variety of accidents, which may in a
moment deprive him of the whole property.
( 26 )
$ 39.
All merchandize has the two effential properties of money,
to measure and to reprefent all value: and in this fenfe
all merchandize is money.
Thefe two properties of ferving as a common meaſure of all
value, and to be a reprefentative pledge of all other commodities
of equal value, comprehend all that conftitute the effence and
ufe of what is called money: and it follows from the details into
which I am just going to enter, that all merchandize is, in fome
refpect, money; and participates more or lefs, according to their
particular nature, of theſe two effential properties. All are more
or lefs proper to ferve as a common meaſure, in proportion as
they are more or lefs in general ufe, of a more fimilar quality,
and more eafy to be divided into aliquot parts. All are more or
lefs applicable for the purpofe of a general pledge of exchange,
in proportion as they are the lefs fufceptible of decay or alteration
in quantity or quality.
§ 40.
Reciprocally all money is eflentially merchandize.
We can take only that which has a value for a common
meaſure of value, that which is received in commerce in exchange
for other properties; and there is no univerfal reprefentative
pledge of value, but fomething of equal value. A money of
convention is therefore a thing impoffible.
§ 41.
Different matters are able to ferve and have ferved for
current money.
Many nations have adopted in their language and in their
trade, as a common meafure of value, different matters more
or lefs precious. There are at this day fome barbarous nations,
who make uſe of a fpecies of little shells, called couries. I re-
member to have feen when at college, fome apricot ftones
( 27 )
**
!
exchanged and paffed as a fpecies of money among the fcholars,
who made ufe of them at certain games. I have already ſpoken
of a valuation by heads of cattle; fome of theſe are to be found
in the veſtiges of the laws of the ancient German nations, who
over-ran the Roman empire. The first Romans, or at leaſt the
Latins, their ancestors, made ufe of them alfo. It is pretended
that the first money they ftruck in brafs, repreſented the value
of a sheep, and bore the image of that animal, and that the name
of pecunia has obtained from pecus. This conjecture carries with
it great probability.
§ 42.
Metals, and particularly gold and filver, are the moft
proper for that purpofe, and why.
We are now arrived at the introduction of precious metals
into trade. All metals as they have been diſcovered, have been
admitted into exchange, on account of their real utility. Their
fplendor has cauſed them to be fought for, to ferve as ornaments;
their ductility and their folidity have rendered them proper for
veffels, more durable and lighter than thofe of clay. But thefe
fubftances cannot be brought into commerce without becoming
almoft immediately a univerfal money. A piece of any metal,
of whatever fort, has exactly the fame qualities as another piece
of the fame metal, provided they are equally pure. Now the eaſe
with which we can feparate, by different chemical operations,
a metal from other metals with which it is incorporated, enables
us to bring it to a degree of purity, or as they call it, to what
ftandard we pleafe; then the value of metal differs only as to
its weight. In expreffing, therefore, the value of any merchan-
dize by the weight of metal which may be had in exchange, we
shall then have the cleareft, the most commodious, and moft
precife expreffion of value; and hence it is impoffible but it muſt
be preferred in ufe to all other things. Nor are metals lefs proper
than other merchandize for becoming the univerfal token of all
value that can be meaſured: as they are fufceptible of all imagin
able divifions, there is not any object of commerce, great or fmall,
whoſe value cannot be exactly paid by a certain quantity of metal.
1
( 28 )
To this advantage of accommodating itſelf to every fpecies of
divifion, they join that of being unalterable, and thofe which
are fcarce, as gold and filver, have a great value, although of a
weight and fize little confiderable.
Theſe two metals are then, of all merchandize, the moſt eafy
to afcertain their quality, to divide their quantity, and to convey
to all places, at the eafieft expenfes. Every one, therefore,
who has a fuperfluity, and who is not at the time in want of
another uſeful commodity, will haften to exchange it for filver,
with which he is more certain than with any thing elſe to procure
himſelf the commodity he shall wish for at the time he wants it.
§ 43.
Gold and filver are conftituted, by the nature of things,
money, and univerfal money, independent of all con-
vention, and of all laws.
Here then is gold and filver conftituted money, and univerſal
money, and that without any arbitrary agreement among men, with-
out the intervention of any law, but only by the nature of things.
They are not, as many people imagine, figns of value; they
have an intrinfic value in themfelves, if they are capable of being
the meaſure and the token of other values. This property they
have in common with all other commodities which have a value
in commerce. They only differ in being at the fame time more
diviſable, more unchangeable, and of more eaſy conveyance than
other merchandize, by which they are more commodiously em-
ployed to meaſure and reprefent the value of others.
$ 44.
Other metals are only employed for theſe uſes, in a
fecondary manner.
All metals are capable of being employed as money. But thoſe
which are too common have too little value in a large bulk to
be employed in the current ufes of commerce. Copper, filver
and gold, are the only ones which have been brought in conftant
( 29 )
wls. And even copper, except among people to whom neither
mines nor commerce have fupplied a fufficient quantity of gold
and filver, has never been ufed but in exchanges of fmall value,
$ 45.
The use of gold and filver, as money, has augmented
their value as materials.
It is not poffible, but the eagerness with which every one
has fought to exchange their fuperfluous commodities for gold
and filver, rather than for any other commodity, muft have
augmented the value of thefe two materials in commerce. Theſe
are only thereby rendered more commodious for their employment
as tokens, or cominon meaſure.
§ 46.
Variations in the value of gold and filver, compared
with the other objects of commerce, and with each
other.
This value is fufceptible of change, and in truth is continually
changing; fo that the fame quantity of metal which anfwered to
a certain quantity of fuch or fuch a commodity, becomes no
longer equal thereto, and it requires a greater or lefs quantity
of filver to reprefent the fame commodity. When it requires
more, it is ſaid the commodity is dearer; when it requires leſs,
that it is become cheaper; but they may as well fay, that the
filver is in the firft cafe become cheaper, and in the latter dearer.
Silver and gold not only vary in price, compared with all other
commodities, but they vary alſo with each other, in proportion
as they are more or lefs abundant. It is notorious that we now
give in Europe from fourteen to fifteen ounces of filver for one
ounce of gold; and that in former times we gave only ten or
eleven ounces.
Again that at prefent in China, they do not give more than
twelve ounces of filver for an ounce of gold, fo that there is a
very great advantage in carrying filver to China, to exchange
for gold, to bring back to Europe. It is vifible, that in proceſs
30
}
of time, this commerce will make gold more common in Europe,
and lefs common in China, and that the value of thefe two
materials muſt finally come in both places to the fame proportion.
A thouſand different caufes concur to fix and change inceffant-
ly the comparative value of commodities, either with refpect to.
each other, or with refpect to filver. The fame caufes confpire
to fix and vary the comparative value, either in refpect to the
value of each commodity in particular, or with refpect to the
totality of the other, values which are actually in commerce. It
is not poffible to inveſtigate thefe different caufes, or to unfold
their effects, without entering into very extenfive and very dif-
ficult details which I shall decline in this difcuffion.
§ 47.
The uſe of payments in money has given room for the
diftinction of feller and buyer.
In proportion as mankind became familiarized to the cuftom
of valuing all things in filver, of exchanging all their fuperfluous.
commodities for filver, and of not parting with that money but
for things which are ufeful or agreeable to them at the moment,
they become accustomed to confider the exchanges of commerce
in a different point of view. They have made a diftinction of
two perfons, the buyer and the feller; the feller is he who gives
commodities for money; and the buyer is he who gives money
for commodities.
§ 48.
The uſe of money has much facilitated the feparation
of different labors among the different orders of fociety.
The more money becomes a univerfal medium, the more every
one is enabled, by devoting himſelf ſolely to that ſpecies of cul-
tivation and induftry of which he has made choice, to diveſt
himſelf of every thought for his other wants, and only to think of
providing the moft money he can by the fale of his fruits or his labor,
very fure with that money to poffefs all the reft. It is thus that the
ufe of money has prodigiously haftened the progrefs of fociety.
( 31 )
§ 49.
Of the excess of annual produce accumulated to form
capitals.
As foon as men are found, whofe property in land affures
them an annual revenue, more than fufficient to fatisfy all their
wants, among them there are fome, who, either uneafy refpect-
ing the future, or perhaps only provident, lay by a portion of
what they gather every year, either with a view to guard againſt
poffible accidents, or to augment their enjoyment. When the
commodities they have gathered are difficult to preferve, they
ought to procure themfelves in exchange fuch objects of a more
durable nature, and fuch as will not decreaſe in their value by
time, or fuch as may be employed in fuch a manner as to procure
fuch profits as will make good the decreaſe with advantage.
L
§ 50.
Perfonal property, accumulation of money.
This fpecies of poffeffion, refulting from the accumulation of
annual produce not confumed, is known by the name of perfonal
property. Houſehold goods, houfes, merchandize in ftore,
utenfils of trade, cattle are under this denomination. It is evident
men muſt have toiled hard to procure themſelves as much as they
could of this kind of wealth, before they became acquainted
with the ufe of money; but it is not lefs evident but, as foon
as it was known that it was the leaft liable to alteration of all
the objects of commerce, and the most eafy to preferve without
trouble, it would be principally fought after by whoever wished
to accumulate. It was not the proprietors of land only who
thus accumulated their fuperfluity. Although the profits of
induſtry are not, like the revenue of lands, a gift of nature,
and the induftrious man draws from his labor, only the price
which is given him by the perfons who pay him his wages;
although the latter is as frugal as he can of his falary, and that
a competition obliges an induftricus man to content himſelf with
a lefs price than he otherwife would do, it is yet certain that
( 32 )
this compotition has neither been fo numerous or ftrong in any
fpecies of labor, but that a man more expert, more active, and
who practifes more economy than others in his perfonal expenfes,
has been able, at all times, to gain a little more than fufficient
to fupport him and his family and referve his furplus to form
a little hoard.
§ 51.
Circulating wealth is an indifpenfible requifite for al
lucrative works.
It is even neceffary, that in every trade the workmen, or
thoſe who employ them, poffefs a certain quantity of circulating
wealth, collected before-hand. We here again are obliged to go
back to a retroſpect of many things which have been as yet only
hinted at, after we have fpoken of the divifion of different pro-
feffions, and of the different methods by which the proprietors
of capitals may render them of value, becaufe, before that, we
should not be able to explain them properly, without interrupting
the connexion of our ideas.
§ 52.
Neceffity of advances for cultivation.
Every fpecies of labor, of cultivation, of induſtry, or of
commerce, requires advances. When people cultivate the ground,
it is neceffary to fow before we can reap; they muft alfo fupport
themſelves until after the harveft. The more cultivation is brought
to perfection and enlivened, the more confiderable theſe advances
are. Cattle, utenfils for farming, buildings to hold the cattle,
to ſtore the productions; a number of perfons, in proportion to
the extent of the undertaking, muſt be paid and fubfifted until
the harveft. It is only by means of confiderable advances that
we obtain rich harvefts, and that lands produce a large revenue.
In whatever buſineſs they engage, the workman muft be provided
with tools, muft have a fufficient quantity of fuch materials as the
object of his labor requires: and he muft fubfift until the fale of
his goods.
8 53.
( 33
33)
§ 53.
First advances furnished by the land as yet uncultivated.
The earth was ever the firſt and the only fource of all riches':
it is that which by cultivation produces all revenue; it is that
which has afforded the firft fund for advances, anterior to all
cultivation. The firft cultivator has taken the grain he has fown
from fuch productions as the land had fpontaneously produced;
while waiting for the harveft, he has fupported himſelf by hunting,
by fishing, or upon wild fruits. His tools have been the branches
of trees, procured in the forefts, and cut with ftories sharpened
upon other ftones; the animals wandering in the woods he has
taken in the chafe, caught them in his traps, or has fubdued
them unawares. At firſt he has made uſe of them for food, after-
wards to help him in his labors. Thefe first funds or capital has
increafed by degrees. Cattle were in early times the most fought
after of all circulating property; and were alfo the eafieft to ao
cumulate; they perish, but they alfo breed, and this fort of riches
is in fome refpects unperishable. This capital augments by
generation alone, and affords an annual produce, either in milk,
wool, leather, and other materials, which, with wood taken in
the foreft, have effected the first foundation for works of įnduſtry,
§ 54.
Cattle a circulating wealth, even before the cultivation
of the earth.
In times when there was yet a large quantity of uncultivated
land, and which did not belong to any individual, cattle might
be maintained without having property in land. It is even pro-
bable that mankind have almoft every where began to collect
flocks and herds, and to live on what they produced, before they
employed themſelves in the more laborious occupation of cultivat-
ing the ground. It feems that thofe nations who first cultivated
the earth, are thofe who found in their country fuch forts of
animals as were the moft fufceptible of being tamed, and that
they have by this been drawn from the wandering and reſtleſs
life of hunters and fishers, to the more tranquil enjoyment of
* * *
:
(
34 )
34
paftoral pursuits. Paftoral life requires a longer refidence in the
fame place, affords more leifure, more opportunities to study
the difference of lands, to obferve the ways of nature in the
production of fuch plants as ferve for the fupport of cattle.
Perhaps it is for this reafon that the Afiatic nations have firſt
cultivated the earth, and that the inhabitants of America have
remained fo long in a favage ftate.
§ 55.
Another Species of circulating wealth, and advances
necessary for cultivation, slaves.
The slaves were another kind of perfonal property, which at
first were procured by violence, and afterwards by way of com-
merce and exchange. Thofe that had many, employed them
not only in the culture of land, but in various other channels
of labor. The facility of accumulating, almoft without meaſure,
thofe two fources of riches, and of making ufe of them abftractedly
from the land, cauſed the land itſelf to be eſtimated, and the
value compared to moveable riches.
§ 56.
Perfonal property has an exchangeable value, even for
land itfelf.
A man that would have been poffeffed of a quantity of lands
without cattle or slaves, would undoubtedly have made an advan-
tageous bargain in yielding a part of his land to a perfon that
would have offered him in exchange cattle and slaves to cultivate
the reft. It is chicfly by this principle that property in land
entered likewife into commerce, and had a comparative value
with that of all the other goods. If four bushels of corn, the
net produce of an acre of land, was worth fix sheep, the acre
itfelf that feeds them could have been given for a certain value,
greater indeed, but always eafy to fettle by the fame way as the
price of other wares. Namely, at firft by debates among the two
contractors, then by the current price cftablished by the agree-
ment of those who exchange land for cattle, or the contrary. It
(
35 )
is by the fcale of this current fpecie that lands were appraifed,
when a debtor is profecuted by his creditor, and he is constrained
to yield his property.
$ 58.
Valuation of lands by the proportion of their revenue,
»
with the fum of perfonal property, or the value for
which they are exchanged: this proportion is called
the price of lands.
It is evident that if land, which produces a revenue equivalent
to fix sheep, can be fold for a certain value, which may always
be expreffed by a number of sheep equivalent to this value; this
number will bear a fixed proportion with that of fix, and will
contain it a certain number of times. Thus the price of an eftate
is nothing elſe but its revenue multiplied a certain number of
times; twenty times if the price is a hundred and twenty sheep
thirty times if one hundred and eighty sheep. And fo the current
price of land is reduced by the proportion of the value of the
revenue; and the number of times that the price of the fale con-
tains that of the revenue, is called the years purchaſe of the land.
They are fold at the price of twenty, thirty, or forty years pur
chaſe, when on purchafing them we pay twenty, thirty, or forty
times their revenue. It is alfo not lefs evident, that this price
muft vary according to the number of purchafers, or fellers of
land, in the fame manner as other goods vary in a ratio to the
different proportion between the offer and the demand.
Let us now go back to the time after money was introduced.
The facility of accumulating it has foon rendered it the moſt defirable
part of perfonal property, and has afforded the means of augment-
ing, by œconomy, the quantity of it without limits. Whoever,
either by the revenue of his land, or by the falary of his labor
or induſtry, receives every year a higher price than he needs to
fpend, he may lay up the refidue and accumulate it: thefe ac-
cumulated values are what we name a capital. The pufillanimous
mifer, that keeps his money with the mere view of foothing
his imagination againſt apprehenfions of diſtreſs in the uncertainty
of futurity, keeps his money in a hoard. If the dangers he had
36 )
forefeen should eventually take place, and he in his poverty be
reduced to live every year upon the treafure, or a prodigal fuc-
ceffor lavish it by degrees, this treafure would foon be exhaufted,
and the capital totally loft to the poffeffor. The latter can draw
a far greater advantage from it, for an eftate in land of a certain
revenue being but an equivalent of a fum of value equal to the
revenue, taken a certain number of times, it follows, that any
fum whatſoever of value is equivalent to an eſtate in land, pro-
ducing a revenue equal to a fixed proportion of that fum. It is
perfectly the fame whether the amount of this' capital confifts
in a maſs of metal, or any other matter, fince money reprefents
all kinds of value, as well as all kinds of value reprefent money.
By theſe means the poffeffor of a capital may at firft employ it
in the purchaſe of lands; but he is not without other refources.
$ 59.
Another employment for money in advances of enterpriſes,
of manufactory or induſtry.
I have already obferved that all kinds of labor, either of
cultivation or induftry, required advances. And I have shown
how the earth, by the fruits and herbages it fpontaneously pró-
duces for the nourishment of men and animals, and by the trees,
of which man has firft formed his utenfils, had furnished the
firft advances for cultivation; and even of the firft manual works
a man may perform for his own fervice. For instance, it is the
earth that provides the ftone, clay, and wood, of which the
firft houfes were built, and, before the divifion of profeffions,
when the fame man that cultivated the earth provided alfo for
his other wants by his own labor, there was no need of other
advances. But when a great part of fociety began to have no
refource but in their arms, it was neceffary that thoſe who lived
thus upon falaries, should have fomewhat before-hand, that
they might either procure themfelves the materials on which
they labored, or fubfift during the time they were waiting for
their falary.
F.
(37
$ 60.
Explanation of the ufe of the advances of capitals in
enterpriſes of induſtry; on their returns, and the profits
they ought to produce.
In early times, he that employed laboring people under him,
furnished the materials him felf, and paid from day to day the
falary of the workmen. It was the cultivator or the owner him-
felf that gave to the ſpinfter the hemp he had gathered, and he
maintained her during the time of her working. Thence he
paffed the yarn to a weaver, to whom he gave every day the
falary agreed upon. But thofe slight daily advances can only
take place in the coarfeft works. A vaft number of arts, and
even of thoſe arts indifpenfible for the uſe of the moſt indigent
members of fociety, require that the fame material should paſs
through many different hands, and undergo during a confider-
able ſpace of time difficult and various operations. I have already
mentioned the preparation of leather, of which shoes are made.
Whoever has feen the workhoufe of a tanner, cannot help feeling
the abfolute impoffibility of one, or even ſeveral indigent perfons
providing themſelves with leather, lime, tan, utenfils, &c. and
caufing the requifite buildings to be erected, to put the tan-houſe
to work, and of their living during a certain ſpace of time, till
their leather can be fold. In this art, and many others, muſt
not thoſe that work on it have learned the craft before they pre-
fume to touch the materials, left they should waste them in their
first trials? Here then is another abfolute neceffity of advances.
Who shall now collect the materials for the manufactory, the
ingredients, the requifite utenfils of their preparation? Who is
to conftruct canals, markets, and buildings of every denomination?
How shall that multitude of workmen fubfift till the time of
their leathers being fold, and of whom none individually would
be able to prepare a fingle skin, and where the emolument of the
fale of a fingle skin would not afford fubfiftence to any one of
them? Who shall defray the expenfes of the inftruction of the
pupils and apprentices? Who shall maintain them until they are
fufficiently inftructed, guiding them gradually from an eaſy
labor, proportionate to their age, to works that demand more
vigor and ability? It must then be one of thofe proprietors of
>
38
capitals, or moveable accumulated property that must employ
them, fupplying them with advances in part for the conftruction
and purchaſe of materials, and partly for the daily falaries of
the workmen that are preparing them. It is he that muft ex-
pect the fale of the leathers, which is to return him not only
his advances, but alſo an emolument fufficient to indemnify him
for what his money would have availed him, had he turned it
to the acquifition of lands, and moreover of the falary due to
his troubles and care, to his risks, and even to his skill; for
furely, upon equal profits, he would have preferred living
without folicitude, on the revenue of land, which he could
have purchafed with the fame capital, In proportion as this
capital returns to him by the fale of his works, he employs it
in new purchaſes for fupporting his family and maintaining his
manufactory; by this continual circulation, he lives on his profits,
and puts in ftore what he can fpare to increaſe his ftook, and to
advance his enterprife in augmenting the mafs of his capital, in
order proportionably to augment his profits.
§ 61.
Subdiviſion of the induſtrious ftipendiary clafs, in under-
taking capitalifts and fimple workmen.
Thus the whole clafs employed in fupplying the different
wants of fociety with an immenfe variety of works of induſtry,
is, if I may ſpeak thus, fubdivided into two claffes. The one
of the undertakers, manufacturers, maſters, all proprietors of
large capitals, which they put to intereft by exerting labor on
their advances; and the other of workmen, deftitute of any
property but their hands, who advance only their daily labor,
and receive no profits but their falaries.
§ 62.
Another employment of capitals in advances towards
undertakings of agriculture. Obfervations on the uſe,
and indifpenfible profits of capitals in undertakings of
agriculture.
In fpeaking first of the placing of capitals in manufacturing
enterpriſes, I had in view to adduce a more ftriking example
( 39 )
of the neceflity and effect of large advances, and of the courfes
of their circulation. But I have reverfed the natural order,
which feemed to require that I should rather begin fpeaking of
enterpriſes of agriculture, which alſo can neither be performed,
nor extended, nor afford any profit, but by means of confider-
able advances. It is the proprietors of great capitals, who, in
order to make them productive in undertakings of agriculture,
leaſe lands, and pay to owners large rents, taking on them-
felves the whole mafs of advances. Their cafe muft neceffarily
be the fame as that of the undertakers of manufactures. Like
them they are obliged to make the firſt advances towards the
undertaking, provide themfelves with cattle, horfes, utenfils
of husbandry, purchaſe the first feeds; like them they muft
maintain and nourish their carters, reapers, threshers, fervants,
and laborers, of any demomination, that fubfift only by their
hands, that advance only their labor, and reap only their falarics.
Like them, they ought to have not only their capital, I mean,
all their prior and annual advances returned, but alſo a profit
equal to the revenue they could have acquired their capital,
exclufive of any fatigue. zdly. The falary and the price of their
own trouble, of their risks, and their industry. 3dly. An emo-
liment to enable them to replace the effects employed in their
enterpriſe, and the lofs by wafte, cattle dying, and utenfils
wiaring out, &c. all which ought to be first charged on the
products of the earth. The overplus will ſerve to the cultivator,
to pay to the proprietor the permiſſion he has given him to make
ufc of his field in the accomplishing of his enterpriſe, namely,
the price of the leafchold, the rent of the proprietor, the clear
product, for all that the land produces, until reimburſement
of the advances and profits of every kind, to him that has made
thefe advances, cannot be looked upon as a revenue, but only
as a rimburſement of the expenfes of the cultivation, fince if
the cultivator should not obtain them, he would be loth to
risk his wealth and trouble in cultivating the field of another.
( 40 )
$ 63.
This competition between the capitalifts, undertakers of
cultivation, fixes the current price of leafeholds, and
the larger cultivations.
The competition between rich undertakers of cultivation fixes
the current price of leaſes in proportion to the fertility of the
foil, and of the rate at which its productions are fold, always
according to the calculation which farmers make both of their
expenditures, and of the profits they ought to draw from their
advances. They cannot give to the owners more than the over-
plus. But when the competition among them happens to be more
animated, they render him the whole overplus, the proprietor
leafing his land to him that offers the greateft rent.
§ 64.
The default of capitals, undertakers, limits the manur
ing of lands to a certain cultivation.
When, on the contrary, there are no rich men that poffefs
Capitals large enough to enbark in enterpriſes of agricultur:,
when, through the low rate of the productions of the earth, or
any other caufe, the crops are not fufficient to enfure to he
undertakers, befides the reimburſement of their capital, emdu-
ments adequate at least to thofe they would derive from their
money by employing it in fome other channel, there are no
farmers that offer to leafe lands, the proprietors are conftrined
to hire mercenaries or métayers, which are equally unable to
make any advances, or duly to cultivate it. The proprietor him-
felf makes moderate advances, which do not produce hm an
indifferent revenue: If the land happens to belong to an owner
poor, negligent, and in debt, to a widow or a minor, it:emains
unmanured; fuch is the principle of the difference I have obferved
between provinces, where the lands are cultivated by opulent
farmers, as in Normandy and the Isle of France, and thfe where
they are cultivated only by indigent mercenaries, as inLimoufin,
Angoumois, Bourbonnois, and feveral others.
( 41 }
§ 65.
Subdivifion of the clafs of cultivators into undertakers,
#
or farmers, and fimple hired perfons, fervants and
day laborers.
Hence it follows, that the clafs of cultivators may be divided,
like that of manufacturers, into two branches, the one of under-
takers or capitalists, who make the advances, the other of fimple
ftipendiary workmen. It refults alfo, that the capitals alone can
form and fupport great enterprifes of agriculture, that give to
the lands an unvariable value, if I may ufe the expreffion, that
fecure to the proprietors a revenue always equal, and the largeſt
poffible.
§ 66.
Fourth employment of capitals, in advances for enter-
prifes of commerce. Necefity of the interpofition of
merchants properly fo called, between the producers
of the commodities and the confumers.
The undertakers either of cultivation or manufacture, draw
their advances and profits only from the fale of the fruits of the
earth, or the commodities fabricated. It is always the wants and
the capacity of the confumer that fets the price on the fale;
neither does the confumer want the produce prepared or fitted
up at the moment of its crop, or the perfection of the work.
However, the undertakers want their ftocks immediately and
regularly reimburſed, to embark in fresh enterpriſes: the manur-
ing and the feed ought to fucceed the crops without interruption.
The workmen of a manufacture are unceasingly to be employed
in beginning other works in proportion as the first are diftributed,
and to replace the materials in mcafure as they are confumed.
It would not be adviſable to ftop short in an enterpriſe once put
in execution, nor is it to be prefumed that they can be begun
again at any time. It is then the ftricteft intereft of the under-
taker to have his capital quickly reimburfed by the fale of his
crops or commodities. On the other hand, it is the confumer's
!
}
C
( 42 )
#
intereft to find, when and where he wishes the things he ftande
in need of; it would be extremely inconvenient for him to be
neceffitated to make, at the time of the crop, his provifion for
the whole courſe of a year. Among the objects of uſual con-
fumption, there are many that require long and expenfive labors,
labors that cannot be undertaken with profit, only on a large
quantity of materials, and fuch as the confumption of a ſmall
number of inhabitants of a limited diſtrict, may not be fufficient
for the fale of the works of a fingle manufactory. Undertakings
of this kind muſt then neceffarily be in a reduced number, at a
confiderable diftance from each other, and confequently very
diſtant from the habitations of the greater number of confumers.
There is no man, not oppreffed under the extremeft mifery,
that is not in a fituation to confume feveral things, which are
neither gathered nor fabricated, but in places confiderably diftant
from him and not lefs diftant from each other. A perfon that
could not procure himſelf the object of his conſumption but in
buying it directly from the hand of him that gathers or works
it, would be either unprovided with many commodities, or paſs
his life in wandering after them.
This double intereft which the perfon producing and the con-
fumer have, the former to find a purchaſer, the other to find
where to purchaſe, and yet not to waſte uſeful time in expecting
a purchafer, or in finding a feller; has give a the idea to a third
perfon to ftand between the one and the other. And it is the
object of the mercantile profeffion who purchaſe goods from the
hands of the producer, to store them in warehouſes, whither
the confumer comes to make his purchaſe. By theſe means the
undertaker, affured of the fale and the re-acquifition of his funds,
looks undisturbed and indefatigably out for new productions,
and the conſumer finds within his reach and at the fame time,
the objects he is in want of.
( 43 )
§ 67.
Different orders of merchants. They all agree in pur
chafing to fell again, and that their traffic is fup.
ported by advances which are to revert with a profit,
to be engaged in a new enterpriſe.
From the green woman who expofes her ware in a market,
to the merchants of Nantz or Cadiz, who traffic even to India.
and America, the profeffion of a trader, or what is properly
called commerce, divides into an infinity of branches, and it may
be faid of degrees. Such a trader confines himſelf to provide
one or feveral fpecies of commodities which he fells in his shop
to thoſe who chufe; another goes with certain commodities to a
place where they are in demand, to bring from thence in exchange
fuch things as are produced there, and are wanted in the place
from whence he departed: one makes his exchanges in his neigh-
bourhood, and by himſelf, another by means of correfpondents,
and by the interpofition of carriers whom he pays, fends and
employs from one province to another, from one kingdom to
another, from Europe to Afia, and from Afia back to Europe.
One fells his merchandiſe by retail to thofe who uſe them,
another only fells in large parcels at a time to other traders,
who retail them out to the confumers: but all have this in com-
mon that they buy to fell again, and that their first purchaſes
are advances, which are returned to them only in courſe of time.
They ought to be returned to them, like thofe of the cultivators
and manufacturers, not only entirely in a certain time to be em-
ployed again in new purchaſes, but alſo, 1. with an equal revenue
to what they could acquire with their capital without any labor;
2dly, with the wages or value of their labor, of their risk, and of
their induftry. Without being affured of this return, and of
thefe indifpcnfible profits, no trader would enter into buſineſs,
nor could any one poffibly continue therein: it is in this view he
governs himſelf in his purchaſes, on a calculation he makes of
the quantity and the price of things which he can hope to diſpoſe
of in a certain time: the retailer learns from experience, by the
fuccefs of limited trials made with precaution, what is nearly
( 44 )
}
the wants of thofe confumers who deal with him. The merchant
learns from his correfpondents of the plenty or fcarcity, and of
the price of merchandiſe in thofe different countries to which
his commerce extends; he directs his fpeculations accordingly, he
fends his goods from the country where they bear a low price to
thoſe where they are fold dearer, including an expenſe of tranſ-
portation in the calculation of the advances he ought to be reim-
burfed. Since trade is neceffary, and it is impoffible to undertake
any commerce without advances proportionable to its extent, here
we ſee another method of employing perfonal property, a new
uſe that the poffeffor of a parcel of commodities, referved and
accumulated, of a fum of money, in a word, of a capital, may
make of it to procure himfelf fubfiftence, and to augment, if
he can, his riches.
§ 68.
The notion of the circulation of money.
We fee, by what has been juft now faid, how the cultivation
of lands, manufactures of all kinds, and all the branches of
trade, depend on a mafs of capital or the accumulation of perfonal
property, which having been at firſt advanced by the undertakers,
in each of theſe different branches, ought to return to them again
every year with a regular profit, that is, the capital to be again
inverted, and advanced in the continuation of the fame enter-
prifes, and the profits for the greater or lefs fubfiftence of the
undertakers. It is this continued advance and return which con-
ftitutes what ought to be called the circulation of money: this
uſeful and fruitful circulation, which animates all the labor of
fociety, which fupports all the motion and the life of the body
politic, and which is with great reafon compared to the circulation
of the blood in the human body. For if by whatever diforder
in the courſe of the expenfes of the different orders of fociety,
the undertakers ceafe to draw their advances with fuch profit as
they have a right to expect, it is evident they will be obliged to
reduce their undertakings, that the total of the labor, that of
the confumption of the fruits of the earth, that of the productions,
and of the revenue would be equally diminished; that to riches will
fucceed poverty, and that the common workman, ceafing to find
employ will fall into the deepest mifery.
}
( 45 )
§ 69.
All extenſive undertakings, particularly thoſe of manu.
factures and of commerce, muft indifpenfibly be very
confined, before the introduction of gold and filver
in trade.
6
Is is almoft unneceffary to remark that undertakings of all
kinds, but especially thofe of manufacturers, and above all
thofe of commerce, muft unavoidably be very confined before
the introduction of gold and filver in trade, fince it was almoſt
impoffible to accumulate confiderable capitals, and yet more
difficult to multiply and to divide payments as much as is neceffary
to facilitate and increaſe the exchanges to that extent, which a
fpirited commerce and circulation require. The cultivation of
the land only may fupport itſelf to a certain degree, becauſe the
cattle are the principal caufe of the advances required therein,
and it is very probable there is then no other adventurer in cul-
tivation but the proprietor. As to arts of all kinds, they muſt
neceffarily have been in the greatest languor before the introduc-
tion of money; they were confined to the coarſeft works, for
which the proprietors fupported the advances by nourishing the
workmen, and furnishing them with materials, or they caufed
them to be made in their own houfes by their fervants.
§ 70.
Capitals being as necessary to all undertakings as labor
and induſtry, the induſtrious man shares voluntarily
the profits of his enterprife with the owner of the
capital, who furnishes him the funds he is in need of.
Since capitals are the indifpenfible foundation of all lucrative
enterpriſes; fince with money we can furnish means for culture,
eftablish manufactures, raiſe a commerce, the profits of which
being accumulated and frugally laid up, will become a new capital;
fince, in a word, money is the principal means to beget money,
thoſe who with induſtry and the love of labor are deftitute of
capital, and have not fufficient for the undertaking they wish to
( 46 )
embark in, have no difficulty in refolving to give up to the
proprietors of fuch capital or money, who are willing to truft
them, a portion of the profits which they are in expectation of
gaining over and above their advances.
§ 71.
Fifth employment of capitals, lending on intereft; nature
of a loan.
The poffeffors of money balance the risk their capital may run,
if the enterpriſe does not fucceed, with the advantage of enjoying
a conftant profit without toil; and regulate themſelves thereby,
to require more or leſs profit or intereft for their money, or to
confent to lend it for fuch an intereft as the borrower offers.
Here another opportunity opens to the poffeffor of money, viz.
lending on intereft, or the commerce of money. Let no one
miſtake me here, lending on intereft is only a trade in which
the lender is a man who fells the ufe of his money, and the
borrower one who buys; precifely the fame as the proprietor of
an eftate, or the perfon who farms it, buys and fells refpective-
ly the ufe of the hired land. The latin term for a loan of money
on intereft, expreffes it exactly, ufura pecunia, a word which
adopted into the French language is become odious, by a con-
fequence of falfe ideas being adopted on the intereft of money.
§ 72.
Falfe ideas on lending upon intereft.
1
The rate of intereft is by no means founded as might be im-
agined on the profit the borrower hopes to make with the capital
of which he purchafes the ufe. This rate, like the price of all
other merchandiſe, is fixed by the circumstances of buyer and
feller; by the proportion of the fum offered with the demand.
People borrow with every fort of view, and with every fort of
motion. One borrows to undertake an enterpriſe that is to make
his fortune, another to buy an eſtate, another to pay his loTes
at play, another to fupply the loſs of his revenue, of which fome
accident has deprived him, fome to exift on in expectation of
what he is able to gain by his labor; but all theſe motives which
determine the borrower, are very indifferent to the lender. He
attends to two things only, the intereft he is to receive, and the
( 47 )
)
Lafety of his capital. He never attends to the ufe the borrower
puts it to, as a merchant does not care to what uſe the buyer
applies the commodities he fells him.
§ 73.
Errors of the Schoolmen refuted.
It is for want of having viewed the lending of money on in-
tereft in its true point of view, that moralifts, more rigid than
enlightened, would endeavour to make us look on it as a crime.
The fcholaftic theologifts have concluded that as money itſelf was
not prolific, it was unjuſt to require a premium for the loan of it.
Full of theſe prejudices they have fancied their doctrine was fanc-
tioned by this paffage in the Gofpel, mutuum dare nibil inde fperantes:
Thoſe theologians who have adopted more reaſonable principles on
the fubject of intereft of money, have been branded with the harsh-
eft reproaches from thoſe who adopt the other fide of the queſtion.
Nevertheleſs, there are but few reflections neceffary to expoſe
the trifling reaſons that are adduced to condemn the taking of in-
tereft. A loan of money is a reciprocal contract, free between
both parties, and entered into only by reafon of its being mutually
advantageous. It is evident if the lender finds an advantage in
receiving an intereft for his money, the borrower is not lefs in-
tereſted in finding that money he ſtands in need of, fince otherwiſe
he would not borrow and fubmit himſelf to the payment of intereft.
Now on this principle can any one look on fuch an advantageous
contract as a crime, in which both parties are content, and which
certainly does no injury to any other perfon? Let them fay the
lender takes advantage of the wants of the borrower, to force the
payment of intereft, this is talking as abfurd as if we were to fay,
that a baker who demands money for his bread he fells, takes
advantage of his cuftomer's wants. If in this latter cafe, the
money is an equivalent for the bread the buyer receives, the
money which the borrower receives to day is equally equivalent
to the capital of intereft he agrees to pay at the expiration of a
certain time, for in fact, it is an advantage to the borrower, to
have during that interval the ufe of the money he ftands in need
of, and it is a difadvantage to the lender to be deprived of it.
This diſadvantage may be eftimated, and it is eftimated, the in-
tereft is the rate. This rate ought to be larger, if the lender
48)
runs the risk of lofing his capital by the borrower becoming in-
folvent. The bargain therefore is perfectly equal on both fides,
and confequently, fair and honeft. Money confidered as a phy-
fical fubftance, as a maſs of metal, does not produce any thing;
but money made ufe of in advances, in cultivation, in manufac-
ture, in commerce, produces a certain profit; with money we
can acquire land, and thereby procure a revenue. The perfon
therefore who lends his money, does not only give up the
unfruitful poffeffion of his money, but deprives himſelf of the
profit which it was in his power to procure by it, and the intereſt
which indemnifies him this lofs cannot be looked upon as unjuſt
The fchoolmen, compelled to acknowledge the juftice of thefe
confiderations, have allowed that intereft for money may be taken,
provided the capital is alienated, that is, provided the lender
gave up his right to be reimburſed his money in a certain time,
and permitted the borrower to retain it´as long as he was inclined
to pay the intereft thereof only. The reafon of this toleration
was, that then it is no longer a loan of money for which an
intereft is paid, but a purchaſe which is bought with a fum of
money, as we purchaſe lands. This was a mode to which they
had recourfe to comply with the abfolute neceffity which exiſts
of borrowing money, in the courfe of the tranfactions of fociety,
without fairly avowing the fallacy of thofe principles, upon which
they had condemned the practice: but this claufe for the aliena-
tion of the capital is not an advantage to the borrower, who
remains equally indebted to the lender, until he shall have repaid
the capital, and whofe property always remains dormant for the
fafety of fuch capital; it is even a diſadvantage, as he finds
it more difficult to borrow money when he is in want of it; for
perfons who would willingly confent to lend for a year or two, a
fum of money which they had deftined for the purchaſe of an
eftate, would not lend it for an uncertain time. Befides, if
they are permitted to fell their money for a perpetual rent, why
may they not lend it for a certain number of years, for a rent
which is only to continue for that term? If an intereft of
1000 livres per annum is equivalent to the fum of 2000 livres livres
from him to keep fuch a fum in perpetuity, 1000 livres will be
an equivalent for the poffeffion of that fum for one year.
§ 74.
( 49 )
§ 74.
True foundation of intereft of money.
A man then may lend his money as lawfully as he may fell
it and the poffeffor of money may either do one or the other,
not only becauſe money is equivalent to a revenue, and a means
to procure a revenue, not only becaufe the lender lofes, during
the continuance of the loan, the revenue he might have procured
by it; not only becauſe he risks his capital; not only becauſe
the borrower can employ it in advantageous acquifitions, or in
undertakings from whence he will draw a large profit: the pro-
prietor of money may lawfully receive the intereft of it, by a
moſt general and decifive principle. Even if none of theſe cir-
cumftances should take place, he will not have the lefs right
to require intereft for his loan, for this reafon only that his
money is his own. Since it is his own, he has a right to keep
it, nothing can imply a duty in him to lend it; if then he does
lend, he may annex fuch a condition to the loan as he chufes,
in this he does no injury to the borrower, fince the latter agrees
to the conditions, and has no fort of right over the fum
lent. The profit which money can procure its borrower, is doubt-
lefs one of the moft prevailing motives to determine him to
borrow on intereft; it is one of the means which facilitates
his payment of the intereft, but this is by no means that which
gives a right to the lender to require it; it is fufficient for him
that his money is his own, and this is a right infeparable from
property. He who buys bread, does it for his fupport, but the
right the baker has to exact a price is totally independent of
the uſe of bread; the fame right he would poffefs in the fale
of a parcel of ſtones, a right foundedon this principle only, that
the bread is his own, and no one has any right to oblige him
to give it up for nothing.
$ 75.
Answer to an objection.
This reflection brings us to the confideration of the application
made by an author, of the text mutuum dare nihil inde ſperantes,
****
i
( 50 )
}
and shows how falfe that application, and how diftant from the
meaning of the Gofpel. The paffage is clear, as interpreted.
by modern and reaſonable divines, as a precept of charity. All
mankind are bound to aflift cach other; a rich man who should
fee his fellow creature in diftrefs, and who, inftead of gratui
tously affifting, should fell him what he needed, would be
equally deficient in the dutics of chriftianity and of humanity.
In fuch circumftances, charity does not only require us to lend
without intereft, she orders us to lend, and even to give if ne-
ceffary. To convert the precept of charity into a precept of
ftrict justice, is equally repugnant to reafon, and the fenfe of
the text. Thofe whom I here attack do not pretend that it is
a duty of justice to lend their moncy; they must be obliged
then to confefs, that the first words of the paffage, mutuum dare,
contain only a precept of charity. Now I demand why they
cxtend the latter part of this paffage to a principle of justice.
What, is the duty of lending not a ftrict precept, and shall its
acceffory only, the condition of the loan, be made one? It would
have been faid to man. It is free for you to lend or not to lend,
but if you do lend, take care you do not require any intereft
for your money, and even when a merchant shall require a
loan of you for an undertaking, in which he hopes to make
a large profit, it will be a crime in you to accept the interest
he offers you; you muft abfolutely cither lend to him gra-
tuitously, or not lend to him at all. You have indeed one
method to make the receipt of intereft lawful, it is to lend
your capital for an indefinite term, and to give up all right
to be repaid it, which is to be optional to your debtor, when
he pleafes or when he can. It you find any inconvenience on
the ſcore of fecurity, or if you forefee you shall want your
money in a certain number of years, you have no other
courſe to take but not to lend it: It is better for you to de-
prive this merchant of this moft fortunate opportunity, than
to commit a fin by affifting him in it. " This is what they
muſt have ſeen in thefe five words, mutuum dare nihil inde Sperantes,
when they have read them under theſe falſe prejudices.
Every man who shall read this text unprejudiced, will foon
find its real meaning; that is, as men, as Chriftians, yon are
( 51 )
all brothers, all friends; act towards each other as brethren
and friends; help each other in your neceffities; let your purfes
Le reciprocally open to each other, and do not fell that affiftance
which you are mutually indebted to each other, in requiring
an intereft for a loan which charity requires of you as a duty. "
This is the true fenfe of the paffage in queftion. The obliga-
tion to lend without intereft, and to lend, have evident relation
to each other; they are of the fame order, and both inculcate
a duty of charity, and not a precept of rigorous juſtice, ap
plicable to all cafes of lending.
§ 76.
The rate of intereft ought only to be fixed, as the price
of every other merchandize, by the courfe of trade alone.
I have already faid that the price of money borrowed, is
regulated like the price of all other merchandize, by the bas
lance of the money at market with the demand for it: thus
when there are many borrowers who are in want of money,
the intereft of money rifes; when there are many poffeffors
who are ready to lend, it falls. It is ther efore an error to
believe that the intereft of money in trade ought to be fixed
by the laws of Princes. It has a current price fixed like that
of all other merchandize. The price varies a little, according
to the greater or lefs fecurity which the lender has; but on
equal fecurity, he ought to raife and fall his price in proportion
to the abundance of the demand, and the law no more ought
to fix the intereft of money than it ought to regulate the price
of all other merchandize which have a currency in trade.
§ 77.
Money has in commerce two different valuations. One
expreffes the quantity of money or filver we give to
procure different forts of commodities; the other ex-
preſſes the relation a fum of money has, to the intereſt
it will procure, in the course of buſineſs.
It ſeems by this explanation of the manner in which money
is either fold or lent for an annual intereft, that there are two
( 52 )
1
,
、
2
ways of valuing money in commerce, In buying and felling
a certain weight of filver reprefents a certain quantity of labor,
or of merchandize of every ſpecies; for example, one ounce of
filver is equal to a certain quantity of corn, or to the labor of
a man for a certain number of days. In lending, and in the
commerce of money, a capital is the equivalent of an equal rent,
to a determinate portion of that capital; and reciprocally an an-
nual rent reprefents a capital equal to the amount of that rent
repeated a certain number of times, according as intereft is
at a higher or lower rate.
$ 78.
Theſe two valuations are independent of each other, and
are governed by quite different principles.
Thefe two different methods of fixing a value, have much
lefs connexion, and depend much lefs on each other than we should
be tempted to believe at first fight. Money may be very common
in ordinary commerce, may hold a very low value, anfwer to
a very fmall quantity of commodities, and the intereft of mo-
ney may at the fame time be very high.
I will fuppofe there are one million ounces of filver in actual
eirculation in commerce, and that an ounce of filver is given
in the market for a bushel of corn. I will fuppofe that there is
brought into the country in fome manner or other, another
million of ounces of filver, and this augmentation is diftributed
to every one in the fame proportion as the firft million, fo that
he who had before two ounces, has now four. The filver
confidered as a quantity of metal, will certainly diminish in
price, or which is the fame thing, commodities will be pur-
chafed dearer, and it becomes, neceffary to procure the fame
meaſure of corn which he had before with one ounce of filver,
to give more filver, perhaps two ounces inftead of one. But
it does not by any means follow from thence, that the intereft
of money falls, if all this money is carried to market, and
employed in the current expenfes of thoſe who poffefs it, as it
is fuppofed the firft million of ounces of filver was; for the
intereft of money falls only when there is a greater quantity
-
53 X
of money to be lent, in proportion to the wants of the borrow-
ers, than there was before. Now the filver which is carried
to market is not to be lent; it is money which is hoarded up,
which forms the accumulated capital for lending; and the
augmentation of the money in the market, or the diminution
of its price in compariſon with commodities in the ordinary
courfe of trade, are very far from cauſing infallibly or by a ne-
ceffary confequence, a decreaſe of the intereft of money, on
the contrary, it may happen that the fame cauſe which angments
the quantity of money in the market, and which confequently
increaſes the price of other commodities by lowering the price
of filver, is precifely the fame caufe which augments the hire
of money or the rate of intercft.
In effect, I will fuppofe for a moment, that all the rich
people in a country, inftead of faving from their revenue, of
from their annual profits, shall expend the whole; that, not
fatisfied with expending their whole revenue, they diffipate a
part of their capital; that a man who has 100,000 livres in
money, inftead of employing them in a profitable manner, or
lending them, confumes them by degrees in foolish expenfes,
it is apparent that on one fide there will be more filver employ-
ed in common circulation, for to fatisfy the wants and hu-
mors of each individual, and that confequently its value will
be lowered; on the other hand there will certainly be lefs money
to be lent; and as many people will in this fituation of things
ruin themſelves, there will clearly be more borrowers. The
intereft of money will confequently augment, while the mo-
Rey itſelf will become more plenty in circulation, and the value
of it will fall, precifely by the fame caufe.
We shall no longer be furprifed at this apparent inconfiftency,
if we confider that the money brought into the market for the
purchaſe of corn, is that which is daily circulated to procure
the neceffaries of life; but that which is offered to be lent on
intereft, is what is actually drawn out of that circulation to
be laid by and accumulated into a capital.
t
*
་
1
( 54 )
§ 79:
In comparing the value of money with that of com
modities, it is confidering filver as a metal, which
is an object of commerce. In eftimating the intereft
of money, we attend to the use of it during a deter
minate time.
In the market a meafure of corn is purchafed with a certain
weight of filver, or a quantity of filver is bought with a certain
commodity, it is this quantity which is valued and compared with
the value of other commodities. In a loan upon intereft, the
object of the valuation is the ufe of a certain quantity of pro-
perty during a certain time. It is in this cafe no longer a maſs
of filver, compared with a quantity of corn, but it is a portion
of effects compared with a certain portion of the fame, which
is become the customary price of that mafs for a certain time.
Let twenty thousand ounces of filver, be an equivalent in the
market for twenty thousand meaſures of corn, or only for ten
thousand, the ufe of thofe twenty thousand ounces of filver
for a year is not worth lefs on a loan than the twentieth part
of the principal fum, or one thouſand ounces of filver, if
intereft is at five per cent.
$ 80.
The price of intereft depends immediately on the proportion,
of the demand of the borrowers, with the offers of
the lenders, and this proportion depends principally,
on the quantity of perfonal property, accumulated by
an excess of revenue and of the annual produce to
form capitals, whether thefe capitals exift in money
or in any other kind of effects having a value in
commerce.
The price of filver in circulation has no influence but with
refpect to the quantity of this metal employed in common cir-
culation; but the rate of intereft is governed by the quantity of
:
( 55
55)
property accumulated and laid by to form a capital. It is in-
different whether this property is in metal or other effects,
provided theſe effects are easily convertible into money. It is
very neceffary that the mafs of metal exifting in a ſtate, is as
large as the amount of the property lent on intereft in the courſe
of a year; but all the capitals in furniture, merchandize, tools
and cattle fupply the place of filver and reprefent it. A paper
figned by a man, who is known to be worth 100,000 livres,
and who promiſes to pay 100 marks in a certain time is worth that
fum; the whole property of the man who has figned this note
is anfwerable for the payment of it, in whatever the nature
of theſe effects confifts, provided they are in value 100,000 livres.
It is not therefore the quantity of filver exifting as merchandize
which caufes the rate of intereft to rife or fall, or which brings
more money in the market to be lent; it is only the capitals
exifting in commerce, that is to fay, the actual value of per-
fonal property of every kind accumulated, fucceffively ſaved
on the revenues and profits, to be employed by the poffeffor to
procure him new revenues and new profits. It is thefe accumu
lated favings which are offered to the borrowers, and the more
there are of them, the lower the intereft of money will be, at
leaft if the number of borrowers is not augmented in proportion.
§ 81.
The Spirit of economy continually augments the amount
of capitals, luxury tends continually to deftroy them.
The fpirit of economy in any nation tends inceffantly to
augment the amount of the capitals, to increafe the number
of lenders, and to diminish that of the borrowers. The habit
of luxury has precifely a contrary effect, and by what has been
already remarked on the ufe of capitals in all undertakings,
whether of cultivation, manufacture or commerce, we may
judge if luxury enriches a nation or impoverishes it.
(56
36
§ 82.
The lowering of intereft proves that in Europe œconomy
has in general prevailed over luxury.
Since the intereft of money has been conftantly diminishing
in Europe for feveral centuries, we muft conclude that the ſpirit
of œconomy has been more general than the fpirit of luxury.
It is only people of fortune who run into luxury, and among
the rich, the fenfible part of them confine their expenfes with-
in their incomes, and pay great attention not to touch their
capital. Thoſe who wish to become rich are far more numerous
in a nation than thofe which are already fo. Now, in the
prefent ftate of things, as all the land is occupied, there is but
one way to become rich, it is either to poffefs, or to procure
in fome way or other, a revenue or an annual profit above
what is abfolutely neceffary for fubfiftence, and to lay up every
year in referve to form a capital, hy means of which they may
obtain an increaſe of revenue or annual profit, which will again
produce another faving, and become capital. There are then a
great number of men intrufted and employed in amaffing capitals,
§ 83.
Recapitulation of the five different methods of employing
capitals.
I have reckoned five different methods of employing capitals,
or of placing them fo as to procure a profit.
1. To buy an eftate which brings in a certain revenue.
2. To employ money in undertakings of cultivation, leafing
lands whofe produce, should render back, befides the expenfes
of farming, the intereft on the advances and a recompence for
the labor of him who employs his property and attention in
the cultivation.
3. To place his capital in fome undertaking of induſtry or
manufactures.
4. To employ it in commerce.
5. To lend it to thofe who want it for an annual intereft.
( 57 )
$ 84.
The influence which the different methods of employing
money have on each other.
It is evident that the annual produce which capitals placed in
different employs will produce, are proportioned to each other,
and all with relation to the actual rate of the intereft of money.
§ 85.
Money invested in land neceffarily produces lefs.
The perfon who invefts his money in land, let to a folvent
tenant, procures himſelf a revenue which gives him very little
trouble in receiving, and which he may difpofe of in the moſt
agreeable manner, by indulging all his inclinations. There is
a greater advantage in the purchafe of this fpecies of property,
than of any other, fince the poffeffion of it is more guarded
against accidents. We must therefore purchaſe a revenue in land
at a higher price, or muft content ourſelves with a lefs revenue
for an equal capital.
§ 86.
Money on intereft ought to bring a little more income
than the revenue of land purchaſed with an equal
capital.
He who lends his money on intereft, enjoys it ftill more
peaceably and freely than the poffeffor of land, but the infolvency
of his debtor may endanger the lofs of his capital. He will
not therefore content himfelf with an intereft equal to the re-
venue of the land which he could buy with an equal capital.
The intereft of money lent, ought confequently to be larger
than the revenue of an eftate purchaſed with the fame capital;
for if the proprietor could find an eftate to purchaſe of an
equal income, he would prefer that.
闻
​(58)
$ 87.
Money employed in cultivation, manufactures, or com-
merce, ought to produce more than the intereft of
money on loan.
By a like reafon, money employed in agriculture, in ma-
nufactures or in commerce, ought to produce a more confider.
able profit than the revenue of the fame capital employed in the
purchaſe of lands, or the intereft of money on loan; for theſe
undertakings, befides the capital advanced, requiring much
care and labor, if they were not more lucrative, it would be
much better to fecure an equal revenue which might be enjoyed
without labor. It is neceffary then, that befides the intereft of
the capital, the undertaker should draw every year a profit to
recompenfe him for his care, his labor, his talents, the risk
he runs, and to replace what his ſtock may lofe by perishable
goods which he is obliged to inveſt at firft on effects capable of
injury, and which ale after expofed to all forts of accidents,
$ 88.
Mean time the freedom of thefe various employments are
limited by each other, and maintain, notwithstanding
their inequality, a Species of equilibrium.
The different ufes of the capitals produce very unequal pro-
fits; but this inequality does not prevent them from having a
reciprocal influence on each other, nor from eftablishing a
fpecies of equilibrium among themfelves, like that between two
liquors of unequal gravity, and which communicate with each
other by means of a reverfed fyphon, the two branches of which
they fill; there can be no height to which the one can rife or
fall, but the liquor in the other branch will be affected in the
fame manner.
I will fuppofe, that on a fudden a great number of proprie-
tors of lands are defirous of felling them. It is evident that
the price of lands will fall, and that with a lefs fum we may
acquire a larger revenue; this cannot come to pafs without the
intereft of money rifing, for the poffeffor of money would chufe
( 59 )
rather to buy lands, than to lend at a lower intereft than the
revenue of the lands they could purchaſe. If then the borrowers
want to have money, they will be constrained to pay a greater
rate, If the intereft of the money increafes, they will prefer
the lending it, to fetting out in a hazardous manner on enter-
prifes of agriculture, induftry, and commerce: they will be
aware of any enterpriſes but thofe that produce, befides the
retribution for trouble, an emolument by far greater than the
rate of the lender's produce: In a word, if the profits, fpringing
from an ufe of money, augment or diminish, the capitals are
converted in withdrawing from other employings, or are with-
drawn in converting them to other ends, which neceffarily
alters, in each of thofe employings, the profits on the capitals
to the annual product. Generally, money converted into pro-
perty in land, does not bring in fo much as money on intereft;
and money on intereft brings lefs than money uſed in laborious
enterprifes but the product of money laid out in any way
whatever, cannot augment or decreaſe without implying a
proportionate augmentation in other employments of money.
:
§ 89.
The current intereft of money is the standard by which
the abundance or fcarcity of capitals may be judged;
it is the Scale on which the extent of a nation's capacity
for enterpriſes in agriculture, manufactures, and com-
merce may be reckoned.
Thus the current intereft of money may be confidered as
a ftandard of the abundance or fcarcity of capitals in a nation,
and of the extent of enterprifes of every denomination into which
she may launch: it is manifeft that the lower the intereft of money
is, the more valuable is the land. A man that has an income
of fifty thousand livres if the land fold but at the rate of twenty
years purchaſe, is an owner of only one million; he has two
millious if the land is fold at the rate of forty, If the inter-
eft is at five per cent. Any land to be manured would continue
fallow, if befides the recovery of the advances, and the retri-
bution due to the care of the cultivator, its products would not
afford five per cent. No manufactory, no commerce can exift,
Go )
that does not bring in five per cent. exclufively of the falary
and equivalents for the risk and trouble of the undertaker.
If there is a neighbouring nation in which the intereft ftands
only at two per cent., not only it will engroſs all the branches
of commerce, of which the nation, where an intereft at fife
per cent. is established, is excluded, but its manufacturers and
merchants, enabled to fatisfy themſelves with a lower intereft,
will alfo hold out their goods at a more moderate price,
will attract the almoft exclufive commerce of all articles, which
they are not prevented to fell by particular circumftances of
exceffive dearth, and expenfes of carriages over the nation by
which the intereft bears five per cent.
§ 90.
and
Influence of the rate of intereft of money on all lucrative
enterpriſes.
The price of the intereft may be looked upon as a kind of
level, under which all labor, culture, induftry, or commerce
acts. It is like a fee expanded over a vaft country; the tops
of the mountains rife above the furface of the water, and form
fertile and cultivated islands. If this fea happens to give way,
in proportion as it defcends, sloping ground, then plains and
vallies appear, which cover themfelves, with productions of
every kind. It wants no more than a foot elevation, or falling,
to inundate or to restore culture to unmeaſurable tracts of land.
It is the abundance of capitals that animates enterpriſe; and
a low intereft of money is at the fame time the effect and á
proof of the abundance of capitals.
§ 91.
The total riches of a nation confift, 1. In the clear re-
venue of all the real eftates, multiplied by the rate of
the price of land. 2. In the fum of all the moveable
riches exifting in a nation.
Real eſtates are equivalent to any capital equal to their
annual revenue, multiplied by the current rate at which lands
are fold. Thus, if we add the revenue of all lands, viz. the
1 1
"
1
A
( 61 )
}
સ્
1
clear revenue they render to the proprietor, and to all those
that share. in the property, as the lord that levies a rent, the.
curate that levies the tithe, the fovereign that levies the tax:
if, fay I, we should add all thefe fums, and multiply them.
by the rate at which lands are fold, we would have the fum,
of all the wealth of a nation in real eftates. To have the whole
of a nation's wealth, the moveable riches ought to be joined,
which confifts in the fum of capital converted into enterprifes
of culture, induſtry, and commerce, which is never loft; as all
advances, in any kind of undertaking muft uncealingly return.
to the undertaker, to be unceasingly converted on enterprifes,
which without that could not be continued. It would be a
grofs miſtake to confound the immenfe mafs of moveable riches
with the maſs of money that exifts in a ftate; the latter is a ſmall
object in comparifon. It fuffices, to convince one's felf, ta
remember the immenfe quantity of beafts, utenfils, and feed,
which conftitute the advances of agriculture; the materials,
tools, moveables, and merchandizes of every kind, that fill
up the workhoufes, shops, and warehouſes of all manufacturers,
of all merchants, and of all traders, and it will be plain, that
in the totality of richefs either real or moveable of a nation,
the fpecie makes but an inconfiderable part: but all riches and
money being continually exchangeable, they all reprefent money,
and money reprefents them all.
§ 92.
1
The Sum of lent capitals cannot be understood without
a twofold employing.
We must not include in the calculation of the riches of a nation
the fum of lent capitals; for the capitals could only be lent either
to proprietors of lands, or to undertakers to enhance their
value in their enterprifes, fince there are but theſe two kinds of
people that can anfwer for a capital, and diſcharge the intereft;
a fum of money lent to people who have neither eſtate nor in-
duftry, would be a dead capital, and not an active one. It the
owner of land of 400,000 livre's borrows one hundred, his land
is charged with a rent that diminishes his revenue by that fum.
If he should fell it, out of the 400,000 livres he would receive,
( 62 )
}
:
one hundred are the property of the creditor. By thefe means
the capital of the lender would always form, in the calculation.
of extant riches, a double eſtimate with a part equal to the
value of the land. The land is always worth 400,000l. when the
proprietor lends 100,000 1.; that does not make 500,000 1.
it only makes that in the 400,000 1. one hundred thouſand
belongs to the lender and that there remains no more than
300,000l. to the borrower.
•
The fame double eftimate would have room in the calcula
tion, if we should comprehend in the total calculation of ca-
pitals, the money lent to an undertaker to be employed in ade
vance for his undertaking; it only refults, that that ſum, and
the part of the profits which reprefents the intereft, belongs to
the lender. Let a merchant employ to,000 livres of his pro
perty in his trade, and engroſs the whole profit, or let him have
thofe 10,000 livres borrowed of another, to whom he pays the
intereft, fatisfied with the overplus of profit, and the falary of
his induftry, it makes only 10,000 livres.
But if we cannot include, without making a double eftimate,
in the calculation of national riches, the capital of the money
lent on intercft, we ought to call in the other kinds of move-
ables, which, though originally forming an object of expenfe,
and not carrying any profit, become, however, by their duration,
a true capital, that augments without ceafing; and which, as
it may occafionally be exchanged for money, is as if it was a
ftock in ftore, which may enter into commerce, and make good,
when neceffary, the lofs of other capitals. Such are the move-
ables of every kind; jewels, plates, paintings, ftatues, ready
money shut up in chefts by mifers: all thofe matters have a
value, and the fum of all thofe values may make a confider
able object among wealthy nations. Yet be it confiderable or
not, it must always be added to the price of real eftates, and
to that of circulating advances in enterprifes of every deno
mination, to form the total fum of the riches of a nation. As
for the reft it is fuperfluous to fay, though it is eafy to be de-
fined, as we have juft done, in what confifts the totality of
the riches of a nation; it is probably impoffible to difcover to
how much they amount, unleſs fome rule be found out, to
fix the proportion of the total commerce of a nation, with the
1
(63)
revenue of its land; a feaſible thing, but which has not been
executed as yet in a manner to difpel all doubts.
§ 93.
In which of the three claffes of fociety the lenders of
money are to be ranked.
Let us fee now, how, what we have juft difcuffed about
the different ways of employing capitals, agrees with what we
have before established about the divifion of all the members
of fociety in three claffes, the one the producing clafs of agri-
cultors, the induftrious or trading clafs, and the difpofing
clafs, or clafs of proprietors."
!
1
$94.
The lender of money belongs, as to his perfon, to the
difpofing clafs.
We have feen that every rich man is neceffarily poffeffor
either of a capital in moveable riches, or funds equivalent to
a capital. Any fund of land is of equal value with a capital;
confequently every proprietor is a capitalift, but not every
capitalift a proprietor of a real eftate; and the poffeffor of a
moveable capital may chufe to confer it on acquiring funds, or
to improve it in enterpriſes of the cultivating clafs, or of the
induftrious clafs. The capitalift turned an undertaker in culture
or induſtry, is no more of the diſpoſing claſs, than the fimple
workmen in thofe two lines; they are both taken up in the
continuation of their enterprifes. The capitalift who keeps to
the lending money, lends it either to a proprietor or to an
undertaker. If he lends it to a proprietor, he feems to belong
to the clafs of proprietors, and he becomes copartitioner in the
property; the income of the land is deftined to the payment of
the intereft of his truft, the value of the funds is equal to
the fecurity of his capital.
If the moneylender has lent to an undertaker, it is certain
that his perfon belongs to the difpofing clafs; but his capital
continues destined to the advances of the enterpriſer, and cannot
be withdrawn without hurting the enterprife, or without being
replaced by a capital of equal value.
1
༨
>
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↑
3
64 )
$ 95.
The ufe which the money-lender makes of his intereft,
Indeed, the intereft he draws from that capital feems to make
him of the difpofing clafs, fince the undertaker and the enter-
prife may shift without it. It feems alfo we may form an in-
ference, that in the profits of the two laborious claffes, either
of the culture of the earth or induftry, there is a diſpoſing
portion, namely, that which anſwers to the intereft of the ad-
vances calculated on the current rate of intereft of money lent;
it appears alfo that this conclufion feems likewife to come up
to what we have faid, that the mere clafs of proprietors had
a revenue properly fo called, a diſpoſing revenue, and that all
the numbers of the other claffes had only falaries or profits. This
wants fome future elucidation. If we confider the thoufand
crowns that a man draws annually who has near 60,000 livres,
to a merchant in attention to the ufe he may make of it, there
is no doubt of this being perfectly difpofing, fince the enterprife
may fubfift without it..
to the
§ 96.
The intereft of money is not difpofing in this fenfe, fo
far as the ftate being authorized to appropriate to itſelf
without any convenience a part for its wants.
'But it does not enfue, that they be difpofing in ſuch a ſenſe
that the state may appropriate to itſelf with propriety a portion
for the public wants. Thofe 1000 crowns are not a retribution,
which culture or commerce beftows gratuitously on him that
makes the advance; it is the price and the condition of this
advance, independent of which the enterprife could not ſubſiſt.
If this retribution is diminished, the capitalift will withdraw
his money, and the undertaking will ceafe. This retribution
ought then to be inviolable, and enjoy an entire immunity,
becauſe it is the price of an advance made for the enterpriſe,
without which the enterprife could not exift. To encroach up-
on it, would cauſe an augmentation in the price of advances in
all enterpriſes, and confequently diminish the enterprifes them-
felves, that is to fay culture, induftry, and commerce.
This
(65 65
)
This anfwer should lead us to infer, that if we have fald
that the capitalist who had lent to a proprietor, ſeemed to belong
to a clafs of proprietors, this had fomewhat equivocal in it
which wanted to be elucidated. In fact, it is strictly true, that
the intereft of his money, is not difpofing, that is, it is not
more fufceptible of retrenching; than that of money lent to the
undertakers of culture and commerce. But the intereft is equally
the price of the free agreement, and they cannot retrench any
part of it without altering or changing the price of the loan.
Now it imports little to whom the loan has been made; if the
price decreaſes or augments for the proprietor of lands, it will
alfo decreafe and augment for the cultivator, the manufacturer,
and the merchant. In a word the proprietor who lends money
ought to be confidered as a dealer in a commodity abfolutely
neceffary for the production of riches, and which cannot be at
too low a price. It is alfo as unreaſonable to charge this com-
merce with duties, as it would be to lay a duty on a dunghill
which ferves to manure the land. Let us conclude from hence,
that the perfon who lends money belongs properly to the
difpofable clafs as to his perfon, becauſe he has nothing to do;
but not as to the nature of his property, whether the intereſt
of his money is paid by the proprietor of land out of a portion
of his income, or whether it is paid by an undertaker out of a
part of his profits defigned for the intereft of his advances.
i
§ 97.
Objection.
It may doubtlefs be objected, that the capitalift may indif
ferently either lend his money, or employ it in the purchaſe of
land: that in either cafe he only receives an equivalent profit for
his money, and which ever way he has employed it, he ought
not the lefs to contribute to the public charges.
§ 98.
Anſwer to this objection.
I anfwer first, that in fact, when the capitalift has purchaſed
an eftate, the revenue will be equal for him, to what he would
have received for his money by lending it; but there is this effential
1
T
1
**
* *
1
( 66 )
difference with refpect to the ftate, that the price which he gives
for his land does not contribute in any refpect to the income it
produces. It would not have produced a lefs income, if he had
not purchaſed it. This income as we have already explained,
confifts in what the land produces beyond the falary of the cul-
tivators, and the intereft of their advances. It is not the fame
with the intereft of money; it is the exprefs condition of the
loan, the price of the advance; without which the revenue or pro-
fits, which ferve to pay it, could never exiſt.
1 anſwer in the fecond place, that if the lands were charged
Separately with the contribution to the public expenfes, as foon
as that contribution shall be once regulated, the capitalift who
shall purchaſe theſe lands will not reckon as intereft for his
money, that part of the revenue which is affected by this con-
tribution. The fame as a man who now buys an eftate does not
buy the tithe which the curate or clergy receives, but the re
venue which remains after that tithe is deducted,
§ 99.
There exifts no revenue truly definable in a fate, but
the clear produce of lands.
It is manifeft by what I have faid, that the intereſt of money
lent is taken on the revenue of lands, or on the profits of en-
terpriſes of culture, and commerce. But we have already shown
that theſe profits themſelves were only a part of the pro-
duction of lands; that the product of land is divided in two por-
tions; that the one was defigned for the falary of the cultivator,
to his profits, to the recovery and intereft of his advances; and
that the other was the part of the proprietor, or the revenue
which the proprietor expended at his option, and where he con-
tributes to the general expenfes of the ftate.
We have demonftrated, that what the other claffes of fociety
received was merely the falaries and profits paid either by
the proprietor upon his revenue, or by agents of the productive
clafs on the part deftined to their wants, and which they are
obliged to purchafe of the induftrious clafs. Whether thefe pro-
fits be now diftributed in wages to the workmen, in profits of
( 67 )
undertakers, or in interefts of advances, they no doubt change
the nature, augment the fum of the revenue produced by the
productive clafs, over and above the price of labor, in which
the induſtrious claſs does not participate, but as far as the price
of its labor.
Thence it follows that there is no revenue but the clear
product of land, and that all other profit is paid, either by the
revenue, or makes part of the expenditure, that ferves to pro-
duce the revenue.
§
100.
The land has alfo furnished the totality of moveable
riches, or exifting capitals, and which are formed
only by a portion of its productions preſerved every year.
Not only there does not exift, nor can exift, any other re-
venue than the clear product of land, but it is alfo the earth
that has furnished all capitals that form the maſs of all the ad-
vances of culture and commerce. It has produced without culture
the first grofs and indispenfible advances of the firft laborers;
all the reſt is the accumulated fruits of the economy of the fuc-
ceffive ages fince they have begun to cultivate the earth. This
@conomy has effect not only on the revenues of proprietors,
but alfo on the profits of all the members of laborious claffes,
It is even generally true, that, though the proprietors have
more overplus, they fpare lefs, for having more treaſure, they
have more defires and more pallions; they think themſelves
more enfured of their fortune; they are more defirous of enjoy-
ing it contentedly, than to augment it; luxury is their purfuit.
The ftipendiary clafs, and chiefly the undertakers of the other
claffes, receiving profits proportionate to their advances, talents,
and activity, have, though they are not poffeffed of a revenue
properly fo called, a fuperfluity beyond their fubfiftence; but
abforbed, as they generally are, only in their enterpriſes, and
anxious for increafing their fortune, reftrained by their labor
from amuſements and expenfive pathons, they fave their whole
fuperfluity, to reconvert it in their enterpriſes, and augment it
The most part of the undertakers of culture borrow but little,
(68 68
)
A
and they almoft all reft on the improving of their own funds.
The undertakers of other bufineffes, who wish to render their
fortune folid, ftrive likewiſe to attain it, but without more
than common abilities. Thoſe that make their enterpriſes on
borrowed funds, are greatly in danger of failing. However,
although capitals are formed in part by the faving of profits in
the laborious claffes, yet, as thofe profits fpring always from
the earth, they are almoſt all repaid either by the revenue, or
in the expenfes that ferve to produce the revenue; it is evident
that the capitals are derived from the earth as well as the re-
venue, or rather that they are but an accumulation of the part
of riches produced by the earth, which the proprietors of the
revenue, or thofe that share it, may lay every year in ſtore,
without confuming it on their wants.
§
ΙΟΙ.
Although money is the direct object in Saving, and it
is, if we may call it fo, the first matter of capitals
in their formation, yet money and Specie forms but
an infenfible part in the total fum of capitals.
We have ſeen what an inconfiderable part money forms in
the total fum of extant capitals, but it makes a very large one
in the formation of capitals. In fact, almoſt all favings are
only in money; it is in money that the revenue is delivered
to the proprietors, that the advances and profits are received
by the undertakers of every kind; it is their money which they
fave, and the annual increaſe in capitals happens in money;
but all the undertakers make no other ufe of it, than immedi
ately to convert it into the different kinds of effects on which
their enterpriſes roll; thus that money returns into circulation,
and the greater part of capitals exift but in effects of different
natures, as we have already explained it.
FINIS,
AN
INQUIRY
INTO THE
NATURE AND CAUSES
OF THE
!
WEALTH
OF NATIONS.
INTRODUCTION AND PLAN OF THE WORK.
THE annual labor of every nation is the fund
which originally fupplies it with all the neceffaries
and conveniencies of life which it annually con-
fumes, and which confift always either in the
immediate produce of that labor, or in what is
purchaſed with that produce from other nations.
According, therefore, as this produce, or what
is purchaſed with it, bears a greater or fmaller
proportion to the number of thoſe who are to con-
fume it, the nation will be better or worſe ſupplied
with all the neceffaries and conveniencies for which
it has occafion.
But this proportion muſt in every nation be
regulated by two different circumftances; firit, by
the fkill, dexterity, and judgment with which
W. of N. 1.
1
;
ទ
THE NATURE AND CAUSES OF
台
​↓
•
its labor is generally applied; and, fecondly, by
the proportion between the number of thoſe who
are employed in ufeful labor, and that of thoſe
who are not ſo employed. Whatever be the foil,
climate, or extent of territory of any particular
nation, the abundance or fcantinefs of its annual
fupply muft, in that particular fituation, depend
upon thoſe two circumftances.
The abundance or fcantinefs of this fupply too
feems to depend more upon the former of thoſe two
circumſtances than upon the latter. Among the
favage nations of hunters and fifhers, every indi-
vidual who is able to work, is more or lefs em-
ployed in uſeful labor, and endeavours to provide,
as well as he can, the neceffaries and convéniencies
of life, for himſelf, or fuch of his family or, tribe
as are either too old, or too young, or too infirm to
go a hunting and fishing. Such nations, however,
are fo miferably poor, that, from mere want, they
are fréquently reduced, or, at leaft, think themſelves
reduced, to the neceffity ſometimes of directly de-
ftroying, and fometimes of abandoning their infants,
their old people, and thoſe afflicted with lingering
diſeaſes, to perifh with hunger,, or to be devoured
by wild beafts. Among civilized and thriving
nations, on the contrary, though a great number
of people do not labor at all, many of whom con-
fume the produce of ten times, frequently of a
hundred times more labor than the greater part of
thoſe who work; yet the produce of the whole
labor of the fociety is fo great, that all are often
abundantly ſupplied, and a workman, even of the
1
سامانه
THE WEALTH OF NATIONS.
3
loweſt and pooreft order, if he is frugal and induf-
trious, may enjoy a greater fhare of the neceffa-
ries and conveniencies of life than it is poffible for
any favage to acquire.
The caufes of this improvement, in the produc-
tive powers of labor, and the order, according
to which its produce is naturally diſtributed among
the different ranks and conditions of men in the
fociety, make the fubject of the firft Book of this
Inquiry.
Whatever be the actual ſtate of the fkill, dexter-
ity, and judgment with which labor is applied in
any nation, the abundance, or fcantineſs of its
annual fupply muft depend, during the continuance
of that ſtate, upon the proportion between the
number of thoſe who are annually employed in
uſeful labor, and that of thoſe who are not ſo
employed. The number of uſeful and productive
laborers, it will hereafter appear, is every where
in proportion to the quantity of capital ftock which
is employed in fetting them to work, and to the
particular way in which it is fo employed. The
Second Book, therefore, treats of the nature of
capital ftock, of the manner in which it is gradu
ally accumulated, and of the different quantities
of labor which it puts into motion, according to
the different ways in which it is employed.
Nations tolerably well advanced as to ſkill, dex-
terity, and judgment, in the application of labor,
have followed very different plans in the general
conduct or direction of it; and thofe plans have
not all been equally favorable to the greatnefs of
CDGI
4
THE NATURE AND CAUSES OF
its produce. The policy of fome nations has given
extraordinary encouragement to the indufry of
the country; that of others to the induſtry of towns,
Scarce any nation has dealt equally and impartially
with every fort of induftry. Since the downfal of
the Roman empire, the policy of Europe has
been more favorable to arts, manufactures, and
commerce, the induftry of towns; than to agri-
culture, the induftry of the country. The circum-
ſtances which feem to have introduced and effab-
liſhed this policy are explained in the Third Book.
Though thoſe different plans were, perhaps,
first introduced by the private interefts and preju-
dices of particular orders of men, without any regard
to, or forefight of, their confequences upon the
general welfare of the fociety; yet they have
given occaſion to very different theories of politic-
al œconomy; of which fome magnify the import-
ance of that induftry which is carried on in towns,
others of that which is carried on in the country.
Thoſe theories have had a. confiderable influence
not only upon the opinions of men of learning,
but upon the public conduct of princes and fover-
eign ftates.
I have endeavoured, in the Fourth
Book, to explain, as fully and diftin&ly as I can,
thoſe different theories and the principal effects
which they have produced in different ages and
nations.
To explain in what has confifted the revenue
of the great body of the people, or what has been
the nature of thoſe funds, which, in different
ages and nations, have fupplied their annual
9
THE WEALTH OF NATIONS.
5
conſumption, is the object of theſe Four firft Books.
The Fifth and laſt Book treats of the revenue of the
fovereign, or commonwealth. In this book I
have endeavoured to fhow; firft, what are the
neceſſary expenſes of the fovereign, or common-
wealth; which of thofe expenfes ought to be de-
frayed by the general contribution of the whole
fociety; and which of them, by that of fome par-
ticular part only, or of fome particular members
of it: fecondly, what are the different methods
in which the whole fociety may be made to con-
tribute towards defraying the expenſes incumbent
on the whole fociety, and what are the principal
advantages and inconveniencies of each of thoſe
methods: and, thirdly and laftly, what are the
reafons and caufes which have induced almoſt all
modern governments to mortgage fome part of
this revenue, or to contract debts, and what have
been the effects of thofe debts upon the real wealth,
the annual produce of the land and labor of the
fociety.
6
THE NATURE AND CAUSES OF
BOOK I.
Of the Cauſes of improvement in the
productive Powers of Labor, and of
the order according to which its Pro-
duce is naturally diftributed among
the different Ranks of the People.
CHAP. I.
Of the Divifion of Labor.
THE greateft improvement in the productive
powers of labor, and the greater part of the fkill,
dexterity, and judgment with which it is any
where directed, or applied, feem to have been
the effects of the divifion of labor,
The effects of the divifion of labor, in the
general buſineſs of ſociety, will be more eaſily
underſtood, by confidering in what manner it
operates in fome particular manufactures. It is
commonly ſuppoſed to be carried furtheft in ſome
very trifling ones;. not perhaps that it really is
carried further in them than in others of more
importance; but in thoſe trifling manufactures.
which are déftined to fupply the fmall wants of
but a ſmall number of people, the whole number
of workmen muft néceffarily be ſmall; and thoſe
employed in every different branch of the work
THE WEALTH OF NATIONS.
7
can often be collected into the fame workhouſe,
and placed at once under the view of the fpectator.
In thoſe great manufactures, on the contrary,
which are deſtined to fupply the great wants of
the great body of the people, every different
branch of the work employs fo great a number
of workmen, that it is impoffible to collect them
all into the fame workhouſe. We can feldom fee
more, at one time, than thoſe employed in one
fingle branch. Though in fuch manufactures,
therefore, the work may really be divided into a
much greater number of parts, than in thoſe of a
more trifling nature, the divifion is not near fo ob-
vious, and has accordingly been much leſs obſerved.
To take an example, therefore, from a very
trifling manufacture; but one in which the divifion
of labor has been very often taken notice of, the
trade of the pin maker; a workman not educated
to this buſineſs, which the divifion of labor has
rendered a diſtinct trade, nor acquainted with
the uſe of the machinery employed in it, to the
invention of which the fame divifion of labor
has probably given occafion, could ſcarce, per-
haps, with his utmoſt induſtry, make one pin in
a day, and certainly could not make twenty. But
in the way in which this buſineſs is now carried
on, not only the whole work is a peculiar trade,
but it is divided into a number of branches, of
which the greater part are likewiſe peculiar trades.
One man draws out the wire, another ftraightens
it, a third cuts it, a fourth points it, a fifth grinds
it at the top for receiving the head; to make the
8
THE NATURE AND CAUSES OF
head requires two or three diftinct operations; to
put it on, is a peculiar bufinefs, to whiten the
pins is another; it is even a trade by itſelf to put
them into the paper; and the important buſineſs
of making a pin is, in this manner divided into
about eighteen diftinct operations, which in fome
manufactories, are all performed by diftinct hands,
though in others the fame man will fometimes
perform two or three of them. I have ſeen a ſmall
manufactory of this kind where ten men only
were employed, and where fome of them confe-
quently performed two or three diftinct operations,
But though they were very poor, and therefore
but indifferently accommodated with the neceffary
machinery, they could, when they exerted them-
ſelves, make among them about twelve pounds
of pins in a day. There are in a pound upwards
of four thousand pins of a middling fize. Thoſe
ten perfons, therefore, could make among them
upwards of forty-eight thouſand pins in a day,
Each perſon, therefore, making a tenth part of
forty-eight thouſand pins, might be conſidered
as making four thousand eight hundred pins in a
day. But if they had all wrought feparately and
independently, and without any of them having
been educated to this particular bufinefs, they
certainly could not each of them have made
twenty, perhaps not one pin in a day; that is,
certainly, not the two hundred and fortieth,
perhaps not the four thousand eight hundredth
part of what they are at prefent capable of
THE WEALTH OF NATIONS.
3
performing, in confequence of a proper diviſion and
combination of their different operations.
In every other art and manufacture, the effects
of the divifion of labor are fimilar to what they
are in this very trifling one; though in many of
them, the labor can neither be ſo much ſubdivided,
nor reduced to fo great a fimplicity of operation,
the divifion of labor, however, fo far as it can be
introduced, occafions, in every art, a proportion-
able increaſe of the productive powers of labor.
The feparation of different trades and employments
from one another, ſeems to have taken place, in
confequence of this advantage. This feparation
too is generally carried furtheft in thoſe countries
which enjoy the highest degree of induftry and
improvement; what is the work of one man in a
rude ſtate of ſociety, being generally that of fever-
al in an improved one. In every improved fociety,
the farmer is generally nothing but a farmer; the
manufacturer, nothing but a manufacturer. The
labor too which is neceffary to produce any one.
complete manufacture, is almoft always divided
among a great number of hands. How many dif
ferent trades are employed in each branch of the
linen and woollen manufactures, from the growers
of the flax and the wool, to the bleachers and
fmoothers of the linen, or to the diers and dref
fers of the cloth! The nature of agriculture,
indeed does not admit of fo many fubdivifions
of labor, nor of fo complete a feparation of one
buſineſs from another, as manufactures. It is
impoffible to ſeparate fo entirely, the bufineſs of
1
10
THE NATURE AND CAUSES OF
the grazier from that of the corn-farmer, as the
trade of the carpenter is commonly ſeparated from
that of the fmith. The ſpinner is almoſt always
a diſtinct perfon from the weaver; but the plough-
man, the harrower, the fower of the feed, and
the reaper of the corn, are often the fame. The
occafions for thoſe different forts of labor return-
ing with the different feafons of the year, it is
impoffible that one man fhould be conftantly em-
ployed in any one of them. This impoffibility
of making fo complete and entire a feparation of
all the different branches of labor employed in
agriculture, is perhaps the reaſon why the improve-
ment of the productive powers of labor in this art,
does not always keep pace with their improve-
ment in manufactures. The moſt opulent nations,
indeed, generally excel all their neighbours in
agriculture as well as in manufactures; but they
are commonly more diftinguifhed by their fuperi-
ority in the latter than in the former. Their lands
are in general better cultivated, and having more
labor and expenfe beftowed upon them, produce
more in proportion to the extent and natural fer-
tility of the ground. But this fuperiority of pro-
duce is feldom much more than in proportion to
the fuperiority of labor and expenſe. In agricul-
ture, the labor of the rich country is not always
much more productive than that of the poor; or
at leaſt, it is never ſo much more productive, as
it commonly is in manufactures. The corn of
the rich country, therefore, will not always, in
the fame degree of goodnefs, come cheaper to
THE WEALTH OF NATIONS.
11
market than that of the poor. The corn of Po-
land, in the fame degree of goodness, is as cheap
as that of France, notwithſtanding the fuperior
opulence and improvement of the latter country.
The corn of France is, in the corn-provinces,
fully as good, and in moft years nearly about the
fame price with the corn of England, though, in
opulence and improvement, France is perhaps
inferior to England. The corn-lands of England,
however, are better cultivated than thofe of France,
and the corn-lands of France are faid to be much
better cultivated than thoſe of Poland. But thḥough
the poor country, notwithſtanding the inferiority
of its cultivation, can, in fome meaſure, rival
the rich in the cheapneſs and goodneſs of its corn,
it can pretend to no fuch competition in its ma-
nufactures; at leaſt if thoſe manufactures fuit the
foil, climate, and fituation of the rich country.
The filks of France are better and cheaper than
thoſe of England, becauſe the filk manufacture,
at leaſt under the prefent high duties upon the
importation of raw filk, does not fo well fuit
the climate of England as that of France. But
the hard-ware and the coarfe woollens of England
are beyond all compariſon fuperior to thofe of
France, and much cheaper too in the fame de-
gree of goodneſs. In Poland there are faid to be
ſcarce any manufactures of any kind, a few of
thoſe coarfer houſehold manufactures excepted,
without which no country can well fubfift.
This great increaſe of the quantity of work,
which, in confequence of the divifion of labor,
12
THE NATURE AND CAUSES OF
the fame number of people are capable of perform-
ing, is owing to three different circumftances;
firft, to the increaſe of dexterity in every parti-
cular workman; fecondly, to the faving of the
time which is commonly loft in paffing from one
ſpecies of work to another; and laftly, to the
invention of a great number of machines which
facilitate and abridge labor, and enable one man
to do the work of many.
Firſt, the improvement of the dexterity of the
workman neceffarily increaſes the quantity of the
work he can perform; and the divifion of labor,
by reducing every man's bufinefs to fome one fim-
ple operation, and by making this operation the
fole employment of his life, neceffarily increaſes
very much the dexterity of the workman. A com-
mon ſmith, who, though accuſtomed 'to handle
the hammer, has never been used to make nails,
if upon ſome particular occafion he is obliged to
attempt it, will fearce, I an affured, be able to
am
make above two or three hundred nails in a day,
and thoſe too very bad ones. A fmith who has
been accuſtomed to make nails, but whofe fole or
principal buſineſs has not been that of a nailer,
can ſeldom with his utmoft diligence make more
than eight hundred or a thouſand nails in a day.
I have ſeen ſeveral boys under twenty years of age
who had never exerciſed any other trade but that
of making nails, and who, when they exerted
themſelves, could make, each of them, upwards
of two thouſand three hundred nails in a day. The
making of a nail, however, is by no means one
THE WEALTH OF NATIONS.
13
}
of the fimpleft operations. The fame perfon blows
the bellows, firs or mends the fire as there is occa-
fion, heats the iron, and forges every part of
the nail: In forging the head too he is obliged to
change his tools. The different operations into
which the making ofa pin, or of a metal button, is
fubdivided, are all of them much more fimple, and
the dexterity of the perfon, of whofe life it has been
the fole buſineſs to perform them, is uſually much
greater. The rapidity with which fome of the
operations of thoſe manufactures are performed,
exceeds what the human hand could, by thoſe who
had never ſeen them, be fuppofed capable of
acquiring.
Secondly, the advantage which is gained by
faving the time commonly loft in paffing from
one fort of work to another, is much greater
than we ſhould at firft view be apt to imagine it. It
it impoffible to pafs very quickly from one kind
of work to another, that is carried on in a different
place, and with quite different tools. A country
weaver, who cultivates a fmall farm; muft lofe a
good deal of time in paffing from his loom to the
field, and from the field to his loom. When the two
trades can be carried on in the fame workhoufe, the
lofs of time is no doubt much lefs. It is even in this
caſe, however, very confiderable. A man commonly
faunters a little in turning his hand from one fort of
employment to another. When he firſt begins the
new work he is feldom very keen and hearty; his
mind, as they ſay, does not go to it, and for fome
time he rather trifles than applies to good purpoſe.
14.
THE NATURE AND CAUSES OF
The habit of fauntering and of indolent carelefs ap-
plication, which is naturally, or rather neceffarily
acquired by every country workman who is obliged
to change his work and his tools every half hour,
and to apply his hand in twenty different ways al-
moft every day of his life; renders him almoſt always
flothful and lazy, and incapable of any vigorous
application even on the moſt preffing occafions.
Independent, therefore, of his deficiency in point
of dexterity, this cauſe alone muſt always reduce
confiderably the quantity of work which he is ca-
pable of performing.
Thirdly, and laftly, every body muſt be ſenſible
how much labor is facilitated and abridged by the
application of proper machinery. It is unneceffary
to give any example. I fhall only obferve, therefore,
that the invention of all thoſe machines by which
labor is fo much facilitated and abridged, ſeems to
have been originally owing to the divifion of labor.
Men are much more likely to diſcover eafier and
readier methods of attaining any object, when the
whole attention of their minds is directed towards
that fingle object, than when it is diffipated among
a great variety of things. But in confequence of the
divifion of labor, the whole of every man's atten-
tion comes naturally to be directed towards fome
one very fimple object. It is naturally to be ex-
pected, therefore, that fome one or other of thoſe
who are employed in each particular branch of
labor, fhould foon find out eaſier and readier
methods of performing their own particular
work, wherever the nature of it admits of ſuch
THE WEALTH OF NATIONS.
15
improvement. A great part of the machines made
ufe of in thofe manufactures in which labor is
moft fubdivided, were originally the inventions
of common workmen, who, being each of them
employed in fome very fimple operation, naturally
turned their thoughts towards finding out eafier
and readier methods of performing it. Whoever
has been much accuſtomed to vifit fuch manufac-
tures, muſt frequently have been ſhown very pretty
machines, which were the inventions of fuch work-
men, in order to facilitate and quicken their own
particular part of the work. In the firft fire-engines,
a boy was conftantly employed to open and ſhut
alternately the communication between the boiler
and the cylinder, according as the piſton either
afcended or defcended. One of thoſe boys, who
loved to play with his companions, obſerved that,
by tying a ftring from the handle of the valve
which opened this communication to another part
of the machine, the valve would open and thut
without his affiftance, and leave him at liberty to
divert himſelf with his play fellows. One of the
greateſt improvements that has been made upon
this machine, fince it was firft invented, was in
this manner the diſcovery of a boy who wanted
to fave his own labor.
All the improvements in machinery, however,
have by no means been the inventions of thoſe
who had occafion to ufe the machines. Many
improvements have been made by the ingenuity
of the makers of the machines, when to make
them became the bufinefs of a peculiar trade; and
16 THE NATURE AND CAUSES OF
fome by that of thoſe who are called philofophers
or men of fpeculation, whoſe trade it is not to do
any thing, but to obferve every thing; and who,
upon that account, are often capable of combining
together the powers of the moft diftant and diffi-
milar objects. In the progrefs of fociety, philofophy
or fpeculation becomes, like every other employ-
ment, the principal or fole trade and occupation
of a particular clafs of citizens. Like every other
employment too, it is fubdivided into a great
number of different branches, each of which affords
occupation to a peculiar tribe or claſs of philofo-
phers; and this fubdivifion of employment in
philofophy, as well as in every other bufinefs,
improves dexterity, and faves time. Each indi-
vidual becomes more expert in his own peculiar
branch, more work is done upon the whole, and
the quantity of fcience is confiderably increaſed
by it.
It is the great multiplication of the produc-
tions of all the different arts, in confequence of
the divifion of labor, which occafions, in a
well-governed ſociety, that univerfal opulence
which extends itſelf to the loweſt ranks of the
people. Every workman has a great quantity
of his own work to diſpoſe of beyond what he
himſelf has occafion for ; and every other work-
man being exacly in the fame fituation, he is
enabled to exchange a great quantity of his own
goods for a great quantity, or, what comes to
the fame thing, for the price of a great quantity
of
!
THE WEALTH OF NATIONS.
17
of theirs. He fupplies them abundantly with
what they have occafion for, and they accom-
modate him as amply with what he has occafion
for, and a general plenty diffufes itſelf through
all the different ranks of the fociety.
Obferve the accommodation of the most com-
mon artificer or day-laborer in a civilized and
thriving country, and you will perceive that the
number of people of whofe induſtry a part,
though but a ſmall part, has been employed in
procuring him this accommodation, exceeds all
computation.
The woollen coat, for example,
which covers the day - laborer, as coarfe and
rough as it may appear, is the produce of the
joint labor of a great multitude of workmen.
The fhepherd, the forter of the wool, the wool-
comber or carder, the dier, the fcribbler, the
ſpinner, the weaver, the fuller, the dreffer, with
many others, muft all join their different arts in
order to complete even this homely production.
How many merchants and carriers, befides, muſt
have been employed in tranſporting the materials
from ſome of thoſe orkmen to others who often
live in a very diftant part of the country! how
much commerce and navigation in particular,
how many ſhip-builders, failors, fail-makers, rope-
makers, muſt have been employed in order to bring
together the different drugs made ufe of by the dier,
which often come from the remoteft corners of the
world! What a variety of labor too is neceſſary in
order to produce the tools of the meaneft of thoſe
workmen To fay nothing of fuch complicated
W. of N.
1.
2
18 THE NATURE AND CAUSES OF
machines as the fhip of the failor, the mill of the
fuller, or even the loom of the weaver, let us
confider only what a variety of labor is requifite
in order to form that very fimple machine, the
fhears with which the fhepherd clips the wool.
The miner, the builder of the furnace for fmelting
the ore, the feller of the timber, the burner of
the charcoal to be made ufe of in the fmelting-
houſe, the brick-maker, the brick-layer, the
workmen who attend the furnace, the mill-wright,
the forger, the ſmith, muſt all of them join their
different arts in order to produce them. Were we
to examine, in the ſame manner, all the different
parts of his dreſs and houſehold furniture, the
coarſe linen fhirt which he wears next his ſkin,
the ſhoes which cover his feet, the bed which he
lies on, and all the different parts which compoſe
it, the kitchen-grate at which he prepares his
victuals, the coals which he makes uſe of for that
purpoſe, dug from the bowels of the earth, and
brought to him perhaps by a long ſea and a long
land carriage, all the other utenfils of his kitchen,
all the furniture of his table, the knives and
forks, the earthen or pewter plates upon which
he ferves up and divides his victuals, the dif
ferent hands employed in preparing his bread
and his beer, the glaſs-window which lets in the
heat and the light, and keeps out the wind and
the rain, with all the knowledge and art requi-
Lite for preparing that beautiful and happy in-
vention, without which theſe northern parts of
the world could fcarce have afforded a very
ལ
17
THE WEALTH OF NATIONS.
19
comfortable habitation, together with the tools
of all the different workmen employed in pro-
ducing thoſe different conveniencies; if we ex-
amine, I fay, all theſe things, and confider what
a variety of labor is employed about each of
them, we fhall be fenfible that without the
affiftance and co-operation of many thoufands,
the very meaneſt perſon in a civilized country
could not be provided, even according to, what
we very falfely imagine, the eaſy and fimple
manner in which he is commonly accommodated.
Compared, indeed, with the more extravagant
luxury of the great, his accommodation muſt no
doubt appear extremely fimple and eafy; and
yet it may be true, perhaps, that the accommo-
dation of an European prince does not always
fo much exceed that of an induftrious and frugal
peaſant, as the accommodation of the latter
exceeds that of many an African king, the ab-
folute mafter of the lives and liberties of ten
thouſand naked favages.
CHA P. II.
Of the principle which gives occafion to the
Divifion of Labor.
THIS divifion of labor, from which fo
many advantages are derived, is not originally
the effect of any human wisdom, which foreſees
and intends that general opulence to which it
20
THE NATURE AND CAUSES OF
gives occafion: It is the neceffary, though very
flow and gradual confequence of a certain pro-
penfity in human nature which has in view no
fuch extenfive utility; the propenfity to truck,
barter, and exchange one thing for another.
Whether this propenfity be one of thofe
original principles in human nature, of which
no further account can be given; or whether,
as feems more probable, it be the neceffary
confequence of the faculties of reaſon and ſpeech;*
it belongs not to our prefent fubject to inquire.
It is common to all men, and to be found in
no other race of animals, which ſeem to know
neither this nor any other fpecies of contracts.
Two greyhounds, in running down the fame
hare, have ſometimes the appearance of acting in
fome fort of concert. Each turns her towards
his companion, or endeavours to intercept her
when his companion turns her towards himſelf.
This, however, is not the effect of any contract,
but of the accidental concurrence of their paf-
fions in the fame object at that particular time.
Nobody ever faw a dog make a fair and delibe-
rate exchange of one bone for another with
another dog. Nobody ever faw one animal by
its geftures and natural cries fignify to another,
this is mine, that yours; I am willing to give this
for that. When an animal wants to obtain fome-
thing either of a man or of another animal, it has
no other means of perfuafion but to gain the
favor of thoſe whofe fervice it requires. A puppy
fawns upon its dam, and a-fpaniel endeavours
THE WEALTH OF NATIONS.
21
by a thouſand attractions to engage the attention
of its mafter who is at dinner, when it wants to
be fed by him. Man fometimes ufes the fame
arts with his brethren, and when he has no other
means of engaging them to act according to his
inclinations, endeavours by every fervile and
fawning attention to obtain their good will. He
has not time, however, to do this upon every
occafion. In civilized fociety he ſtands at all times
in need of the co-operation and affiftance of great
multitudes, while his whole life is fearce fufficient
to gain the friendship of a few perfons. In
almoſt every other race of animals each in-
dividual, when it is grown up to maturity, is
entirely independent, and in its natural ftate has
occafion for the affiftance of no other living
creature. But man has almoft conftant occa-
fion for the help of his brethren, and it is in
vain for him to expect it from their benevolence
only. He will be more likely to prevail if he
can intereft their felf-love in his favor, and
fhow them that it is for their own advantage
to do for him what he requires of them. Who-
ever offers to another a bargain of any kind,
propoſes to do this. Give me that which I
want, and you fhall have this which you want,
is the meaning of every fuch offer; and it is in
this manner that we obtain from one another
the far greater part of thoſe good offices which
we ftand in need of. It is not from the benevo-
lence of the butcher, the brewer, or the baker,
that we expect our dinner, but from their
22 THE NATURE AND CAUSES OF
i
?
regard to their own intereft. We addrefs our-
felves, not to their humanity but to their ſelf-
love and never talk to them of our own
neceffities but of their advantages. Nobody but
a beggar chufes to depend chiefly upon the
benevolence of his fellow-citizens. Even a beggar
does not depend upon it entirely. The charity
of well-difpofed people, indeed, fupplies him
with the whole fund of his fubſiſtence. But
though this principle ultimately provides him with
all the neceffaries of life which he has occafion for,
it neither does nor can provide him with them as
he has occafion for them. The greater part of
his occafional wants are fupplied in the fame
manner as thoſe of other people, by treaty, by
barter, and by purchaſe. With the money which
one man gives him he purchaſes food. The old
clothes which another beftows upon him he ex-
changes for other old clothes which fuit him
better, or for lodging, or for food, or for money,
with which he can buy either food, clothes, or
lodging, as he has occafion.
As it is by treaty, by barter, and by purchaſe,
that we obtain from one another the greater part
of thofe mutual good offices, which we ftand in
need of, fo it is this fame trucking difpofition
which originally gives occafion to the divifion
of labor. In a tribe of hunters or fhepherds
a particular perſon makes bows and arrows, for
example, with more readineſs, and dexterity than
any other.
He frequently exchanges them for
cattle or for venifon with his companions; and
1
THE WEALTH OF NATIONS.
13
he finds at laft that he can in this manner get
more cattle and veniſon, than if he himſelf went
to the field to catch them. From a regard to
his own intereſt, therefore, the making of bows
and arrows grows to be his chief buſineſs, and
he becomes a fort of armorer. Another excels
in making the frames and covers of their little
huts or moveable houſes. He is accuftomed to
be of uſe in this way to his neighbours, who re-
ward him in the fame manner with cattle and
with veniſon, till at laft he finds it his intereſt
to dedicate himſelf entirely to this employment,
and to become a fort of houſe-carpenter. In the
ſame manner a third becomes a ſmith or a brazier,
a fourth a tanner or dreffer of hides or fkins, the
principal part of the clothing of favages. And
thus the certainty of being able to exchange all
that furplus part of the produce of his own labor,
which is over and above his own conſumption, for
fuch parts of the produce of other men's labor as
he may have occafion for, encourages every man
to apply himſelf to a particular occupation, and
to cultivate and bring to perfection whatever talent
or genius he may poffefs for that particular ſpecies
of buſineſs.
The difference of natural talents in different
men is, in reality, much leſs than we are awarę
of; and the very different genius which appears
to diftinguiſh men of different profeffions, when
grown up to maturity, is not upon many occa-
fions ſo much the cauſe, as the effect of the
divifion of labor. The difference between the
1
24
THE NATURE AND CAUSES OF
moft diffimilar characters, between a philofopher
and a common ftreet-porter, for example, feems
to ariſe not ſo much from nature as from habit,
cuſtom, and education. When they came into
the world, and for the firft fix or eight years of
their exiſtence, they were, perhaps, very much
alike, and neither their parents nor play - fellows
could perceive any remarkable difference. About
that age, or foon after, they come to be employed
in very different occupations. The difference of
talents comes then to be taken notice of, and
widens by degrees, till at laft the vanity of the
philoſopher is willing to acknowledge ſcarce any
refemblance. But without the difpofition to truck,
barter, and exchange, every man muſt have pro-
cured to himſelf every neceffary and conveniency
of life which he wanted. All muft have had the
ſame duties to perform, and the fame work to do,
and there could have been no fuch difference of
employment as could alone give occafion to any
great difference of talents.
As it is this difpofition which forms that difference
of talents, fo remarkable among men of different
profeffions, fo it is this fame difpofition which
renders that difference ufeful. Many tribes of ani-
mals acknowledged to be all of the ſame ſpecies,
derive from nature a much more remarkable diftinc-
tion ofgenius, than what, antecedent to cuftom and
education, appears to take place among men. By na-
ture a philofopher is not in genius and difpofition half
fo different from a ftreet-porter, as a maftiffis from a
greyhound, or a greyhound from a ſpaniel, or this
THE WEALTH OF NATIONS..
25
-
+
laft from a fhepherd's dog. Thofe different
tribes of animals, however, though all of the
fame ſpecies, are of fcarce any uſe
to one
another. The ftrength of the maftiff is not,
in the leaft, fupported either by the ſwiftnefs of
the greyhound, or by the fagacity of the ſpaniel,
or by the docility of the fhepherd's dog. The
effects of thoſe different geniufes and talents, for
want of the power or difpofition to barter and ex-
change, cannot be brought into a common ſtock,
and do not in the leaft contribute to the better
accommodation and conveniency of the fpecies.
Each animal is ftill obliged to ſupport and dẹ-
fend itſelf, feparately and independently, and
derives no fort of advantage from that variety of
talents with which nature has diftinguiſhed its
fellows. Among men, on the contrary, the moſt
diffimilar geniufes are of ufe to one another; the
different produces of their refpective talents, by
the general difpofition to truck, barter, and ex-
change, being brought, as it were, into a com-
mon ſtock, where every man may purchaſe what-
ever part of the produce of other men's talents
he has occafion for.
}
"
16 THE NATURE AND CAUSES OF
CHAP. III.
That the Divifion of Labor is limited by the
Extent of the Market.
As it is the power of exchanging that gives
occafion to the divifion of labor, fo the extent of
this diviſion muſt always be limited by the extent
of that power, or, in other words, by the extent
of the market. When the market is very ſmall,
no perſon can have any encouragement to dedicate
himſelf entirely to one employment, for want of
the power to exchange all that ſurplus part of the
produce of his own labor, which is over and
above his own confumption, for fuch parts of
the produce of other men's labor as he has
occafion for.
There are fome forts of induftry, even of the
loweſt kind, which can be carried on no where
but in a great town. A porter, for example, can
find employment and fubfiftence in no other place.
A village is by much too narrow a ſphere for him;
even an ordinary market-town is fcarce large
enough to afford him conftant occupation. In the
lone houſes and very ſmall villages which are ſcat-
tered about in fo defert a country as the Highlands
of Scotland, every farmer muſt be butcher, baker
and brewer for his own family. In fuch fituations we
can ſcarce expect to find even a ſmith, a carpenter,
or a maſon, within leſs than twenty miles of another
of the fame trade. The ſcattered families that
THE WEALTH OF NATIONS.
27
live at eight or ten miles diſtance from the neareſt
of them, muſt learn to perform themſelves a
great number of little pieces of work, for which,
in more populous countries, they would call in
the affiftance of thoſe workmen. Country-work-
men are almoſt every where obliged to apply
themſelves to all the different branches of induſtry
that have ſo much affinity to one another as to
be employed about the fame fort of materials. A
country carpenter deals in every fort of work that
is made of wood; a country ſmith in every fort
of work that is made of iron. The former is not
only a carpenter, but a joiner, a cabinet-maker,
and even a carver in wood, as well as a wheel-
wright, a plough-wright, a cart and waggon-
maker. The employments of the latter are ftill
more various. It is impoffible there fhould be
fuch a trade as even that of a nailer in the remote
and inland parts of the Highlands of Scotland.
Such a workman at the rate of a thouſand nails
a day, and three hundred working days in the
year, will make three hundred thouſand nails in
the year. But in fuch a fituation it would be
impoffible to diſpoſe of one thoufand, that is, of
one day's work in the year.
As by means of water-carriage a more exten-
five market is opened to every fort of induftry
than what land-carriage alone can afford it, ſo it
is upon the fea-coaft, and along the banks of na-
vigable rivers, that induſtry of every kind natu-
rally begins to fubdivide and improve itfelf; and
it is frequently not till a long time after that
28 THE NATURE AND CAUSES OF
thofe improvements extend themſelves to the in-
land parts of the country. A broad-wheeled
waggon, attended by two men, and drawn by
eight horſes, in about fix weeks time carries and
brings back between London and Edinburgh near
four ton weight of goods. In about the fame
time a fhip navigated by fix or eight men, and
failing between the ports of London and Leith,
frequently carries and brings back two hundred
ton weight of goods. Six or eight men, therefore,
by the help of water-carriage, can carry and bring
back in the fame time the fame quantity of goods
between London and Edinburgh, as fifty broad-
wheeled waggons, attended by a hundred men,
and drawn by four hundred horfes. Upon two
hundred tons of goods, therefore, carried by the
cheapeſt land-carriage from London to Edinburgh,
there muſt be charged the maintenance of a
hundred men for three weeks, and both the main-
tenance, and, what is nearly qual to the mainte-
nance, the wear and tear of four hundred horfes
as well as of fifty great waggons. Whereas, upon
the fame quantity of goods carried by water, there
is to be charged only the maintenance of fix or
eight men, and the wear and tear of a fhip of
two hundred tons burden, together with the value
of the fuperior rifk, or the difference of the infu-
rance between land and water-carriage. Were there
no other communication between thoſe two pla-
ces, therefore, but by land-carriage, as no goods
could be tranfported from the one to the other,
except fuch whoſe price was very confiderable
THE WEALTH OF NATIONS.
29
in proportion to their weight, they could carry
on but a ſmall part of that commerce which at
prefént fubfifts between them, and confequently
could give but a fmall part of that encouragement
which they at prefent mutually afford to each
other's induſtry. There could be little or no com-
merce of any kind, between the diftant parts of
the world. What goods could bear the expenſe of
land carriage between London and Calcutta? Or
if there were any fo precious as to be able to fup-
port this expenſe, with what ſafety could they be
tranſported through the terriories of fo many bar-
barous nations? Thoſe two cities, however, at pre-
fent ry on a very confiderable commerce with
each other, and by mutually affording a market, give
a good deal of encouragement to each other's
induftry.
Since fuch, therefore, are the advantages of
water-carriage, it is natural that the first improve-
ments of art and induſtry ſhould be made where
this conveniency opens the whole world for a
market to the produce of every fort of labor,
and that they ſhould always be much later in ex-
tending themſelves into the inland parts of the
country. The inland parts of the country can for
a long time have no other market for the greater
part of their goods, but the country which lies
round about them, and ſeparates them from the
ſea - coaft, and the great navigable rivers. The
extent o their market, therefore, muft for a
long time be in proportion to the riches and
populouſneſs of that country, and confequently
28.
30 THE NATURE AND CAUSES OF
T
their improvement must always be pofterior to the
improvement of that country. In our North Ame-
rican colonies the plantations have conftantly follow-
ed either the fea-coaft or the banks of the navigable
rivers, and have ſcarce any where extended them-
felves to any confiderable diftance from both.
The nations that, according to the beft au-
thentical hiſtory, appear to have been firſt civi-
lized, were thoſe that dwelt round the coaſt of
the Mediterranean fea. That fea, by far the
greateſt inlet that is known in the world, having
no tides, nor confequently any waves except fuch
as are cauſed by the wind only, was, by the
fmoothneſs of its furface, as well as by the mul-
titude of its iflands, and the proximity of its
neighbouring fhores, extremely favorable to the
infant navigation of the world; when, from their
ignorance of the compaſs, men were afraid to quit
the view of the coaft, and from the imperfection
of the art of fhip-building, to abandon themfelyes
to the boisterous waves of the ocean.
To paſs
beyond the pillars of Hercules, that is, to fail out
of the Straits of Gibraltar, was, in the ancient
world, long confidered as a moft wonderful and
dangerous exploit of navigation. It was late before
even the Phenicians and Carthaginians, the moft
fkilful navigators and fhipbuilders of thoſe old
times, attempted it, and they were for a long time
the only nations that did attempt it.
Of all the countries on the coaft of the Medi-
terranean fea, Egypt feems to have been the firſt
in which either agriculture or manufactures were
THE WEALTH OF NATIONS.
31
cultivated and improved to any confiderable de-
gree. Upper Egypt extends itſelf nowhere above
a few miles from the Nile, and in Lower Egypt
that great river breaks itſelf into many different
canals, which, with the affiftance of a little art,
ſeem to have afforded a communication by water-
carriage, not only between all the great towns,
but between all the confiderable villages, and even
to many farm-houſes in the country; nearly in
the ſame manner as the Rhine and the Maeſe do in
Holland at prefent. The extent and eafineſs of this
inland navigation was probably one of the prin-
cipal causes of the early improvement of Egypt.
The improvements in agriculture and manu-
factures feem likewife to have been of very great
antiquity in the provinces of Bengal in the Eaft
Indies, and in fome of the eaſtern provinces of
China; though the great extent of this antiquity
is not authenticated by any hiftories of whoſe
authority we, in this part of the world, are well
affured. In Bengal the Ganges and ſeveral other
great rivers form a great number of navigable
canals in the fame manner as the Nile does in
Egypt. In the Eaſtern provinces of China too,
feveral great rivers form, by their different
branches, a multitude of canals, and by commu-
nicating with one another afford an inland navi-
gation much more extenfive than that either of
the Nile or the Ganges, or perhaps than both of
them put together. It it remarkable that neither
the ancient Egyptians, nor the Indians, nor the
Chineſe, encouraged
encouraged foreign commerce, but
32 THE NATURE AND CAUSES OF
feem all to have derived their great opulence
from this inland navigation.
All the inland parts of Africa, and all that part
of Afia which lies any confiderable way north of
the Euxine and Cafpain feas, the ancient Scythia,
the modern Tartary and Siberia, feem in all ages of
the world to have been in the fame barbarous and
uncivilized ſtate in which we find them at preſent.
The fea of Tartary is the frozen ocean which admits
of no navigation, and though ſome of the greateſt
rivers in the world run through that country, they
are at too great a diſtance from one another to carry
commerce and communication through the greater
part of it. There are in Africa none of thoſe great
inlets, fuch as the Baltic and Adriatic feas, in
Europe, the Mediterranean and Euxine feas, in
both Europe and Afia, and the gulphs of Arabia,
Perfia, India, Bengal, and Siam, in Aſia, to
carry maritime commerce into the interior parts
of that great continent: and the great rivers of
Africa are at too great a diſtance from one an-
other to give occafion to any confiderable inland
navigation. The commerce befides which any.
nation can carry on by means of a river which
does not break itſelf into any great number of
branches or canals, and which runs into another
territory before it reaches the fea, can never be
very confiderable; becauſe it is always in the
power of the nations who poffefs that other terri-
tory to obftruct the communication between the
upper country and the fea. The navigation of
the Danube is of very little ufe to the different
-Atates-
THE WEALTH OF NATIONS.
33
ftates of Bavaria, Auftria and Hungary, in com-
pariſon of what it would be if any of them pof-
feffed the whole of its courfe till it falls into the
Black Sea.
CHA P. IV.
Of the Origin and Ufe of Money.
WHEN the divifion of labor has been once
thoroughly eftabliſhed, it is but a very ſmall part
of a man's wants which the produce of his own
labor can ſupply. He ſupplies the far greater
part of them by exchanging that furplus part of
the produce of his own labor, which is over and
above his own conſumption, for ſuch parts of the
produce of other men's labor as he has occafion
for. Every man thus lives by exchanging, or
becomes in fome meaſure a merchant, and the
fociety itſelf grows to be what is properly a com-
mercial fociety.
But when the divifion of labor firft began to
take place, this power of exchanging muft fre
quently have been very much. clogged and em-
barraffed in its operations. One man, we fhall
fuppofe, has more of a certain commodity than
he himſelf has occafion for, while another has
lefs. The former confequently would be glad to
diſpoſe of, and the latter to purchaſe, a part of
this fuperfluity. But if this latter fhould chance
to have nothing that the former ftands in need
of, no exchange can be made between them
W. of N. 1.
3
34
THE NATURE AND CAUSES OF
The butcher has more meat in his fhop than he
himſelf can confume, and the brewer and the
baker would each of them be willing to purchaſe
a part of it. But they have nothing to offer in
exchange, except the different productions of
their reſpective trades, and the butcher is already
provided with all the bread and beer which he
has immediate occafion for. No exchange can,
in this cafe, be made between them. He cannot
be their merchant, nor they his cuftomers; and
they are all of them thus mutually lefs fervice-
able to one another. In order to avoid the in-
conveniency of fuch fituations, every prudent
man in every period of fociety, after the firſt
eftabliſhment of the divifion of labor, muft na-
turally have endeavoured to manage his affairs in
ſuch a manner, as to have at all times by him,
befides the peculiar produce of his own induſtry,
a certain quantity of fome one commodity or other,
fuch as he imagined few people would be likely to
refufe in exchange for the produce of their induſtry.
Many different commodities, it is probable,
were fucceffively both thought of and employed
for this purpoſe. In the rude ages of fociety,
cattle are faid to have been the common inftru-
ment of commerce; and, though they muſt have
been a moſt inconvenient one, yet in old times
we find things were frequently valued according
to the number of cattle which had been given in
exchange for them. The armor of Diomede,
fays Homer, coft only nine oxen; but that of
Glaucus coft a hundred oxen. Salt is faid to
THE WEALTH OF NATIONS.
35
}
be the common inftrument of commerce and ex-
changes in Abyffinia; a fpecies of fhells in fome
parts of the coaft of India; dried cod at Newfound-
land; tobacco in Virginia; fugar in fome of our
Weft India colonies; hides or dreffed leather in
fome other countries; and there is at this day a
village in Scotland where it is not uncommon, I
am told, for a workman to carry nails inſtead of
money to the baker's fhop or the ale - houfe.
In all countries, however, men ſeem at laſt to
have been determined by irreſiſtible reaſons to give
the preference, for this employment, to metals
above every other commodity. Metals can not
only be kept with as little lofs as any other com-
modity, ſcarce any thing being lefs perifhable
than they are, but they can likewife, without
any lofs, be divided into any number of parts,
as by fuſion thoſe parts can eafily be reunited
again; a quality which no other equally durable
commodities poffefs, and which more than any
other quality renders them fit to be the inftruments
of commerce and circulation. The man who want-
ed to buy falt, for example, and had nothing
but cattle to give in exchange for it, muft have
been obliged to buy falt to the value of a whole
ox, or a whole fheep at a time. He could ſeldom
buy leſs than this, becauſe what he was to give
for it could feldom be divided without lofs; and
if he had a mind to buy more, he muſt, for the
fame reaſons, have been obliged to buy double
or triple the quantity, the value, to wit, of two
or three oxen, or of two or three fheep. If, on
36 THE NATURE AND CAUSES OF
the contrary, inftead of fheep or oxen, he had
metals to give in exchange for it, he could eafily
proportion the quantity of the metal to the preciſe
quantity of the commodity which he had imme-
diate occafion for.
Different metals have been made ufe of by
different nations for this purpoſe. Iron was the
common inſtrument of commerce among the an-
cient Spartans; copper among the ancient Ro-
mans; and gold and filver among all rich and
commercial nations.
Thoſe metals feem originally to have been:
made uſe of for this purpoſe in rude bars, with-
out any ſtamp or coinage. Thus we are told by
Pliny, upon the authority of Timæus, an an-
cient hiftorian, that, till the time of Servius Tul-.
lius, the Romans had no coined money, but
made uſe of unftamped bars of copper, to pur-
chafe whatever they had occafion for. Theſe rude
bars, therefore, performed at this time the func-
tion of money!
The uſe of metals in this rude ftate was attend-
ed with two very confiderable inconveniencies,
firſt, with the trouble of weighing; and, fecondly,
with that of afſaying them. In the precious metals,
where a ſmall difference in the quantity makes
a great difference in the value, even the bufinefs
of weighing, with proper exactneſs, requires at
leaſt very accurate weights and fcales. The
weighing of gold in particular is an operation
* Plin. Hift. Nat. lib. 33. cap. 3.
}
THE WEALTH OF NATIONS.
.
3137
;
of fome nicety. In the coarfer metals, indeed,
where a ſmall error would be of little confequence,
lefs accuracy would, no doubt, be neceffary.
Yet we ſhould find it exceffively troubleſome,
if every time a poor man had occafion either to
buy or fell a farthing's worth of goods, he was
obliged to weigh the farthing. The operation of
affaying is ftill more difficult, ftill more tedious,
and, unleſs a part of the metal is fairly melted in
the crucible, with proper diffolvents, any conclu-
fion that can be drawn from it, is extremely uncer-
tain. Before the inftitution of coined money, how-
ever unleſs they went through this tedious
and difficult operation, people muft always
have been liable to the groffeft frauds and
impofitions, and inſtead of a pound weight of
pure filver, or pure copper, might receive in ex-
change for their goods, an adulterated compofi-
tion of the coarſeſt and cheapeſt materials, which
had, however, in their outward appearance, been
made to reſemble thofe metals.
To prevent
>
fuch abuſes, to facilitate exchanges, and thereby
to encourage all forts of induſtry and commerce,
it has been found neceſſary, in all countries that
have made any confiderable advances towards
improvement, to affix a public ftamp upon cer-
tain quantities of fuch particular metals, as were
in thoſe countries commonly made ufe of to pur-
chafe goods. Hence the origin of coined mo-
and of thofe public offices called mints;
inftitutions exactly of the fame nature with thoſe
of the alnagers and ftampmafters of woollen
rey,
38 THE NATURE AND CAUSES OF
and linen cloth. All of them are equally meant
to aſcertain, by means of a public ftamp, the
quantity and uniform goodneſs of thofe different
commodities when brought to market.
The first public ftamps of this kind that were
affixed to the current metals, feem in many cafes to
have been intended to afcertain, what it was
both most difficult and most important to afcertain,
the goodneſs or fineness of the meal, and to have
refembled the ſterling mark which is at prefent affix-
ed to plate and bars of filver, or the Spanish mark
which is fometimes affixed to ingots of gold, and
which being ftruck only upon one fide of the piece,
and, not covering the whole furface, afcertains the
fineneſs, but not the weight of the metal. Abraham
weighs to Ephron the four hundred fhekels of filver
which he had agreed to pay for the field of Machpe-
Jah. They are faid however to be the current money
of the merchant, and yet are received by weight
and not by tale, in the fame manner as ingots of
gold and bars of filver are at prefent. The re-
venues of the ancient Saxon kings of England
are faid to have been paid, not in money but in
kind, that is, in victuals and provifions of all
forts. William the Conqueror introduced the
cuftom of paying them in money, This money,
however, was for a long time, received at the
exchequer, by weight and not by tale.
The inconveniency and difficulty of weighing
thofe metals with exactnefs gave occafion to the
inftitution of coins, of which the ftamp, covering
entirely both fides of the piece and fometimes
THE WEALTH OF NATIONS.
39
the edges too, was fuppofed to afcertain not only
the fineness, but the weight of the metal. Such
coins, therefore, were received by tale as at prefent,
without the trouble of weighing.
The denominations of thofe coins feem origin-
ally to have expreffed the weight or quantity of
metal contained in them. In the time of Servius
Tullius, who firft coined money at Rome, the
Roman As or Pondo contained a Roman pound
of good copper. It was divided in the fame manner
as our Troyes pound, into twelve ounces, each of
which contained a real ounce of good copper. The
Engliſh pound sterling, in the time of Edward I,
contained a pound, Tower weight, of filver of a
known fineneſs. The Tower pound feems to have
been fomething more than the Roman pound, and
fomething less than the Troyes pound. This laſt
was not introduced into the mint of England
till the 18th of Henry VIII. The French livre
contained in the time, of Charlemagne a pound,
Troyes weight, of filver of a known fineneſs.
The fair of Troyes in Champagne was at that time
frequented by all the nations of Europe, and
the weights and meaſures of fo famous a market
were generally known and eſteemed. The Scots
money pound contained, from the time of Alexander
the Firſt to that of Robert Bruce, a pound of filver
of the fame weight and fineneſs with the Engliſh
pound fterling. English, French, and Scots pen-
nies too, contained all of them originally a real
pennyweight of filver, the twentieth part of an
ounce, and the two-hundred-and-fortieth part of
40
THE NATURE AND CAUSES OF
a pound. The fhilling too feems originally to
have been the denomination of a weight. When
wheat is at twelve fhillings the quarter, fays an
ancient ftatute of Henry III. then waftel bread of a
farthing fhall weigh eleven fhillings and four pence.
The proportion, however, between the fhilling
and either the penny on the one hand, or the
pound on the other, feems not to have been ſo
conftant and uniform as that between the penny
and the pound. During the firft race of the kings
of France, the French fou or fhilling appears
upon different occafions to have contained five,
twelve, twenty, and forty pennies. Among the
ancient Saxons a fhilling appears at one time to
have contained only five pennies, and it is not
improbable that it may have been as variable
among them as among their neighbours, the
ancient Franks. From the time of Charlemagne
among the French, and from that of William the
Conqueror among the Engliſh, the proportion
between the pound, the fhilling, and the penny,
ſeems to have been uniformly the fame as the
prefent, though the value of each has been very
different. For in every country of the world, I
believe, the avarice and injuſtice of princes and
fovereign ſtates, abufing the confidence of their
fubjects, have by degrees diminiſhed the real
quantity of metal, which had been originally
contained in their coins. The Roman As, in the
latter ages of the Republic, was reduced to the
twenty-fourth part of its original value, and, in-
ſtead of weighing a pound, came to weigh only
THE WEALTH OF NATIONS.
41
half an ounce,
The Engliſh pound and penny
contain at preſent about a third only; the Scots
pound and penny about a thirty-fixth; and the
French pound and penny about a fixty-fixth
part of their original value. By means of thoſe
operations the princes and fovereign ſtates which
performed them were enabled, in appearance, to
pay their debts and to fulfil their engagements
with a ſmaller quantity of filver than would
otherwiſe have been requifite. It was indeed in
appearance only; for their creditors were really
defrauded of a part of what was due to them.
All other debtors in the ftate were allowed the
fame privilege, and might pay with the fame
nominal fum of the new and debafed coin what-
ever they had borrowed in the old. Such ope-
rations, therefore, have always proved favorable
to the debtor, and ruinous to the creditor, and
have fometimes produced a greater and more
univerſal revolution in the fortunes of private
perfons, than could have been occafioned by a
very great public calamity.
It is in this manner that money has become in
all civilized nations the univerſal inftrument of
commerce, by the invention of which goods of
all kinds are bought and fold, or exchanged for
one another,
What are the rules which men naturally obſerve
in exchanging them either for money or for one
another, I fhall now proceed to examine. Theſe
rules determine what may be called the relative
or exchangeable value of goods,
42
THE NATURE AND CAUSES OF
The word VALUE, it is to be obſerved, has
two different meanings, and fometimes expreffes the
utility of fome particular object, and fometimes
the power of purchafing other goods which the
poffeffion of that object conveys. The one may
be called "value in ufe;" the other, "value in
"exchange." The things which have the greateſt
value in uſe have frequently little or no value in
exchange; and, on the contrary, thoſe which have
the greateſt value in exchange have frequently little
or no value in ufe. Nothing is more uſeful than
water: but it will purchaſe ſcarce any thing; ſcarce
any thing can be had in exchange for it. A dia-
moud, on the contrary, has fcarce any value in
uſe; but a very great quantity of other goods may
frequently be had in exchange for it.
In order to inveſtigate the principles which
regulate the exchangeable value of commodities,
I fhall endeavour to fhow,
Firſt, what is the real meaſure of this exchange-
able value; or, wherein confifts the real price of
all commodities.
Secondly, what are the different parts of which
this real price is compoſed or made up.
And, laftly, what are the different circumſtances
which fometimes raiſe fome or all of theſe dif-
ferent parts of price above, and fometimes fink
them below their natural or ordinary rate; or, what
are the cauſes which fometimes hinder the market
price, that is, the actual price of commodities
from coinciding exactly with what may be called
their natural price.
2
THE WEALTH OF NATIONS.
43
I fhall endeavour to explain, as fully and
diftinctly as I can, thofe three fubjects in the
three following chapters, for which I muft very
earneſtly entreat both the patience and attention
of the reader: his patience in order to examine
a detail which may perhaps in fome places ap-
pear unneceffarily tedious; and his attention in
order to underſtand what may, perhaps, after
the fulleft explication which I am capable of
giving of it, appear ftill in fome degree obfcure.
I am always willing to run fome hazard of being
tedious in order to be fure that I am perfpicuous;
and after taking the utmoſt pains that I can to
be perfpicuous, fome obfcurity may ftill appear
to remain upon a ſubject in its own nature ex-
tremely abftracted.
CHAP. V.
Of the real and nominal Price of Commodities, or of
their Price in Labor, and their Price in Money.
EVER
VERY man is rich or poor according to
the degree in which he can afford to enjoy
the neceffaries, conveniencies, and amufements
of human life. But after the divifion of labor
has once thoroughly taken place, it is but a very
fmall part of theſe with which a man's own la-
bor can fupply him. The far greater part of
them he muft derive from the labor of other
people, and he muſt be rich or poor according
#
:
44 THE NATURE AND CAUSES OF
4
to the quantity of that labor which he can
command, or which he can afford to purchaſe.
The value of any commodity, therefore, to the
perſon who poffeffes it, and who means not to
uſe or confume it himself, but to exchange it
for other commodities, is equal to the quantity
of labor which it enables him to purchaſe or
command. Labor, therefore, is the real meaſure
of the exchangeable value of all commodities.
The real price of every thing, what every thing
really cofts to the man who wants to acquire it,
is the toil and trouble of acquiring it. What
every thing is really worth to the man who has
acquired it, and who wants to difpofe of it or
exchange it for fomething elfe, is the toil and
trouble which it can ſave to himſelf, and which
it can impoſe upon other people. What is
bought with money or with goods is purchaſed
by labor as much as what we acquire by the
toil of our own body. That money or thoſe
goods indeed fave us this toil. They contain
the value of a certain quantity of labor which
we exchange for what is fuppofed at the time to
contain the value of an equal quantity. Labor
was the firſt price, the original purchaſe-money-
that was paid for all things. It was not by gold or
by filver, but by labor, that all the wealth of the
world was originally purchaſed; and its value,
to thoſe who poffefs it, and who want to ex-
change it for ſome new productions, is precifely
equal to the quantity of labor which it can
enable them to purchaſe or command.
THE WEALTH OF NATIONS.
45
Wealth, at Mr. Hobbes fays, is power. But
the perſon who either acquires, or fucceeds to a
great fortune, does not neceffarily acquire or fuc-
ceed to any political power, either civil or military.
His fortune may, perhaps, afford him the means
of acquiring both, but the mere poffeffion of that
fortune does not neceffarily convey to him either.
The power which that poffeffion immediately and
directly conveys to him, is the power of pur-
chafing; a certain command over all the labor,
or over all the produce of labor which is then in
the market. His fortune is greater or lefs, pre-
ciſely in proportion to the extent of this power;
or to the quantity either of other men's labor, or,
what is the fame thing, of the produce of other
men's labor, which it enables him to purchaſe or
command. The exchangeable value of every
thing must always be preciſely equal to the extent
of this power which it conveys to its owner.
But though labor be the real meaſure of the
exchangeable value of all commodities, it is not
that by which their value is commonly eſtimated.
It is often difficult to afcertain the proportion
between two different quantities of labor. The
time ſpent in two different forts of work will not
always alone determine this proportion. The
different degrees of hardship endured, and of
ingenuity exerciſed, muft likewiſe be taken into
account. There may be more labor in an hour's
hard work than in two hours eafy buſineſs; or
in an hour's application to a trade which it coſt
ten years labor to learn, than in a month's induftry
4.6
THE NATURE AND CAUSES OF
at an ordinary and obvious employment. But it
is not eaſy to find any accurate meaſure either
of hardship or ingenuity. In exchanging indeed
the different productions of different forts of labor
for one another, fome allowance is commonly
made for both. It is adjuſted, however, not by
the accurate meaſure, but by the higgling and bar-
gaining of the market, according to that fort of
rough equality which, though not exact, is fuf-
ficient for carrying on the bufinefs of common
life.
Every commodity befides, is more frequently
exchanged for, and thereby compared with
other commodities than with labor. It is more
natural, therefore, to eftimate its exchangeable
value by the quantity of fome other commodity
than by that of the labor which it can purchaſe.
The greater part of people too' underſtand better
what is meant by a quantity of a particular commo-
dity, than by a quantity of labor. The one is a
plain palpable object; the other an abſtract notion,
which, though it can be made fufficiently intelli-
gible, is not altogether fo natural and obvious.
But when barter ceaſes, and money has be-
come the common inftrument of commerce, every
particular commodity is more frequently ex-
changed for money than for any other commo-
dity. The butcher feldom carries his beef or
his mutton to the baker, or the brewer, in order
to exchange them for bread or for beer; but he
carries them to the market, where he exchanges
them for money, and afterwards exchanges that
THE WEALTH OF NATIONS.
47
The quantity
money for bread and for beer.
of money which he gets for them regulates too
the quantity of bread and beer which he can after-
wards purchaſe. It is more natural and obvious
to him, therefore, to eſtimate their value by the
quantity of money, the commodity for which he
immediately exchanges them, than by that of
bread and beer, the commodities for which he
can exchange them only by the intervention of
another commodity; and rather to fay that his
butcher's meat is worth three pence or four pence
a pound, than that it is worth three or four
pounds of bread, or three or four quarts of fmall beer.
Hence is comes to pafs, that the exchangeable
value of every commodity is more frequently efti-
mated by the quantity of money, than by the
quantity either of labor or of any other com-
modity which can be had in exchange for it.
Gold and filver, however, like every other
commodity, vary in their value, are fometimes
cheaper and fometimes dearer, fometimes of ealier
and fometimes of more difficult purchaſe. The
quantity of labor which any particular quantity
of them can purchaſe or command, or the quan-
tity of other goods which it will exchange for,
depends always upon the fertility or barrenneſs
of the mines which happen to be known about
the time when fuch exchanges are made. The
diſcovery of the abundant mines of America
reduced, in the fixteenth century, the value of
gold and filver in Europe to about a third of
what it had been before. As it coft lefs labor
48 THE NATURE AND CAUSES OF
to bring thoſe metals from the mine to the
market, ſo when they were brought thither they
could purchaſe or command leſs labor; and this
revolution in their value, though perhaps the great-
eſt, is by no means the only one of which hiſtory
gives fome account. But as a meaſure of quan-
tity, fuch as the natural foot, fathom, or handful,
which is continually varying in its own quantity,
can never be an accurate meaſure of the quantity
of other things; fo a commodity which is itſelf
continually varying in its own value, can never
be an accurate meaſure of the value of other com-
modities. Equal quantities of labor, at all times
and places, may be faid to be of equal value to the
laborer. In his ordinary ſtate of health, ftrength
and fpirits; in the ordinary degree of his fkill
and dexterity, he muſt always lay down the ſame
portion of his eaſe, his liberty, and his happi-
nefs. The price which he pays muſt always be
the fame, whatever may be the quantity of goods
which he receives in return for it. Of theſe,
indeed, it may fometimes purchaſe a greater and
ſometimes a ſmaller quantity; but it is their
value which varies, not that of the labor which
purchaſes them. At all times and places that is
dear which it is difficult to come at, or which it
cofts much labor to acquire; and that cheap
which is to be had eafily, or with very little
labor. Labor alone, therefore, never varying
in its own value, is alone the ultimate and real
ftandard by which the value of all commodities
can at all times and places be eſtimated and
compared.
THE WEALTH OF NATIONS.
49
compared. It is their real price; money is their
nominal price only.
But though equal quantities of labor are al-
ways of equal value to the laborer, yet to the
perſon who employs him they appear fometimes
to be of greater and fometimes of fmaller value.
He purchaſes them ſometimes with a greater and
fometimes with a fmaller quantity of goods, and
to him the price of labor feems to vary like that
of all other things. It appears to him dear in
the one cafe, and cheap in the other. In reality,
however, it is the goods which are cheap in the
one cafe, and dear in the other.
In this popular fenfe, therefore, labor, like
commodities, may be faid to have a real and a
nominal price. Its real price may be faid to con-
fift in the quantity of the neceffaries and conve-
niencies of life which are given for it; its nominal
price, in the quantity of money. The laborer is
rich or poor, is well or ill rewarded, in proportion
to the real, not to the nominal price of his labor.
The diftinction between the real and the no-
minal price of commodities and labor, is not
a matter of mere fpeculation, but may fometimes
be of confiderable ufe in practice. The fame
real price is always of the fame value; but on
account of the variations in the value of gold
and filver, the fame nominal price is fometimes
of very different values. When a landed eftate,
therefore, is fold with a refervation of a perpe.
tual rent, if it is intended that this rent ſhould
always be of the fame value, it is of importance
W. of N.
1.
4
50 THE NATURE AND CAUSES OF
to the family in whofe favor it is referved, that
it should not confift in a particular fum of money.
Its value would in this cafe be liable to variations.
of two different kinds; firſt, to thoſe which ariſe
from the different quantities of gold and filver
which are contained at different times in coin of
the fame denomination; and, fecondly, to thoſe
which arife from the different values of equal
quantities of gold and filver at different times.
Princes and fovereign ftates have frequently
fancied that they had a temporary intereft to
diminish the quantity of pure metal contained in
their coins; but they feldom have fancied that
they had any to augment it. The quantity of
metal contained in the coins, I believe of all
nations, has, accordingly, been almoſt continually
diminiſhing, and hardly ever augmenting. Such
variations therefore tend almoft always to di-
miniſh the value of a money rent.
The diſcovery of the mines of America dimi-
niſhed the value of gold and filver in Europe.
This diminution, it is commonly fuppofed, though
I apprehend without any certain prooi, is ftill
going on gradually, and is likely to continue to
do fo for a long time. Upon this fuppofition,
therefore, fuch variations are more likely to
diminiſh, than to augment the value of a money
rent, even though it fhould be ftipulated to be
paid, not in fuch a quantity of coined money of
fuch a denomination (in fo many pounds fter-
ling, for example), but in ſo many ounces either
of pure filver, or of filver of a certain ftandard,
THE WEALTH OF NATIONS.
51
The rents which have been referved in corn
have preferved their value much better than
thoſe which have been referved in money, even
where the denomination of the coin has not been
altered. By the 18th of Elizabeth it was enacted,
That a third of the rent of all college leafes
ſhould be reſerved in corn, to be paid, either in
kind, or according to the current prices at the
neareſt public market. The money ariſing from
this corn rent, though originally but a third of
the whole, is in the preſent times, according to
Doctor Blackftone, commonly near double of what
arifes from the other two-thirds. The old money
rent of colleges muft, according to this account,
have funk almoft to a fourth part of their ancient
value; or are worth little more than a fourth part
of the corn which they were formerly worth.
But fince the reign of Philip and Mary the deno-
mination of the Engliſh coin has undergone little ·
or no alteration, and the fame number of pounds,
fhillings and pence have contained very nearly the
fame quantity of pure filver. This degradation,
therefore, in the value of the money rents of
colleges, has ariſen altogether from the degrada-
tion in the value of filver.
જ
When the degradation in the value of filver
is combined with the diminution of the quantity
of it contained in the coin of the fame denomi-
nation, the lofs is frequently fill greater. In
Scotland, where the denomination of the coin has
undergone much greater alterations than it ever
did in England, and in France, where it has
*
52 THE NATURE AND CAUSES OF
undergone ftill greater than it ever did in Scot-
land, fome ancient rents, originally of confider-
able value, have in this manner been reduced
almoft to nothing.
Equal quantities of labor will at diftant times.
be purchaſed more nearly with equal quantities of
corn, the fubfiftence of the laborer, than with
equal quantities of gold and filver, or perhaps of
any other commodity. Equal quantities of corn,
therefore, will, at diftant times, be more nearly
of the fame real value, or enable the poffeffor to
purchaſe or command more nearly the fame quan-
tity of the labor of other people. They will do
this, I fay, more nearly than equal quantities of
almoſt any other commodity; for even equal
quantities of corn will not do it exactly. The
fubfiftence of the laborer, or the real price of
labor, as I fhall endeavour to fhow hereafter, is
very different upon different occafions; more
liberal in a fociety advancing to opulence, than
in one that is ſtanding ftill; and in one that is
ftanding ftill, than in one that is going backwards.
Every other commodity, however, will at any
particular time purchaſe a greater or fmaller
quantity of labor in proportion to the quantity of
fubfiftence which it can purchaſe at that time. A
rent therefore reſerved in corn is liable only to
the variations in the quantity of labor which a
certain quantity of corn can purchaſe. But a
rent reſerved in any other commodity is liable,
not only to the variations in the quantity of la-
bor which any particular quantity of corn can
THE WEALTH OF NATIONS.
53
purchaſe, but to the variations in the quantity of
corn which can be purchafed by any particular
quantity of that commodity.
Though the real value of a corn rent, it is to
be obferved, however, varies much lefs from cen-
tury to century than that of a money rent, it
varies much more from year to year, The
money price of labor, as I fhall endeavour to
fhow hereafter, does not fluctuate from year to
year with the money price of corn, but feems to
be every where accommodated, not to the tem-
porary or occafional, but to the average or ordi-
nary price of that neceffary of life. The average
or ordinary price of corn again is regulated, as
I fhall likewife endeavour to fhow hereafter, by
the value of filver, by the richneſs or barrenness
of the mines which fupply the market with that
metal, or by the quantity of labor which muft
be employed, and confequently of corn which
muſt be conſumed, in order to bring any parti-
cular quantity of filver from the mine to the
market. But the value of filver, though it fome-
times varies greatly from century to century,
feldom varies much from year to year, but fre-
quently continues the fame, or very nearly the
fame, for half a century or a century together.
The ordinary or average money price of corn,
therefore, may, during fo long a period, con-
tinue the fame or very nearly the ſame too, and
along with it the money price of labor, pro-
vided, at leaſt, the fociety continues, in other
refpects, in the fame or nearly in the fame
54 THE NATURE AND CAUSES OF
condition. In the mean time the temporary and
occafional price of corn may frequently be double,
one year, of what it had been the year before, or
fluctuate, for example, from five-and-twenty to
fifty fhillings the quarter. But when corn is at the
latter price, not only the nominal, but the real
value of a corn rent will be double of what it is
when at the former, or will command double the
quantity either of labor or of the greater part of
other commodities; the money price of labor,
and along with it that of moſt other things, conti-
nuing the fame during all theſe fluctuations.
Labor,
therefore, it appears evidently, is
the only univerfal, as well as the only accurate
meaſure of value, or the only ſtandard by which
we can compare the values of different commo-
dities at all times and at all places. We cannot
eftimate, it is allowed, the real value of different
commodities from century to century by the
quantities of filver which were given for them.
We cannot eſtimate it from year to year by the
quantities of corn. By the quantities of labor
we can, with the greateſt accuracy, eſtimate it
both from century to century and from year to
year. From century to century, corn is a better
meaſure than filver, becauſe, from century to
century, equal quantities of corn will command
the fame quantity of labor more nearly than
equal quantities of filver. From year to year,
on the contrary, filver is a better meaſure than
corn, becauſe equal quantities of it will more
nearly command the fame quantity of labor.
THE WEALTH OF NATIONS.
55
But though in eftabliſhing perpetual rents,
or even in letting very long leafes, it may be of
ufe to diſtinguiſh between real and nominal price;
it is of none in buying and felling, the more com-
mon and ordinary tranfactions of human life.
At the fame time and place the real and the
nominal price of all commodities are exactly in
proportion to one another. The more or leſs
money you get for any commodity, in the Lon-
don market, for example, the more or leſs la-
bor it will at that time and place enable you to
purchaſe or command. At the fame time and
place, therefore, money is the exact meaſure of
the real exchangeable value of all commodities.
It is fo, however, at the fame time and place only.
Though at diftant places, there is no regular
proportion between the real and the money price
of commodities, yet the merchant who carries
goods from the one to the other has nothing to
confider but their money price, or the difference
between the quantity of filver for which he buys
them, and that for which he is likely to fell
them. Half an ounce of filver at Canton in
China may command a greater quantity both of
labor and of the neceffaries and conveniencies of
life, than an ounce at London. A commodity,
therefore, which fells for half an ounce of filver
at Canton may there be really dearer, of more
real importance to the man who poffeffes it there,
than a commodity which fells for an ounce at
London is to the man who poffeffes it at Lon-
don. If a London merchant, however, can buy
56 THE NATURE AND CAUSES OF
at Canton for half an ounce of filver, a commo-
tity which he can afterwards fell at London for
an ounce, he gains
he gains a hundred per cent. by the
bargain, juft as much as if an ounce of filver
was at London exacly of the fame value as at
Canton. It is of no importance to him that half
an ounce of filver at Canton would have given
him the command of more labor and of a
greater quantity of the neceffaries and conve-
niencies of life than an ounce can do at London.
An ounce at London will always give him the
command of double the quantity of all theſe
which half an ounce could have done there, and
this is preciſely what he wants.
As it is the nominal or money price of goods,
therefore, which finally determines the prudence
or imprudence of all purchaſes and fales, and
thereby regulates almoft the whole bufineſs of
common life in which price is concerned, we
cannot wonder that it fhould have been ſo much
more attended to than the real price.
In fuch a work as this, however, it may fome-
times be of ufe to compare the different real
values of a particular commodity at different
times and places, or the different degrees of
power over the labor of other people which it
may, upon different occafions, have given to
thofe who poffeffed it. We muſt in this cafe
compare, not ſo much the different quantities of
filver for which it was commonly fold, as the
different quantities of labor which thofe dif-
ferent quantities of filver could have purchaſed.
THE WEALTH OF NATIONS.
57
Bnt the current prices of labor at diftant times.
and places can ſcarce ever be known with any
degree of exactneſs. Thofe of corn, though
they have in few places been regularly re-
corded, are in general better known and have
been more frequently taken notice of by hifto-
rians and other writers. We muft generally,
therefore, content ourſelves with them, not as
being always exactly in the fame proportion as
the current prices of labor, but as being the
neareſt approximation which can commonly be
had to that proportion. I fhall hereafter have
occafion to make feveral compariſons of this
kind.
In the progrefs of induftry, commercial na-
tions have found it convenient to coin feveral
different metals into money; gold for larger
payments, filver for purchaſes of moderate value,
and copper, or fome other coarſe metal, for thoſe
of ftill ſmaller confideration. They have al-
ways, however, confidered one of thofe metals
as more peculiarly the meaſure of value than
any of the other two; and this preference feems
generally to have been given to the metal which
they happened firft to make ufe of as the in-
frument of commercė. Having once begun
to uſe it as their ftandard, which they muſt have
done when they had no other money, they have
generally continued to do fo even when the ne-
ceffity was not the fame.
The Romans are faid to have had nothing but
copper money till within five years before the
58
THE NATURE AND CAUSES OF
firſt Punic war, when they firft began to coin
filver. Copper, therefore, appears to have con-
tinued always the meaſure of value in that re-
public. At Rome all accounts appear to have
been kept, and the value of all eftates to have
been computed either in Affes or in Seftertii.
The As was always the denomination of a copper
coin. The word Seftertius fignifies two Affes and
a half. Though the Seftertius, therefore
originally a filver coin, its value was eſtimated in
copper. At Rome, one who owed a great deal
of money, was ſaid to have a great deal of other
people's copper.
was
The northern nations who eftabliſhed them-
felves upon the ruins of the Roman empire, feem
to have had filver money from the firſt beginning
of their fettlements, and not to have known
either gold or copper coins for ſeveral ages there-
after. There were filver coins in England in
the time of the Saxons; but there was little gold
coined till the time of Edward III. nor any cop-
per till that of James I. of Great Britain. In
England, therefore, and for the fame, reafon, I
believe, in all other modern nations of Europe,
all accounts are kept, and the value of all goods
and of all eftates is generally computed in filver:
and when we mean to exprefs the amount of a
perfon's fortune, we feldom mention the number
of guineas, but the number of pounds fterling
which we ſuppoſe would be given for it.
* Pliny, lib. xxxiii, c. 3.
THE WEALTH OF NATIONS.
59
,
Originally, in all countries, I believe, a legal
tender of payment could be made only in the coin
of that metal, which was peculiarly confidered as
the ſtandard or meaſure of value. In England
gold was not confidered as a legal tender for a
long time after it was coined into money. The
proportion between the values of gold and filver
money was not fixed by any public law or pro-
clamation, but was left to be fettled by the market.
If a debtor offered payment in gold, the creditor
might either reject fuch payment altogether, or
accept of it at fuch a valuation of the gold as he
and his debtor could agree upon. Copper is not at
preſent a legal tender, except in the change of the
ſmaller filver coins. In this ftate of things the
diftinction between the metal which was the
ſtandard, and that which was not the ſtandard,
was fomething more than a nominal diftinction.
In proceſs of time, and as people became
gradually more familiar with the ufe of the dif-
ferent metals in coin, and confequently better
acquainted with the proportion between their re-
ſpective values, it has in moft countries, I be
lieve, been found convenient to aſcertain this
proportion, and to declare by a public law that
a guinea, for example, of fuch a weight and
fineneſs, fhould exchange for one-and-twenty
fhillings, or be a legal tender for a debt of that
amount. In this ſtate of things, and during the
continuance of any one regulated proportion of
this kind, the diftinction between the metal
which is the ſtandard, and that which is not the
бо
THE NATURE AND CAUSES OF
ftandard, becomes little more than a nominal
diftinction.
In confequence of any change, however, in this
regulated proportion, this diftinction becomes, or
at leaſt ſeems to become, fomething more than
nominal again. If the regulated value of a guinea,
for example, was either reduced to twenty, or
raiſed to two-and-twenty fhillings, all accounts
being kept and almoſt all obligations for debt being
expreffed in filver money, the greater part of pay-
ments could in either caſe be made with the fame
quantity of filver money as before; but would re-
quire very different quantities of gold money; a
greater in the one cafe, and a fmaller in the other.
Silver would appear to be more invariable in its
value than gold. Silver would appear to meaſure
the value of gold, and gold would not appear to
meaſure the value of filver. The value of gold
would feem to depend upon the quantity of fil-
ver which it would exchange for; and the value
of filver would not feem to depend upon the
quantity of gold which it would exchange for.
This difference, however, would be altogether
owing to the cuftom of keeping accounts, and of
expreffing the amount of all great and fmall fums
rather in filver than in gold money. One of
Mr. Drummond's notes for five-and-twenty or
fifty guineas would, after an alteration of this
kind, be ftill payable with five-and-twenty or
fifty guineas in the fame manner as before. It
would, after fuch an alteration, be payable with
the fame quantity of gold as before, but with
THE WEALTH OF NATIONS.
61
very different quantities of filver. In the payment
of ſuch a note, gold would appear to be more
invariable in its value than filver. Gold would ap-
pear to meaſure the value of filver, and filver would
not appear to meaſure the value of gold. If the
cuftom of keeping accounts, and of expreffing
promiffory notes and other obligations for money
in this manner, fhould ever become general, gold,
and not filver, would be coufidered as the metal
which was peculiarly the ftandard or meaſure of
value.
In reality, during the continuance of any one re-
gulated proportion between the refpective values of
the different metals in coin, the value of the moſt
precious metal regulates the value of the whole coin.
Twelve copper pence contain half a pound, avoir-
dupois, of copper, of not the beſt quality, which,
before it is coined, is feldom worth feven-pence in
filver. But as by the regulation twelve fuch pence
are ordered to exchange for a fhilling, they are in
the market confidered as worth a fhilling, and a
fhilling can at any time be had for them. Even before
the late reformation of the gold coin of Great Bri-
tain, the gold, that part of it at leaſt which circulated
in London and its neighbourhood, was in general
lefs degraded below its ftandard weight than the
greater part of the filver. One-and-twenty worn and
defaced fhillings, however, were confidered as equi-
valent to a guinea, which perhaps, indeed, was worn
and defaced too, but ſeldom ſo much ſo. The late
regulations have brought the gold coin as near per-
haps to its ſtandard weight as it is poffible to bring
62 THE NATURE AND CAUSES OF
the current coin of any nation; and the order, to
receive no gold at the public offices but by weight,
is likely to preſerve it fo, as long as that order is
enforced. The filver coin ftill continues in the
ſame worn and degraded ftate as before the re-
formation of the gold coin. In the market, how-
ever, one-and-twenty fhillings of this degraded
filver coin are ftill confidered as worth a guinea
of this excellent gold coin.
The reformation of the gold coin has evidently
raiſed the value of the filver coin which can be
exchanged for it.
In the Engliſh mint a pound weight of gold is
coined into forty-four guineas and a half, which,
at one-and-twenty fhillings the guinea, is equal
to forty-fix pounds fourteen fhillings and fixpence.
An ounce of fuch gold coin, therefore, is worth
3 l. 17 s. 10 d. in filver. In England no duty or
ſeignorage is paid upon the coinage, and he who
carries a pound weight or an ounce weight of
ftandard gold bullion to the mint, gets back a
pound weight or an ounce weight of gold in coin,
without any deduction. Three pounds ſeventeen
fhillings and ten-pence halfpenny an ounce, there-
fore, is faid to be the mint price of gold in Eng-
land, or the quantity of gold coin which the
mint gives in return for ſtandard gold bullion.
Before the reformation of the gold coin, the
price of ftandard gold bullion in the market had
for many years been upwards of 3 l. 18 s. fome-
times 3 I. 19 s. and very frequently 4 . an ounce;
1.
that ſum it is probable, in the worn and
THE WEALTH OF NATIONS.
63
degraded gold coin, feldotn containing more than
an ounce of ſtandard gold. Since the reformation
of the gold coin, the market price of ſtandard gold
bullion feldom exceeds 3 l. 17 s. 7 d. an ounce.
Before the reformation of the gold coin, the mar-
ket price was always more or lefs above the mint
price. Since that reformation, the market price
has been conftantly below the mint price. But
that market price is the fame whether it is paid
in gold or in filver coin. The late reformation of
the gold coin, therefore, has raiſed not only the
value of the gold coin, but likewiſe that of the
filver coin in proportion to gold bullion, and
probably too in proportion to all other commo-
dities; though the price of the greater part of
other commodities being influenced by fo many
other cauſes, the riſe in the value either of gold
or filver coin in proportion to them, may not be
fo diftinct and fenfible.
+
,
In the Engliſh mint a pound weight of ſtandard
filver bullion is coined into fixty-two fhillings,
containing, in the fame manner, a pound weight
of ſtandard ſilver. Five fhillings and two-pence an
ounce, therefore, is faid to be the mint price of
filver in England, or the quantity of filver coin
which the mint gives in return for ftandard filver
bullion. Before the reformation of the gold coin,
the market price of ftandard filver bullion was,
upon different occafions, five fhillings and four-
pence, five fhillings and five-pence, five fhillings
and fix-pence, five fhillings and feven-pence, and
very often five fhillings and eight-pence an ounce.
64
THE NATURE AND CAUSES OF
Five fhillings and feven-pence, however, feems to
have been the most common price. Since the
reformation of the gold coin, the market price of
ftandard filver bullion has fallen occafionally to
five fhillings and three-pence, five fillings and
four-pence, and five fhillings and five-pence an
ounce, which laft price it has fcarce ever exceeded.
Though the market price of filver bullion has
fallen confiderably fince the reformation of the gold
coin, it has not fallen fo low as the mint price.
In the proportion between the different metals
in the Engliſh coin, as copper is rated very much
above its real value, fo filver is rated fomewhat
below it. In the market of Europe, in the French
coin and in the Dutch coin, an ounce of fine gold
exchanges for about fourteen ounces of fine filver.
In the Engliſh coin, it exchanges for about fifteen
ounces; that is, for more filver than it is worth
according to the common eftimation of Europe.
But as the price of copper in bars is not, even in
England, raiſed by the high price of copper in
Engliſh coin, fo the price of filver in bullion is not
funk by the low rate of filver in Englifh coin.
Silver in bullion ftill preſerves its proper proportion
to gold; for the fame reaſon that copper in bars.
preferves its proper proportion to filver.
Upon the reformation of the filver coin in the
reign of William III. the price of filver bullion
ftill continued to be fomewhat above the mint
price. Mr. Locke imputed this high price to
the permiffion of exporting filver bullion, and to
the prohibition of exporting filver coin. This
permiffion
1
THE WEALTH OF NATIONS.
65
permiffion of exporting, he ſaid, rendered the
demand for filver bullion greater than the de-
mand for filver coin. But the number of people
who want filver coin for the common uſes of
buying and felling at home, is furely much
greater than that of thoſe who want filver bullion
either for the ufe of exportation or for any other
uſe. There fubfifts at prefent a like permiffion
of exporting gold bullion, and a like prohibition
of exporting gold coin; and yet the price of gold
bullion has fallen below the mint price. But in
the English coin filver was then, in the ſame man-
ner as now, under-rated in proportion to gold,
and the gold coin (which at the time too was not
ſuppoſed to require any reformation) regulated
then, as well as now, the real value of the whole
coin. As the reformation of the filver coin did
not then reduce the price of filver bullion to the
mint price, it is not very probable that a like
reformation will do fo now.
Were the filver coin brought back as near to
its ftandard weight as the gold, a guinea, it is
probable, would, according to the preſent pro-
portion, exchange for more filver in coin than it
would purchaſe in bullion. The filver coin con-
taining its full ftandard weight, there would in
this cafe be a profit in melting it down, in order,
firſt, to fell the bullion for gold coin, and after-
wards to exchange this gold coin for filver coin to
be melted down in the fame manner. Some alter-
ation in the prefent proportion feems to be the
only method of preventing this inconveniency.
W. of N. 1,
5
66 THE NATURE AND CAUSES OF
The inconveniency perhaps would be leſs if
filver was rated in the coin as much above its
proper proportion to gold as it is at prefent rated
below it; provided it was at the fame time enacted
that filver fhould not be a legal tender for more
than the change of a guinea; in the fame manner
as copper is not a legal tender for more than the
change of a fhilling. No creditor could in this
caſe be cheated in confequence of the high valua-
tion of filver in coin; as no creditor can at pre-
fent be cheated in confequence of the high valua-
tion of copper.
The bankers only would fuffer
by this regulation. When a run comes upon them
they fometimes endeavour to gain time by paying
in fixpences, and they would be precluded by
this regulation from this difcreditable method of
evading immediate payment. They would be
obliged in confequence to keep at all times in their
coffers a greater quantity of caſh than at preſent;
and though this might no doubt be a confiderable
inconveniency to them, it would at the fame time
be a confiderable ſecurity to their creditors.
Three pounds feventeen fhillings and ten-
pence halfpenny (the mint price of gold) cer-
tainly does not contain, even in our preſent ex-
cellent gold coin, more than an ounce of ſtand-
ard gold, and it may be thought, therefore,
fhould not purchaſe more ftandard bullion. But
gold in coin is more convenient than gold in
bullion, and though, in England, the coinage is
free, yet the gold which is carried in bullion to
the mint, can feldom be returned in coin to the
THE WEALTH OF NATIONS.
67
owner till after a delay of feveral weeks. In the
preſent hurry of the mint, it could not be re-
turned till after a delay of feveral months. This
delay is equivalent to a fmall duty, and renders
gold in coin fomewhat more valuable than an
equal quantity of gold in bullion. If in the English
coin filver was rated according to its proper
proportion to gold, the price of filver bullion
would probably fall below the mint price even
without any reformation of the filver coin; the
value even of the preſent worn and defaced filver
coin being regulated by the value of the excellent
gold coin for which it can be changed.
A fmall feignorage or duty upon the coinage
of both gold and filver would probably increaſe
ftill more the fuperiority of thoſe metals in coin
above an equal quantity of either of them in bul-
lion. The coinage would in this cafe increaſe
the value of the metal coined in proportion to
the extent of this fmall duty; for the fame rea-
fon that the fafhion increaſes the value of plate
in proportion to the price of that fafhion. The
fuperiority of coin above bullion would prevent
the melting down of the coin, and would difcou-
rage its exportation. If upon any public exi-
gency it fhould become neceflary to export the
coin, the greater part of it would foon return
again of its own accord. Abroad it could fell
only for its weight in bullion. At home it would
buy more than that weight. There would be a
profit, therefore, in bringing it home again. In
France a feignorage of about eight per cent. is
68 THE NATURE AND CAUSES OF
impofed upon the coinage, and the French coin,
when exported, is faid to return home again of
its own accord.
The occafional fluctuations in the market price
of gold and filver bullion arife from the fame
cauſes as the like fluctuations in that of all other
commodities. The frequent lofs of thofe metals
from various accidents by fea and by land, the
continual wafte of them in gilding and plating,
in lace and embroidery, in the wear and tear of
coin, and in that of plate; require, in all countries
which poſſeſs no mines of their own, a continual
importation, in order to repair this loſs and this
wafte. The merchant importers, like all other
merchants, we may believe, endeavour, as well as
they can, to ſuit their occafional importations to
what, they judge, is likely to be the immediate
demand. With all their attention, however, they
fometimes over- do the bufinefs, and fometimes.
under-do it. When they import more bullion than
is wanted, rather than incur the rifk and trouble
of exporting it again, they are fometimes willing
to fell a part of it for fomething lefs than the ordi-
nary or average price. When, on the other hand,
they import leſs than is wanted, they get fomething
more than this price. But when, under all thoſe
occafional fluctuations, the market price either of
gold or filver bullion continues for feveral years
together ſteadily and conftantly, either more or
lefs above, or more or lefs below the mint price:
we may be aſſured that this ſteady and conftant,
either fuperiority or inferiority of price, is the
THE WEALTH OF NATIONS.
69
effect of ſomething in the ſtate of the coin, which
at that time, renders a certain quantity of coin
either of more value or of lefs value than the preciſe
quantity of bullion which it ought to contain. The
conftancy and fteadiness of the effect, fuppofes a
proportionable conftancy and fteadinefs in the
caufe.
The money of any particular country is, at
any particular time and place, more or leſs an
accurate meaſure of value according as the cur-
rent coin is more or lefs exactly agreeable to its
ftandard, or contains more or lefs exactly the
precife quantity of pure gold or pure filver which
it ought to contain. If in England, for exam-1
ple, forty-four guineas and a half contained ex-
actly a pound weight of ftandard gold, or eleven
ounces of fine gold and one ounce of alloy, the
gold coin of England would be as accurate a
meaſure of the actual value of goods at any par-
ticular time and place as the nature of the thing
would admit. But if, by rubbing and wearing,
forty-four guineas and a half generally contain
leſs than a pound weight of ftandard gold; the
diminution, however, being greater in fome
pieces than in others; the meaſure of value
comes to be liable to the fame fort of uncertainty
to which all other weights and meafures are com-
monly expoſed. As it rarely happens that theſe
are exactly agreeable to their ftandard, the mer-
chant adjuſts the price of his goods, as well as he
can, not to what thoſe weights and meaſures
ought to be, but to what, upon an average, he
70
THE NATURE AND CAUSES OF
finds by experience they actually are. In confe-
quence of a like diforder in the coin the price of
goods comes, in the fame manner to be ad-
juſted, not to the quantity of pure gold or filver
which the coin ought to contain, but to that
which, upon an average, it is found by expe-
rience, it actually does contain.
By the money-price of goods, it is to be ob-
ferved, I underſtand always the quantity of pure
gold or filver for which they are fold, without
any regard to the denomination of the coin. Six
fhillings and eight-pence, for example, in the
time of Edward I, I confider as the fame money-
price with a pound fterling in the preſent times;
becauſe it contained, as nearly as we can judge,
the fame quantity of pure filver.
CHAP. VI.
Of the component Parts of the Price of
Commodities.
IN that early and rude ſtate of fociety which
precedes both the accumulation of ftock and the
appropriation of land, the proportion between
the quantities of labor neceffary for acquiring
different objects ſeems to be the only circumſtance
which can afford any rule for exchanging them
for one another. If among a nation of hunters,
for example, it ufually cofts twice the labor to
kill a beaver which it does to kill a deer, one
beaver fhould naturally exchange for or be worth
THE WEALTH OF NATIONS.
71
two deer. It is natural that what is ufually the
produce of two days or two hours labor, fhould
be worth double of what is ufually the produce
of one day's or one hour's labor.
If the one ſpecies of labor ſhould be more fevere
than the other, fome allowance will naturally be
made for this fuperior hardſhip; and the produce
of one hour's labor in the one way may frequently
exchange for that of two hours labor in the other.
Or if the one fpecies of labor requires an
uncommon degree of dexterity and ingenuity,
the efteem which men have for fuch talents, will
naturally give a value to their produce, fuperior
to what would be due to the time employed
about it. Such talents can feldom be acquired
but in confequence of long application, and the
fuperior value of their produce may frequently
be no more than a reaſonable compenfation for
the time and labor which muſt be ſpent in ac-
quiring them.
In the advanced ftate of fociety,
allowances of this kind, for fuperior hardship and
fuperior ſkill, are commonly made in the wages
of labor; and fomething of the fame kind muft
probably have taken place in its earlieſt and
rudeft period.
In this ſtate of things, the whole produce of
labor belongs to the laborer; and the quan-
tity of labor commonly employed in acquiring
or producing any commodity, is the only cir-
cumftance which can regulate the quantity of labor
which it ought commonly to purchaſe, command,
or exchange for,
72
THE NATURE AND CAUSES OF
As foon as ftock has accumulated in the hands
of particular perfons, fome of them will naturally
employ it in fetting to work induftrious people,
whom they will fupply with materials and fub-
fiftence, in order to make a profit by the fale of
their work, or by what their labor adds to the
value of the materials. In exchanging the com-
plete manufacture either for money, for labor,
or for other goods, over and above what may be
fufficient to pay the price of the materials, and
the wages of the workmen, fomething muſt be
given for the profits of the undertaker of the
work who hazads his ftock in this adventure.
The value which the workmen add to the mate-
rials, therefore, refolves itſelf in this cafe into
two parts, of which the one pays their wages,
the
other the profits of their employer upon the
whole ftock of materials and wages which he ad-
vanced. He could have no intereft to employ
them, unleſs he expected from the fale of their
work fomething more than what was fufficient to
replace his flock to him; and he could have no
intereſt to employ a great ftock rather than a
ſmall one, unleſs his profits were to bear ſome
proportion to the extent of his ſtock.
The profits of flock, it may perhaps be
thought, are only a different name for the wages
of a particular fort of labor, the labor of in-
ſpection and direction. They are, however, al-
together different, are regulated by quite differ-
ent principles, and bear no proportion to the
quantity, the hardſhip, or the ingenuity of this
THE WEALTH OF NATIONS.
73
fuppofed labor of infpection and direction.
They are regulated altogether by the value of
the ſtock employed, and are greater or fmaller
in proportion to the extent of this ftock. Let us
ſuppoſe, for example, that in fome particular
place, where the common annual profits of ma-
nufacturing ſtock are ten per cent., there are two
different manufactures, in each of which twenty
workmen are employed at the rate of fifteen
pounds a year each, or at the expenſe of three
hundred a year in each manufactory. Let us
ſuppoſe too, that the coarſe materials annually
wrought up in the one coft only feven hundred
pounds, while the finer materials in the other
coft ſeven thouſand. The capital annually em-
ployed in the one will in this cafe amount only
to one thouſand pounds; whereas that employed
in the other will amount to ſeven thouſand three
hundred pounds. At the rate of ten per cent.
therefore, the undertaker of the one will expect
a yearly profit of about one hundred pounds
only; while that of the other will expect about
feven hundred and thirty pounds. But though
their profits are fo very different, their labor of
inſpection and direction may be either altogether
or very nearly the fame. In many great works,
almoft the whole labor of this kind is commit-
ted to fome principal clerk. His wages pro-
perly exprefs the value of this labor of in-
ſpection and direction. Though in fettling them
fome regard is had commonly, not only to his
labor and skill, but to the truft which is repofed
74
THE NATURE AND CAUSES OF
in him, yet they never bear any regular propor-
tion to the capital of which he overfees the ma-
nagement; and the owner of this capital, though
he is thus diſcharged of almoft all labor, ftill
expecs that his profits fhould bear a regular
proportion to his capital. In the price of com-
modities, therefore, the profits of ſtock conſtitute
a component part altogether different from the
wages of labor, and regulated by quite different
principles.
In this ftate of things, the whole produce of
labor does not always belong to the laborer.
He must in moft cafes fhare it with the owner of
the ſtock which employs him. Neither is the
quantity of labor commonly employed in ac-
quiring or producing any commodity, the only
circumſtance which can regulate the quantity
which it ought commonly to purchaſe, com-
mand, or exchange for. An additional quantity,
it is evident, muſt be due for the profits of the
ftock [which advanced the wages and furniſhed
the materials of that labor.
As foon as the land of any country has all
become private property, the landlords, like all
other men, love to reap where they never fowed,
and demand a rent even for its natural produce.
The wood of the foreft, the graſs of the field, and
all the natural fruits of the earth, which, when
land was in common, coft the laborer only the
trouble of gathering them, come, even to him,
to have an additional price fixed upon them.
He must then pay for the licence to gather
THE WEALTH OF NATIONS.
75
them; and muft give up to the landlord a por-
tion of what his labor either collects or pro-
duces. This portion, or, what comes to the fame
thing, the price of this portion, conftitutes the
rent of land, and in the price of the greater part
of commodities makes a third component part.
The real value of all the different component
parts of price, it muſt be obſerved, is meaſured by
the quantity of labor which they can, each of
them, purchaſe or command. Labor meaſures
the value not only of that part of price which
refolves itſelf into labor, but of that which re-
folves itſelf into rent, and of that which refolves
itſelf into profit.
In every fociety the price of every commodity
finally refolves itſelf, into fome one or other, or
all of thoſe three parts; and in every improved
fociety; all the three enter more or lefs, as com-
ponent parts, into the price of the far greater
part of commodities.
In the price of corn, for example, one part.
pays the rent of the landlord, another pays the
wages or maintenance of the laborers and la-
boring cattle employed in producing it, and
the third pays the profit of the farmer. Theſe
three parts feem either immediately or ulti-
mately to make up the whole price of corn. A
fourth part, it may perhaps be thought, is necef-
fary for replacing the ftock of the farmer, or for
compenfating the wear and tear of his laboring
cattle, and other inftruments of huſbandry. But
it must be confidered that the price of any
}
1
76 THE NATURE AND CAUSES OF
inftrument of huſbandry, fuch as a laboring horſe,
is itſelf made up of the fame three parts; the
rent of the land upon which he is reared, the
labor of tending and rearing him, and the profits
of the farmer who advances both the rent of this
land, and the wages of this labor. Though the
price of the corn, therefore, may pay the price
as well as the maintenance of the horfe, the
whole price ftill refolves itſelf either immediately
or ultimately into the fame three parts of rent,
labor, and profit.
In the price of flour and meal, we muſt add to
the price of the corn, the profits of the miller,
and the wages of his fervants; in the price of
bread, the profits of the baker, and the wages of
his fervants; and in the price of both, the labor
of tranſporting the corn from the houſe of the
farmer to that of the miller, and from that of the
miller to that of the baker, together with the profits
of thoſe who advance the wages of that labor.
The price of flax refolves itſelf into the fame
three parts as that of corn. In the price of linen
we muſt add to this price the wages of the flax-
dreffer, of the ſpinner, of the weaver, of the
bleacher, &c. together with the profits of their
reſpective employers.
As any particular commodity comes to be
more manufactured, that part of the price which
reſolves itſelf into wages and profit, comes to be
greater in proportion to that which refolves it-
felf into rent. In the progrefs of the manufac-
ture, not only the number of profits increaſe,
THE WEALTH OF NATIONS.
77
but every fubfequent profit is greater than the
foregoing; becaule the capital from which it is
derived muſt always be greater. The capital
which employs the weavers, for example, muſt
be greater than that which employs the ſpin-
ners; becauſe it not only replaces that capital
with its profits, but pays, befides, the wages of
the weavers; and the profits muft always bear
fome proportion to the capital.
In the moſt improved focieties, however, there
are always a few commodities of which the price
refolves itſelf into two parts only, the wages of
labor, and the profits of ftock; and a fill
fmaller number, in which it confifts altogether in
the wages of labor. In the price of fea- fiſh
for example, one part pays the labor of the
fiſhermen, and the other the profits of the ca-
pital employed in the fiſhery. Rent very fel-
dom makes any part of it, though it does fome-
times, as I fhall fhow hereafter. It is otherwiſe,
at leaſt through the greater part of Europe, in
river fisheries. A falmon fishery pays a rent,
and rent, though it cannot well be called the
rent of land, makes a part of the price of a ſal-
mon as well as wages and profit. In fome parts
of Scotland a few poor people make a trade of
gathering, along the fea-fhore, thofe little va-
riegated ftones commonly known by the name
of Scotch Pebbles. The price which is paid to
them by the ſtone cutter is altogether the wages
of their labor; neither rent nor profit make any
part of it.
78
THE NATURE AND CAUSES OF
But the whole price of any commodity muft ftill
finally refolve itſelf into fome one or other, of all of
thoſe three parts; as whatever part of it remains
after paying the rent of the land, and the price
of the whole labor employed in raifing, manu-
facturing, and bringing it to market, muſt ne-
ceffarily be profit to fomebody.
As the price or exchangeable value of every
particular commodity, taken feparately, refolves
itſelf into fome one or other or all of thofe three
parts; fo that of all the commodities which com-
poſe the whole annual produce of the labor of
every country, taken complexly, muft refolve
itſelf into the fame three parts, and be parcelled
out among different inhabitants of the country,
either as the wages of their labor, the profits of
their ſtock, or the rent of their land. The whole
of what is annually either collected or produced
by the labor of every fociety, or what comes to
the fame thing, the whole price of it, is in this
manner originally diftributed among fome of its
different members. Wages, profit, and rent, are
the three original fources of all revenue as well as
of all exchangeable value. All other revenue is
ultimately derived from fome one or other of theſe.
Whoever derives his revenue from a fund
which is his own, muft draw either from his
labor, from his ftock, or from his land. The
revenue derived from labor is called wages.
That derived from ftock, by the perfon who
manages or employs it, is called profit. That
derived from it by the perſon who does not
THE WEALTH OF NATIONS.
79
employ it himſelf, but lends it to another, is
called the intereft or the uſe of money. It is the
compenfation which the borrower pays to the
lender, for the profit which he has an opportunity
of making by the ufe of the money. Part of that
profit naturally belongs to the borrower, who
runs the riſk and takes the trouble of employing
it; and part to the lender, who affords him the
opportunity of making this profit. The intereft
of money is always a derivative revenue, which,
if it is not paid from the profit which is made by
the uſe of the money, muft be paid from fome
other ſource of revenue, unleſs perhaps the bor-
rower is a ſpendthrift, who contracts a fecond
debt in order to pay the intereft of the firſt. The
revenue which proceeds altogether from land, is
called rent, and belongs to the landlord. The
revenue of the farmer is derived partly from his
labor, and partly from his flock. To him,
land is only the inftrument which enables him
to earn the wages of this labor, and to make the
profits of this ſtock. All taxes, and all the
revenue which is founded upon them, all fala-
ries, penfions, and annuities of every kind, are
ultimately derived from fome one or other of
thoſe three original fources of revenue, and are
paid either immediately or mediately from the
wages of labor, the profits of ftock, or the rent
of land.
When thoſe three different forts of revenue
belong to different perfons, they are readily dif-
tinguiſhed; but when they belong to the fame
80 THE NATURE AND CAUSES OF
they are fometimes confounded with one another
at leaſt in common language.
A gentleman who farms a part of his own
eftate, after paying the expenfe of cultivation,
ſhould gain both the rent of the landlord and
the profit of the farmer. He is apt to denomi-
nate, however, his whole gain, profit, and thus
confounds rent with profit, at leaft in common
language. The greater part of our North-Ame-
rican and Weft - Indian planters are in this fitua-
tion. They farm, the greater part of them, their
own eftates, and accordingly we feldom hear of
the rent of a plantation, but frequently of its
profit.
Common farmers feldom employ any overſeer
to direct the general operations of the farm.
They generally too work a good deal with their
own hands, as ploughmen, harrowers, &c. What
remains of the crop after paying the rent, there-
fore, ſhould not only replace to them their ſtock
employed in cultivation, together with its ordi-
nary profits, but pay them the wages which are
due to them, both as laborers and overſeers.
Whatever remains, however, after paying the
rent and keeping up the ſtock, is called profit.
But wages evidently make a part of it. The
farmer, by faving theſe wages, muſt neceffarily
gain them. Wages, therefore, are in this cafe
confounded with profit.
An independent manufacturer, who has ftock
enough both to purchaſe materials, and to main-
tain himſelf till he can carry his work to market,
fhould
THE WEALTH OF NATIONS.
81
fhould gain both the wages of a journeyman who
works under a mafter, and the profit which that
mafter makes by the fale of the journeyman's
work. His whole gains, however, are commonly
called profit, and wages are, in this cafe too,
confounded with profit.
A gardener who cultivates his own garden with
his own hands, unites in his own perfon the three
different characters, of landlord, farmer, and laborer.
His produce, therefore, fhould pay him the rent
of the first, the profit of the fecond, and the wages
of the third. The whole, however, is commonly
confidered as the earnings of his labor. Both rent
and profit are, in this cafe, confounded with wages.
As in a civilized country there are but few
commodities of which the exchangeable value
arifes from labor only, rent and profit contri-
buting largely to that of the far greater part of
them, fo the annual produce of its labor will
always be fufficient to purchaſe or command a
much greater quantity of labor than what was
employed in raiſing, preparing, and bringing
that produce to market. If the fociety were an-
nually to employ all the labor which it can
annually purchaſe, as the quantity of labor would
increaſe greatly every year, fo the produce of
every fucceeding year would be of vaftly greater
value than that of the foregoing. But there is
no country in which the whole annual produce is
employed in maintaining the induftrious. The
idle every where confume a great part of it; and
according to the different proportions in which
W, of N. 14
6
82 THE NATURE AND CAUSES OF
it is annually divided between thoſe two different
orders of people, its ordinary or average value
muſt either annually increaſe, or diminiſh, or
continue the fame from one year to another.
CHAP. VII.
Of the natural and Market Price of Commodities
THERE is in every fociety or neighbourhood
an ordinary or average rate both of wages and
profit in every different employment of labor and
ftock. This rate is naturally regulated, as I fhall
fhow hereafter, partly by the general circumſtances
of the fociety, their riches or poverty, their ad-
vancing, ftationary, or declining condition; and
partly by the particular nature of each employment.
There is likewife in every fociety or neighbour-
hood an ordinary or average rate of rent, which
is regulated too, as I fhall fhow hereafter, partly
by the general circumftances of the ſociety or
neighbourhood in which the land is fituated, and
partly by the natural or improved fertility of the
land.
Theſe ordinary or average rates may be called
the natural rates of wages, profit, and rent, at
the time and place in which they commonly
prevail.
When the price of any commodity is neither
more nor leſs than what is fufficient to pay the,
THE WEALTH OF NATIONS.
8.3%
rent of the land, the wages of the labor, and
the profits of the ftock employed in raiſing, pre-
paring, and bringing it to market, according to
their natural rates, the commodity is then fold
for what may be called its natural price.
The commodity is then fold precifely for what
it is worth, or for what it really cofts the perfon
who brings it to market; for though in common
language what is called the prime coft of any
commodity does not comprehend the profit of the
perſon who is to fell it again, yet if he fells it
at a price which does not allow him the ordinary
rate of profit in his neighbourhood, he is evidently
a lofer by the trade; fince by employing his ftock
in fome other way he might have made that profit.
His profit, befides, is his revenue, the proper fund
of his fubfiftence. As, while he is preparing and
bringing the goods to market, he advances to
his workmen their wages, or their fubfiftence;
ſo he advances to himſelf, in the fame manner,
his own fubfiftence, which is generally fuitable
to the profit which he may reaſonably expect
from the ſale of his goods. Unleſs they yield him
this profit, therefore, they do not repay him
what they may very properly be faid to have.
really coft him.
Though the price, therefore, which leaves him
this profit, is not always the loweſt at which a deal-
er may ſometimes fell his goods, it is the loweft at
which he is likely to fell them for any confiderable
time; at leaſt where there is perfect liberty, or where
he may change his trade as often as he pleaſes,
84
THE NATURE AND CAUSES OF
The actual price at which any commodity is
commonly fold is called its market price. It may
either be above, or below, or exacly the fame.
with its natural price.
The market price of every particular commo-
dity is regulated by the proportion between the
quantity which is actually brought to market,
and the demand of thoſe who are willing to pay
the natural price of the commodity, or the whole
value of the rent, labor, and profit, which muſt
be paid in order to bring it thither. Such people
may be called the effectual demanders; and their
demand the effectual demand; fince it may be
fufficient to effectuate the bringing of the commodity
to market. It is different from the abfolute demand.
A very poor man may be faid in fome fenfe to
have a demand for a coach and fix; he might
like to have it; but his demand is not an effec◄
tual demand, as the commodity can never be
brought to market in order to ſatisfy it.
When the quantity of any commodity which
is brought to market falls fhort of the effectual
demand, all thoſe who are willing to pay the
whole value of the rent, wages, and profit, which
muſt be paid in order to bring it thither, cannot be
ſupplied with the quantity which they want. Rath-
er than want it altogether, fome of them will
be willing to give more. A competition will im-
mediately begin among them, and the market price
will rife more or lefs above the natural price, accord-
ing as either the greatneſs of the deficiency, or
the wealth and wanton luxury of the competitors,
THE WEALTH OF NATIONS.
85
happen to animate more or lefs the eagerneſs of
the competition. Among competitors of equal wealth
and luxury the fame deficiency will generally occa-
fion a more or lefs eager competition, according
as the acquifition of the commodity happens to be
of more or lefs importance to them. Hence the
exorbitant price of the neceffaries of life during
the blockade of a town or in a famine.
When the quantity brought to market exceeds
the effectual demand, it cannot be all fold to thoſe
who are willing to pay the whole value of the
rent, wages and profit, which must be paid in
order to bring it thither. Some part muſt be fold
to thoſe who are willing to pay lefs, and the low
price which they give for it muſt reduce the price
of the whole. The market price will fink more
or lefs below the natural price, according as the
greatneſs of the exceſs increaſes more or leſs the
competition of the fellers, or according as it hap-
pens to be more or leſs important to them to get
immediately rid of the commodity. The fame exceſs
in the importation of perishable, will occafion a
much greater competition than in that of durable
commodities; in the importation of oranges, for
example, than in that of old iron.
When the quantity brought to market is juſt
fufficient to ſupply the effectual demand and no
more, the market price naturally comes to be
either exactly, or as nearly as can be judged of,
the fame with the natural price. The whole-
quantity upon hand can be diſpoſed of for this.
price, and cannot be diſpoſed of for more. The
86 THE NATURE AND CAUSES OF
competition of the different dealers obliges them
all to accept of this price, but does not oblige
them to accept of lefs.
The quantity of every commodity brought to
market naturally fuits itſelf to the effectual demand.
It is the intereft of all thoſe who employ their land,
labor, or ſtock, in bringing any commodity to
market, that the quantity never ſhould exceed the
effectual demand; and it is the intereft of all other
people that it never ſhould fall fhort of that demand.
If at any time it exceeds the effectual demand,
ſome of the component parts of its price muſt be
paid below their natural rate. If it is rent, the
intereft of the landlords will immediately prompt
them to withdraw a part of their land; and if
it is wages or profit, the intereft of the laborers
in the one cafe, and of their employers in the
other, will prompt them to withdraw a part of
their labor or ftock from this employment. The
quantity brought to market will foon be no more
than fufficient to fupply the effectual demand.
All the different parts of its price will rife to their
natural rate, and the whole price to its natural
price.
If, on the contrary, the quantity brought to
market ſhould at any time fall fhort of the effec-
tual demand, fome of the component parts of its
price muſt riſe above their natural rate. If it is
rent, the intereft of all other landlords will na-
turally prompt them to prepare more land for
the raifing of this commodity; if it is wages or
profit, the intereft of all other laborers and dealers
THE WEALTH OF NATIONS.
87
Will foon prompt them to employ more labor
and ſtock in preparing and bringing it to market.
The quantity brought thither will foon be fuf-
ficient to fupply the effectual demand. All the dif-
ferent parts of its price will foon fink to their natural
rate, and the whole price to its natural price.
The natural price, therefore, is, as it were, the
central price, to which the prices of all commodities
are continually gravitating. Different accidents may
fometimes keep them fufpended a good deal above
it, and fometimes force them down even ſomewhat
below it. But whatever may be the obſtacles
which hinder them from fettling in this centre of
repofe and continuance, they are conftantly tending
towards it.
The whole quantity of induſtry annually em-
ployed in order to bring any commodity to market,
naturally fuits itſelf in this manner to the effectual
demand. It naturally aims at bringing always that
preciſe quantity thither which may be fufficient
to ſupply, and no more than fupply, that demand.
But in fome employments the fame quantity
of induſtry will in different years produce very
different quantities of commodities; while in
others it will produce always the fame, or very
nearly the fame. The fame number of laborers
in huſbandry will, in different years, produce
very different quantities of corn, wine, oil, hops,
&c. But the fame number of ſpinners and
weavers will every year produce the fame or very
nearly the fame quantity of linen and woollen
cloth. It is only the average produce of the one
88 THE NATURE AND CAUSES OF
E
fpecies of induſtry which can be fuited in any
refpect to the effectual demand; and as its actual
produce is frequently much greater and frequently
much less than its average produce, the quantity
of the commodities brought to market will fome-
times exceed a good deal, and fometimes fall fhort
a good deal, of the effectual demand. Even
though that demand therefore fhould continue
always the fame, their market price will be liable
to great fluctuations, will fometimes fall a good
deal below, and ſometimes riſe a good deal above
their natural price. In the other fpecies of induftry,
the produce of equal quantities of labor being
always the fame, or very nearly the fame, it can be
more exactly ſuited to the effectual demand. While
that demand continues the fame, therefore, the
market price of the commodities is likely to do ſo
too, and to be either altogether, or as nearly as
can be judged of, the fame with the natural price.
That the price of linen and woollen cloth is liable
neither to ſuch frequent nor to ſuch great variations
as the price of corn, every man's experience will
inform him. The price of the one ſpecies of
commodities varies only with the variations in
the demand: That of the other varies, not only
with the variations in the demand, but with the
much greater and more frequent variations in the
quantity of what is brought to market in order
to ſupply that demand.
The occafional and temporary fluctuations in the
market price of any commodity fall chiefly upon
thoſe parts of its price which refolve themſelves
into wages and profit. That part which reſolves
THE WEALTH OF NATIONS.
89.
A rent
itſelf into rent is lefs affected by them.
certain in money is not in the leaft affected by
them either in its rate or in its value. A rent
which confifts either in a certain proportion or
in a certain quantity of the rude produce, is no
doubt affected in its yearly value by all the occa-
fional and temporary fluctuations in the market
price of that rude produce: but it is feldom
affected by them in its yearly rate. In fettling
the terms of the leafe, the landlord and farmer
endeavour, according to their best judgment, to
adjuſt that rate, not to the temporary and occa-
fional, but to the average and ordinary price of
the produce.
Such fluctuations affect both the value and
the rate either of wages or of profit, according
as the market happens to be either over-ſtocked
or under-ftocked with commodities or with la-
bor; with work done, or with work to be done.
A public mourning raiſes the price of black
cloth, with which the market is almoſt always
under - ftocked upon fuch occafions, and aug-
ments the profits of the merchants who poffefs
any confiderable quantity of it. It has no effect
upon the wages of the weavers. The market is
under-ſtocked with commodities, not with la-
bor; with work done, not with work to be
done. It raiſes the wages of journeymen taylors.
The market is here under-ftocked with labor,
There is an effectual demand for more labor,
for more work to be done than can be had. It
finks the price of colored filks and cloths, and
thereby reduces the profits of the merchants who
|
90
THE NATURE AND CAUSES OF
have any confiderable quantity of them upon hand.
It finks too the wages of the workmen employed
in preparing fuch commodities, for which all
demand is ftopped for fix months, perhaps for a
twelvemonth. The market is here over-ftocked
both with commodities and with labor.
But though the market price of every particular
commodity is in this manner continually gravitat-
ing, if one may fo, towards the natural price,
yet ſometimes particular accidents, fometimes
natural cauſes, and ſometimes particular regulations
of police, may, in many commodities, keep up
the market price, for a long time together, a
good deal above the natural price.
When by an increaſe in the effectual demand,
the market price of fome particular commodity
happens to riſe a good deal above the natural
price, thoſe who employ their ftocks in fupply-
ing that market are generally careful to conceal
this change. If it was commonly known, their
great profit would tempt fo many new rivals to
employ their ftocks in the fame way, that, the
effectual demand being fully fupplied, the market
price would foon be reduced to the natural price,
and perhaps for fome time even below it. If the
market is at a great diſtance from the refidence of
thoſe who ſupply it, they may ſometimes be able
to keep the fecret for feveral years together, and
may fo long enjoy their extraordinary profits
without any new rivals. Secrets of this kind,
however, it muſt be acknowledged, can feldom
be long kept, and the extraordinary profit can
laft very little longer than they are kept.
THE WEALTH OF NATIONS.
91
Secrets in manufactures are capable of being
longer kept than fecrets in trade. A dier who
has found the means of producing a particular
color with materials which coft only half the price
of thoſe commonly made uſe of, may, with good
management, enjoy the advantage of his difcovery
as long as he lives, and even leave it as a legacy
to his pofterity. His extraordinary gains arife
from the high price which is paid for his private
labor. They properly confift in the high wages
of that labor. But as they are repeated upon
every part of his ftock, and as their whole amount
bears, upon that account, a regular proportion to
it, they are commonly confidered as extraordinary
profits of ſtock.
Such enhancements of the market price are
evidently the effects of particular accidents, of
which, however, the operation may fometimes
laft for many years together.
Some natural productions require fuch a fingu-
larity of foil and fituation, that all the land in
a great country, which is fit for producing
them, may not be fufficient to fupply the effec-
tual demand. The whole quantity brought to
market, therefore, may be diſpoſed of to thoſe
who are willing to give more than what is fuffi-
cient to pay the rent of the land which produced
them, together with the wages of the labor, and
the profits of the ftock which were employed in
preparing and bringing them to market, accord-
ing to their natural rates. Such commodities
may continue for whole centuries together to be
92
THE NATURE AND CAUSES OF
fold at this high price; and that part of it which
refolves itſelf into the rent of land is in this
cafe the part which is generally paid above its
natural rate. The rent of the land which affords.
fuch fingular and efteemed productions, like the
rent of fome vineyards in France of a peculiarly
happy foil and fituation, bears no regular pro-
portion to the rent of other equally fertile and
equally well cultivated land in its neighbourhood.
The wages of the labor and the profits of
the ſtock employed in bringing ſuch commodities
to market, on the contrary, are feldom out
of their natural proportion to thoſe of the other
employments of labor and ſtock in their neigh-
bourhood.
Such enhancements of the market price are
evidently the effect of natural caufes which may
hinder the effectual demand from ever being fully
fupplied, and which may continue, therefore, to
operate for ever.
A monopoly granted either to an individual or
to a trading company has the fame effect as a
fecret in trade or manufactures. The monopolifts,
by keeping the market conſtantly underſtocked,
by never fully fupplying the effectual demand,
fell their commodities much above the natural
price, and raiſe their emoluments, whether they
confift in wages or profit, greatly above their
natural rate.
The price of monopoly is upon every occafion
the higheſt which can be got. The natural price,
or the price of free competition, on the contrary,
THE WEALTH OF NATIONS.
93
As the loweft which can be taken, not upon every
occafion, indeed, but for any confiderable time
together. The one is upon every occafion the
higheſt which can be ſqueezed out of the buyers,
or which, it is fuppofed, they will confent to
give: The other is the loweſt which the ſellers
can commonly afford to take, and at the fame
time continue their buſineſs.
The exclufive privileges of corporations, fta-
tutes of apprenticeship, and all thofe laws which
reſtrain, in particular employments, the compe-
tition to a ſmaller number than might otherwiſe
go into them, have the fame tendency, though
in a leſs degree. They are a fort of enlarged
monopolies, and may frequently, for ages together,
and in whole claffes of employments, keep up
the market price of particular commodities above
the natural price, and maintain both the wages
of the labor and the profits of the ſtock employ-
ed about them fomewhat above their natural
rate.
Such enhancements of the market price may
laft as long as the regulations of police which
give occafion to them.
The market price of any particular commodity,
though it may continue long above, can feldom
continue long below its natural price. What-
ever part of it was paid below the natural rate,
the perfons whofe intereft it affected would im-
mediately feel the lofs, and would immediately
withdraw either fo much land, or fo much labor,
or ſo much ſtock, from being employed about
94
THE NATURE AND CAUSES OF
it, that the quantity brought to market would
foon be no more than fufficient to fupply the
effectual demand. Its market price, therefore, would
foon rife to the natural price. This at leaft would
be the cafe where there was perfect liberty.
The fame ftatutes of apprenticeſhip and other
corporation laws indeed, which, when a manu-
facture is in profperity, enable the workmen to
raiſe his wages a good deal above their natural
rate, fometimes oblige him, when it decays to
let them down a good deal below it. As in the
one cafe they exclude many people from his em-
ployment, fo in the other they exclude him from
many employments. The effect of fuch regula-
tions, however, is not near ſo durable in finking
the workman's wages below, as in raifing them
above their natural rate. Their operation in the
one way may endure for many centuries, but in
longer than the lives of
the other it can laft no
fome of the workmen who were bred to the bufi-
neſs in the time of its profperity. When they
are gone, the number of thoſe who are after-
wards educated to the trade will naturally fuit.
itſelf to the effectual demand, The police muft
be as violent as that of Indoftan or ancient Egypt
(where every man was bound by a principle of
religion to follow the occupation of his father,
and was fuppofed to commit the moft horrid
facrilege if he changed it for another), which can
in any particular employment, and for feveral
generations together, fink either the wages of
THE WEALTH OF NATIONS.
95
labor or the profits of ſtock below their natural
rate.
This is all that I think neceſſary to be ob-
ſerved at preſent concerning the deviations, whe-
ther occafional or permanent, of the market price
of commodities from the natural price.
The natural price itſelf varies with the natural
rate of each of its component parts, of wages,
profit, and rent; and in every ſociety this rate
varies according to their circumſtances, according
to their riches or poverty, their advancing
ftationary, or declining condition. I fhall, in
the four following chapters, endeavour to explain
as fully and diftinctly as I can, the cauſes of thoſe
different variations.
Firft, I fhall endeavour to explain what are
the circumſtances which naturally determine the rate
of wages, and in what manner thofe circumftances
are affected by the riches or poverty, by the advan-
cing, ftationary, or declining ftate of the fociety,
Secondly, I fhall endeavour to fhow what are
the circumftances which naturally determine the
rate of profit, and in what manner too thofe cir-
cumſtances are affected by the like variations in
the ſtate of the fociety.
Though pecuniary wages and profit are very
different in the different employments of labor
and ſtock; yet a certain proportion feems com-
monly to take place between both the pecuniary
wages in all the different employments of labor,
and the pecuniary profits in all the different em-
ployments of ſtock, This proportion, it will
96
THE NATURE AND CAUSES OF
appear hereafter, depends partly upon the nature
of the different employments, and partly upon
the different laws and policy of the fociety in
which they are carried on. But though in many
reſpects dependent upon the laws and policy,
this proportion feems to be little affected by the
riches or poverty of that fociety; by its ad-
vancing, ſtationary, or declining condition; but
to remain the fame or very nearly the fame in
all thoſe different ftates. I fhall, in the third
place, endeavour to explain all the different cir-
cumſtances which regulate this proportion.
In the fourth and laft place, I fhall endeavour
to ſhow what are the circumftances which regulate
the rent of land, and which either raiſe or lower
the real price of all the different ſubſtances which
it produces.
CHAP. VIII.
Of the Wages of Labor.
HE produce of labor conftitutes the natural
recompence or wages of labor.
In that original ftate of things, which pre-
cedes both the appropriation of land and the
accumulation of ftock, the whole produce of
labor belongs to the laborer. He has neither
landlord nor mafter to fhare with him.
Had this ſtate continued, the wages of labor
would have augmented with all thofe improvements
in
THE WEALTH OF NATIONS.
97
1
in its produclive powers, to which the divi-
fion of labor gives occafion. All things would
gradually have become cheaper. They would
have been produced by a ſmaller quantity of
labor; and as the commodities produced by equal
quantities of labor would naturally in this ftate
of things be exchanged for one another, they
would have been purchaſed likewife with the pro-
duce of a ſmaller quantity.
But though all things would have become
cheaper in reality, in appearance many things
might have become dearer than before, or have
been exchanged for a greater quantity of other
goods. Let us fuppofe; for example, that in the
greater part of employments the productive
powers of labor had been improved to tenfold,
or that a day's labor could produce ten times
the quantity of work which it had done origin-
ally; but that in a particular employment they
had been improved only to double, or that a
day's labor could produce only twice the quan-
tity of work which it had done before. In ex-
changing the produce of a day's labor in the
greater part of employments, for that of a day's
labor in this particular one, ten times the ori-
ginal quantity of work in them would purchaſe
only twice the original quantity in it. Any
particular quantity in it, therefore, a pound
weight, for example, would appear to be five
times dearer than before. In reality, however,
it would be twice as cheap. Though it re-
quired five times the quantity of other goods to
W. of N. 1.
7
98
THE NATURE AND CAUSES OF
purchaſe it, it would require only half the quan-
tity of labor either to purchaſe or to produce
it. The acquifition, therefore, would be twice
as eafy as before.
But this original flate of things, in which the
laborer enjoyed the whole produce of his own
labor, could not laft beyond the firft introduc-
tion of the appropriation of land and the accu-
mulation of ſtock. It was at an end, therefore,
long before the moft confiderable improvements
were made in the productive powers of labor,
and it would be to no purpoſe to trace further
what might have been its effects upon the re-
compence or wages of labor.
As foon as land becomes private property, the
landlord demands a fhare of almoſt all the pro-
duce which the laborer can either raife, or col-
lect from it. His rent makes the first deduction
from the produce of the labor which is employed
upon land.
It feldom happens that the perſon who tills
the ground has wherewithal to maintain himſelf
till he reaps the harveft. His maintenance is
gene-
rally advanced to him from the flock of a maſter,
the farmer who employs him, and who would
have no intereſt to employ him, unleſs he was to
fhare in the produce of his labor, or unleſs his ſtock
was to be replaced to him with a profit. This
profit makes a fecond deduction from the produce
of the labor which is employed upon land.
The produce of almoſt all other labor is liable
to the like deduction of profit. In all arts and

PARSONS
LIBRAAT
University of
THE WEALTH OF NATIONS MICHIGAN
manufactures the greater part of the workmen
ftand in need of a mafter to advance them the
materials of their work, and their wages and
maintenance till it be completed, He fhares in the
produce of their labor, or in the value which
it adds to the materials upon which it is beſtowed;
and in this fhare confifts his profit.
It ſometimes happens, indeed, that a fingle
independent workman has ftock fufficient both
to purchaſe the materials of his work, and to
maintain himſelf till it be completed. He is both
mafter and workman, and enjoys the whole pro-
duce of his own labor, or the whole value which
it adds to the materials upon which it is beſtowed.
It includes what are ufually two diftinct revenues
belonging to two diftinct perfons, the profits of
flock, and the wages of labor,
Such cafes, however, are not very frequent,
and in every part of Europe, twenty workmen
ferve under a mafter for one that is independent;
and the wages of labor are every where under-
ſtood to be, what they uſually are, when the
laborer is one perfon, and the owner of the ſtock
which employs him another.
1
What are the common wages of labor, de-
pends every where upon the contract ufually
made between thoſe two parties, whofe intereſts
are by no means the fame. The workmen defire
to get as much, the mafters to give as little as
poffible. The former are difpofed to combine in
order to raiſe, the latter in order to lower the
wages of labor.
100 THE NATURE AND CAUSES OF
It is not, however, difficult to forefee which
of the two parties muft, upon all ordinary occa-
fions, have the advantage in the difpute, and
force the other into a compliance with their terms.
The maſters, being fewer in number, can combine
much more eafily; and the law, befides, authorizes,
or at leaſt does not prohibit their combinations,
while it prohibits thofe of the workmen. We
have no acs of parliament againſt combining to
lower the price of work; but many againft com-
bining to raiſe it. In all fuch difputes the mafters
can hold out much longer. A landlord, a farmer,
a mafter manufacturer, or merchant, though they
did not employ a fingle workman, could gene-
rally live a year or two upon the flocks which
they have already acquired. Many workmen could
not fubfift a week, few could ſubſiſt a month,
and ſcarce any a year without employment. In
the long-run the workman may be as neceffary to
his maſter as his mafter is to him; but the necef-
fity is not fo immediate.
i
We rarely hear, it has been faid, of the com-
binations of mafters; though frequently of thofe
of workmen. But whoever imagines, upon this
account, that mafters rarely combine, is as igno-
rant of the world as of the fubject. Mafters are:
always and every where in a fort of tacit, but
conftant and uniform combination, not to raiſe
the wages of labor above their actual rate. To
violate this combination is every where a moſt
unpopular action, and a fort of reproach to a
maſter among his neighbours and equals.
We
I
THE WEALTH OF NATIONS.
101
feldom, indeed, hear of this combination, becauſe
it is the ufual, and one may fay, the natural ſtate
of things which nobody ever hears of. Mafters too
fometimes enter into particular combinations to
fink the wages of labor even below this rate.
Theſe are always conducted with the utmoſt filence
and fecrecy, till the moment of execution, and
when the workmen yield, as they fometimes do,
without reſiſtance, though ſeverely felt by them,
they are never heard of by other people. Such
combinations, however, are frequently refifted by
a contrary defenfive combination of the workmen ;
who fometimes too, without any provocation of
this kind, combine of their own accord to raiſe
the price of their labor. Their uſual pretences are,
fometimes the high price of provifions; fometimes
the great profit which their maſters make by their
work. But whether their combinations be offenfive
or defenſive, they are always abundantly heard of.
In order to bring the point to a ſpeedy decifion,
they have always recourfe to the loudeft cla-
mor, and ſometimes to the moſt ſhocking vio-
lence and outrage. They are deſperate, and act
with the folly and extravagance of defperate men,
who muft either ftarve, or frighten their maſters
into an immediate compliance with their demands.
The mafters upon theſe occafions are juſt as cla-
morous upon the other fide, and never ceaſe to
call aloud for the affiftance of the civil magif-
trate, and the rigorous execution of thofe laws
which have been enacted with fo much feverity
againſt the combinations of fervants, laborers
102
THE NATURE AND CAUSES OF
and journeymen. The workmen, accordingly, very
feldom derive any advantage from the violence of
thofe tumultuous combinations, which, partly from
the interpofition of the civil magiftrate, partly from
the fuperior ſteadineſs of the maſters, partly from
the neceffity which the greater part of the workmen
are under offubmitting for the fake of preſent fub-
fiftence, generally end in nothing, but the puniſh
ment or ruin of the ringleaders.
But though in difputes with their workmen,
mafters muſt generally have the advantage, there
is however a certain rate below which it ſeems
impoffible to reduce, for any confiderable time,
the ordinary wages even of the loweft fpecies of
labor.
A man must always live by his work, and his
wages muft at least be fufficient to maintain
him. They muft even upon moft occafions be
ſomewhat more; otherwiſe it would be impof-
fible for him to bring up a family, and the race
of fuch workmen could not laft beyond the firſt
generation. M. Cantillon feems, upon this ac-
count, to fuppofe that the loweft fpecies of com-
mon laborers muſt every where earn at leaſt
double their own maintenance, in order that one
with another they may be enabled to bring up
two children; the labor of the wife, on account
of her neceffary attendance on the children,
being fuppofed no more than fufficient to pro-
vide for herſelf. But one half the children born,
it is computed, die before the age of manhood.
The pooreft laborers, therefore, according to
>
THE WEALTH OF NATIONS.
103
this account, muſt, one with another, attempt to
rear at least four children, in order that two may
have an equal chance of living to that age. But
the neceſſary maintenance of four children, it is
ſuppoſed, may be nearly equal to that of one man.
The labor of an able-bodied ſlave, the fame author
adds, is computed to be worth double his mainte-
nance; and that of the meaneft laborer, he thinks,
cannot be worth leſs than that of an able-bodied
flave. Thus far at leaſt ſeems certain, that, in
order to bring up a family, the labor of the huf-
band and wife together muft, even in the loweſt
fpecies of common labor, be able to earn ſomething
more than what is precifely neceſſary for their own
maintenance; but in what proportion, whether in
that above-mentioned, or in any other, I fhall
not take upon me to determine.
There are certain circumſtances, however, which
ſometimes give the laborers an advantage, and
enable them to raiſe their wages confiderably above
this rate; evidently the loweſt which is confiftent
with common humanity.
!
When in any country the demand for thoſe
who live by wages; laborers, journeymen, fer-
vants of every kind, is continually increaſing;
when every year furniſhes empyment for a
greater number than had been employed the
year before, the workmen have no occaſion to
combine in order to raiſe their wages. The
ſcarcity of hands occafions a competition among
maſters, who bid againſt one another, in order
to get workmen, and thus voluntarily break
104 THE NATURE AND CAUSES OF
through the natural combination of mafters not
to raiſe wages.
The demand for thoſe who live by wages, it is
evident, cannot increaſe but in proportion to the
increaſe of the funds which are deſtined for the
payment of wages. Theſe funds are of two kinds;
firſt, the revenue which is over and above what is
neceffary for the maintenance; and, fecondly,
the ftock which is over and above what is neceffary
for the employment of their maſters.
When the landlord, annuitant, or monied
man, has a greater revenue than what he judges
fufficient to maintain his own family, he employs
either the whole or a part of the furplus in
maintaining one or more menial fervants. In-
creaſe this ſurplus, and he will naturally increaſe
the number of thofe fervants.
When an independent workman, fuch as a
weaver or fhoe-maker, has got more flock than
what is fufficient to purchaſe the materials of his
own work, and to maintain himſelf till he can
diſpoſe of it, he naturally employs one or more
journeymen with the furplus, in order to make a
profit by their work. Increaſe this furplus, and
he will naturally increaſe the number of his
journeymen.
The demand for thofe who live by wages,
therefore, neceffarily increaſes with the increaſe
of the revenue and ſtock of every country, and
cannot poſſibly increaſe without it. The increaſe
of revenue and ftock is the increaſe of national
wealth, The demand for thoſe who live by
THE WEALTH OF NATIONS.
105
wages, therefore, naturally increaſes with the
increaſe of national wealth, and cannot poffibly
increaſe without it.
It is not the actual greatneſs of national wealth,
but its continual increaſe, which occafions a riſe in
the wages of labor. It is not, accordingly, in the
richeſt countries, but in the moſt thriving, or in
thoſe which are growing rich the faſteſt, that the
wages of labor are higheft. England is certainly,
in the preſent times, a much richer country than
any part of North-America. The wages of labor,
however, are much higher in North-America than
in any part of England. In the province of New
York, common laborers earn three fhillings
and fixpence currency, equal to two fhillings
ſterling, a day; fhip carpenters, ten fhillings and
fixpence currency, with a pint of rum worth fix-
pence fterling, equal in all to fix fhillings and
fixpence fterling; houfe carpenters and brick-
layers, eight fhillings currency, equal to four
fhillings and fixpence fterling; journeymen tay-
lors, five fhillings currency, equal to about two
fhillings and ten pence fterling. Theſe prices
are all above the London price; and wages are
faid to be as high in the other colonies as in New
York. The price of provifions is every where in
North-America much lower than in England. A
dearth has never been known there. In the
worſt ſeaſons, they have always had a ſufficiency
*This was written in 1773, before the commencement of
the late difturbances.
106 THE NATURE AND CAUSES OF
for themſelves, though lefs for exportation. If the
money price of labor, therefore, be higher than it
is any where in the mother country, its real price,
the real command of the neceffaries and convenien-
cies of life which it conveys to the laborer, muſt be
higher in a ſtill greater proportion.
-
But though North-America is not yet ſo rich
as England, it is much more thriving, and ad-
vancing with much greater rapidity to the further
acquifition of riches. The moft decifive mark
of the proſperity of any country is the increaſe
of the number of its inhabitants. In Great Bri-
tain, and moſt other European countries, they
are not fuppofed to double in lefs than five hun-
dred years,
In the British colonies in North-
America, it has been found, that they double in
twenty or five and twenty years. Nor in the
preſent times is this increafe principally owing
to the continual importation of new inhabitants,
but to the great multiplication of the fpecies.
Thoſe who live to old age, it is faid, frequently
ſee there from fifty to a hundred, and ſometimes
many more, defcendants from their own body.
Labor is there fo well rewarded that a numer-
ous family of children, inftead of being a bur-
den is a fource of opulence and profperity to
the parents. The labor of each child, before it
can leave their houſe, is computed to he worth
a hundred pounds clear gain to them. A young
widow with four or five young children, who,
among the middling or inferior ranks of people
in Europe, would have fo little chance for a
THE WEALTH OF NATIONS.
107
fecond huſband, is there frequently courted as a
fort of fortune. The value of children is the greateſt
of all encouragements to marriage. We cannot,
therefore, wonder that the people in North-America
fhould generally marry very young. Notwithftand-
ing the great increaſe occafioned by fuch early
marriages, there is a continual complaint of the
fcarcity of hands in North-America. The demand
for laborers, the funds deftined for maintaining
them, increaſe, it feems, ftill fafter than they can
find laborers to employ.
Though the wealth of a country would be
very great, yet if it has been long ftationary, we
must not expect to find the wages of labor very
high in it. The funds deftined for the payment
of wages, the revenue and ſtock of its inhabit-
ants, may be of the greateſt extent; but if they
have continued for feveral centuries of the ſame,
or very nearly of the fame extent, the number
of laborers employed every year could eaſily
fupply, and even more than fupply, the number
wanted the following year. There could feldom
be any ſcarcity of hands, nor could the maſters.
be obliged to bid against one another in order to
get them. The hands, on the contrary, would,
in this caſe, naturally multiply beyond their em-
ployment. There would be a conftant ſcarcity
of employment, and the laborers would be
obliged to bid against one another in order to
get it.
If in fuch a country the wages of labor
had ever been more than fufficient to maintain
the laborer, and to enable him to bring up a
108 THE NATURE AND CAUSES OF
family, the competition of the laborers and the
intereft of the mafters would foon reduce them to
this loweſt rate which is confiftent with common
humanity. China has been long one of the richeſt,
that is, one of the moft fertile, beft cultivated,
moſt induſtrious, and moft populous countries in
the world. It ſeems. however, to have been long
ftationary. Marco Polo, who vifited it more than
five hundred years ago, defcribes its cultivation,
induſtry, and populoufnefs, almoft in the fame
terms in which they are deſcribed by travellers in
the preſent times. It had perhaps, even long before
his time, acquired that full complement of riches
which the nature of its laws and inftitutions permits
it to acquire. The accounts of all travellers, incon-
fiftent in many other refpects, agree in the low
wages of labor, and in the difficulty which a
laborer finds in bringing up a family in China.
If by digging the ground a whole day he can get
what will purchaſe a ſmall quantity of rice in the
evening, he is contented. The condition of ar-
tificers is, if poffible, ftill worſe. Inftead of
waiting indolently in their work-houſes, for the
calls of their customers, as in Europe, they are
continually running about the ſtreets with the
tools of their reſpective trades, offering their
fervice, and as it were begging employment.
The poverty of the lower ranks of people in
China far furpaffes that of the moſt beggarly
nations in Europe. In the neighbourhood of
Canton many hundred, it is commonly faid,
many thouſand families have no habitation on
THE WEALTH OF NATIONS. 109
the land, but live conflantly in little fifhing-
boats upon the rivers and canals. The fubfift-
ence which they find there is fo fcanty that they
are eager to filh up the naftieft garbage thrown
overboard from any European fhip. Any car-
rion, the carcafe of a dead dog or cat, for exam-
ple, though half putrid and ftinking, is as wel-
come to them as the moft wholefome food to the
people of other countries. Marriage is encou-
raged in China, not by the profitablenefs of chil-
dren, but by the liberty of deſtroying them. In
all great towns ſeveral are every night expoſed in
the ftreets, or drowned like puppies in the water.
The performance of this horrid office is even faid
to be the avowed bufinefs by which fome people
earn their fubfiftence.
J
་ ༈
China, however, though it may perhaps ftand
ftill, does not ſeem to go backward. Its towns
are no-where deferted by their'inhabitants. The
lands which had once been cultivated are no-
where neglected. The fame or very nearly the
fame annual labor muft therefore continue to be
performed, and the funds deftined for maintain-
ing it muſt not, confequently, be fentibly di
miniſhed. The loweft clafs of laborers, therefore,
notwithſtanding their feanty fubfiftence, muft
fome way or another make fhift to continue their
race fo far as to keep up their ufual numbers.
4
?
But it would be otherwife in a country where
the funds deftined for the maintenance of labor
were fenfibly decaying. Every year the demand
for fervants and laborers would, in all the different
110
THE NATURE AND CAUSES OF
claffes of employments, be lefs than it had been
the year before. Many who had been bred in
the fuperior claffes, not being able to find employ-
ment in their own buſineſs, would be glad to
feek it in the loweft. The loweſt claſs being not
only overſtocked with its own workmen, but
with the overflowings of all the other claffes, the
competition for employment would be fo great
in it, as to reduce the wages of labor to the moſt
miferable and ſcanty fubfiftence of the laborer.
Many would not be able to find employment
even upon thefe hard terms, but would either
ftarve, or be driven to feek a ſubſiſtence either
by begging, or by the perpetration perhaps of
the greateſt enormities. Want, famine, and morta-
lity would immediately prevail in that clafs, and
from thence extend themſelves to all the fuperior
claffes, till the number of inhabitants in the coun-
try was reduced to what could eafily be maintained
by the revenue and ftock which remained in it,
and which had eſcaped either the tyranny or cala-
mity which had deftroyed the reſt.
This per-
haps is nearly the prefent ftate of Bengal, and of
fome other of the Engliſh fettlements in the Eaft
Indies. In a fertile country which had before
been much depopulated, where fubfiftence, con-
fequently, fhould not be very difficult, and
where, notwithſtanding, three or four hundred
thouſand people die of hunger in one year, we
may be aſſured that the funds deftined for the
maintenance of the laboring poor are faft de-
caying. The difference between the genius of
THE WEALTH OF NATIONS. 111
the Britiſh conflitution which protects and governs
North-America, and that of the mercantile com-
pany which oppreffes and domineers in the Eaft
Indies, cannot perhaps be better illuftrated than
by the different ftate of thofe countries.
The liberal reward of labor, therefore, as it
is the neceffary effect, fo it is the natural fymp-
tom of increafing national wealth. The ſcanty
maintenance of the laboring poor, on the other
hand, is the natural fymptom that things are at a
ftand, and their ftarving condition that they are
going faft backwards.
ட்
In Great Britain the wages of labor feem, in
the preſent times, to be evidently more than what
is preciſely neceffary to enable the laborer to bring
up a family. In order to fatisfy ourſelves upon
this point it will not be neceffary to enter into
any tedious or doubtful calculation of what may
be the loweft fum upon which it is poffible to do
this. There are many plain fyınptoms that the
wages of labor are no- where in this country re-
gulated by this loweſt rate which is confiftent with
common humanity.
Firſt, in almoſt every part of Great Britain
there is a diftinction, even in the loweſt ſpecies
of labor, between fummer and winter wages.
Summer wages are always higheft. But on ac-
count of the extraordinary expenfe of fuel, the
maintenance of a family is moft expenfive in
winter. Wages, therefore, being higheſt when
this expenſe is loweft, it feems evident that they
are not regulated by what is neceffary for this
112 THE NATURE AND CAUSES OF
expenſe; but by the quantity and fuppofed
value of the work. A laborer, it may be faid
indeed, ought to fave part of his fummer wages
in order to defray his winter expenſe; and that
through the whole year they do not exceed what
is neceffary to maintain his family through the
whole year. A flave, however, or one abfolutely
dependent on us for immediate fubfiftence, would
not be treated in this manner. His daily fubfiftence
would be proportioned to his daily neceffities.
;
Secondly, the wages of labor do not in Great
Britain fluctuate with the price of provifions..
Theſe vary every-where from year to year, fre-
quently from month to month. But in many pla
ces the money price of labor remains uniformly
the ſame ſometimes for half a century together. If
in theſe places, therefore, the laboring poor can
maintain their families in dear years, they muft he
at their eaſe in times of moderate plenty, and in
affluence in thoſe of extraordinary cheapness. The
high price of provifions during theſe ten years paft
has not in many parts of the kingdom been accom-
panied with any fenfible rife in the money price of
labor. It has, indeed, in fome; owing probably
more to the increaſe of the demand for labor than
to that of the price of provifions.
Thirdly, as the price of provifions varies
more from year to year than the wages of labor,
fo, on the other hand, the wages of labor vary
more from place to place than the price of pro-
vifions. The prices of bread and butcher's meat
are generally the fame or very nearly the fame
through
THE WEALTH OF NATIONS.
113
through the greater part of the united kingdom.
Theſe and moſt other things which are fold by
retail, the way in which the laboring poor buy all
things, are generally fully as cheap or cheaper in
great towns than in the remoter parts of the coun-
try, for reafons which I fhall have occafion to
explain hereafter. But the wages of labor in a
great town and its neighbourhood are frequently a
fourth or a fifth part, twenty or five-and-twenty per
cent. higher than at a few miles diſtance. Eighteen
pence a day may be reckoned the common price
of labor in London and its neighbourhood. At a
few miles diftance it falls to fourteen and fifteen
pence.
Ten pence may be reckoned its price in
Edingburgh and its neighbourhood. At a few miles
diſtance it falls to eight pence, the uſual price of
common labor through the greater part of the low
country of Scotland, where it varies a good deal
leſs than in England. Such a difference of prices,
which it ſeems is not always fufficient to tranſport
a man from one pariſh to another, would neceffa-
rily occafion fo great a tranſportation of the moſt
bulky commodities, not only from one pariſh to
another, but from one end of the kingdom, almoſt
from one end of the world to the other, as would
foon reduce them more nearly to a level. After all
that has been faid of the levity and inconftancy
of human nature, it appears evidently from expe-
rience that a man is of all forts of luggage the
moſt difficult to be tranfported. If the laboring
poor, therefore, can maintain their families in
thofe parts of the kingdom where the price of
W. of N. 1.
•
8
114 THE NATURE AND CAUSES OF
labor is loweſt, they muſt be in affluence where
it is higheſt.
Fourthly, the variations in the price of labor not
only do not correfpond either in place or time
with thofe in the price of provifions, but they
are frequently quite oppofite.
Grain, the food of the common people, is dearer
in Scotland than in England, whence Scotland
receives almoſt every year very large fupplies. But
Engliſh corn must be fold dearer in Scotland, the
country to which it is brought, than in England,
the country from which it comes; and in propor-
tion to its quality it cannot be fold dearer in
Scotland than the Scotch corn that comes to the
ſame market in competition with it. The quality
of grain depends chiefly upon the quantity of flour
or meal which it yields at the mill, and in this
reſpect Engliſh grain is fo much fuperior to the
Scotch, that, though often dearer in appearance,
or in proportion to the meaſure of its bulk, it is
generally cheaper in reality, or in proportion to its
quality, or even to the meaſure of its weight. The
price of labor, on the contrary, is dearer in
England than in Scotland. If the laboring poor,
therefore, can maintain their families in the one
part of the united kingdom, they muſt be in
affluence in the other. Oatmeal indeed ſupplies
the common people in Scotland with the greateſt
and the beſt part of their food, which is in general
much inferior to that of their neighbours of the
fame rank in England. This difference, however,
in the mode of their fubfiftence is not the caufe
i
THE WEALTH OF NATIONS,
115
*
but the effect of the difference in their wages;
though, by a ftrange mifapprehenfion. I have
frequently heard it reprefented as the caufe. It is
not becauſe one man keeps a coach while his neigh-
bour walks a-foot, that the one is rich and the
other poor; but becauſe the one is rich he keeps
a coach, and becauſe the other is poor he walks
a-foot.
During the courſe of the laſt century, taking one
year with another, grain was dearer in both parts
of the united kingdom than during that of the
prefent. This is a matter of fact which cannot now
admit of any reaſonable doubt; and the proof of
it is, if poffible, ftill more decifive with regard to
Scotland than with regard to England. It is in
Scotland fupported by the evidence of the public
fiars, annual valuations made upon oath, according
to the actual ftate of the markets, of all the
different forts of grain in every different county of
Scotland. If fuch direct proof.could require any
collateral evidence to confirm it, I would obſerve
that this has likewife been the cafe in France
and probably in moſt other parts of Europe. With
regard to France there is the cleareft proof. But
though it is certain that in both parts of the
united kingdom grain was fomewhat dearer in the
laft century than in the preſent, it is equally cer-
tain that labor was much cheaper. If the laboring
poor, therefore, could bring up their families then,
they muſt be much more at their eafe now. In
the laſt century, the moſt uſual day-wages of com-
mon labor through the greater part of Scotland
116 THE NATURE AND CAUSES OF
were fixpence in fummer and five-pence in winter.
Three fhillings a week, the fame price very nearly,
ftill continues to be paid in fome parts of the
Highlands and Weftern Iſlands. Through the greater
part of the low country the moſt ufual wages of
common labor are now eight-pence a day; ten-
pence, fometimes a fhilling about Edinburgh, in
the counties which border upon England, pro-
bably on account of that neighbourhood, and in
a few other places where there has lately been a
confiderable rife in the demand for labor, about
Glaſgow, Carron, Ayr-fhire, &c. In England the
improvements of agriculture, manufactures and
commerce began much earlier than in Scotland.
The demand for labor, and confequently its
price, muft neceffarily have increaſed with thoſe
improvements. In the laft century, accordingly,
as well as in the prefent, the wages of labor were
higher in England than in Scotland. They have
rifen too confiderably fince that time, though,
on account of the greater variety of wages paid
there in different places, it is more difficult to
aſcertain how much. In 1614,
In 1614, the pay of a foot
foldier was the fame as in the prefent times,
eight pence a day. When it was firft eftablished
it would naturally be regulated by the ufual
wages of common laborers, the rank of people
from which foot foldiers are comnionly drawn.
Lord Chief Juftice Hales, who wrote in the
time of Charles II. computes the neceffary ex-
penſe of a laborer's family, confifting of fix
perfons, the father and mother, two children able
THE WEALTH OF NATIONS.
117
If
to do ſomething, and two not able, at ten fhil-
lings a week, or twenty-fix pounds a year.
they cannot earn this by their labor, they muſt
make it up, he fuppofes, either by begging or
ftealing. He appears to have inquired very
carefully into this fubject. In 1688, Mr. Gre-
gory King, whofe fkill in political arithmetic is
fo much extolled by Doctor Davenant, computed
the ordinary income of laborers and out-fervants
to be fifteen pounds a year to a family, which
he ſuppoſed to confift, one with another, of three
and a half perfons. His calculation, therefore,
though different in appearance, correſponds very
nearly at bottom with that of judge Hales. Both
ſuppoſe the weekly expenſe of fuch families to
be about twenty pence a head. Both the pecu-
niary income and expenſe of fuch families have
increaſed confiderably fince that time through
the greater part of the kingdom; in fome places
more, and in fome lefs; though perhaps fcarce
any where ſo much as fome exaggerated accounts
of the prefent wages of labor have lately reprefented
them to the public. The price of labor, it muſt be
obferved, cannot be aſcertained very accurately any
where, different prices being often paid at the fame
place and for the fame fort of labor, not only ac-
cording to the different abilities of the workmen, but
according to the eafinefs or hardness of the mafters.
Where wages are not regulated by law, all that we
* See his fcheme for the maintenance of the Poor, in Burn's
Hiftory of the Poor-laws.
118 THE NATURE AND CAUSES OF
can pretend to determine is what are the moſt uſual;
and experience feems to fhow that law can never
regulate them properly, though it has often pre-
tended to do fa.
The real recompence of labor, the real quan-
tity of the neceffaries and conveniencies of life
which it can procure to the laborer, has, during
the courſe of the prefent century, increaſed per-
haps in a ſtill greater proportion than its money
price. Not only grain has become fomewhat cheaper,
but many other things from which the induftrious
poor derive an agreeable and wholeſome variety
of food, have become a great deal cheaper. Po-
tatoes, for example, do not at prefent, through
the greater part of the kingdom, coft half the price
which they uſed to do thirty or forty years ago,
The fame thing may be faid of turnips, carrots,
cabbages; things which were formerly never raiſed
but by the ſpade, but which are now commonly
raiſed by the plough. All fort of garden ſtuff too
has become cheaper. The greater part of the ap-
ples and even of the onions confumed in Great
Britain were in the laft century imported from
Flanders. The great improvements in the coarſer
manufactures of both linen and woollen cloth fur-
nifh the laborers with cheaper and better clothing;
and thofe in the manufactures of the coarfer metals,
with cheaper and better inftruments of trade, as well
as with many agreeable and convenient pieces of
houſehold furniture. Soap, falt, candles, leather,
and fermented liquors have, indeed, become a
good deal dearer; chiefly from the taxes which
THE WEALTH OF NATIONS.
119
have been laid upon them. The quantity of
theſe, however, which the laboring poor are under
any neceffity of confuming, is ſo very ſmall,
that the increaſe in their price does not compen-
fate the diminution in that of fo many other things.
The common complaint that luxury extends itſelf
even to the loweſt ranks of the people, and that
the laboring poor will not now be contented with
the fame food, clothing and lodging which fatis-
fied them in former times, may convince us that
it is not the money price of labor only, but its
real recompence, which has augmented.
Is this improvement in the circumſtances of
the lower ranks of the people to be regarded as
an advantage or as an inconveniency to the fo-
ciety? The anſwer ſeems at firft fight abundantly
plain. Servants, laborers and workmen of dif-
ferent kinds, make up the far greater part of
every great political fociety. But what im-
proves the circumftances of the greater part can
never be regarded as an inconveniency to the
whole. No fociety can furely be flouriſhing and
happy, of which the far greater part of the mem-
bers are poor and miferable.
It is but equity,
clothe and lodge
befides, that they who feed,
the whole body of the people, fhould have fuch
a fhare of the produce of their own labor as to
be themſelves tolerably well fed, clothed and
lodged.
Poverty, though it no doubt difcourages, does
not always prevent marriage. It feems even to be
favorable to generation. A half-ftarved Highland
120 THE NATURE AND CAUSES OF
:
woman frequently bears more than twenty
children, while a pampered fine lady is often
incapable of bearing any, and is generally exhauſted
by two or three. Barrennefs, fo frequent among
women of faſhion, is very rare among thofe of
inferior ſtation. Luxury in the fair fex, while it
inflames perhaps the paffion for enjoyment, ſeems
always to weaken, and frequently to deſtroy alto-
gether, the powers of generation.
But poverty, though it does not prevent the
generation, is extremely unfavorable to the rear-
ing of children. The tender plant is produced,
but in fo cold a foil and fo fevere a climate, foon
withers and dies. It is not uncommon, I have
been frequently told, in the Highlands of Scot-
land for a mother who has borne twenty children
not to have two alive. Several officers of great
experience have affured me, that fo far from re-
cruiting their regiment, they have never been
able to fupply it with drums and fifes from all
the foldiers children that were born in it. A
greater number of fine children, however, is
feldom ſeen any where than about a barrack of
foldiers. Very few of them, it ſeems, arrive at
the age of thirteen or fourteen.
In ſome places
one half the children born die before they are
four years of age; in many places before they
are ſeven; and in almoſt all places before they
are nine or ten. This great mortality, however
will every where he found chiefly among the
children of the common people, who cannot
afford to tend them with the fame care as thoſe
THE WEALTH OF NATIONS.
121
of better ftation. Though their marriages are
generally more fruitful than thofe of people of
faſhion, a ſmaller porportion of their children
arrive at maturity. In foundling hofpitals, and
among the children brought up by pariſh charities,
the mortality is ftill greater than among thofe of
the common people.
Every ſpecies of animals naturally multiplies
in proportion to the means of their fubfiftence,
and no fpecies can ever multiply beyond it. But
in civilized fociety it is only among the inferior
ranks of people that the fcantinefs of fubfiftence
can fet limits to the further multiplication of the
human fpecies; and it can do fo in no other way
than by deſtroying a great part of the children
which their fruitful marriages produce.
The liberal reward of labor, by enabling them to
provide better for their children, and confequently
to bring up a greater number, naturally tends to
widen and extend thofe limits. It deſerves to be
remarked to, that it neceffarily does this as nearly
as poffible in the proportion which the demand for
labor requires. If this demand is continually increa-
fing, the reward of labor muft neceffarily encourage
in fuch a manner the marriage and multiplication of
laborers, as may enable them to fupply that con-
tinually increaſing demand by a continually in-
creafing population. If the reward fhould at
any time be leſs than what was requifite for this
purpoſe, the deficiency of hands would foon raiſe
it; and if it fhould at any time be more, their
exceffive multiplication would foon lower it to
THE NATURE AND CAUSES OF
this neceffary rate. The market would be fo much
under-ſtocked with labor in the one cafe, and ſo
much over-stocked in the other, as would foon force
back its price to that proper rate which the circum-
ftances of the ſociety required. It is in this manner
that the demand for men, like that for any other
commodity, neceffarily regulates the production of
men; quickens it when it goes on too flowly, and
ftops it when it advances too faſt. It is this demand
which regulates and determines the ftate of the pro-
pagation in all the different countries of the world,
in North-America, in Europe, and in China; which
renders it rapidly progreffive in the firft, flow and
gradual in the ſecond, and altogether ftationary in
the laſt.
The wear and tear of a flave, it has been faid, is at
the expenſe of his mafter; but that of a free fervant
is at his own expenſe. The wear and tear of the
latter, however, is, in reality, as much at the expenſe
of his mafter as that of the former. The wages paid
to journeymen and fervants of every kind muſt be
fuch as may enable them, one with another, to
continue the race of journeymen and fervants, ac-
cording as the increafing, diminiſhing, or ftationary
demand of the fociety may happen to require. But
though the wear and tear of a free fervant be
equally at the expenſe of his maſter, it generally
cofts him much leſs than that of a flave. The
fund deftined for replacing or repairing, if I may
fay fo, the wear and tear of the flave, is com-
monly managed by a negligent mafter or careleſs
overfeer. That deftined for performing the
THE WEALTH OF NATIONS.
123
fame office with regard to the free man, is ma-
naged by the free man himself. The diforders
which generally prevail in the economy of the
rich, naturally introduce themſelves into the
management of the former: The ftrict frugality
and parfimonious attention of the poor as naturally
eſtabliſh themſelves in that of the latter. Under
fuch different management, the fame purpoſe muſt
require very different degrees of expenfe to exe-
cute it. It appears, accordingly, from the expe-
rience of all ages and nations, I believe, that
the work done by freemen comes cheaper in the
end than that performed by flaves. It is found to
do fo even at Bofton, New York, and Philadelphia,
where the wages of common labor are fo very high,
The liberal reward of labor, therefore, as it is
the effect of increafing wealth, fo it is the caufe
of increaſing population. To complain of it is
to lament over the neceffary effect and caufe of
the greateſt public profperity,
It deferves to be remarked, perhaps, that it is
in the progreffive ftate, while the fociety is ad-
vancing to the further acquifition, rather than
when it has acquired its full complement of riches,
that the condition of the laboring poor, of
the great body of the people, feems to be the
happiest and the moft comfortable.. It is hard in
the ſtationary, and miferable in the declining ſtate.
The progreffive ftate is in reality the chearful
and the hearty ftate to all the different orders of
the fociety. The ftationary is dull; the declining,
melancholy.
124 THE NATURE AND CAUSES OF
The liberal reward of labor, as it encourages
the propagation, fo it increaſes the induſtry of
the common people. The wages of labor are the
encouragement of industry, which, like every
other human quality, improves in proportion to
the encouragement it receives. A plentiful fubfift-
ence increaſes the bodily ftrength of the laborer,
and the comfortable hope of bettering his condition,
and of ending his days perhaps in eafe and plenty,
animates him to exert that ftrength to the utmoſt.
Where wages are high, accordingly, we fall al-
ways find the workmen more active, diligent,
and expeditious, than where they are low; in
England, for example, than in Scotland; in the
neighbourhood of great towns, than in remote
country places. Some workmen, indeed, when
they can earn in four days what will maintain
them through the week, will be idle the other
three. This, however, is by no means the cafe
with the greater part. Workmen, on the contrary,
when they are liberally paid by the piece, are very
apt to over-work themſelves, and to ruin their health
and conftitution in a few years. A carpenter in
London, and in fome other places, is not fup-
pofed to laft in his utmoft vigor above eight
years. Something of the fame kind happens in
many other trades, in which the workmen are
paid by the piece; as they generally are in ma-
nufactures, and even in country labor, wherever
wages are higher than ordinary, Almoft every
claſs of artificers is fubject to fome peculiar in-
firmity occafioned by exceffive application to
THE WEALTH OF NATIONS.
125
Ramuzzini, an
their peculiar ſpecies of work.
eminent Italian phyfician, has written a particular
book concerning fuch difeafes. We do not reckon
our foldiers the moſt induftrious fet of people
among us. Yet when foldiers have been employed
in ſome particular forts of work, and liberally
paid by the piece, their officers have frequently
been obliged to ftipulate with the undertaker, that
they ſhould not be allowed to earn above a
certain fum every day, according to the rate at
which they were paid. Till this ftipulation was
made, mutual emulation and the defire of
greater
gain, frequently prompted them to over-work
themſelves, and to hurt their health by exceſſive
labor. Exceffive application during four days of the
week, is frequently the real caufe of the idleness
of the other three, fo much and fo loudly com-
plained of. Great labor, either of mind or body,
continued for ſeveral days together, is in moſt men
naturally followed by a great defire of relaxation,
which, if not reftrained by force or by fome
ftrong neceffity, is almoſt irreſiſtible. It is the call
of nature, which requires to be relieved by fome
indulgence, fometimes of eafe only, but fometimes
too of diffipation and diverfion. If it is not com-
plied with, the confequences are often dangerous,
and fometimes fatal, and fuch as almoſt always,
fooner or later, bring on the peculiar infirmity of
the trade. If mafters would always liften to the
dictates of reaſon and humanity, they have fre-
quently occafion rather to moderate, than to
animate the application of many of their workmen.
126 THE NATURE AND CAUSES OF
It will be found, I believe, in every fort of trade,
that the man who works fo moderately, as to be
able to work conftantly, not only preferves his
health the longeft, but, in the courſe of the year,
executes the greateſt quantity of work.
"
In cheap years, it is pretended, workmen are
generally more idle, and in dear ones more
induſtrious than ordinary. A plentiful fubfift-
ence, therefore, it has been concluded, relaxes
and a ſcanty one quickens their induftry. That
a little more plenty than ordinary may render
fome workmen idle, cannot well be doubted;
but that it fhould have this effect upon the
greater part, or that men in general fhould
work better when they are ill fed than when
they are well fed, when they are difheartened
than when they are in good ſpirits, when they
are frequently fick than when they are generally
in good health, feems not very probable. Years
of dearth, it is to be obſerved, are generally
among the common people years of ficknefs and
mortality, which cannot fail to diminiſh the pro-
duce of their induſtry.
In years of plenty, fervants frequently leave
their maſters, and truft their fubfiftence to what
they can make by their own induftry. But the
fame cheapneſs of provifions, by increafing the
fund which is deftined for the maintenance of
fervants, encourages mafters, farmers efpecially,
to employ a greater number. Farmers upon fuch
occafions expect more profit from their corn by
maintaining a few more laboring fervants, than
ļ
THE WEALTH OF NATIONS.
127
by felling it at a low price in the market. The
demand for fervants increaſes, while the number
of thoſe who offer to ſupply that demand diminiſhes.
The price of labor, therefore, frequently rifes in
cheap years.
In years of fcarcity, the difficulty and uncertainty
offubfiftence make all fuch people eager to return
to fervice. But the high price of provifions, by
diminiſhing the funds deftined for the maintenance
of ſervants, diſpoſes maſters rather to diminiſh than
to increaſe the number of thoſe they have. In dear
years too, poor independent workmen frequently
confume the little ftocks with which they had
uſed to ſupply themſelves with the materials of
their work, and are obliged to become journeymen
for fubfiftence. More people want employment
than can eaſily get it; many are willing to take
it upon lower terms than ordinary, and the wages
of both fervants and journeymen frequently fink
in dear years.
Mafters of all forts, therefore, frequently make
better bargains with their fervants in dear than
in cheap years, and find them more humble and
dependent in the former than in the latter. They
naturally, therefore, commend the former as more
favorable to induſtry. Landlords and farmers,
befides, two of the largeſt claffes of mafters, have
another reaſon for being pleafed with dear years.
The rents of the one and the profits of the other
depend very much upon the price of provifions.
Nothing can be more abfurd, however, than to
imagine that men in general fhould work lefs
128
THE NATURE AND CAUSES OF
when they work for themſelves, than when they
work for other people. A poor independent
workman will generally be more induftrious than
even a journeyman who works by the piece. The
one enjoys the whole produce of his own induftry;
the other ſhares it with his mafter. The one, in
his feparate independent ftate, is lefs liable to
the temptations of bad company, which in large
manufactories fo frequently ruin the morals of the
other. The fuperiority of the independent work-
man over thoſe fervants who are hired by the
month or by the year, and whofe wages and
maintenance are the fame whether they do much
or do little, is likely to be ftill greater. Cheap
years tend to increaſe the proportion of independ.
ent workmen to journeymen and fervants of all
kinds, and dear years to diminiſh it.
A French author of great knowledge and
ingenuity, Mr. Meffance, receiver of the tailles
in the election of St. Etienne, endeavours to
fhow that the poor do more work in cheap than
in dear years, by comparing the quantity and
value of the goods made upon thoſe different
occafions in three different manufactures; one
of coarfe woollens carried on at Elbeuf; one of
linen, and another of filk, both which extend
through the whole generality of Rouen. It ap-
pears from his account, which is copied from
the regiſters of the public offices, that the quan-
tity and value of the goods made in all thoſe
three manufactures has generally been greater in
cheap than in dear years; and that it has always
been
THE WEALTH OF NATIONS.
129
been greateſt in the cheapeſt, and leaft in the deareſt
years. All the three feem to be ſtationary manufac-
tures, or which, though their produce may vary
fomewhat from year to year, are upon the whole
neither going backwards nor forwards.
9
The manufacture of linen in Scotland and
that of coarſe woollens in the weft riding of
Yorkshire, are growing manufactures, of which
the produce is generally, though with fome va-
riations, increaſing both in quantity and value.
Upon examining, however, the accounts which
have been publifhed of their annual produce, I
have not been able to obferve that its variations
have had any fenfible connexion with the dear-
neſs or cheapneſs of the ſeaſons. In 1740, a year
of great ſcarcity, both manufactures, indeed, ap-
pear to have declined very confiderably. But in
1756, another year of great ſcarcity, the Scotchi
manufacture made more than ordinary advances.
The Yorkshire manufacture, indeed, declined,
and its produce did not rife to what it had been
in 1755 till 1766, after the repeal of the Ameri-
can ftamp act. In that and the following year it
greatly exceeded what it had ever been before,
and it has continued to advance ever fince.
The produce of all great manufactures for dift-
ant fale muft neceffarily depend, not fo much
upon the dearnefs or cheapnefs of the feaſons in
the countries where they are carried on, as upon
the circumftances which affect the demand in the
countries where they are confumed; upon peace
or war, upon the profperity or declenfion of
W. of N. 1.
9
130 THE NATURE AND CAUSES OF
other rival manufactures, and upon the good or
bad humor of their principal cuſtomers. A great
part of the extraordinary work, befides, which is
probably done in cheap years, never enters the
public regifters of manufactures. The men fervants
who leave their mafters become independent la-
borers. The women return to their parents, and
commonly ſpin in order to make cloths for them-
felves and their families. Even the independent
workmen do not always work for public fale, but
are employed by ſome of their neighbours in
manufactures for family uſe. The produce of their
labor, therefore, frequently makes no figure in
thoſe public regifters of which the records are fome-
times publiſhed with fo much parade, and from
which our merchants and manufacturers would
often vainly pretend to announce the proſperity
or declenfion of the greateft empires.
Though the variations in the price of labor,
not only do not always correfpond with thofe in
the price of provifions, but are frequently quite
oppofite, we muft not, upon this account, ima-
gine that the price of provifions has no influence
upon that of labor. The money price of la-
bor is neceffarily regulated by two circum-
ftances; the demand for labor, and the price of
the neceffaries and conveniencies of life. The
demand for labor, according as it happens to
be increaſing, ftationary, or declining, or to re-
quire an increafing, ftationary, or declining po-
pulation, determines the quantity of the neceffa-
ries and conveniencies of life which muft be
THE WEALTH OF NATIONS.
131
given to the laborer; and the money price of
labor is determined by what is requifite for
purchafing this quantity. Though the money
price of labor, therefore, is fometimes high
where the price of provifions is low, it would be
ftill higher, the demand continuing the fame, if
the price of provifions was high.
It is becauſe the demand for labor increaſes
in years offudden and extraordinary plenty, and
diminiſhes in thofe of fudden and extraordinary
fcarcity, that the money price of labor fome-
times rifes in the one, and finks in the other.
In a year of fudden and extraordinary plenty,
there are funds in the hands of many of the em-
ployers of induftry, fufficient to maintain and
employ a greater number of induftrious people
than had been employed the year before; and
this extraordinary number cannot always be had.
Thoſe maſters, therefore, who want more work-
men, bid against one another, in order to get
them, which fometimes raiſes both the real and
the money price of their labor.
The contrary of this happens in a year of fud-
den and extraordinary fcarcity. The funds def
tined for employing induftry are lefs than they
had been the year before. A confiderable num-
ber of people are thrown out of employment,
who bid againſt one another, in order to get it,
which fometimes lowers both the real and the
money price of labor. In
traordinary ſcarcity, many
to work for bare fubfiftence.
1740, a year of ex-
people were willing
In the fucceeding
}
132 THE NATURE AND CAUSES OF
years of plenty, it was more difficult to get la-
borers and fervants.
The ſcarcity of a dear year by diminiſhing
the demand for labor, tends to lower its price,
as the high price of provifions tends to raiſe it.
The plenty of a cheap year, on the contrary, by
increaſing the demand, tends to raiſe the price
of labor, as the cheapnefs of provifions tends to
lower it. In the ordinary variations of the price
of provifions, thoſe two oppofite caufes feem to
counterbalance one another; which is probably
in part the reaſon why the wages of labor are
every-where ſo much more fteady and permanent
than the price of provifions.
The increaſe in the wages of labor neceffarily
increaſes the price of many commodities, by in-
creafing that part of it which refolves itfelf into
wages, and fo far tends to diminish their con-
fumption both at home and abroad. The fame
cauſe, however, which raiſes the wages of labor,
the increaſe of ſtock, tends to increaſe its pro-
ductive powers, and to make a ſmaller quantity
of labor produce a greater quantity of work.
The owner of the ftock which employs a great
number of laborers, neceffarily endeavours, for
his own advantage, to make fuch a proper divi-
fion and diftribution of employment, that they
may be enabled to produce the greateft quantity
of work poffible. For the ſame reaſon, he en-
deavours to fupply them with the beſt machinery
which either he or they can think of. What
takes place among the laborers in a particular
THE WEALTH OF NATIONS. 133
!
workhouſe, takes place, for the fame reaſon,
among thoſe of a great fociety.
The greater
their number, the more they naturally divide
themſelves into different claffes and fubdivifions
of employment. More heads are occupied in
inventing the moft proper machinery for exécut-
ing the work of each, and it is, therefore, more
likely to be invented. There are many commo-
dities, therefore; which, in confequence of theſe
improvements, come to be produced by fo much
lefs labor than before, that the increaſe of its
price is more than compenfated by the diminution
of its quantity.
;
CHAP. IX.
Of the Profits of Stock.
1
THE rife and fall in the profits of flock
depend upon the fame cauſes with the rife
and fall in the wages of labor, the increafing or
declining ftate of the wealth of the fociety; but
thoſe cauſes affect the one and the other very
differently.
The increaſe of ſtock, which raiſes wages,
tends to lower profit. When the ftocks of many
rich merchants are turned into the fame trade,
their mutual competition naturally tends to
lower its profit; and when there is a like in-
creaſe of ſtock in all the different trades carried
134 THE NATURE AND CAUSES OF
1
↓
on in the ſame ſociety, the fame competition muſt
produce the fame effect in them all.
It is not eafy, it has already been obſerved, to
afcertain what are the average wages of labor
even in a particular place, and at a particular time.
We can, even in this cafe, feldom determine more
than what are the moft ufual wages. But even
this can feldom be done with regard to the profits
of flock. Profit is ſo very fluctuating, that the
perſon who carries on a particular trade cannot
always tell you himſelf what is the average of his
annual profit.
It is affected, not only by every
variation of price in the commodities which he
deals in, but by the good or bad fortune both of
his rivals and of his cuftomers, and by a thoufand
other accidents to which goods when carried either
by fea or by land, or even when ſtored in a
warehouſe, are liable. It varies, therefore, not
only from year to year, but from day to day, and
almoft from hour to hour. To afcertain what is the
average profit of all the different trades carried on
in a great kingdom, must be much more difficult;
and to judge of what it may have been formerly,
or in remote periods of time, with any degree of
precifion, mufl be altogether impoffible.
9
But though it may be impoffible to deter-
mine, with any degree of precifion, what are or
were the average profits of flock, either in the
prefent, or in ancient times, fome notion may
be formed of them from the intereft of money.
It may be laid down as a maxim, that wherever
a great deal can be made by the uſe of money,
}
-་
THE WEALTH OF NATIONS.
135
a great deal will commonly be given for the uſe
of it; and that wherever little can be made by it,
lefs will commonly be given for it. According,
therefore, as the ufual market rate of intereft va-
ries in any country, we may be affured that the
ordinary profits of ftock muft vary with it, muft
fink as it finks, and rife as it rifes. The progrefs
of intereft, therefore, may lead us to form fome
notion of the progrefs of profit.
By the 37th of Henry VIII. all intereſt above
ten per cent. was declared unlawful. More, it ſeems,
had fometimes been taken before that. In the reign
of Edward VI. religious zeal prohibited all intereſt.
This prohibition, however, like all others of the
fame kind, is faid to have produced no effect, and
probably rather increaſed than diminiſhed the evil
of ufury. The ftatute of Henry VIII. was revived
by the 13th of Elizabeth, cap. 8. and ten per cent.
continued to be the legal rate of intereft till the 21ſt
of James I. when it was reftricted to eight per
cent. It was reduced to fix per cent. ſoon after
the reſtoration, and by the 12th of Queen Anne,
to five per cent. All theſe different ftatutory
regulations feem to have been made with great
propriety. They ſeem to have followed and not
to have gone before the market rate of intereft,
or the rate at which people of good credit ufually
borrowed. Since the time of Queen Anne, five
per cent. feems to have been rather above than
below the market rate. Before the late war, the
government borrowed at three per cent.; and
people of good credit in the capital, and in
1
•
•
136 THE NATURE AND CAUSES OF
many other parts of the kingdom, at three and à
half, four, and four and a half per cent.
Since the time of Henry VIII. the wealth and
revenue of the country have been continually
advancing, and, in the courſe of their progreſs,
their pace feems rather to have been gradually
accelerated than retarded. They feem, not only
to have been going on, but to have been going
on fafter and fafter. The wages of labor have
been continually increafing during the fame pe-
riod, and in the greater part of the different
branches of trade and manufactures their profits.
of ftock have been diminiſhing.
It generally requires a greater ſtock to carry
on any ſort of trade in a great town than in a
country village. The great ftocks employed in
every branch of trade, and the number of rich
competitors, generally reduce the rate of profit
in the former below what it is in the latter. But
the wages of labor are generally higher in a
great town than in a country village. In a
thriving town the people who have great flocks
to employ, frequently cannot get the number of
workmen they want, and therefore bid againſt
one another in order to get as many as they can,
which raiſes the wages of labor, and lowers the
profits of ſtock. In the remote parts of the
country there is frequently not flock fufficient
to employ all the people, who therefore bid
against one another in order to get employment,
which lowers the wages of labor, and raiſes the
profits of flock.
}
THE WEALTH OF NATIONS.
137
In Scotland, though the legal rate of intereſt
is the fame as in England, the market rate is
rather higher.
People of the beſt credit there
feldom borrow under five per cent. Even pri-
vate bankers in Edinburgh give four per cent.
upon their promiffory notes, of which payment
either in whole or in part may be demanded at
pleaſure. Private bankers in London give no in-
tereſt for the money which is depofited with them.
There are few trades which cannot be carried on
with a ſmaller ſftock in Scotland than in England.
The common rate of profit, therefore, muſt be
fomewhat greater. The wages of labor, it has
already been obferved, are lower in Scotland than
in England. The country too is not only much
poorer, but the ſteps by which is advances to
a better condition, for it is evidently advancing,
ſeem to be much flower and more tardy.
The legal rate of intereft in France has not,
during the courſe of the preſent century, been
always regulated by the market rate *. In
1720 intereft was reduced from the twentieth to
the fiftieth penny, or from five to two per cent.
In 1724 it was raiſed to the thirtieth penny, or
to 3 per cent. In 1725 it was again raiſed to
the twentieth penny, or to five per cent. In
1766, during the adminiftration of Mr. Laverdy,
it was reduced to the twenty-fifth penny, or to
four per cent. The Abbé Terray raifed it after-
wards to the old rate of five per cent. The fuppofed
See Denifart. Article Taux des Intéréts, tom. iii. p. 18.
138 THE NATURE AND CAUSES OF
purpoſe of many of thofe violent reductions of
intereft was to prepare the way for reducing that
of the public debts; a purpoſe which has fome-
times been executed. France is perhaps in the
preſent times not fo rich a country as England;
and though the legal rate of intereft has in France
frequently been lower than in England, the market
rate has generally been higher; for there, as in
other countries, they have feveral very fafe and
eafy methods of evading the law. The profits of
trade, I have been affured by Britiſh merchants
who had traded in both countries, are higher in
France than in England; and it is no doubt upon
this account that many Britiſh fubjects chufe rather
to employ their capitals in a country where trade
is in difgrace, than in one where it is highly
reſpected. The wages of labor are lower in France
than in England. When you go from Scotland
to England, the difference which you may remark
between the drefs and countenance of the common
people in the one country and in the other, fuffi-
ciently indicates the difference in their condition.
The contraft is ftill greater when you return from
France. France, though no doubt a richer coun-
try than Scotland, feems not to be going forward
ſo faſt. It is a common and even a popular opi-
nion in the country that it is going backwards;
an opinion which, I apprehend, is ill founded
even with regard to France, but which nobody
can poffibly entertain with regard to Scotland,
who fees the country now, and who faw it
twenty or thirty years ago.
THE WEALTH OF NATIONS.
139
The province of Holland, on the other hand,
in proportion to the extent of its territory and
the number of its people, is a richer country
than England. The government there borrow at
two per cent., and private people of good credit.
at three. The wages of labor are faid to be higher
in Holland than in England, and the Dutch, it
is well known, trade upon lower profits than any
people in Europe. The trade of Holland, it has
been pretended by fome people, is decaying,
and it may perhaps be true that fome particular
branches of it are fo. But theſe ſymptoms feem
to indicate fufficiently that there is no general
decay. When profit diminiſhes, merchants are
very apt to complain that trade decays; though
the diminution of profit is the natural effect of its
proſperity, or of a greater ftock being employed
in it than before. During the late war the Dutch
gained the whole carrying trade of France, of
which they ſtill retain a very large fhare. The great
property which they poffefs both in the French
and Engliſh funds, about forty millions, it is faid,
in the latter (in which I fufpect, however, there
is a confiderable exaggeration); the great fums
which they lend to private people in countries
where the rate of intereft is higher than in their
own, are circumftances which no doubt demon-
ſtrate the redundancy of their ſtock, or that it has
increaſed beyond what they can employ with
tolerable profit in the proper buſineſs of their
own country: but they do not demonftrate that
that buſineſs has decreaſed. As the capital of a
140 THE NATURE AND CAUSES OF
private man, though acquired by a particular
trade, may increaſe beyond what he can employ
in it, and yet that trade continue to increaſe too;
fo may likewiſe the capital of a great nation.
In our North-American and Weft-Indian colo-
nies, not only the wages of labor, but the intereſt
of money, and confequently the profits of ftock,
are higher than in England. In the different co-
lonies both the legal and the market rate of intereſt
run from fix to eight per cent. High wages of
labor and high profits of ftock, however, are
things, perhaps, which fcarce ever go together,
except in the peculiar circumftances of new colo-
nies. A new colony muft always for ſome time
be more underſtocked in proportion to the extent
of its territory, and more under-peopled in pro-
portion to the extent of its flock, than the greater
part of other countries. They have more land
than they have ſtock to cultivate. What they have,
therefore, is applied to the cultivation only of
what is moft fertile and moft favorably fituated,
the land near the ſea fhore, and along the banks of
navigable rivers. Such land too its frequently
purchaſed at a price below the value even of its
natural produce. Stock employed in the purchaſe
and improvement of fuch lands muft yield a very
large profit, and confequently afford to pay a very
large intereſt. Its rapid accumulation in ſo pro-
fitable an employment enables the planter to in-
creaſe the number of his hands fafter than he can
find them in a new fettlement. Thofe whom he
can find, therefore, are very liberally rewarded.
THE WEALTH OF NATIONS.
141
As the colony increaſes, the profits of flock gra-
dually diminish. When the moft fertile and beſt
fituated lands have been all occupied, lefs profit
can be made by the cultivation of what is inferior
both in foil and fituation, and lefs intereft can be
afforded for the flock which is fo employed. In
the greater part of our colonies, accordingly, both
the legal and the market rate of intereft have been
confiderably reduced during the courſe of the pre-
fent century. As riches, improvement, and popu-
lation have increaſed, intereft has declined. The
wages of labor do not fink with the profits of ftock.
The demand for labor increafes with the increaſe
of ſtock whatever be its profits; and after theſe
are diminiſhed, ſtock may not only continue to
increaſe, but to increaſe much fafter than before.
It is with induftrious nations who are advancing
in the acquifition of riches, as with induftrious
individuals. A great ſtock, though with ſmall
profits, generally increaſes fafter than a fmall
ftock with great profits. Money, fays the pro-
verb, makes money. When you have got a
little, it is often eafy to get more.
The great
difficulty is to get that little.
The connexion
between the increaſe of ftock and that of in-
duſtry, or of the demand for uſeful labor, has
partly been explained already, but will be ex-
plained more fully hereafter in treating of the
accumulation of ſtock.
The acquifition of new territory, or of new
branches of trade, may fometimes raife the pro-
fits of ſtock, and with them the intereſt of
money,
142 THE NATURE AND CAUSES OF
even in a country which is faft advancing in the
acquifition of riches. The flock of the country
not being fufficient for the whole acceffion of
buſineſs, which fuch acquifitions preſent to the
different people among whom it is divided, is
applied to thoſe particular branches only which
afford the greateſt profit. Part of what had be-
fore been employed in other trades, is neceffarily
withdrawn from them, and turned into fome of
the new and more profitable ones. In all thofe
old trades, therefore, the competition comes to be
lefs than before. The market comes to be lefs
fully ſupplied with many different forts of goods.
Their price neceffarily rifes more or lefs, and yields
2
greater profit to thoſe who deal in them, who
can, therefore, afford to borrow at a higher in-
tereft. For fome time after the conclufion of the
late war, not only private people of the beſt credit,
but fome of the greateſt companies in London
commonly borrowed at five per cent. who before
that had not been uſed to pay more than four,
and four and a half per cent. The great acceffion
both of territory and trade, by our acquifitions in
North-America and the Weft-Indies, will fuffi-
ciently account for this, without fuppofing any
diminution in the capital ftock of the fociety. So
great an acceffion of new bufinefs to be carried on
by the old ftock, muft neceffarily have diminiſhed
the quantity employed in a great number of par-
ticular branches, in which the competition being
lefs, the profits muft have been greater. I fhall
hereafter have occafion to mention the reaſons
THE WEALTH OF NATIONS.
143
which difpofe me to believe that the capital ftock
of Great Britain was not diminiſhed even by the
enormous expenſe of the late war.
The diminution of the capital flock of the fo-
ciety, or of the funds deftined for the maintenance
of induſtry, however, as it lowers the wages of
labor, fo it raiſes the profits of flock, and confe-
quently the intereft of money. By the wages of
labor being lowered, the owners of what ftock
remains in the fociety can bring their goods at lefs
expenſe to market than before, and lefs ftock
being employed in fupplying the market than
before, they can fell them dearer. Their goods.
coft them lefs, and they get more for them. Their
profits, therefore, being augmented at both ends,
can well afford a large intereft. The great fortunes
ſo ſuddenly and fo eafily acquired in Bengal and
the other Britiſh fettlements in the Eaft- Indies,
may fatisfy us that, as the wages of labor are very
low, fo the profits of flock are very high in thoſe
ruined countries. The intereft of money is propor-
tionably fo. In Bengal, money is frequently lent
to the farmers at forty, fifty, and fixty per cent.
and the fucceeding crop is mortgaged for the
payment. As the profits which can afford fuch
an intereſt muſt eat up almoſt the whole rent of
the landlord, fo fuch enormous ufury muft in
its turn eat up the greater part of thofe profits.
Before the fall of the Roman republic, a ufury
of the fame kind feems to have been common in
the provinces, under the ruinous adminiftration
of their proconfuls. The virtuous Brutus lent
1
;
144 THE NATURE AND CAUSES OF
}
Į
money in Cyprus at eight-and-forty per cent. as
we learn from the letters of Cicero.
In a country which had acquired that full
complement of riches which the nature of its foil
and climate, and its fituation with refpect to other
countries, allowed it to acquire; which could,
therefore, advance no further, and which was not
going backwards, both the wages of labor and
the profits of ftock would probably be very low.
In a country fully peopled in proportion to what
either its territory could maintain or its ftock em-
ploy, the competition for employment would
neceſſarily be fo great as to reduce the wages of
labor to what was barely fufficient to keep up
the number of laborers, and, the country being
already fully peopled, that number could never
be augmented. In a country fully ftocked in
proportion to all the buſineſs it had to tranfact,
as great a quantity of ftock would be employed in
every particular branch as the nature and extent of
the trade would admit. The competition, there-
fore, would every-where be as great, and conſe-
quently the ordinary profit as low as poffible.
But perhaps no country has ever yet arrived
at this degree of opulence. China feems to have
been long ſtationary, and had probably long ago
acquired that full complement of riches which
is confiftent with the nature of its laws and infti-
tutions. But this complement may be much
inferior to what, with other laws and inftitu-
tions, the nature of its foil, climate; and fitua-
tion might admit of. A country which neglects.
or
THE WEALTH OF NATIONS.
145
or
the owners of
but are liable,
or defpifes foreign commerce, and which admits
the veffels of foreign nations into one or two of
its ports only, cannot tranfact the fame quantity
of buſineſs which it might do with different laws
and inftitutions. In a country too, where, though
the rich or the owners of large capitals enjoy a
good deal of fecurity, the poor
fmall capitals enjoy fcarce any,
under the pretence of juftice, to be pillaged and
plundered at any time by the inferior mandarines,
the quantity of ſtock employed in all the different
branches of buſineſs tranſacted within it, can never
be equal to what the nature and extent of that
buſineſs might admit. In every different branch,
the oppreffion of the poor muſt eſtabliſh the mo-
nopoly of the rich, who, by engroffing the whole
trade to themſelves, will be able to make very
larger profits. Twelve per cent. accordingly is faid
to be the common intereft of money in China,
and the ordinary profits of ſtock muſt be ſufficient
to afford this large intereft.
A defect in the law may fometimes raife the
rate of intereft confiderably above what the con-
dition of the country, as to wealth or poverty,
wonld require. When the law does not enforce
the performance of contracts, it puts all bor-
rowers nearly upon the fame footing with bank-
rupts or people of doubtful credit in better regu-
lated countries. The uncertainty of recovering
his money makes the lender exact the fame ufu-
rious intereft which is ufually required from
bankrupts. Among the barbarous nations whe
W. of N. 1.
10
146 THE NATURE AND CAUSES OF
over-run the western provinces of the Roman
empire, the performance of contracts was left
for many ages to the faith of the contracting
parties. The courts of juftice of their kings feldom
intermeddled in it. The high rate of intereft which
took place in thoſe ancient times may perhaps be
partly accounted for from this cauſe.
When the law prohibits intereft altogether,
it does not prevent it. Many people muft bor-
row, and nobody will lend without fuch a con-
fideration for the uſe of their money as is fuit-
able, not only to what can be made by the uſe
of it, but to the difficulty and danger of evading
the law. The high rate of intereft among all
Mahometan nations is accounted for by Mr.
Montefquieu, not from their poverty, but partly
from this, and partly from the difficulty of re-
covering the money.
The loweſt ordinary rate of profit muft always
be fomething more than what is fufficient to
compenfate the occafional loffes to which every
employment of ftock is expofed. It is this fur-
plus only which is neat or clear profit. What is
called gross profit comprehends frequently, not
only this furplus, but what is retained for com-
penſating ſuch extraordinary loffes. The intereft
which the borrower can afford to pay is in pro-
portion to the clear profit only.
The loweſt ordinary rate of intereſt muſt, in
the ſame manner, be fomething more than ſuffi-
cient to compenfate the occafional loffes to which
lending, even with tolerable prudence, is expofed.
A
THE WEALTH OF NATIONS.
147
Were it not more, charity or friendship could be
the only motives for lending.
In a country which had acquired its full com-
plement of riches, where in every particular
branch of bufinefs there was the greateft quantity
of flock that could be employed in it, as the
ordinary rate of clear profit would be very ſmall,
fo the ufual market rate of intereft which could
be afforded out of it, would be fo low as to ren-
der it impoffible for any but the very wealthieſt
people to live upon the intereft of their money.
All people of ſmall or middling fortunes would
be obliged to fuperintend themſelves the em-
ployment of their own ftocks. It would be ne-
ceſſary that almoft every man fhould be a man of
bufiness, or engage in fome fort of trade. The
province of Holland feems to be approaching
near to this ftate. It is there unfafhionable not
to be a man of bufinefs. Neceffity makes it
uſual for almoſt every man to be fo, and cuſtom
every where regulates fafhion. As it is ridiculous
not to dreſs, fo is it, in fome meaſure, not to
be employed, like other people. As a man of
a civil profeffion feems awkward in a camp or a
garrifon, and is even in fome danger of being
deſpiſed there, ſo does an idle man among men
of buſineſs.
The higheft ordinary rate of profit may be
fuch as, in the price of greater part of com-
modities, eats up the whole of what thould go to
the rent of the land, and leaves only what is ſuf-
ficient to pay the labor of preparing and bringing
148 THE NATURE AND CAUSES OF
them to market, according to the loweft rate at
which labor can any-where be paid, the bare
fubfiftence of the laborer. The workman muft
always have been fed in fome way or other while
he was about the work; but the landlord may
not always have been paid. The profits of the
trade which the fervants of the Eaft India Com-
pany carry on in Bengal may not perhaps be
very far from this rate.
The proportion which the ufual market rate
of intereft ought to bear to the ordinary rate of
clear profit, neceffarily varies as profit rifes or
falls. Double intereft is in Great Britain rec-
koned, what the merchants call, a good, mo-
derate, reaſonable profit; terms which I ap-
prehend mean no more than a common and
uſual profit. In a country where the ordinary
rate of clear profit is eight or ten per cent., it
may be reaſonable that one half of it fhould go
to intereſt, wherever buſineſs is carried on with
borrowed money.
The ſtock is at the riſk of
the borrower, who, as it were, enfures it to the
lender; and four or five per cent. may, in the
greater part of trades, be both a fufficient pro-
fit upon the rifk of this enfurance, and a fuf-
ficient recompence for the trouble of employ-
ing the ſtock. But the proportion between in-
tereft and clear profit might not be the fame in
countries where the ordinary rate of profit was
either a good deal lower, or a good deal higher.
If it were a good deal lower, one half of it per-
haps could not be afforded for intereft; and
THE WEALTH OF NATIONS.
149
more might be afforded if it were a good deal
higher.
In countries which are faft advancing to riches,
the low rate of profit may, in the price of many
commodities, compenfate the high wages of labor,
and enable thofe countries to fell as cheap as
their leſs thriving neighbours, among whom the
wages of labor may be lower.
In reality high profits tend much more to raiſe
the price of work than high wages. If in the linen
manufacture, for example, the wages of the different
working people, the flax-dreffers, the ſpinners, the
weavers, &c. fhould, all of them, be advanced
two pence a day; it would be neceffary to heighten
the price of a piece of linen only be a number of
two pences equal to the number of people that
had been employed about it, multiplied by the
number of days during which they had been fo
employed. That part of the price of the commodity
which refolved itfelf into wages would, through
all the different ſtages of the manufacture, riſe only
in arithmetical proportion to this rife of wages.
But if the profits of all the different employers of
thoſe working people ſhould be raiſed five per cent.
that part of the price of the commodity which
refolved itſelf into profit, would, through all the
different ftages of the manufacture, rife in geo-
metrical proportion to this rife of profit. The
employer of the flax-dreffers would in felling his
flax require an additional five per cent, upon the
whole value of the materials and wages which he
advanced to his workmen. The employer of
150 THE NATURE AND CAUSES OF
the ſpinners would require an additional five per
cent. both upon the advanced price of the flax
and upon the wages of the fpinners. And the
employer of the weavers would require a like
five per cent. both upon the advanced price of
the linen yarn and upon the wages of the wea-
vers. In raiſing the price of commodities the rife
of wages operates in the fame manner as fimple
intereft does in the accumulation of debt., The
rife of profit operates like compound intereſt,
Our merchants and mafter manufacturers com-
plain much of the bad effects of high wages in
raiſing the price, and thereby leffening the fale
of their goods both at home and abroad. They
ſay nothing concerning the bad effects of high
profits. They are filent with regard to the per
nicious effects of their own gains. They complain
only of thoſe of other people,
جية
THE WEALTH OF NATIONS. 151
1
CHAP. X.
Of Wages and profit in the different Employments
of Labor and Stock.
THE whole of the advantages and diſadvantages
of the different employments of labor and ftock
muſt, in the ſame neighbourhood, be either per-
fectly equal or continually tending to equality. If
in the fame neighbourhood, there was any employ-
ment evidently either more or less advantageous
than the reft, fo many people would crowd into
it in the one cafe, and fo many would defert it
in the other, that its advantages would foon return
to the level of other employments. This at leaſt.
would be the cafe in a fociety where things were
left to follow their natural courfe, where there.
was perfect liberty, and where every man was
perfectly free both to chufe what occupation he
thought proper, and to change it as often as he
thought proper. Every man's intereft would prompt
him to feek the advantageous, and to fhun the
diſadvantageous employment.
Pecuniary wages and profit, indeed are every-
where in Europe extremely different according to
the different employments of labor and ſtock. But
this difference arifes partly from certain circum-
ftances in the employments themselves, which
either really, or at leaft in the imaginations of
men, make up for a ſmall pecuniary gain in ſome,
152 THE NATURE AND CAUSES OF
and counter-balance a great one in others; and
partly from the policy of Europe, which no-where
leaves things at perfect liberty.
The particular confideration of thoſe circum-
ſtances and of that policy will divide this chapter
into two parts,
PART I.
Inequalities arifing from the Nature of the Em-
ployments themſelves.
THE five following are the principal circum-
ftances which, fo far as I have been able to obſerve,
make up for a ſmall pecuniary gain in fome em-
ployments, and counter-balance a great one in
others: first, the agreeableness or diſagreeableness
of the employments themſelves; fecondly, the
eafineſs and cheapnefs, or the difficulty and expenſe
of learning them; thirdly, the conftancy or in-
conftancy of employment in them; fourthly, the
ſmall or great truſt which muſt be repoſed in thoſe
who exerciſe them; and fifthly the probability or
improbability of ſucceſs in them,
Firſt, The wages of labor vary with the
eaſe or hardſhip, the cleanliness or dirtinefs, the
honorablenefs or difhonorablenefs of the em-
ployment, Thus in moft places, take the year
round, a journeyman taylor earns less than a
journeyman weaver. His work is much eafier.
A journeyman weaver earns lefs than a journey-
man ſmith. His work is not always eafier, but
it is much cleanlier. A journeyman blackſmith,
THE WEALTH OF NATIONS.
153
though an artificer, feldom earns fo much in
twelve hours as a collier, who is only a laborer,
does in eight. His work is not quite fo dirty, is
leſs dangerous, and is carried on in day-light, and
above ground. Honor makes a great part of the
reward of all honorable profeffions. In point of
pecuniary gain, all things confidered, they are
generally under-recompenfed, as I fhall endeavour
to ſhow by and by. Difgrace has the contrary
effect. The trade of a butcher is a brutal and an
odious bufinefs; but it is in moft places more
profitable than the greater part of common trades.
The moſt deteftable of all employments, that of
public executioner, is, in proportion to the quan-
tity of work done, better paid than any common
trade whatever.
Hunting and fifhing, the most important employ-
ments of mankind in the rude ftate of fociety,
become in its advanced ftate their moft agreeable
amuſements, and they purſue for pleaſure what
they once followed from neceffity. In the advanced
ſtate of ſociety, therefore, they are all very poor
people who follow as a trade, what other people
purſue as a paftime. Fiſhermen have been fo fince
the time of Theocritus. A poacher is every where
a very poor man in Great Britain. In countries
where the rigor of the law ſuffers no poachers, the
licenſed hunter is not in a much better condition.
The natural tafte for thoſe employments makes more
people follow them than can live comfortably by
them, and the produce of their labor, in proportion
* See Idyllium XXI,
1
154 THE NATURE AND CAUSES OF
to its quantity, comes always too cheap to market
to afford any thing but the moſt ſcanty fubfiftence
to the laborers.
Diſagreeableness and diſgrace affect the profits of
ftock in the fame manner as the wages of labor.
The keeper of an inn or tavern, who is never
maſter of his own houfe, and who is expofed to
the brutality of every drunkard, exercifes neither
a very agreeable nor a very creditable bufinefs.
But there is ſcarce any common trade in which a
ſmall ſtock yields fo great a profit.
Secondly, The wages of labor vary with the
eaſineſs and cheapneſs, or the difficulty and expenſe
of learning the bufinefs.
When any expenfive machine is erected, the
extraordinary work to be performed by it before
it is worn out, it must be expected, will replace
the capital laid out upon it, with at leaſt thé
ordinary profits. A man educated at the expenſe
of much labor and time to any of thofe employ-
ments which require extraordinary dexterity and
fkill, may be compared to one of thofe expenfive
machines. The work which he learns to perform,
it muſt be expected, over and above the uſual
wages of common labor, will replace to him the
whole expenſe of his education, with at leaſt the
ordinary profits of an equally valuable capital. It
muft do this too in a reaſonable time, regard
being had to the very uncertain duration of human
life, in the fame manner as to the more certain
duration of the machine.
THE WEALTH OF NATIONS.
155
The difference between the wages of fkilled
labor and thofe of common labor, is founded
upon this principle.
The policy of Europe confiders the labor of
all mechanics, artificers, and manufacturers, as
fkilled labor; and that of all country laborers as
common labor. It feems to fuppofe that of the
former to be of a more nice and delicate nature
than that of the latter. It is fo perhaps in fome
cafes; but in the greater part it is quite utherwiſe,
as I fhall endeavour to fhow by and by. The laws
and cuſtoms of Europe, therefore, in order to
qualify any perfon for exercifing the one fpecies
of labor, impoſe the neceffity of an apprenticeſhip,
though with different degrees of rigor in different
places. They leave the other free and open to
every body. During the continuance of the appren-
ticeſhip, the whole labor of the apprentice belongs
to his mafter. In the mean time he muft, in many
cafes, be maintained by his parents or relations
and in almoſt all cafes muſt be clothed by them.
Some money too is commonly given to the maſter
for teaching him his trade. They who cannot
give money, give time, or become bound for
more than the ufnal number of years; a confidera-
tion which, though it is not always advantageous
to the mafter, on account of the ufual idleness
of apprentices, is always diſadvantageous to the
apprentice. In country labor, on the contrary,
the laborer, while he is employed about the eaſier,
learns the more difficult parts of his buſineſs, and
his own labor maintains him through all the
156 THE NATURE AND CAUSES OF
different ftages of his employment. It is reafon-
able, therefore, that in Europe the
that in Europe the wages of
mechanics, artificers, and manufacturers, fhould
be fomewhat higher than thofe of common labor-
ers. They are fo accordingly, and their ſuperior
gains make them in moft places be confidered
as a fuperior rank of people. This fuperiority,
however, is generally very fmall; the daily or
weekly earnings of journeymen in the more com-
mon forts of manufactures, fuch as thofe of plain
linen and woollen cloth, computed at an average,
are, in moſt places, very little more than the
day wages of common laborers. Their employ-
ment, indeed, is more fteady and uniform, and
the fuperiority of their earnings, taking the whole
year together, may be fomewhat greater. It ſeems
evidently, however, to be no greater than what
is fufficient to compenfate the fuperior expenſe of
their education.
Education in the ingenious arts and in the
liberal profeffions, is ftill more tedious and
expenfive. The pecuniary recompence, there-
fore, of painters and fculptors, of lawyers and
phyſicians, ought to be much more liberal; and
it is fo accordingly,
The profits of stock feem to be very little
affected by the eafinefs or difficulty of learning
the trade in which it is employed. All the
different ways in which ftock is commonly em-
ployed in great towns feem, in reality, to be
almoſt equally eafy and equally difficult to learn.
One branch either of foreign or domeftic trade,
THE WEALTH OF NATIONS.
157
cannot well be a much more intricate buſineſs
than another.
Thirdly, The wages of labor in different
occupations vary with the conftancy or incon-
ftancy of employment.
Employment is much more conftant in fome
trades than in others. In the greater part of
manufactures, a journeyman may be pretty ſure
of employment almoſt every day in the year that
he is able to work. A mafon or bricklayer, on
the contrary, can work neither in hard froſt nor
in foul weather, and his employment at all other
times depends upon the occafional calls of his
cuſtomers. He is liable, in confequence, to be
frequently without any. What he earns, there-
fore, while he is employed, muft not only main-
tain him while he is idle, but make him fome
compenfation for thofe anxious and defponding
moments which the thought of fo precarious a
fituation muft fometimes occafion. Where the
computed earnings of the greater part of manu-
facturers, accordingly, are nearly upon a level
with the day wages of common laborers, thoſe of
mafons and bricklayers are generally from one
half more to double thoſe wages. Where common
laborers earn four and five fhillings a week, mafons
and bricklayers frequently earn feven and eight;
where the former earn fix, the latter often earn
nine and ten; and where the former earn nine
and ten, as in London, the latter commonly earn
fifteen and eighteen. No fpecies of fkilled labor,
however, ſeems more eafy to learn than that of
158 THE NATURE AND CAUSES OF
mafons and bricklayers. Chairmen in London
during the fummer feafon, are faid fometimes to
be employed as bricklayers. The high wages of
thofe workmen, therefore, are not fo much the
recompence of their ſkill, as the compenfation for
the inconftancy of their employment.
A houfe carpenter feems to exercife rather a
nicer and more ingenious trade than a maſon. In
moſt places, however, for it is not univerfally fo,
his day-wages are fomewhat lower. His employ-
ment, though it depends much, does not depend
fo entirely upon the occafional calls of his cuftom-
and it is not liable to be interrupted by
the weather.
ers;
When the trades which generally afford conftant
employment, happen in a particular place not to
do fo, the wages of the workmen always rife
a good deal above their ordinary proportion
to thofe of common labor. In London almoft
all journeymen artificers are liable to be called
upon and difmiffed by their maſters from day
to day, and from week to week, in the fame
manner as day-laborers in other places. The
loweſt order of artificers, journeymen taylors,
accordingly, earn there half a crown a-day,
though eighteen pence may be reckoned the
wages of common labor. In fmall towns and
country-villages, the wages of journeymen tay-
lors frequently ſcarce equal thofe of common
labor; but in London they are often many weeks
without employment, particularly during the
fummer.
THE WEALTH OF NATIONS.
159
When the inconftancy of employment is com-
bined with the hardship, difagreeablenefs and
dirtinefs of the work, it fometimes raiſes the
wages of the most common labor above thoſe
of the moſt ſkilful artificers. A collier working by
the piece is ſuppoſed, at Newcaſtle, to earn com-
monly about double, and in many parts of Scot-
land about three times the wages of common
labor. His high wages arife altogether from the
hardſhip, diſagreeablenefs, and dirtinefs of his
work. His employment may, upon moft occafions,
be as conftant as he pleaſes. The coal-heavers in
London exerciſe a trade which in hardſhip, dirti-
neſs, and diſagreeableneſs, almoſt equals that of
colliers; and from the unavoidable irregularity in
the arrivals of coal-fhips, the employment of the
greater part of them is neceffarily very inconftant.
If colliers, therefore, commonly earn double and
triple the wages of common labor, it ought not to
feem unreaſonable that coal-heavers fhould fome-
times earn four and five times thofe wages.
the inquiry made into their condition a few years
ago,
it was found that at the rate at which they
were then paid, they could earn from fix to ten
fhillings a day. Six fhillings are about four
times the wages of common labor in London,
and in every particular trade, the loweft com-
mon earnings may always be confidered as thoſe
of the far greater number. How extravagant
foever thoſe earnings may appear, if they were
more than fufficient to compenfate all the dif-
agreeable circumſtances of the buſineſs, there
In
100 THE NATURE AND CAUSES OF
would foon be fo great a number of competitors
as, in a trade which has no exclufive privilege,
would quickly reduce them to a lower rate.
The conftancy or inconftancy of employment
cannot affect the ordinary profits of ſtock in any
particular trade. Whether the flock is or is not
conftantly employed depends, not upon the
trade, but the trader.
Fourthly, The wages of labor vary according
to the ſmall or great truſt which muſt be repoſed
in the workmen.
The wages of goldfmiths and jewellers are
every-where fuperior to thofe of many other
workmen, not only of equal, but of much fupe-
rior ingenuity; on account of the precious ma-
terials with which they are intruſted.
We truft our health to the phyfician; our for-
tune and fometimes our life and reputation to
the lawyer and attorney. Such confidence could
not fafely be repofed in people of a very mean
or low condition. Their reward muſt be fuch,
therefore, as may give them that rank in the fo-
ciety which fo important a truft requires. The
long time and the great expenſe which muſt be
laid out in their education, when combined with
this circumftance, neceffarily enhance ſtill further
the price of the labor.
When a perſon employs only his own ftock in
trade, there is no truft; and the credit which he
may get from other people, depends, not upon
the nature of his trade, but upon their opinion
of his fortune, probity, and prudence. The
different
THE WEALTH OF NATIONS.
161
different rates of profit, therefore, in the different
branches of trade, cannot arife from the different
degrees of truft repoſed in the traders.
Fifthly, The wages of labor in different em-
ployments vary according to the probability or
improbability of fuccefs in them.
The probability that any particular perſon
fhall ever be qualified for the employment to
which he is educated, is very different in different
occupations. In the greater part of mechanic
trades, fuccefs is almoſt certain; but very un-
certain in the liberal profeffions. Put your fon
apprentice to a fhoemaker, there is little doubt of
his learning to make a pair of fhoes: But fend
him to ſtudy the law, it is at leaſt twenty to one
if ever he makes ſuch proficiency as will enable
him to live by the bufinefs. In a perfectly fair
lottery, thoſe who draw the prizes ought to gain
all that is loft by thoſe who draw the blanks. In
a profeffion where twenty fail for one that fucceeds,
that one ought to gain all that ſhould have been
gained by the unſucceſsful twenty. The counfellor
at law who, perhaps, at near forty years of age,
begins to make ſomething by his profeffion, ought
to receive the retribution, not only of his own fo
tedious and expenfive education, but of that of
more than twenty others who are never likely to
make any thing by it. How extravagant foever
the fees of counſellors at law may fometimes
appear, their real retribution is never equal to
this. Compute in any particular place, what is
likely to be annually gained, and what is likely
W. of N. 1.
11
162 THE NATURE AND CAUSES OF
>
to be annually ſpent, by all the different workmen
in any common trade, fuch as that of fhoemakers or
weavers, and you will find that the former fum will
generally exceed the latter. But make the fame
computation with regard to all the counsellors and
ftudents of law, in all the different inns of court,
and you will find that their annual gains bear but
a very ſmall proportion to their annual expenſe,
even though you rate the former as high, and the
latter as low, as can well be done. The lottery of the
law, therefore, is very far from being a perfectly
fair lottery; and that, as well as many other liberal
and honorable profeffions, are, in point of pecuniary
gain, evidently under-recompenſed.
Thofe profeffions keep their level, however,
with other occupations, and, notwithſtanding
thefe difcouragements, all the most generous and
liberal fpirits are eager to crowd into them.
Two different caufes contribute to recommend
them. First, the defire of the reputation which
attends upon fuperior excellence in any of them ;
and, fecondly, the natural confidence which
every man has more or leſs, not only in his own
abilities, but in his own good fortune.
To excel in any profeffion, in which but few
arrive at mediocrity, is the moft decifive mark of
what is called genius or fuperior talents. The
public admiration which attends upon fuch dif-
tinguiſhed abilities, makes always a part of their
reward, a greater or fmaller in proportion as it
is higher or lower in degree. It makes a con-
fiderable part of that reward in the profeffion of
THE WEALTH OF NATIONS.
163
phyfic; a ftill greater perhaps in that of law;
in poetry and philofophy it makes almoft the
whole.
There are fome very agreeable and beautiful
talents of which the poffeffion commands a cer -
tain fort of admiration; but of which the exer-
ciſe for the fake of gain is confidered, whether
from reaſon or prejudice, as
as a fort of public
proftitution. The pecuniary recompence, there-
fore, of thoſe who exerciſe them in this manner,
muſt be fufficient, not only to pay for the time,
labor, and expenſe of acquiring the talents,
but for the difcredit which attends the employ-
ment of them as the means of fubfiftence. The
exorbitant rewards of players, opera-fingers,
opera - dancers, &c. are founded upon thofe two
principles; the rarity and beauty of the talents,
and the difcredit of employing them in this
manner. It ſeems abfurd at firft fight that we
fhould deſpiſe their perfons, and yet reward their
talents with the moft profufe liberality. While
we do the one, however, we muſt of neceffity do
the other. Should the public opinion or pre-
judice ever alter with regard to fuch occupa-
tions, their pecuniary recompence would quickly
diminiſh. More people would apply to them,.
and the competition would quickly reduce the
price of their labor. Such talents, though far
from being common, are by no means fo rare as
is imagined. Many people poffefs them in great
perfection, who difdain to make this ufe of
them; and many more are capable of acquiring
164 THE NATURE AND CAUSES OF
them, if any thing could be made honorably bý
them.
The over-weening conceit which the greater
part of men have of their own abilities, is an
ancient evil remarked by the philofophers and
moralifts of all ages. Their abfurd preſumption in
their own good fortune, has been lefs taken notice
of. It is, however, if poffible, ſtill more univerſal.
There is no man living who, when in tolerable
health and ſpirits, has not ſome ſhare of it. The
chance of gain is by every man more or leſs over-
valued, and the chance of lofs is by moft men under-
valued, and by ſcarce any man, who is in tolerable
health and ſpirits, valued more than it is worth.
That the chance of gain is naturally over-
valued, we may learn from the univerſal ſucceſs
of lotteries. The world neither ever faw, nor
ever will fee, a perfectly fair lottery; or one in
which the whole gain compenfated the whole
lofs; becauſe the undertaker could make nothing
by it. In the ſtate lotteries the tickets are really
not worth the price which is paid by the original
ſubſcribers, and yet commonly fell in the market
for twenty, thirty, and fometimes forty per cent.
advance. The vain hope of gaining fome of the
great prizes is the fole cauſe of this demand.
The ſobereft people ſcarce look upon it as a folly
to pay a ſmall fum for the chance of gaining ten
or twenty thousand pounds; though they know
that even that ſmall fum is perhaps twenty
or thirty per cent. more than the chance is
worth. In a lottery in which no prize exceeded
THE WEALTH OF NATIONS.
165
twenty pounds, though in other reſpects it ap-
proached much nearer to a perfectly fair one than
the common ftate lotteries, there would not be the
fame demand for tickets. In order to have a
better chance for ſome of the great prizes, ſome
people purchaſe feveral tickets, and others, fmall
fhares in a ftill greater number. There is not,
however, a more certain propofition in mathematics,
than that the more tickets you adventure upon,
the more like you are to be a loſer. Adventure
upon all the tickets in the lottery, and you lofe
for certain, and the greater the number of your
tickets the nearer you approach to this certainty.
That the chance of lofs is frequently under-
valued, and ſcarce ever valued more than it is
worth, we may learn from the very moderate
profit of enfurers. In order to make enfurance,
either from fire or fea-riſk, a trade at all, the
common premiun muſt be ſufficient to compen-
fate the common loffes, to pay the expenſe of
management, and to afford fuch a profit as
might have been drawn from an equal capital
employed in any common trade. The perfon
who pays no more than this, evidently pays no
more than the real value of the riſk, or the loweft
price at which he can reaſonably expect to
enſure it. But though many people have made
a little money by enfurance; very few have made
a great fortune; and from this confideration
alone, it ſeems evident enough, that the ordinary
balance of profit and lofs is not more advantage-
ous in this, than in other common trades by
166 THE NATURE AND CAUSES OF
1
which fo many people make fortunes. Moderate,
however, as the premium of enfurance commonly
is, many people deſpiſe the riſk too much to care
to pay it. Taking the whole kingdom at an
average, nineteen boufes in twenty, or rather
perhaps ninety-nine in hundred, are not enfured
from fire. Sea-rifk is more alarming to the greater
part of people, and the proportion of ſhips enfured
to thoſe not enfured is much greater. Many fail,
however, at all ſeaſons, and even in time of war,
without any enfurance. This may fometimes per-
haps be done without any imprudence. When a
great company, or even a great merchant, has
twenty or thirty fhips at ſea, they may, as it were,
enfure one another. The premium faved upon.
them all, may more than compenfate fuch loffes as
they are likely to meet with in the common courſe
of chances. The neglect of enfurance upon fhip-
ping, however, in the fame manner as upon houſes,
is, in moſt caſes, the effect of no fuch nice calculation,
but of mere thoughtless rafhnefs and prefumptuous
contempt of the riſk.
The contempt of rifk and the prefumptuous
hope of fuccefs, are in no period of life more
active than at the age at which young people
chuſe their profeffions. How little the fear of
misfortune is then capable of balancing the hope
of good luck, appears ftill more evidently in the
readineſs of the common people to inlift as foldiers,
or to go to fea, than in the eagernefs of thoſe of
better faſhion to enter into what are called the
liberal profeffions.
,
THE WEALTH OF NATIONS.
167
What a common foldier may lofe is obvious
enough. Without regarding the danger, however,
young volunteers never inlift fo readily as at the
beginning of a new war; and though they have
fcarce any chance of preferment, they figure to
themſelves, in their youthful fancies, a thouſand
occafions of acquiring honor and diftinction which
never occur. Thefe romantic hopes make the
whole price of their blood. Their pay is lefs than
that of common laborers, and in actual ſervice their
fatigues are much greater.
The lottery of the fea is not altogether fo dif-
advantageous as that of the army. The fon of a
creditable laborer or artificer may frequently go
to fea with his father's confent; but if he inlifts as
a foldier, it is always without it. Other people
fee ſome chance of his making fomething by the
one trade: nobody but himſelf fees any of his
making any thing by the other. The great admiral
is lefs the object of public admiration than the
great general, and the higheſt ſucceſs in the ſea
ſervice promiſes a leſs brilliant fortune and reputa-
tion than equal fuccefs in the land. The fame
difference runs through all the inferior degrees of
preferment in both. By the rules of precedency
a captain in the navy ranks with a colonel in the
ariny: but he does not rank with him in the com-
mon eſtimation. As the great prizes in the lottery
are leſs, the ſmaller ones muſt be more numerous.
Common failors, therefore, more frequently get
fome fortune and preferment than common foldiers;
and the hope of thoſe prizes is what principally
168 THE NATURE AND CAUSES OF
recommends the trade. Though their fkill and
dexterity are much fuperior to that of almoft any
artificers, and though their whole life is one con-
tinual ſcene of hardſhip and danger, yet for all
this dexterity and fkill, for all thofe hardships
and dangers, while they remain in the condition of
common failors, they receive fcarce any other
recompence but the pleaſure of exercising the one
and of furmounting the other. Their wages are not
greater than thoſe of common laborers at the port.
which regulates the price of feamen's wages.
As
they are continually going from port to port, the
monthly pay of thoſe who fail from all the different
ports of Great Britain, is more nearly upon a level
than that of any other workmen in thoſe different
places; and the rate of the port to and from which
the greateſt number fail, that is the port of Lon-
don, regulates that of all the reft. At London
the wages of the greateft part of the different
claffes of workmen are about double thoſe of the
fame claffes at Edinburgh. But the failors who fail
from the port of London feldom earn above three
or four fhillings a month more than thofe who
fail from the port of Leith, and the difference is
frequently not fo great. In time of peace, and
in the merchant fervice, the London price is from
a guinea to about feven-and-twenty fhillings the
calendar month. A common laborer in London,
at the rate of nine or ten fhillings a week, may
earn in the calendar month from forty to five-
and-forty fhillings. The failor, indeed, over
and above his pay, is fupplied with proviſions.
THE WEALTH OF NATIONS.
169
Their value, however, may not perhaps always ex-
ceed the difference between his pay andthat of the
common laborer; and though it ſometimes ſhould,
the excess will not be clear gain to the failor,
becauſe he cannot fhare it with his wife and family,
whom he muſt maintain out of his wages at home.
The dangers and hair-breadth efcapes of a life
of adventures, inftead of difheartening young
people, feem frequently to recommend a trade
to them. A tender mother, among the inferior
ranks of people, is often afraid to fend her fon to
ſchool at a fea-port town, left the fight of the
fhips and the converſation and adventures of the
failors fhould entice him to go to fea. The dif-
tant proſpect of hazards, from which we can hope
to extricate ourſelves by courage and addreſs, is
not diſagreeable to us, and does not raiſe the
wages of labor in any employment. It is other-
wiſe with thoſe in which courage and addreſs can
be of no avail. In trades which are known to be
very unwholeſome, the wages of labor are always
remarkably high. Unwholeſomeneſs is a ſpecies
of diſagreeableneſs, and its effects upon the wages
of labor are to be ranked under that general head.
In all the different employments of ftock, the
ordinary rate of profit varies more or lefs with the
certainty or uncertainty of the returns. Thefe
are in general lefs uncertain in the inland than in
the foreign trade, and in fome branches of foreign
trade than in others; in the trade to North
America, for example, than in that to Jamaica.
The ordinary rate of profit always rifes more or
170
THE NATURE AND CAUSES OF
lefs with the riſk. It does not, however, ſeem to
rife in proportion to it, or fo as to compenfate it
completely. Bankruptics are most frequent in
the moſt hazardous trades. The moſt hazardous
of all trades, that of a fmuggler, though when
the adventure fucceeds it is likewiſe the moſt
profitable, is the infallible road to bankruptcy.
The prefumptuous hope of fuccefs ſeems to act
here as upon all other occafions, and to entice fo
many adventurers into thoſe hazardous trades,
that their competition reduces their profit below
what is fufficient to compenfate the riſk.
To
compenfate it completely, the common returns
ought, over and above the ordinary profits of
ftock, not only to make up for all occafional loffes,
but to afford a furplus profit to the adventurers
of the fame nature with the profit of enfurers.
But if the common returns were fufficient for
all this, bankruptcies would not be more frequent
in theſe than in other trades.
Of the five circumftances, therefore, which
vary the wages of labor, two only affect the
profits of ſtock; the agreeableneſs or diſagree-
ableneſs of the buſineſs, and the riſk or fecurity
with which it is attended. In point of agree-
ableneſs or diſagreeableneſs, there is little or no
difference in the far greater part of the different
employments of ſtock; but a great deal in thoſe
of labor; and the ordinary profit of ftock,
though it riſes with the rifk, does not always
feem to riſe in proportion to it. It fhould fol-
low from all this, that, in the fame fociety or
THE WEALTH OF NATIONS.
171
neighbourhood, the average and ordinary rates
of profit in the different employments of ſtock
fhould be more nearly upon a level than the
pecuniary wages of the different forts of labor.
They are fo accordingly. The difference be-
tween the earnings of a common laborer and
thoſe of a well employed lawyer or phyfician, is
evidently much greater, than that, between the
ordinary profits in any two different branches of
trade. The apparent difference, beſides, in the
profits of different trades, is generally a deception
arifing from our not always diftinguiſhing what
ought to be confidered as wages, from what
ought to be confidered as profit.
Apothecaries profit is become a bye-word,
denoting fomething uncommonly extravagant.
This great apparent profit, however, is fre-
quently no more than the reaſonable wages of
labor. The ſkill of an apothecary is a much
nicer and more delicate matter than that of any
artificer whatever; and the truſt which is repoſed
in him is of much greater importance.
He is
the phyſician of the poor in all caſes, and of the
rich when the diftrefs or danger is not very great.
His reward, therefore ought to be ſuitable to
his fkill and his truft, and it arifes generally
from the price at which he fells his drugs. But
the whole drugs which the beſt employed apo-
thecary, in a large market town, will fell in a year,
may not perhaps coft him above thirty or forty
pounds. Though he fhould fell them, therefore,
for three or four hundred, or at a thouſand
172 THE NATURE AND CAUSES OF
per cent. profit, this may frequently be no more
than the reaſonable wages of his labor charged, in
the only way in which he can charge them, upon the
price of his drugs. The greater part of the apparent
profit is real wages diſguiſed in the garb of profit.
In a ſmall fea - port town,
a little
grocer will
make forty or fifty per cent. upon a flock of a
fingle hundred pounds, while a confiderable
wholeſale merchant in the fame place will ſcarce
make eight or ten per cent. upon a ftock of ten
thouſand. The trade of the grocer may be ne-
ceffary for the conveniency of the inhabitants,
and the narrowneſs of the market may not admit
the employment of a larger capital in the bufi-
neſs. The man, however, muft not only live
by his trade, but live by it ſuitably to the quali-
fications which it requires. Befides poffeffing a
little capital, he muſt be able to read, write, and
account, and muſt be a tolerable judge too of,
perhaps, fifty or fixty different forts of goods,
their prices, qualities, and the markets where
they are to be had cheapeſt. He must have all
the knowledge, in fhort, that is neceffary for a
great merchant, which nothing hinders him from
becoming but the want of a fufficient capital.
Thirty or forty pounds a year cannot be con-
fidered as too great a recompence for the labor
of a perfon fo accomplished. Deduct this from
the feemingly great profits of his capital, and little
more will remain, perhaps, than the ordinary
profits of ſtock. The greater part of the ap-
parent profit is, in this cafe too, real wages,
THE WEALTH OF NATIONS.
173
The difference between the apparent profit of
the retail and that of the wholeſale trade, is much
lefs in the capital than in fmall towns and coun-
try villages. Where ten thousand pounds can be
employed in the grocery trade, the wages of the
grocer's labor make but a very trifling addition to
the real profits of ſo great a flock. The apparent
profits of the wealthy retailer, therefore, are there
more nearly upon a level with thoſe of the wholeſale
merchant. It is upon this account that goods fold
by retail are generally as cheap and frequently
much cheaper in the capital than in ſmall towns
and country villages. Grocery goods, for example,
are generally much cheaper; bread and butcher's
meat frequently as cheap. It cofts no more to
bring grocery goods to the great town than to the
country village; but it cofts a great deal more to
bring corn and cattle, as the greater part of them
muſt be brought from a much greater diflance.
The prime coft of grocery goods, therefore, be-
ing the fame in both places, they are cheapeſt
where the leaft profit is charged upon them.
The prime coft of bread and butcher's - meat is
greater in the great town than in the country
village; and though the profit is lefs, therefore
they are not always cheaper there, but often
equally cheap. In fuch articles as bread and but-
cher's meat, the fame cauſe, which diminiſhes
apparent profit, increaſes prime coft. The extent
of the market, by giving employment to greater
ftocks, diminiſhes apparent profit; but by requi-
ring ſupplies from a greater diftance, it increaſes
174 THE NATURE AND CAUSES OF
prime coſt. This diminution of the one and
increaſe of the other feem, in moft cafes, nearly
to counter-balance one another; which is pro-
bably the reaſon that, though the prices of corn
and cattle are commonly very different in dif-
ferent parts of the kingdom, thoſe of bread and
butcher's-meat are generally very nearly the fame
through the greater part of it.
Though the profits of flock both in the whole-
fale and retail trade are generally lefs in the capital
than in ſmall towns and country villages, yet
great fortunes are frequently acquired from fmall
beginnings in the former, and ſcarce ever in the
latter. In fmall towns and country villages, on
account of the narrowneſs of the market, trade
cannot always be extended as ſtock extends. In
fuch places, therefore, though the rate of a
particular perſon's profits may be very high, the
fum or amount of them can never be very great,
nor confequently that of his annual accumulation.
In great towns, on the contrary, trade can be
extended as ſtock increaſes, and the credit of a
frugal and thriving man increaſes much fafter than
his ſtock. His trade is extended in proportion to
the amount of both, and the fum or amount of
his profits is in proportion to the extent of his
trade, and his annual accúmulation in proportion
to the amount of his profits. It feldom happens,
however, that great fortunes are made even in
great towns by any one regular, eftabliſhed, and
well-known branch of bufinefs, but in confequence
of a long life of induſtry, frugality, and attention.
1
THE WEALTH OF NATIONS.
175
1
Sudden fortunes, indeed, are ſometimes made in
fuch places by what is called the trade of ſpecula-
tion. The fpeculative merchant exerciles no one
regular, eſtabliſhed, or well known branch of
bufinefs. He is a corn merchant this year, and a
wine merchant the next, and a fugar, tobacco,
or tea merchant the year after. He enters into
every trade when he forefees that it is likely to be
more than commonly profitable, and he quits it
when he foreſees that its profits are likely to return
to the level of other trades. His profits and loffes,
therefore, can bear no regular proportion to thofe
of any one eftablished and well-known branch of
bufinefs. A bold adventurer may fometimes ac-
quire a confiderable fortune by two or three
fucceſsful ſpeculations; but is juſt as likely to loſe
one by two or three unfuccefsful ones. This trade
can be carried on no where but in great towns.
It is only in places of the most extenfive commerce
and correſpondence that the intelligence requifite
for it can be had.
The five circumftances above mentioned
though they occafion confiderable inequalities in
the wages of labor and profits of ftock, occafion
none in the whole of the advantages and difad-
vantages, real or imaginary, of the different em-
ployments of either. The nature of thofe cir-
cumſtances is fuch, that they make up for a finall
pecuniary gain in fome, and counter balance a
great one in others.
I order, however, that this equality may
take place in the whole of their advantages or
176 THE NATURE AND CAUSES OF
difadvantages, three things are requifite even where
there is the moft perfect freedom. Firft, the em-
ployments muſt be well known and long eſtabliſhed
in the neighbourhood; ſecondly, they muſt be in
their ordinary, or what may be called their natural
ſtate; and, thirdly, they muſt be the fole or prin-
cipal employments of thoſe who occupy them.
Firft, this equality can take place only in thoſe
employments which are well known, and have
been long eſtabliſhed in the neighbourhood.
Where all other circumftances are equal,
wages are generally higher in new than in old
trades. When a projector attempts to eſtabliſh
a new manufacture, he muſt at firſt entice his
workmen from other employments by higher
wages than they can either earn in their own
trades, or than the nature of his work would
otherwiſe require, and a confiderable time muſt
paſs away before he can venture to reduce them
to the common level. Manufactures for which
the demand arifes altogether from faſhion and
fancy, are continually changing, and feldom laſt
long enough to be confidered as old eftabliſhed
manufactures. Thofe, on the contrary, for
which the demand ariſes chiefly from ufe or ne-
ceffity, are lefs liable to change, and the fame
form or fabric may continue in demand for
whole centuries together. The wages of labor
therefore, are likely to be higher in manufactures
of the former, than in thoſe of the latter kind.
Birmingham deals chiefly in manufactures of the
former kind; Sheffield in thoſe of the latter;
and
THE WEALTH OF NATIONS.
177
and the wages of labor in thoſe two different
places, are faid to be ſuitable to this difference in
the nature of their manufactures.
The eſtabliſhment of any new manufacture, of any
new branch of commerce, or of any new practice
in agriculture, is always a ſpeculation, from which
the projector promifes himſelf extraordinary profits.
Thefe profits fometimes are very great and fome-
times, more frequently, perhaps, they are quite
otherwiſe; but in general they bear no regular pro-
portion to thoſe of other old trades in the neighbour-
hood. If the project fucceeds, they are commonly at
first very high. When the trade or practice becomes
thoroughly eſtabliſhed and well known, the compe-
tition reduces them to the level of other trades.
Secondly, This equality in the whole of the
advantages and difadvantages of the different
employments of labor and stock, can take place
only in the ordinary, or what may be called the
natural ſtate of thoſe employments.
The demand for almoft every different fpecies
of labor, is fometimes greater and fometimes
leſs than ufual. In the one cafe the advantages
of the employment rife above, in the other they
fall below the common level. The demand for
country labor is greater at hay-time and harveſt,
than during the greater part of the year; and
wages rife with the demand.
In time of war
when forty or fifty thouſand failors are forced
from the merchant fervice into that of the king,
the demand for failors to merchant fhips necef-
farily riſes with their ſcarcity, and their wages
W. of N. 1.
12
2
178 THE NATURE AND CAUSES OF
upon fuch occafions commonly rife from a guinea
and feven-and-twenty fhillings, to forty fhillings
and three pounds a month. In a decaying ma-
nufacture, on the contrary, many workmen, rather
than quit their old trade, are contented with ſmaller
wages than would otherwiſe be fuitable to the
nature of their employment.
The profits of ſtock vary with the price of the
commodities in which it is employed. As the price of
any commodity rifes above the ordinary or average
rate, the profits of at leaft fome part of the ftock
that is employed in bringing it to market, riſe above
their proper level, and as it falls they fink below
it. All commodities are more or lefs liable to
variations of price, but fome are much more fo than
others. In all commodities which are produced by
human induſtry, the quantity of induftry annually
employed is neceffarily regulated by the annual
demand, in ſuch a manner that the average annual
produce may, as nearly as poffible, be equal to
the average annual conſumption.
In fome em-
ployments, it has already been obferved, the
fame quantity of induftry will always produce
the fame, or very nearly the fame quantity of
commodities. In the linen or woollen manu-
factures, for example, the fame number of hands.
will annually work up very nearly the fame
quantity of linen and woollen cloth. The varia-
tions in the market price of fuch commodities,
therefore, can arife only from fome accidental
variation in the demand.
A public mourning
raiſes the price of black cloth. But as the demand
THE WEALTH OF NATIONS.
179
>
for moſt forts of plain linen and woollen cloth is
pretty uniform, fo is likewife the price. But
there are other employments in which the ſame
quantity of induſtry will not always produce the
ſame quantity of commodities. The fame quantity
of induſtry, for example, will in different years,
produce very different quantities of corn, wine
hops, fugar, tobacco, &c. The price of ſuch
commodities, therefore, varies not only with the
variations of demand, but with the much greater
and more frequent variations of quantity, and is
conſequently extremely fluctuating. But the profit
of fome of the dealers muft neceffarily fluctuate
with the price of the commodities. The operations
of the ſpeculative merchant are principally employed
about ſuch commodities. He endeavours to buy
them up when he forefees that their price is likely to
rife, and to fell them when it is likely to fall.
•
Thirdly, This equality in the whole of the
advantages and diſadvantages of the different em-
ployments of labor and ſtock, can take place
only in fuch as are the fole or principal employ-
ments of thoſe who occupy them.
When a perfon derives his fubfiftence from
one employment, which does not occupy the
greater part of his time; in the intervals of his
leiſure he is often willing to work at another for
lefs wages than would otherwife fuit the nature of
the employment.
There ftill fubfifts in many parts of Scotland
a fet of people called Cotters or Cottagers,
though they were more frequent fome years ago
180 THE NATURE AND CAUSES OF
卞
​than they are now. They are a fort of out-
Tervants of the landlords and farmers. The ufual
reward which they receive from their maſters is a
houfe, a fmall garden for pot-herbs, as much
grafs as will feed a cow, and, perhaps, an acre
or two of bad arable land. When their mafter has
occafion for their labor, he gives them, befides
two pecks of oatmeal a week, worth about fixteen
pence fterling. During a great part of the year he
has little or no occafion for their labor, and the
cultivation of their own little poffeffion is not
fufficient to occupy the time which is left at their
own difpofal. When fuch occupiers were more
numerous than they are at prefent, they are faid
to have been willing to give their ſpare time for a
very ſmall recompence to any body, and to have
wrought for lefs wages than other laborers. In
ancient times they ſeem to have been common all
over Europe. In countries ill cultivated and worſe
inhabited, the greater part of landlords and farm-
ers could not otherwiſe provide themſelves with
the extraordinary number of hands, which country
labor requires at certain feaſons. The daily or
weekly recompence which fuch laborers occafionally
received from their mafters, was evidently not the
whole price of their labor. Their ſmall tenement
made a confiderable part of it. This daily or
weekly recompence, however, feems to have been
confidered as the whole of it, by many writers
who have collected the prices of labor and provifions
in ancient times, and who have taken pleaſure in
repreſenting both as wonderfully low,
THE WEALTH OF NATIONS.
181
The produce of fuch labor comes frequently
cheaper to market than would otherwiſe be ſuit-
able to its nature. Stockings in many parts of
Scotland are knit much cheaper than they can
any-where be wrought upon the loom. They are
the work of fervants and laborers, who derive
the principal part of their ſubſiſtence from ſome
other employment. More than a thouſand pair
of Shetland ftockings are annually imported into
Leith, of which the price is from five pence to
ſeven pence a pair. At Learwick, the fmall capital
of the Shetland iflands ten pence a day, I have
been affured, is a common price of common labor,
In the fame iflands they knit worfted ftockings to
the value of a guinea a pair and upwards.
The fpinning of linen yarn is carried on in
Scotland nearly in the fame way as the knitting
of ſtockings, by fervants, who are chiefly hired
for other purpoſes. They earn but a very ſcanty
fubfiftence, who endeavour to get their whole
livelihood by either of thofe trades. In most parts
of Scotland fhe is a good fpinner who can earn
twenty pence a week.
In opulent countries the market is generally
fo extenfive, that any one trade is fufficient to
employ the whole labor and ftock of thoſe who
occupy it. Inftances of people's living by one
employment, and at the fame time deriving ſome
little advantage from another, occur chiefly in
poor countries. The following inftance, how
ever, of fomething of the fame kind is to be
found in the capital of a very rich one. There
182 THE NATURE AND CAUSES OF
is no city in Europe, I believe, in which houfe-
rent is dearer than in London, and yet I know
no capital in which a furniſhed apartment can be
hired fo cheap. Lodging is not only much cheaper
in London than in Paris; it is much cheaper than
in Edinburgh of the fame degree of goodneſs;
and what may ſeem extraordinary, the dearneſs
of houſe - rent is the cauſe of the cheapneſs of
lodging. The dearneſs of houfe - rent in London
arifes, not only from thoſe cauſes which render
it dear in all great capitals, the dearneſs of labor,
the dearneſs of all the materials of building, which
muft generally be brought from a great diftance,
and above all the dearnefs of ground-rent, every
landlord acting the part of a monopoliſt, and fre-
quently exacting a higher rent for a fingle acre of
bad land in a town, than can be had for a hundred
of the beſt in the country; but it ariſes in part from
the peculiar manners and cuſtoms of the people,
which oblige every maſter of a family to hire a
whole houſe from top to bottom. A dwelling-
houſe in England means every thing that is con-
tained under the fame roof. In France, Scot-
land, and many other parts of Europe, it fre-
quently means no more than a fingle ftory. A
tradeſman in London is obliged to hire a whole
houſe in that part of the town where his cuſtom-
ers live. His fhop is upon the ground-floor,
and he and his family fleep in the garret; and
he endeavours to pay a part of his houfe-rent by
letting the two middle ftories to lodgers. He
expects to maintain his family by his trade, and
4
THE WEALTH OF NATIONS.
183
not by his lodgers. Whereas, at Paris and Edin-
burgh, the people who let lodgings, have com-
monly no other means of fubfiftence; and the
price of the lodging muſt pay, not only the rent
of the houſe, but the whole expenfe of the family.
PART II.
Inequalities occafioned by the Policy of Europe.
SUCH are the inequalities in the whole of the
advantages and difadvantages of the different em-
ployments of labor and ſtock, which the defect of
any of the three requifites above-mentioned muft
occafion, even where there is the moft perfect
liberty. But the policy of Europe, by not leaving
things at perfect liberty, occafions other inequalities
of much greater importance.
It does this chiefly in the three following ways.
Firſt, by reſtraining the competition in fomẹ
employments to a fmaller number than would
otherwiſe be diſpoſed to enter into them; fecondly,
by increaſing it in others beyond what it naturally
would be; and, thirdly, by obftructing the free
circulation of labor and ſtock, both from employ-
ment to employment, and from place to place.
First, The policy of Europe occafions a very
important inequality in the whole of the advan-
tages and diſadvantages of the different employ-
ments of labor and ftock, by restraining the
184 THE NATURE AND CAUSES OF
competition in fome employments to a ſmaller
number than might otherwiſe be diſpoſed to enter
into them.
The exclufive privileges of corporations are the
principal means it makes uſe of for this purpoſe.
The exclufive privilege of an incorporated
trade neceffarily reftrains the competition, in the
town where it is eftablifhed, to thofe who are free
of the trade. To have ferved an apprenticeſhip
in the town, under a mafter properly qualified,
is commonly the neceffary requifite for obtaining
this freedom. The bye-laws of the corporation
regulate fometimes the number of apprentices
which any mafter is allowed to have, and almoſt
always the number of years which each apprentice
is obliged to ferve. The intention of both regu-
lations is to reftrain the competition to a much
fmaller number than might otherwiſe be dif
poſed to enter into the trade. The limitation of
the number of apprentices reftrains it directly.
A long term of apprenticeſhip reftrains it more
indirectly, but as effectually, by increafing the
expenſe of education.
In Sheffield no mafter cutler can have more
than one apprentice at a time, by a bye-law of
the corporation. In Norfolk and Norwich no
mafter weaver can have more than two appren-
tices, under pain of forfeiting five pounds a
month to the king. No mafter hatter can have
more than two apprentices any-where in Eng-
land, or in the Engliſh plantations under pain
of forfeiting five pounds a month, half to the
THE WEALTH OF NATIONS.
183
king, and half to him who fhall fue in any court
of record. Both theſe regulations, though they
have been confirmed by a public law of the king-
dom, are evidently dictated by the fame corpora-
tion ſpirit which enacted the bye-law of Sheffield.
The filk weavers in London had fcarce been in-
corporated a year when they enacted a bye-law,
reftraining any mafter from having more than two
apprentices at a time. It required a particular act
of parliament to refcind this bye-law.
Seven years ſeem anciently to have been, all
over Europe, the ufual term eftablifhed for the
duration of apprenticeſhips in the greater part of
incorporated trades. All fuch incorporations
were anciently called univerfities; which indeed
is the proper Latin name for any incorporation
whatever. The univerfity of fmiths, the uni-
verfity of taylors, &c. are expreffions which we
commonly meet with in the old charters of an-
cient towns. When thofe particular incorpora-
tions which are now peculiarly called univer-
fities were firſt eſtabliſhed, the term of years
which it was neceffary to ftudy in order to ob-
tain the degree of mafter of arts, appears evi-
dently to have been copied from the term of
apprenticeſhip in common trades, of which the
incorporations were much more ancient. As to
have wrought feven years under a mafter pro-
perly qualified, was neceffary, in order to entitle
any perfon to become a maſter, and to have him-
felf apprentices in a common trade; fo to have
ftudied feven years under a mafter properly
186 THE NATURE AND CAUSES OF
1
qualified, was neceffary to entitle him to become
a mafter, teacher, or doctor (words anciently
fynonymous) in the liberal arts, and to have
ſcholars or apprentices (words likewife originally
fynonymous) to ſtudy under him.
By the 5th of Elizabeth, commonly called the
Statute of Apprenticeſhip, it was enacted, that no
perfon fhould for the future exercife any trade,
craft, or myftery at that time exercifed in Eng-
land, unleſs he had previoufly ferved to it an
apprenticeſhip of ſeven years at leaft; and what
before had been the bye-law of many particular
corporations, became in England the general and
public law of all trades carried on in market towns.
For though the words of the ftatute are very
general, and feem plainly to include the whole
kingdom, by interpretation its operation has been
limited to market towns, it having been held that
in country villages a perfon may exercife feveral
different trades, though he has not ferved a ſeven
years apprenticeſhip to each, they being neceſſary
for the conveniency of the inhabitants, and the
number of people frequently not being fufficient
to ſupply each with a particular ſet of hands.
By a ftrict interpretation of the words too the
operation of this ftatute has been limited to thofe
trades which were eſtabliſhed in England before
the 5th of Elizabeth, and has never been ex-
tended to fuch as have been introduced fince that
time. This limitation has given occafion to ſe-
veral diſtinctions which, confidered as rules of
police, appear as fooliſh as can well be imagined.
THE WEALTH OF NATIONS.
187
It has been adjudged, for example, that a coach-
maker can neither himſelf make nor employ jour-
neymen to make his coach-wheels, but muſt buy
them of a mafter wheel-wright; this latter trade
having been exerciſed in England before the 5th of
Elizabeth. But a wheel-wright, though he has
never ſerved an apprenticeſhip to a coach-maker,
may either himſelf make or employ journeymen to
make coaches; the trade of a coach-maker not
being within the ftatute, becauſe not exerciſed in
England at the time when it was made. The
manufactures of Mancheſter, Birmingham, and
Wolverhampton, are many of them, upon this
account, not within the ftatute; not having been
exerciſed in England before the 5th of Elizabeth.
In France, the duration of apprenticeſhips is
different in different towns and in different trades.
In Paris, five years is the term required in a great
number; but before any perſon can be qualified
to exerciſe the trade as a mafter, he muſt, in
many of them, ſerve five years more as a jour-
neyman. During this latter term he is called the
companion of his maſter, and the term itſelf is
called his companionſhip.
In Scotland there is no general law which re-
gulates univerſally the duration of apprentice-
ſhips. The term is different in different corpo-
rations. Where it is long, a part of it may
generally be redeemed by paying a ſmall fine.
In moſt towns too a very ſmall fine is fufficient
to purchaſe the freedom of any corporation. The
weavers of linen and hempen cloth, the principal
188 THE NATURE AND CAUSES OF
manufactures of the country, as well as all other
artificers fubfervient to them, wheel-makers, reel-
makers, &c. may exerciſe their trades in any town
corporate without paying any fine. In all towns
corporate all perfons are free to fell butcher's-
meat upon any lawful day of the week. Three
years is in Scotland a common term of appren-
ticeſhip, even in fome very nice trades; and in
general I know of no country in Europe in which
corporation laws are fo little oppreffive.
The property which every man has in his own
labor, as it is the original foundation of all other
property, fo it is the moft facred and inviolable.
The patrimony of a poor man lies in the ftrength
and dexterity of his hands; and to hinder him
from employing this ftrength and dexterity in
what manner he thinks proper without injury to
his neighbour, is a plain violation of this moft
facred property. It is a manifeft encroachment
upon the juſt liberty both of the workman, and of
thoſe who might be diſpoſed to employ him. As
it hinders the one from working at what he thinks
proper, ſo it hinders the others from employing
whom they think proper. To judge whether hẹ
is fit to be employed, may furely be trufted to
the diſcretion of the employers whoſe intereſt it
ſo much concerns. The affected anxiety of the
law-giver left they fhould employ an improper
perfon, is evidently as impertinent as it is oppreffive.
The inftitution of long apprenticeſhips can give
no fecurity that infufficient workmanship fhall not
frequently be expofed to public fale. When this
THE WEALTH OF NATIONS.
189
is done it is generally the effect of fraud, and not
of inability; and the longeſt apprenticeſhip can
give no fecurity againſt fraud. Quite different
regulations are neceffary to prevent this abuſe. The
fterling mark upon plate, and the ſtamps upon
linen and woollen cloth, give the purchaſer much
greater fecurity than any ftatute of apprenticeſhip.
He generally looks at theſe, but never thinks it
worth while to inquire whether the workman had
ſerved a ſeven years apprenticeſhip.
The inftitution of long apprenticeſhips has
no tendency to form young people to induſtry.
A journeyman who works by the piece is likely
to be induſtrious, becauſe he derives a benefit
from every exertion of his induſtry.
An ap-
触
​•
prentice is likely to be idle, and almoſt always is
fo, becauſe he has no immediate intereſt to be
otherwiſe. In the inferior employments, the
fweets of labor confift altogether in the recom-
pence of labor. They who are fooneft in a
condition to enjoy the ſweets of it, are likely
fooneft to conceive a reliſh for it, and to acquire
the early habit of induſtry. A young man na-
turally conceives an averfion to labor, when for
a long time he receives no benefit from it. The
boys who are put out apprentices from public
charities are generally bound for more than the
ufual number of years, and they generally turn out
very idle and worthlefs.
Apprenticeſhips were altogether unknown to
the ancients. The reciprocal duties of mafter and
apprentice make a confiderable article in every
190 THE NATURE AND CAUSES OF
A
modern code. The Roman law is perfectly filent
with regard to them. I know no Greek or Latin
word (I might venture, I believe, to affert that
there is none) which expreſſes the idea we now
annex to the word Apprentice, a fervant bound
to work at a particular trade for the benefit of a
mafter, during a term of years, upon condition
that the mafter ſhall teach him that trade.
Long apprenticeſhips are altogether unnecef
fary. The arts, which are much fuperior to
common trades, fuch as thoſe of making clocks
and watches, contain no fuch myftery as to re-
quire a long courfe of inftruction. The firft
invention of fuch beautiful machines, indeed,
and even that of fome of the inftruments em-
ployed in making them, muſt, no doubt, have
been the work of deep thought and long time,
and may juftly be confidered as among the hap-
pielt efforts of human ingenuity. But when
both have been fairly invented and are well un-
derſtood, to explain to any young man, in the
completeft manner, how to apply the inftru-
ments and how to conftruct the machines, can-
not well require more than the leffons of a few
weeks: perhaps thofe of a few days might be
fufficient. In the common mechanic trades, thoſe
of a few days might certainly be fufficient.
dexterity of hand, indeed, even in common trades,
cannot be acquired without much practice and
experience. But a young man would practiſe
more diligence and attention if
from the beginning he wrought as a journeyman,
with much
The
THE WEALTH OF NATIONS.
191
being paid in proportion to the little work which
he could execute, and paying in his turn for the
materials which he might ſometimes ſpoil through
awkwardneſs and inexperience. His education
would generally in this way be more effectual,
and always leſs tedious and expenſive. The maſter,
indeed, would be a lofer. He would lofe all the
wages of the apprentice, which he now faves, for
feven years together. In the end, perhaps, the
apprentice himſelf would be a lofer. In a trade
fo eaſily learnt he would have more competitors,
and his wages, when he came to be a complete
workman, would be much leſs than at preſent.
The fame increaſe of competition would reduce
the profits of the mafters as well as the wages of
the workmen. The trades, the crafts, the mytteries,
would all be lofers. But the public would be a
gainer, the work of all artificers coming in this
way much cheaper to market.
It is to prevent this reduction of price, and
conſequently of wages and profit, by reſtraining
that free competition which would moſt certainly
occafion it, that all corporations, and the greater
part of corporation laws, have been eſtabliſhed.
In order to erect a corporation, no other authority
in ancient times was requifite in many parts of
Europe, but that of the town corporate in
which it was eſtabliſhed. In England, indeed,
a charter from the king was likewife neceffary.
But this prerogative of the crown feems to have
been referved rather for extorting money from
the ſubject, than for the defence of the common
192 THE NATURE AND CAUSES OF
liberty againſt fuch oppreffive monopolies. Upon
paying a fine to the king, the charter feems ge
nerally to have been readily granted; and when
any particular clafs of artificers or traders thought
proper to act as a corporation without a charter,
fuch adulterine guilds, as they were called, were
not always disfranchiſed upon that account, but
obliged to fine annually to the king for permiffion
to exerciſe their ufurped privileges. The imme-
diate inſpection of all corporations, and of the
bye-laws which they might think proper to enact
for their own government, belonged to the town
corporate in which they were eſtabliſhed; and
whatever difcipline was exerciſed over them, pro-
ceeded commonly, not from the king, but from
that greater incorporation of which thofe fubordi-
nate ones were only parts or members:
The government of towns corporate was alto-
gether in the hands of traders and artificers; and
it was the manifeſt intereſt of every particular
claſs of them, to prevent the market from being
over-ſtocked, as they commonly exprefs it, with
their own particular fpecies of induſtry; which
is in reality to keep it always under - flocked.
Each clafs was eager to eſtabliſh regulations
proper for this purpoſe, and, provided it was al-
lowed to do ſo, was willing to confent that every
other claſs fhould do the fame. In conſequence.
of ſuch regulations, indeed, each clafs was
obliged to buy the goods they had occafion for
* See Madox Firma Burgi, p. 26,
from
THE WEALTH OF NATIONS. 193
from every other within the town, fomewhat dearer
than they otherwife might have done. But in recom-
pence, they were enabled to fell their own juſt as
much dearer; fo that fo far it was as broad as long,
as they fay; and in the dealings of the different
claſſes within the town with one another, none of
them were lofers by theſe regulations. But in their
dealings with the country they were all great gainers;
and in theſe latter dealings confifts the whole trade
which fupports and enriches every town.
Every town draws its whole fubfiftence, and
all the materials of its induftry, from the country.
It pays for theſe chiefly in two ways: first,
firſt, by
fending back to the country a part of thofe ma-
terials wrought up and manufactured; in which
cafe their price is augmented by the wages of
the workmen, and the profits of their mafters or
immediate employers: fecondly, by fending to
it a part both of the rude and manufactured pro-
duce, either of other countries, or of diflant
parts of the fame country, imported into the
town; in which cafe too the original price of
thoſe goods is augmented by the wages of the
carriers or failors, and by the profits of the mer-
chants who employ them. In what is gained
upon the firſt of thofe two branches of com-
merce, confifts the advantage which the town
makes by its manufactures; in what is gained
upon the ſecond, the advantage of its inland and
foreign trade. The wages of the workmen, and
the profits of their different employers, make up
the whole of what is gained upon both. Whatever
W. of N. 1.
13
194 THE NATURE AND CAUSES OF
regulations, therefore, tend to increaſe thoſe wages
and profits beyond what they otherwiſe would be,
tend to enable the town to purchaſe, with a
ſmaller quantity of its labor, the produce of a
greater quantity of the labor of the country. They
give the traders and artificers in the town an ad-
vantage over the landlords, farmers, and laborers
in the country, and break down that natural
equality which would otherwife take place in the
commerce which is carried on between them. The
whole annual produce of the labor of the faciety
is annually divided between thofe two different fets
of people. By means of thofe regulations a greater
fhare of it is given to the inhabitants of the town
than would otherwife fall to them; and a lefs to
thoſe of the country.
The price which the town really pays for the
proviſions and materials annually imported into
it, is the quantity of manufactures and other
goods annually exported from it. The dearer
the latter are fold, the cheaper the former are
bought. The induſtry of the town becomes more,
and that of the country lefs advantageous.
That the induftry which is carried on in
towns is, every-where in Europe, more advan-
tageous than that which is carried on in the
country, without entering into any very nice
computations, we may fatisfy ourſelves by one
very fimple and obvious obfervation. In every
country of Europe we find, at leaſt, a hundred
people who have acquired great fortunes from
fmall beginnings by trade and manufactures, the
THE WEALTH OF NATIONS.
195
induftry which properly belongs to towns, for
one who has done ſo by that which properly be-
longs to the country, the raifing of rude produce
by the improvement and cultivation of land.
Induſtry, therefore, must be better rewarded, the
wages of labor and the profits of stock muſt
evidently be greater in the one fituation than in
the other. But ftock and labor naturally feek
the moſt advantageous employment. They na-
turally, therefore, refort as much as they can
to the town, and defert the country.
The inhabitants of a town, being collected
into one place, can eaſily combine together.
The most infignificant trades carried on in towns
have accordingly, in fome place or other, been
incorporated; and even where they have never
been incorporated, yet the corporation fpirit, the
jealoufy of ftrangers, the averfion to take appren
tices, or to communicate the fecret of their
trade, generally prevail in them, and often teach
them, by voluntary affociations and agreements,
to prevent that free competition which they can-
not prohibit by bye-laws. The trades which
employ but a ſmall number of hands, run moſt
eafily into fuch combinations. Half a dozen wool-
combers, perhaps, are neceffary to keep a thou-
fand ſpinners and weavers at work. By combining
not to take apprentices they can not only engrofs
the employment, but reduce the whole manu-
facture into a fort of flavery to themſelves, and
raiſe the price of their labor much above what is
due to the nature of their work,
196 THE NATURE AND CAUSES OF
The inhabitants of the country, diſperſed in
diftant places, cannot eafily combine together.
They have not only never been incorporated, but
the corporation ſpirit never has prevailed among
them. No apprenticeſhip has ever been thought
neceffary to qualify for huſbandry, the great trade
of the country. After what are called the fine arts
and the liberal profeffions, however, there is per-
haps no trade which requires fo great a variety of
knowledge and experience. The innumerable
volumes which have been written upon it in all
languages, may fatisfy us, that among the wiſeſt
and moſt learned nations, it has never been re-
garded as a matter very easily understood. And from
all thoſe volumes we ſhall in vain attempt to collect
that knowledge of its various and complicated
operations, which is commonly poffeffed even by
the common farmer; how contemptuouſly foever
the very contemptible authors of fome of them
may fometimes affect to ſpeak of him. There is
ſcarce any common mechanic trade, on the con-
trary, of which all the operations may not be as
completely and diftinctly explained in a pamphlet
of a very few pages, as it is poffible for words il-
luftrated by figures to explain them. In the
hiſtory of the arts, now publifhing by the French
academy of ſciences, feveral of them are ac-
tually explained in this manner. The direction
of operations, befides, which must be varied with
every change of the weather, as well as with many
other accidents, requires much more judgment
diſcretion, than that of thoſe which are always the
fame or very nearly the fame. ·
THE WEALTH OF NATIONS.
197
,
Not only the art of the farmer, the general
direction of the operations of huſbandry, but many
inferior branches of country labor require much.
more ſkill and experience than the greater part of
mechanic trades. The man who works upon braſs
and iron, works with inftruments and upon ma-
terials of which the temper is always the fame, or
very nearly the fame. But the man who ploughs
the ground with a team of horfes or oxen, works
with inftruments of which the health, ftrength
and temper, are very different upon different
occafions. The condition of the materials which
he works upon too is as variable as that of the
inftruments which he works with, and both re-
quire to be managed with much judgment and
diſcretion. The common ploughman, though
generally regarded as the pattern of ftupidity and
ignorance, is feldom defective in this judgment
and diſcretion. He is lefs accuſtomed, indeed,
to focial intercourſe than the mechanic who lives
in a town. His voice and language are more un-
couth and more difficult to be underſtood by thoſe
who are not uſed to them. His underſtanding,
however, being accuſtomed to confider a greater
variety of objects, is generally much fuperior to
that of the other, whofe whole attention from mor-
ning till night is commonly occupied in performing
one or two very fimple operations. How much the
lower ranks of people in the country are really
fuperior to thofe of the town, is well known to
every man whom either bufinefs or curiofity has
led to converfe much with both. In China and
198 THE NATURE AND CAUSES OF
Indoftan accordingly both the rank and the wages
of country laborers are faid to be fuperior to thoſe
of the greater part of artificers and manufacturers.
They would probably be ſo every where, if cor-
poration laws and the corporation fpirit did not
prevent it.
The fuperiority which the induftry of the
towns has every where in Europe over that of the
country, is not altogether owing to corporations
and corporation laws. It is fupported by many
other regulations. The high duties upon foreign
manufactures and upon all goods imported by
alien merchants, all tend to the fame purpoſe.
Corporation laws enable the inhabitants of towns
to raiſe their prices, without fearing to be under-
fold by the free competition of their own coun-
trymen. Thoſe other regulations fecure them
equally againſt that of foreigners. The enhance-
ment of price occafioned by both is every-where
finally paid by the landlords, farmers, and la-
borers of the country, who have feldom oppofed
the eſtabliſhment of fuch monopolies. They have
commonly either inclination nor fitnefs to enter
into combinations; and the clamor and fophiftry
of merchants and manufacturers eaſily perfuade
them that the private intereft of a part, and of a
fubordinate part of the fociety, is the general in-
tereft of the whole.
In Great Britain the fuperiority of the induftry
of the towns over that of the country, feems to
have been greater formerly than in the prefent
times. The wages of country labor approach nearer
THE WEALTH OF NATIONS.
199
}
to thofe of manufacturing labor, and the profits of
ftock employed in agriculture to thofe of trading
and manufacturing ftock, than they are faid to
have done in the laft century, or in the beginning
of the prefent. This change may be regarded as
the neceſſary, though very late conſequence of the
extraordinary encouragement given to the induftry
of the towns. The flock accumulated in them
comes in time to be fo great, that it can no longer
be employed with the ancient profit in that ſpecies
of induſtry which is peculiar to them. That in-
duftry has its limits like every other; and the
increaſe of ſtock, by increafing the competition,
neceffarily reduces the profit. The lowering of
profit in the town forces out ftock to the country,
where, by creating a new demand for country
labor, it neceffarily raiſes its wages. It then
fpreads itſelf, if I may fay fo, over the face of
the land, and by being employed in agriculture,
is in part reſtored to the country, at the expenſe
of which, in a great meaſure, it had originally
been accumulated in the town.
That every
where in Europe the greateft improvements of
the country have been owing to fuch overflow-
ings of the ftock originally accumulated in the
towns, I fhall endeavour to fhow hereafter ; and
at the fame time to demonftrate, that though
fome countries have by this courfe attained to a
confiderable degree of opulence, it is in itſelf
neceffarily flow, uncertain, liable to be diſturbed
and interrupted by innumerable accidents, and
in every reſpect contrary to the order of nature
200
THE NATURE AND CAUSES OF
i
2
and of reafon. The interefts, prejudices, laws and
cuftoms which have given occafion to it, I fhall
endeavour to explain as fully and diftinctly as I
can in the third and fourth books of this inquiry.
People of the fame trade feldom meet toge-
ther, even for merriment and diverfion, but the
converfation ends in a confpiracy against the
public, or in fome contrivance to raiſe prices.
It is impoffible indeed to prevent fuch meetings,
by any law which either could be executed, or
would be confiftent with liberty and juftice. But
though the law cannot hinder people of the fame
trade from fometimes affembling together, it
ought to do nothing to facilitate fuch affemblies,
much leſs to render them neceffary.
A regulation which obliges all thofe of the
fame trade in a particular town to enter their
names and places of abude in a public regifter,
facilitates fuch affemblies. It connects individuals
who might never otherwiſe be known to one
another, and gives every man of the trade a direc-
tion where to find every other man of it.
A regulation which enables thofe of the fame
trade to tax themfelves in order to provide for
their poor, their fick, their widows and orphans,
by giving them a common intereft to manage,
renders fuch affemblies neceffary.
An incorporation not only renders them ne-
ceffary, but makes the act of the majority bind-
ing upon the whole. In a free trade an effectual
combination cannot be eſtabliſhed but by the
unanimous confent of every fingle trader, and it
>
1/
1
1
R
•
THE WEALTH OF NATIONS. 201
**
cannot last longer than every fingle trader continues
of the fame mind. The majority of a corporation
can enact a bye-law with proper penalties, which
will limit the competition more effectually and
more durably than any voluntary combination
whatever.
The pretence that corporations are neceffary
for the better government of the trade, is with-
out any foundation. The real and effectual dif-
cipline which is exerciſed over a workman, is
not that of his corporation, but that of his
cuftomers. It is the fear of lofing their employ-
ment which reftrains his frauds and corrects his
negligence. An exclufive corporation neceffarily
weakens the force of this difcipline. A particular
ſet of workmen must then be employed, let
them behave well or ill. It is upon this account
that in many large incorporated towns no tolerable
workmen are to be found, even in fome of the
moft neceffary trades. If you would have your
work tolerably executed, it muſt be done in the
fuburbs, where the workmen having no exclufive
privilege, have nothing but their character to
depend upon, and you muft then fmuggle it into
the town as well as you can.
It is in this manner that the policy of Europe,
by reftraining the competition in fome employ-
ments to a ſmaller number than would otherwiſe
be difpofed to enter into them, occafions a very
important inequality in the whole of the adyan-
tages and diſadvantages of the different employments
of labor and flock.
[
202 THE NATURE AND CAUSES OF
Secondly, The policy of Europe, by increaſing
the competition in fome employments beyond what
it naturally would be, occafions another inequality
of an oppofite kind in the whole of the advantages
and diſadvantages of the different employments of
labor and ftock.
It has been confidered as of fo much importance
that a proper number of young people fhould be
educated for certain profeffions, that, fometimes the
public, and fometimes the piety of private founders
have eſtabliſhed many penfions, fcholarships, exhi-
bitions, burfaries, &c. for this purpoſe, which
draw many more people into thoſe trades than
could otherwife pretend to follow them. In all
chriſtian countries, I believe, the education of the
greater part of churchmen is paid for in this manner.
Very few of them are educated altogether at their
own expenſe. The long, tedious and expenſive
education, therefore, of thoſe who are, will not
always procure them a fuitable reward, the church
being crowded with people who, in order to get
employment, are willing to accept of a much fmaller
recompence than what fuch an education would
otherwiſe have entitled them to; and in this
manner the competition of the poor takes away
the reward of the rich. It would be indecent,
no doubt, to compare either a curate or chaplain
with a journeyman in any common trade. The
pay of a curate or chaplain, however, may very
properly be confidered as of the fame nature
with the wages of a journeyman. They are, all
three, paid for their work according to the contract
THE WEALTH OF NATIONS.
203
which they may happen to make with their
reſpective ſuperiors. Till after the middle of the
fourteenth century, five marks, containing about
as much filver as ten pounds of our prefent money,
was in England the ufual pay of a curate or a
ftipendiary parifh prieft, as we find it regulated by
the decrees of feveral different national councils. At
the fame period four pence a day, containing the
fame quantity of filver as a fhilling of our prefent
money, was declared to be the pay of a mafter
maſon, and three pence a day, equal to nine
pence of our prefent money, that of a journeyman
mafon*. The wages of both theſe laborers, there-
fore, fuppofing them to have been conftantly
employed, were much fuperior to thoſe of the
curate. The wages of the mafter mafon, fuppofing
him to have been without employment one third
of the year, would have fully equalled them. By
the 12th of Queen Anne, c. 12, it is declared,
"That whereas for want of fufficient maintenance
"and encouragement to curates, the cures have
in feveral places been meanly ſupplied, the biſhop
"is, therefore, empowered to appoint by writing
"under his hand and feal a fufficient certain
66
'
ftipend or allowance, not exceeding fifty and
"not less than twenty pounds, a year." Forty
pounds a year is reckoned at prefent very good
pay for a curate, and notwithſtanding this act
of parliament, there are many curacies under
twenty pounds a year. There are journeymen
* See the Statute of laborers, 25 Ed. IIL
204 THE NATURE AND CAUSES OF
5
fhoe-makers in London who earn forty pounds
a year, and there is fcarce an induftrious workman
of any kind in that metropolis who does not
earn more than twenty. This laft fum indeed
does not exceed what is frequently earned by
common laborers in many country parishes.
Whenever the law has attempted to regulate
the wages of workmen, it has always been rather
to lower them than to raiſe them. But the law
has upon many occafions attempted to raife the
wages of curates and for the dignity of the
church, to oblige the rectors of pariſhes to give
them more than the wretched maintenance which
they themſelves might be willing to accept of.
And in both cafes the law feems to have been
equally ineffectual, and has never either been
able to raiſe the wages of curates, or to fink thoſe
of laborers to the degree that was intended;
becauſe it has never been able to hinder either
the one from being willing to accept of less than
the legal allowance, on account of the indigence
of their fituation and the multitude of their com-
petitors; or the other from receiving more, on
account of the contrary competition of thoſe who
expected to derive either profit or pleaſure from
employing them.
The great benefices and other ecclefiaftical
dignities fupport the honor of the church, not-
withſtanding the mean circumftances of fome of
its inferior members. The refpect paid to the pro-
feffion too makes fome compenfation even to them
for the meannefs of their pecuniary recompence.
THE WEALTH OF NATIONS.
205
In England, and in all Roman Catholic countries,
the lottery of the church is in reality much more
advantageous than is neceffary. The example of
the churches of Scotland, of Geneva, and offeveral
other proteftant churches, may fatisfy us that in ſo
creditable a profeffion, in which education is ſo
eafily procured, the hopes of much more moderate
benefices will draw a fufficient number of learned,
decent, and reſpectable men into holy orders.
In profeffions in which there are no benefices,
fuch as law and phyfic, if an equal proportion
of people were educated at the public expenſe,
the competition would foon be fo great, as to
fink very much their pecuniary reward. It might
then not be worth any man's while to educate
his fon to either of thoſe profeffions at his own
expenſe. They would be entirely abandoned
to fuch as had been educated by thofe public
charities, whofe numbers and neceffities would
oblige them in general to content themſelves with
a very miſerable recompence, to the entire de-
gradation of the now refpectable profeffions of
law and phyfic.
That unprofperous race of men commonly
called men of letters, are pretty much in the fitu-
ation which lawyers and phyficians probably
would be in upon the foregoing fuppofition. In
every part of Europe the greater part of them
have been educated for the church, but have
been hindered by different reafons from entering
into holy orders. They have generally, there-
fore, been educated at the public expenfe, and
206 THE NATURE AND CAUSES OF
their numbers are every-where fo great as com-
monly to reduce the price of their labor to a
very paultry recòmpence.
Before the invention of the art of printing, the
only employment by which a man of letters could
make any thing by his talents, was that of a public
or private teacher, or by communicating to other
people the curious and uſeful knowledge which het
had acquired himſelf: And this is ftill furely a
more honorable, a more uſeful, and in general
even a more profitable employment than that other
of writing for a bookfeller, to which the art of
printing has given occafion. The time and ftudy,
the genius, knowledge, and application requifite
to qualify an eminent teacher of the ſciences, are
at leaſt equal to what is neceffary for the greateſt
practitioners in law and phyfic. But the ufual
reward of the eminent teacher bears no proportion
to that of the lawyer or phyſician; becauſe the
trade of the one is crowded with indigent people
who have been brought up to it at the public
expenſe; whereas thofe of the other two are incum-
bered with very few who have not been educated
at their own. The ufual recompence, however, of
public and private teachers, fmall as it may
appear, would undoubtedly be leſs than it is,
the competition of thoſe yet more indigent men
of letters who write for bread was not taken out
of the market. Before the invention of the art
of printing, a ſcholar and a beggar ſeem to have
been terms very nearly fynonymous. The dif-
ferent governors of the univerfities before that
if
THE WEALTH OF NATIONS.
207
time appear to have often granted licences to their
ſcholars to beg.
In ancient times, before any charities of this
kind had been eſtabliſhed for the education of
indigent people to the learned profeffions, the
rewards of eminent teachers appear to have been
much more confiderable. Ifocrates, in what is called
his diſcourſe againſt the fophifts, reproaches the
teachers of his own times with inconfiftency." They
make the moſt magnificent promiſes to their ſcho-
lars, fays he, and undertake to teach them to be
wife, to be happy, and to be juſt, and in return
for fo important a ſervice they ftipulate the paultry
reward of four or five minæ. They who teach
wiſdom, continues he, ought certainly to be wife
themſelves; but if any man were to fell fuch a
bargain for fuch a price, he would be convicted of
the moſt evident folly." He certainly does not
mean here to exaggerate the reward, and we may
be affured that it was not less than he repreſents it.
Four mine were equal to thirteen pounds fix
fhillings and eight pence: five minæ to fixteen
pounds thirteen fhillings and four pence. Some-
thing not less than the largeſt of thoſe two fums
therefore, muft at that time have been uſually
paid to the moſt eminent teachers at Athens.
Ifocrates himſelf demanded ten minæ, or thirty-
three pounds fix thillings and eight pence, from
each ſcholar. When he taught at Athens, he is
faid to have had a hundred fcholars. I under-
ftand this to be the number whom he taught at
one time, or who attended what we would call
7
208 THE NATURE AND CAUSES OF
one courſe of lectures, a number which will not
appear extraordinary from fo great a city to fo
famous a teacher, who taught too what was at
that time the moſt faſhionable of all ſciences, rhe-
toric. He muſt have made, therefore, by each
courſe of lectures, a thouſand minæ, or 3,333 7.
6 s. 8 d. A thouſand minæ, accordingly, is faid
by Plutarch in another place, to have been his
Didactron, or ufual price of teaching. Many other
eminent teachers in thoſe times appear to have
acquired great fortunes. Gorgias made a prefent to
the temple of Delphi of his own ftatue in ſolid
gold. We muſt not, I prefume, fuppofe that it
was as large as the life. His way of living, as well
as that of Hippias and Protagoras, two other
eminent teachers of thoſe times, is repreſented by
Plato as fplendid even to oftentation. Plato himſelf
is faid to have lived with a good deal of magni-
ficence. Ariſtotle, after having been tutor to
Alexander, and moft munificently rewarded, as it
is univerfally agreed, both by him and his father
Philip, thought it worth while, notwithſtanding,
to return to Athens, in order to reſume the teaching
of his ſchool. Teachers of the fciences were
probably in thoſe times lefs common than they
came to be in an age or two afterwards, when
the competition had probably fomewhat reduced
both the price of their labor and the admiration
for their perſons. The moft eminent of them
however, appear always to have enjoyed a degree
of confideration much fuperior to any of the like
profeffion in the prefent times. The Athenians
fent
THE WEALTH OF NATIONS.
209
fent Carneades the academic, and Diogenes the
ftoic , upon a folemn embaffy to Rome; and
though their city had then declined from its
former grandeur, it was ftill an independent and
confiderable republic. : Carneades too was a
Babylonian by birth, and as there never was a
people more jealous of admitting foreigners to
public offices than the Athenians, their con-
fideration for him muft have been very great.
This inequality is upon the whole, perhaps,
rather advantageous than hurtful to the public
It may fomewhat degrade the profeffion of a
public teacher; but the cheapnefs of literary
education is furely an advantage which greatly
over-balances this trifling inconveniency The
public too might derive ftill greater benefit
from it, if the conftitution of thofe fchools and
colleges, in which education is carried on, was
more reaſonable than it is at preſent through the
greater part of Europe.
Thirdly, The policy of Europe, by obftructing
the free circulation of labor and flock both from
employment to employment, and from place to
place, occafions in fome cafes a very inconvenient
inequality in the whole of the advantages and
diſadvantages of their different employments.
The ftatute of apprenticeſhip obftructs the free
circulation of labor from one employment to
another, even in the fame place. The exclufive
privileges of corporations obftruct it from one
place to another, even in the ſame employment.
It frequently happens that while high wages
W. of N. 1.
14
;
210
THE NATURE AND CAUSES OF
are given to the workmen in one manufacture,
thoſe in another are obliged to content them-
felves with bare fubfiftence. The one is in an
advancing ftate, and has, therefore, a continual
demand for new hands: The other is in a de-
clining ſtate, and the fuper- abundance of hands
is continually increaſing. Thoſe two manufac-
tures may fometimes be in the fame town, and
fometimes in the fame neighbourhood, without
being able to lend the leaft affiftance to one
another. The ftatute of apprenticeſhip may
oppoſe it in the one cafe, and both that and an
exclufive corporation in the other.
In many
different manufactures, however, the operations
are ſo much alike, that the workmen could eaſily
change trades with one another, if thofe abfurd
laws did not hinder them. The arts of weaving
plain linen and plain filk, for example, are al-
moft entirely the fame. That of weaving plain
woollen is fomewhat different; but the differ-
ence is fo infignificant, that either a linen or a
filk weaver might become a tolerable workman
in a very few days. If any of thoſe three capital
manufactures, therefore, were decaying, the
workmen might find a reſource in one of the
other two which was in a more profperous con-
dition; and their wages would neither rife too
high in the thriving, nor fink too low in the
decaying manufacture. The linen manufacture
indeed is, in England, by a particular ftatute,
open to every body; but as it is not much cul-
tivated through the greater part of the country,
THE WEALTH OF NATIONS.
aii
it can afford no general refource to the workmeni
of other decaying manufactures, who, wherever
the ftatute of apprenticeſhip takes place, have no
other choice but either to come upon the parish,
or to work as common laborers, for which, by
their habits, they are much worfe qualified than
for any fort of manufacture that bears any re-
femblance to their own. They generally, there-
fore, chufe to come upon the pariſh.
Whatever obftructs the free circulation of
labor from one employment to another, ob-
ftructs that of ſtock likewife; the quantity of
ſtock which can be employed in any branch of
buſineſs depending very much upon that of the
labor which can be employed in it. Corpora
tion laws, however, give lefs obftruction to the
free circulation of ftock from one place to an-
other than to that of labor. It is every-where
much eaſier for a wealthy merchant to obtain the
privilege of trading in a town corporate, than
for a poor artificer to obtain that of working in it.
The obftruction which corporation laws give
to the free circulation of labor is common, I
believe, to every part of Europe. That which
is given to it by the poor laws is, fo far as I
know, peculiar to England. It confifts in the
difficulty which a poor man finds in obtaining a
fettlement, or even in being allowed to exerciſe
his induſtry in any parifh but that to which he
belongs. It is the labor of artificers and ma-
nufacturers only of which the free circulation is
obftructed by corporation laws. The difficulty
212 THE NATURE AND CAUSES OF
of obtaining fettlements obftructs even that of
common labor. It may be worth while to give
fome account of the rife, progrefs, and prefent
ſtate of this diſorder, the greateſt perhaps of any
in the police of England.
When by the deftruction of monafteries the
poor had been deprived of the charity of thoſe
religious houſes, after fome other ineffectual at-
tempts for their relief, it was enacted by the 43d
of Elizabeth, c. 2. that every parifh fhould be
bound to provide for its own poor; and that over-
feers of the poor fhould be annually appointed,
who, with the churchwardens, fhould raiſe by a
pariſh rate, competent fums for this purpoſe.
By this ftatute the neceffity of providing for
their own poor was indifpenfibly impoſed upon
every pariſh. Who were to be confidered as the
poor of each parifh, became, therefore, a quef-
tion of ſome importance. This queſtion, after
fome variation, was at laft determined by the
13th and 14th of Charles II. when it was en-
acted, that forty days undisturbed refidence
fhould gain any perſon a ſettlement in any pa-
riſh; but that within that time it ſhould be law-
ful for two juftices of the peace, upon complaint
made by the churchwardens or overſeers of the
poor, to remove any new inhabitant to the pariſh
where he was laft legally fettled; unless he either
rented a tenement of ten pounds a year, or could
give fuch fecurity for the diſcharge of the pariſh
where he was then living, as thofe juftices fhould
judge fufficient.
f
THE WEALTH OF NATIONS.
213
Some frauds, it is faid, were committed in con-
fequence of this ftatute; pariſh officers fometimes
bribing their own poor to go clandeftinely to an-
other parifh, and by keeping themſelves concealed
for forty days to gain a fettlement there, to the
diſcharge of that to which they properly belonged.
It was enacted, therefore, by the 1ft of James II.
that the forty days undisturbed refidence of any
perſon neceſſary to gain a fettlement, fhould be
accounted only from the time of his delivering
notice in writing, of the place of his abode and the
number of his family, to one of the churchwardens
or overfeers of the pariſh where he came to dwell.
But parish officers, it ſeems, were not always
more honeſt with regard to their own, than they
had been with regard to other pariſhes, and
fometimes connived at fuch intrufions; receiving
the notice, and taking no proper fteps in con-
fequence of it. As every perfon in a parifli,
therefore, was fuppofed to have an intereft to
prevent as much as poffible their being burdened
by fuch intruders, it was further enacted by the 3d
of William III. that the forty days refidence fhould
be accounted only from the publication of ſuch
notice in writing on Sunday in the church, im-
mediately after divine fervice.
"After all, fays Doctor Burn this kind of
"ſettlement, by continuing forty days after
"publication of notice in writing, is very fel-
"dom obtained, and the defign of the acts is
"not fo much for gaining of fettlements, as for
"the avoiding of them, by perfons coming into
$14
THE NATURE AND CAUSES OF
66
66
a pariſh clandeftinely for the giving of no-
tice is only putting a force upon the parifh to
remove. But if a perfon's fituation is fuch,
that it is doubtful whether he is actually re-
"movable or not, he fhall by giving of notice
રૈ
compel the parifh either to allow him a fettle-
"ment unconteſted, by ſuffering him to con-
tinue forty days; or, by removing him, to try
the right."
This ftatute, therefore, rendered it almoft im-
practicable for a poor man to gain a new ſettle-
ment in the old way, by forty days inhabitancy.
But that it might not appear to preclude altoge-
ther the common people of one pariſh from ever
eſtabliſhing themſelves with fecurity in another,
it appointed four other ways by which a fettle-
ment might be gained without any notice de-
livered or published. The firft was, by being
taxed to pariſh rates and paying them; the fe-
cond, by being elected into an annual pariſh
office, and ferving in it a year; the third,
ferving an apprenticeſhip in the pariſh; the fourth,
by being hired into fervice there for a year,
and continuing in the fame fervice during the
whole of it.
by
Nobody can gain a fettlement by either of the
two firft ways, but by the public deed of the
whole parish, who are too well aware of the con-
fequences to adopt any new-comer who has
nothing but his labor to fupport him, either by
taxing him to parifh rates, or by electing him
into a pariſh office.
THE WEALTH OF NATIONS.
215
No married man can well gain any fettlement
in either of the two laft ways. An apprentice is
ſcarce ever married; and it is exprefsly enacted,
that no married fervant fhall gain any fettlement
by being hired for a year. The principal effects of
introducing fettlement by ſervice, has been to put
out in a great meaſure the old faſhion of hiring
for a year, which before had been fo cuftomary
in England, that even at this day, if no particula
term is agreed upon, the law intends that every
fervant is hired for a year. But mafters are not
always willing to give their fervants a fettlement
by hiring them in this manner; and fervants are
not always willing to be fo hired, becauſe, as
every laſt ſettlement diſcharges all the foregoing,
they might thereby loſe their original fettlement
in the places of their nativity, the habitation of
their parents and relations.
No independent workman, it is evident, whe-
ther laborer or artificer, is likely to gain any new
ſettlement either by apprenticeſhip or by ſervice.
When fuch a perfon, therefore, carried his induf-
try to a new pariſh, he was liable to be removed,
how healthy and induſtrious foever, at the caprice
of any churchwarden or overfeer, unleſs he either
rented a tenement of ten pounds a year, a thing
impoffible for one who has nothing but his labor
to live by; or could give fuch fecurity for the
diſcharge of the pariſh as two juſtices of the peace
fhould judge fufficient. What fecurity they fhall
require, indeed, is left altogether to their difcretion;
but they cannot well require less than thirty pounds,
216 THE NATURE AND CAUSES OF
it having been enacted, that the purchaſe even o
a freehold eftate of lefs than thirty pounds value,
fhall not gain any perfon a fettlement, as not be-
ing fufficient for the difcharge of the parish. But
this is a fecurity which ſcarce any man who lives
by labor can give; and much greater fecurity is
frequently demanded.
In order to reftore in fome meaſure that free
circulation of labor which thoſe different ftatutes
had almoſt entirely taken away, the invention of
certificates was fallen upon. By the 8th and 9th
of William III. it was enacted, that if any perſon
fhould bring a certificate from the pariſh where he
was laſt legally ſettled, ſubſcribed by the church-
wardens and overfeers of the poor, and allowed
by two juftices of the peace, that every other
pariſh ſhould be obliged to receive him; that he
fhould not be removable merely upon account
of his being likely to become chargeable, but only
upon his becoming actually chargeable; and that
then the parish which granted the certificate
fhould be obliged to pay the expenſe both of his
maintenance and of his removal. And in order to
give the moſt perfect fecurity to the parish where
fuch certificated man fhould come to refide, it was
further enacted by the fame ftatute, that he fhould
gain no fettlement there by any means whatever,
except either by renting a tenement of ten pounds
a year, or by ferving upon his own account in an
annual pariſh office for one whole year; and confe-
quently neither by notice nor by ſervice, nor by
apprenticeſhip, nor by paying pariſh rates. By
THE WEALTH OF NATIONS.
217
the 12th of Queen Anne too, ftat. 1. c. 18. it
was further enacted, that neither the fervants nor
apprentices of fuch certificated man fhould gain any
fettlement in the parifh where he refided under
fuch certificate.
How far this invention has reftored that free
circulation of labor which the preceding ftatutes
had almoſt entirely taken away, we may learn
from the following very judicious obſervation of
Doctor Burn. "It is obvious, fays he, that
"there are divers good reafons for requiring certi-
"ficates with perfons coming to ſettle in any place;
"namely, that perfons refiding under them can
. gain no fettlement, neither by apprenticeſhip,
"nor by ſervice, nor by giving notice, nor by
"paying pariſh rates; that they can fettle neither
66
apprentices nor fervants; that if they become
chargeable, it is certainly known whither to
remove them, and the pariſh fhall be paid for
"the removal, and for their maintenance in the
16
mean time; and that if they fall fick, and can-
"not be removed, the parish which gave the
"certificate muft maintain them: none of all which
66 can be without a certificate. Which reaſons
"will hold proportionably for parishes not grant-
"ing certificates in ordinary cafes; for it is far
“more than an equal chance, but that they will
"have the certificated perfons again, and in a
"worfe condition." The moral of this obferva-
tion feems to be, that certificates ought always
to be required by the pariſh where any poor man
-comes to refide, and that they ought very feldom
218 THE NATURE AND CAUSES OF
to be granted by that which he propoſes to leave.
"There is fomething of hardfhip in this matter
"of certificates," fays the fame very intelligent
Author in his hiftory of the Poor Laws,
by
<<
putting it in the power of a parish officer, to
"impriſon a man as it were for life; however
"inconvenient it may be for him to continue at
"that place where he has had the misfortune to
"acquire what is called a fettlement, or what-
"ever advantage he may propoſe to himſelf by
"living elſewhere."
Though a certificate carries along with it no tef-
timonial of good behaviour, and certifies nothing
but that the perfon belongs to the pariſh to which
he really does belong, it is altogether difcretionary
in the parish officers either to grant or to refuſe it.
A mandamus was once moved for, fays Doctor
Burn, to compel the church-wardens and overſeers
to fign a certificate; but the court of King's Bench
rejected the motion as a very ftrange attempt.
The very unequal price of labor which we
frequently find in England in places at no great
diſtance from one another, is probably owing to
the obſtruction which the law of ſettlements gives
to a poor man who would carry his induftry from
one pariſh to another without a certificate. A
lingle man, indeed, who is healthy and induftri-
ous, may fometimes refide by fufferance without
one; but a man with a wife and family who
fhould attempt to do fo, would in moſt pariſhes
be fure of being removed, and if the fingle man
ſhould afterwards marry, he would generally be
THE WEALTH OF NATIONS.
219
removed likewife.
parish, therefore, cannot always be relieved by their
ſuper-abundance in another, as it is conftantly in
Scotland, and, I believe, in all other countries
where there is no difficulty of fettlement. In ſuch
countries, though wages may fometimes rife a little
in the neighbourhood of a great town, or where-
ever elſe there is an extraordinary demand for
labor, and fink gradually as the diſtance from
fuch places increaſes, till they, fall back to the
common rate of the country; yet we never meet
with thoſe ſudden and unaccountable differences in
the wages of neighbouring places which we fome-
times find in England, where it is often more
difficult for a poor man to pafs the artificial
boundary of a pariſh, than an arm of the fea or a
ridge ofhigh mountains, natural boundaries which
fometimes feparate very dictinctly different rates.
of wages in other countries.
The ſcarcity of hands in one
To remove a man who has committed no mif
demeanour from the pariſh where he chufes to
refide, is an evident violation of natural liberty
and juftice. The common people of England,
however, fo jealous of their liberty, but like the
common people of moft other countries never
rightly underſtanding wherein it confifts, have
now for more than a century together fuffered
themſelves to be expoſed to this oppreffion with-
out a remedy. Though men of reflection too
have ſometimes complained of the law of fettle-
ments as a public grievance; yet it has never
been the object of any general popular clamor,
220 THE NATURE AND CAUSES OF
ſuch as that againſt general warrants, an abuſive
practice undoubtedly, but fuch a one as was not
likely to occafion any general oppreffion. There
is ſcarce a poor man in England of forty years of
age, I will venture to fay, who has not in fome
part of his life felt himself moſt cruelly oppreſſed
by this ill-contrived law of fettlements.
I fhall conclude this long chapter with obferving,
that though anciently it was ufual to rate wages,
firſt by general laws extending over the whole
kingdom, and afterwards by particular orders of
the juſtices of peace in every particular county,
both theſe practices have now gone entirely into
diſuſe. "By the experience of above four hundred
66
years," fays Doctor Burn, "it feems time to
"lay afide all endeavours to bring under ftrict
"regulations, what in its own nature feems in-
"capable of minute limitation: for if all perfons
"in the fame kind of work were to receive equal
wages, there would be no emulation, and no
"room left for induftry or ingenuity.
"6
Particular acts of parliament, however, ftill
attempt ſometimes to regulate wages in particu-
lar trades and in particular places. Thus the 8th
of George III. prohibits under heavy penalties
all mafter taylors in London, and five miles
round it, from giving, and their workmen from
accepting, more than two fhillings and feven-
pence halfpenny a day, except in the cafe of a
general mourning. Whenever the legiflature
attempts to regulate the differences between
maſters and their workmen, its counſellors are
THE WEALTH OF NATIONS.
221
always the maſters. When the regulation, there-
fore, is in favor of the workmen, it is always
juft and equitable; but it is fometimes otherwife
when in favor of the mafters. Thus the law
which obliges the maſters in ſeveral different
trades to pay their workmen in money and not
in goods, is quite juſt and equitable. It impoſes.
no real hardſhip upon the maſters. It only obliges
them to pay that value in money, which they
pretended to pay, but did not always really
pay, in goods. This law is in favor of the work-
men; but the 8th of George III. is in favor of
the maſters. When mafters combine together in
order to reduce the wages of their workmen, they
commonly enter into a private bond or agreement,
not to give more than a certain wage under a
certain penalty. Were the workmen to enter
into a contrary combination of the fame kind
not to accept of a certain wage under a certain
penalty, the law would puniſh them very fevere-
ly; and if it dealt impartially, it would treat the
mafters in the fame manner. But the 8th of
George III. enforces by law that very regulation
which maſters fometimes attempt to eſtabliſh by
fuch combinations. The complaint of the work-
men, that it puts the ableft and moſt induftrious
upon the fame footing with an ordinary work-
man, ſeems perfectly well founded.
"
In ancient times too it was uſual to attempt-
to regulate the profits of merchants and other
dealers, by rating the price both of provifions
and other goods. The affize of bread is, fo far
222 THE NATURE AND CAUSES OF
as I know, the only remnant of this ancient ufage.
Where there is an exclufive corporation, it may
perhaps be proper to regulate the price of the
firſt neceſſary of life. But where there is none, the
competition will regulate it much better than any
affize. The method of fixing the affize of bread
eſtabliſhed by the 31ft of George II. could not be
put in practice in Scotland, on account of a defect
in the law; its execution depending upon the office
of clerk of the market, which does not exiſt there.
This defect was not remedied till the 3d of George III.
The want of an afſize occafioned no fenfible incon-
veniency, and the eſtabliſhment of one in the few
places where it has yet taken place, has produced
no fenfible advantage. In the greater part of the
towns of Scotland, however, there is an incor-
poration of bakers who claim exclufive privileges,
though they are not very ftrictly guarded.
The proportion between the different rates both
of wages and profit in the different employments
of labor and ſtock, feems not to be much affected,
as has already been obſerved, by the riches or
power, the advancing, ftationary, or declining
ſtate of the fociety. Such revolutions in the public
welfare, though they affect the general rates both
of wages and profit, muft in the end affect them
equally in all different employments. The pro-
portion between them, therefore, muft remain
the fame, and cannot well be altered, at leaſt for
any confiderable time, by any fuch revolutions.
THE WEALTH OF NATIONS.
223
CHA P. X I.
Of the Rent of Land.
RENT, confidered as the price paid for the uſe
of land, is naturally the higheſt which the tenant
can afford to pay in the actual circumſtances of
the land. In adjuſting the terms of the leafe, the
landlord endeavours to leave him no greater
ſhare of the produce than what is fufficient to
keep up the ſtock from which he furniſhes the
feed, pays the labor, and purchaſes and maintains
the cattle and other inftruments of hufbandry, to-
gether with the ordinary profits of farming ftock in
the neighbourhood. This is evidently the ſmalleſt
fhare with which the tenant can content himſelf
without being a lofer, and the landlord feldom
means to leave him any more. Whatever part of the
produce, or, what is the ſame thing, whatever part
of its price, is over and above this ſhare, he naturally
endeavours to referve to himſelf as the rent of his
land, which is evidently the higheſt the tenant
can afford to pay in the actual circumftances of
the land. Sometimes, indeed, the liberality,
more frequently the ignorance, of the landlord,
makes him accept of fomewhat lefs than this por-
tion; and fometimes too, though more rarely,
the ignorance of the tenant makes him undertake
to pay fomewhat more, or to content himſelf
with fomewhat lefs than the ordinary profits of
farming ſtock in the neighbourhood. This portion,
however, may ftill be confidered as the natural
224 THE NATURE AND CAUSES OF
rent of land, or the rent for which it is naturally
meant that land fhould for the moft part be let.
The rent of land, it may be thought, is fre-
quently no more than a reafonable profit or in-
tereft for the ftock laid out by the landlord upon
its improvement. This, no doubt, may be
partly the cafe upon fome occafions; for it can
ſcarce ever be more than partly the cafe. The
landlord demands a rent even for unimproved
land, and the fuppofed intereſt or profit upon the
expenſe of improvement is generally an addition
to this original rent. Thoſe improvements, befides,
are not always made by the ftock of the landlord
but fometimes by that of the tenant. When the
leaſe comes to be renewed, however, the land-
lord commonly demands the fame augmentation
of rent, as if they had been all made by his own.
He ſometimes demands rent for what is alto-
gether incapable of human improvement. Kelp
is a ſpecies of fea-weed, which, when burnt,
yields an alkaline falt, ufeful for making glaſs,
foap, and for feveral other purpoſes. It grows
in feveral parts of Great Britain, particularly in
Scotland, upon fuch rocks only as lie within the
high water mark, which are twice every day co-
vered with the fea, and of which the produce,
therefore was never augmented by human in-
duftry. The landlord, however, whofe eftate is
bounded by a kelp fhore of this kind, demands
a rent for it as much as for his corn fields.
2
The fea in the neighbourhood of the iſlands
of Shetland is more than commonly abundant in
fish,
THE WEALTH OF NATIONS. 225
}
i
fish, which make a great part of the fubfiftence
of their inhabitants. But in order to profit by
the produce of the water, they muſt have a habi-
tation upon the neighbouring land. The rent of
the landlord is in proportion, not to what the
farmer can make by the land, but to what he can
make both by the land and by the water. It is
partly paid in fea-fiſh; and one of the very few
inftances in which rent makes a part of the price
of that commodity, is to be found in that country.
The rent of land, therefore, confidered as the
price paid for the uſe of the land, is naturally a
monopoly price. It is not at all proportioned
to what the landlord may have laid out upon the
improvement of the land, or to what he can af
ford to take, but to what the farmer can afford
to give.
AL
Such parts only of the produce of land can
commonly be brought to market of which the
ordinary price is fufficient to replace the stock
which muſt be employed in bringing them thither,
together with its ordinary profits. If the ordinary.
price is more than this, the furplus part of it will
naturally go to the rent of the land. If it is not
more, though the commodity may be brought to
market, it can afford no rent to the landlord.
Whether the price is, or is not more, depends
upon the demand..
There are fome parts of the produce of land
for which the demand muft always be ſuch as to
afford a greater price than what is fufficient to
bring them to market; and there are others for
W. of N. 1.
15
226 THE NATURE AND CAUSES OF
which it either may or may not be ſuch as to af-
ford this greater price. The former muſt always
afford a rent to the landlord. The latter fome-
times may, and fometimes may not, according
to different circumſtances.
Rent, it is to be obſerved, therefore, enters
into the compofition of the price of commodi-
ties in a different way from wages and profit.
High or low wages and profit, are the cauſes of
high or low price; high or low rent is the effect
of it. It is becauſe high or low wages and profit
must be paid, in order to bring a particular com-
modity to market, that its price is high or low.
But it is becauſe its price is high or low; a great
deal more, or very little more, or no more, than
what is fufficient to pay thofe wages and profit,
that it affords a high rent, or a low rent, or no
rent at all.
The particular confideration, firſt, of thoſe
parts of the produce of land which always afford
ſome rent; ſecondly, of thoſe which fometimes
may and fometimes may not afford rent; and,
thirdly, of the variations which, in the different
periods of improvement, naturally take place, in
the relative value of thoſe two different forts of
rude produce, when compared both with one an-
other and with manufactured commodities, will
divide this chapter into three parts.
THE WEALTH OF NATIONS. 227
PART I.
Of the Produce of Land which always affords
Rent.
As men, like all other animals, naturally mul-
tiply in proportion to the means of their ſubſiſtence,
food is always, more or leſs, in demand. It can
always purchaſe or command a greater or ſmaller
quantity of labor, and ſomebody can always be
found who is willing to do ſomething, in order to
obtain it. The quantity of labor, indeed, which it
can purchaſe, is not always equal to what it could
maintain, if managed in the moft economical
manner, on account of the high wages which are
fometimes given to labor. But it can always pur-
chafe fuch a quantity of labor as it can maintain,
according to the rate at which that fort of labor is
commonly maintained in the neighbourhood.
But land, in almoſt any ſituation, produces a
greater quantity of food than what is ſufficient to
maintain all the labor neceffary for bringing it
to market, in the moſt liberal way in which that
labor is ever maintained. The furplus too is
always more than fufficient to replace the ftock
which employed that labor, together with its
profits. Something, therefore, always remains for
a rent to the landlord.
The moft defert moors in Norway and Scot-
land produce fome fort of pafture for cattle, of
which the milk and the increaſe are always more
228 THE NATURE AND CAUSES OF
than fufficient, not only to maintain all the labor
neceffary for tending them, and to pay the ordinary
profit to the farmer or owner of the herd or ſtock;
but to afford fome fmall rent to the landlord. The
rent increaſes in proportion to the goodneſs of the
päfture. The fame extent of ground not only
maintains a greater number of cattle, but as they
are brought within a fmaller compaſs, leſs labor
becomes requifite to tend them, and to collect their
produce. The landlord gains both ways; by the
increaſe of the produce, and by the diminution of
the labor which must be maintained out of it.
The rent of land not only varies with its fer-
tility, whatever be its produce, but with its fitu-
ation, whatever be its fertility. Land in the
neighbourhood of a town, gives a greater rent
than land equally fertile in a diftant part of the
country. Though it may coft no more labor
to cultivate the one than the other, it muſt al-
ways coft more to bring the produce of the dif
tant land to market. A greater quantity of la-
bor, therefore, must be maintained out of it;
and the furplus, from which are drawn both the
profit of the farmer and the rent of the landlord,
muſt be diminiſhed. But in remote parts of the
country the rate of profits, as has already been
fhown, is generally higher then in the neigh-
bourhood of a large town. A ſmaller proportion
of this diminiſhed furplus, therefore, muft belong
to the landlord.
Good roads, canals, and navigable rivers, by
diminiſhing the expenſe of carriage, put the remote
'
THE WEALTH OF NATIONS.
229
parts of the country more nearly upon a level with
thoſe in the neighbourhood of the town. They
are upon that account the greateſt of all improve-
ments. They encourage the cultivation of the re-
mote, which muſt always be the moſt extenſive
circle of the country. They are advantageous to
the town, by breaking down the monopoly of
the country in its neighbourhood. They are ad-
vantageous even to that part of the country.
Though they introduce fome rival commodities
into the old market, they open many new markets
to its produce. Monopoly, befides, is a great
enemy to good management, which can never be
univerfally eſtabliſhed but in confequence of that
free and univerfal competition which forces every
body to have recourſe to it for the fake of ſelf-
defence. It is not more than fifty years ago, that
fome of the counties in the neighbourhood of
London petitioned the parliament againſt the
extenfion of the turnpike roads into the remoter
counties. Thoſe remoter counties, they pretend-
ed, from the cheapneſs of labor, would be able
to fell their grafs and corn cheaper in the London
market than themſelves, and would thereby re-
duce their rents, and ruin their cultivation. Their
rents, however, have rifen, and their cultivation
has been improved fince that time.
A corn field of moderate fertility produces a
much greater quantity of food for man, than the
beſt paſture of equal extent. Though its culti-
vation requires much more labor, yet the fur-
plus which remains after replacing the feed and
230 THE NATURE AND CAUSES OF
maintaining all that labor, is likewife much
greater. If a pound of butcher's-meat, therefore,
was never ſuppoſed to be worth more than a pound
of bread, this greater furplus would every-where
be of greater value, and conftitute a greater fund
both for the profit of the farmer and the rent of
the landlord. It ſeems to have done fo univerfally
in the rude beginnings of agriculture.
But the relative values of thofe two different
fpecies of food, bread and butcher's - meat, are
very different in the different periods of agricul-
ture. In its rude beginnings, the unimproved
wilds, which then occupy the far greater part
of the country, are all abandoned to cattle.
There is more butcher's-meat than bread, and
bread, therefore, is the food for which there is
the greateſt competition, and which confequently
brings the greateft price. At Buenos Ayres,
we are told by Ulloa, four reals, one-and-twenty
pence halfpenny fterling, was, forty or fifty years
ago, the ordinary price of an ox, chofen from a
herd of two or three hundred. He fays nothing
of the price of bread, probably becauſe he found
nothing remarkable about it. An ox there, he
fays, cofts little more than the labor of catching
him. But corn can no-where be raiſed without
a great deal of labor, and in a country which
lies upon the river Plata, at that time the direct
oad from Europe to the filver mines of Potoſi,
the money price of labor could not be very
cheap. It is otherwife when cultivation is ex-
tended over the greater part of the country,
THE WEALTH OF NATIONS.
31
There is then more bread than butcher's-meat.
The competition changes its direction, and the
price of butcher's meat becomes greater than the
price of bread.
By the extention befides of cultivation, the
unimproved wilds become infufficient to fupply the
demand for butcher's-meat. A great part of the
cultivated lands muſt be employed in rearing and
fattening cattle, of which the price, therefore,
muſt be ſufficient to pay, not only the labor necef
fary for tending them, but the rent which the
landlord and the profit which the farmer could
have drawn from fuch land employed in tillage.
The cattle bred upon the most uncultivated moors,
when brought to the fame market, are, in propor-
tion to their weight or goodneſs, fold at the ſame
price as thoſe which are reared upon the moſt im-
proved land. The proprietors of thoſe moors profit
by it, and raiſe the rent of their land in proportion
to the price of their cattle. It is not more than a cen-
tury ago that in many parts of the highlands of
Scotland, butcher's-meat was as cheap or
cheaper than even bread made of oat-meal. The
union opened the market of England to the
highland cattle. Their ordinary price is at pre-
fent about three times greater than at the begin
ning of the century, and the rents of many high-
land eftates have been tripled and quadrupled in
the fame time. In almoft every part of Great
Britain a pound of the beſt butcher's-meat is, in
the preſent times, generally worth more than
two pounds of the beſt white bread; and in
232 THE NATURE AND CAUSES OF
plentiful years it is fometimes worth three or four
pounds.
It is thus that in the progrefs of improvement
the rent and profit of unimproved paſture come
to be regulated in fome meaſure by the rent and
profit of what is improved, and theſe again by the
rent and profit of corn. Corn is an annual crop.
Butcher's-meat, a crop which requires four or
five years to grow. As an acre of land, therefore,
will produce a much fmaller quantity of the one
fpecies of food than of the other, the inferiority
of the quantity must be compenfated by the fu-
periority of the price. If it was more than compen-
fated, more corn land would be turned into paſture;
and if it was not compenfated, part of what was
in paſture would be brought back into corn.
This equality, however, between the rent and
profit of grafs and thofe of corn; or of the land of
which the immediate produce is food for cattle,
and of that of which the immediate produce is
food for men; muſt be underſtood to take place
only through the greater part of the improved
lands of a great country. In fome particular lo-
cal fituations it is quite otherwiſe, and the rent
and profit of grafs are much fuperior to what can
be made by corn.
>
Thus in the neighbourhood of a great town,
the demand for milk and for forage to horſes
frequently contribute, together with the high
price of butcher's - meat, to raiſe the value of
grafs above what may be called its natural pro-
portion to that of corn. This local advantage,
THE WEALTH OF NATIONS.
233
1
it is evident, cannot be communicated to the lands
at a diſtance.
Particular circumftances have fometimes ren-
dered fome countries fo populous, that the whole
territory, like the lands in the neighbourhood of a
great town, has not been fufficient to produce both
the graſs and the corn neceffary for the fubfiſtence
of their inhabitants. Their lands, therefore, have
been principally employed in the production of
grafs, the more bulky commodity, and which
cannot be to eaſily brought from a great diſtance;
and corn, the food of the great body of the people,
has been chiefly imported from foreign countries.
Holland is at preſent in this fituation, and a confi-
derable part of ancient Italy feems to have been
fo during the profperity of the Romans. To feed
well, old Cato faid, as we are told by Cicero,
was the firſt and moſt profitable thing in the
management of a private eſtate; to feed tolerably
well, the ſecond; and to feed ill, the third. To
plough, he ranked only in the fourth place of
profit and advantage. Tillage, indeed, in that
part of ancient Italy which lay in the neighbour-
hood of Rome, muft have been very much dif
couraged by the diftributions of corn which were
frequently made to the people, either gra-
tuitouſly, or at a very low price. This corn was
brought from the conquered provinces, of which
feveral, inſtead of taxes, were obliged to furniſh
a tenth part of their produce at a ſtated price,
about fixpence a peck, to the republic. The
low price at which this corn was diftributed to
234 THE NATURE AND CAUSES OF
the people, muft neceffarily have funk the price
of what could be brought to the Roman market
from Latium, or the ancient territory of Rome,
and muſt have difcouraged its cultivation in that
country.
>
In an open country too, of which the princi-
pal produce is corn, a well-encloſed piece of
grafs will frequently rent higher than any corn.
field in its neighbourhood. It is convenient for
the maintenance of the cattle employed in the
cultivation of the corn, and its high rent is in
this caſe, not ſo properly paid from the value of
its own produce, as from that of the corn lands
which are cultivated by means of it. It is likely
to fall, if ever the neighbouring lands are com-
pletely encloſed. The preſent high rent of en-
cloſed land in Scotland feems owing to the
ſcarcity of encloſure, and will probably laft no
longer than that ſcarcity. The advantage of
encloſure is greater for pafture than for corn. It
faves the labor of guarding the cattle, which
feed better too when they are not liable to be
diſturbed by their keeper or his dog.
But where there is no local advantage of this
kind, the rent and profit of corn, or whatever elſe
is the common vegetable food of the people, muft
naturally regulate, upon the land which is fit for
producing it, the rent and profit of paſture.
The uſe of the artificial graffes, of turnips,
carrots, cabbages, and the other expedients
which have been fallen upon to make an equal
quantity of land feed a greater number of cattle
1
THE WEALTH OF NATIONS.
235
than when in natural grafs, fhould ſomewhat
reduce, it might be expected, the fuperiority
which, in an improved country, the price of
butcher's-meat naturally has over that of bread.
It ſeems accordingly to have done fo; and there
is ſome reaſon for believing that, at leaſt in the
London market, the price of butcher's-meat in
proportion to the price of bread, is a good deal
lower in the prefent times than it was in the
beginning of the laſt century.
In the appendix to the Life of prince Henry,
Doctor Birch has given us an account of the
prices of butcher's-meat as commonly paid by
that prince. It is there faid, that the four quar-
ters of an ox weighing fix hundred pounds
ufually coft him nine pounds ten fhillings, or
thereabouts; that is, thirty-one fhillings and
eight pence per hundred pounds weight. Prince
Henry died on the 6th of November 1612, in
the nineteenth year of his age.
In March 1774, there was a parliamentary
inquiry into the cauſes of the high price of pro-
vifions at that time. It was then, among other
proofs to the fame purpoſe, given in evidence by a
Virginia merchant, that in March 1763, he had
victualled his fhips for twenty-four or twenty-
five fhillings the hundred weight of beef, which
he confidered as the ordinary price; whereas, in
that dear year, he had paid twenty-feven fhillings
for the fame weight and fort. This high price
in 1764 is however, four fhillings and eight-
pence cheaper than the ordinary price paid by
236 THE NATURE AND CAUSES OF
prince Henry; and it is the beſt beef only, it
muſt be obferved, which is fit to be falted for
thoſe diftant voyages.
The price paid by prince Henry amounts to
3 d. per pound weight of the whole carcaſe, coarſe
and choice pieces taken together; and at that
rate the choice pieces could not have been fold
by retail for lefs than 4d. or 5d. the pound.
In the parliamentary inquiry in 1764, the
witneſſes ftated the price of the choice pieces of
the best beef to be to the confumer 4d. and 44d.
the pound; and the coarſe pieces in general to
be from ſeven farthings to 2d. and 23d.; and this
they ſaid was in general one half-penny dearer
than the fame fort of pieces had ufually been
fold in the month of March. But even this high
price is ftill a good deal cheaper than what we
can well fuppofe the ordinary retail price to have
been in the time of prince Henry.
During the twelve firft years of the laft cen-
tury, the average price of the beſt wheat at the
Windfor market was 17. 18s. 3 d. the quarter of
nine Winchefter bufhels.
But in the twelve years preceding 1764, in-
cluding that year, the average price of the fame
meaſure of the beft wheat at the fame market
was 21. 18. d.
In the twelve firft years of the laft century,
therefore, wheat appears to have been a good
deal cheaper, and butcher's - meat a good deal
dearer, than in the twelve years preceding 1764,
including that year.
THE WEALTH OF NATIONS. 1
237
In all great countries the greater part of the
cultivated lands are employed in producing either
food for men or food for cattle. The rent and
profit of theſe regulate the rent and profit of all
other cultivated land. If any particular produce
afforded lefs, the land would foon be turned into
corn or paſture; and if any afforded more, fume
part of the lands in corn or pafture would foon
be turned to that produce.
Thoſe productions, indeed, which require either
a greater original expenfe of improvement, or a
greater annual expenfe of cultivation, in order to fit
the land for them, appear commonly to afford, the
one a greater rent, the other a greater profit than
corn or paiture. This fuperiority, however, will
feldom be found to amount to more than a reaſonable
intereft or compenfation for this fuperior expenſe.
In a hop garden, a fruit garden, a kitchen
garden, both the rent of the landlord, and the
profit of the farmer, are generally greater than in
a corn or grafs field. But to bring the ground
into this condition requires more expenſe.
Hence a greater rent becomes due to the land-
lord. It requires too a more attentive and ſkil-
ful management. Hence a greater profit be-
comes due to the farmer. The crop too, at leaſt
in the hop and fruit garden, is more precarious.
Its price, therefore, befides compenfating all oc-
cafional loffes, muſt afford fomething like the
profit of enfurance. The circumftances of gar-
deners, generally mean, and always moderate,
may fatisfy us that their great ingenuity is not
238 THE NATURE AND CAUSES OF
commonly over-recompenfed. Their delightful art
is practiſed by ſo many rich people for amufement,
that little advantage is to be made by thoſe who prac-.
tiſe it for profit; becauſe the perfons who ſhould
naturally be their beſt cuſtomers, fupply themſelves
with all their moſt precious productions.
The advantage which the landlord derives
from fuch improvements feems at no time to
have been greater than what was fufficient to
compenſate the original expenſe of making them.
In the ancient huſbandry, after the vineyard, a
well-watered kitchen garden feems to have been
the part of the farm which was fuppofed to yield
the moſt valuable produce. But Democritus, who
wrote upon huſbandry about two thouſand years
ago,
and who was regarded by the ancients as
one of the fathers of the art, thought they did
not act wiſely who encloſed a kitchen garden.
The profit, he ſaid, would not compenſate the
expenſe of a ſtone wall; and bricks (he meant
I ſuppoſe, bricks baked in the fun) mouldered
with the rain, and the winter ftorm, and required
continual repairs. Columella, who reports this
judgment of Democritus, does not controvert it,
but propoſes a very frugal method of encloſing
with a hedge of brambles and briars, which he
fays, he had found by experience to be both a
laſting and an impenetrable fence; but which, it
feems, was not commonly known in the time of
Democritus. Palladius adopts the opinion of
Columella, which had before been recommended
by Varro. In the judgment of thofe ancient
THE WEALTH OF NATIONS.
239
9
improvers, the produce of a kitchen garden had,
it ſeems, been little more than fufficient to pay
the extraordinary culture and the expenſe of
watering; for in countries fo near the fun, it
was thought proper, in thofe times as in the
preſent, to have the command of a ftream of
water which could be conducted to every bed
in the garden. Through the greater part of
Europe, a kitchen garden is not at preſent fup-
poſed to deſerve a better encloſure than that re-
commended by Columella. In Great Britain,
and fome other northern countries, the finer
fruits cannot be brought to perfection but by
the affiftance of a wall. Their price, therefore,
in fuch countries muſt be fufficient to pay the
expenſe of building and maintaining what they
cannot be had without. The fruit-wall frequently
furrounds the kitchen garden, which thus enjoys
the benefit of an encloſure which its own produce
could feldom pay for.
That the vineyard, when properly planted
and brought to perfection, was the most valuable
part of the farm, feems to have been an un-
doubted maxim in the ancient agriculture, as it
is in the modern through all the wine countries.
But whether it was advantageous to plant a new
vineyard, was a matter of diſpute among the an-
cient Italian hufbandmen, as we learn from Co-
lumella. He decides, like a true lover of all
curious cultivation, in favor of the vineyard, and
endeavours to fhow, by a compariſon of the profit
and expenfe, that it was a moft advantageous
240 THE NATURE AND CAUSES OF
¿
improvement. Such compariſons, however, be
tween the profit and expenſe of new projects, are
commonly very fallacious, and in nothing more fo
than in agriculture. Had the gain actually made by
fuch plantations been commonly as great as he
imagined it might have been, there could have been
no diſpute about it. The fame point is frequently at
this day a matter of controverfy in the wine coun-
tries. Their writers on agriculture, indeed, the
lovers and promoters of high cultivation, feem
generally difpofed to decide with Columella in favor
of the vineyard. In France the anxiety of the pro-
prietors of the old vineyards to prevent the
planting of any new ones; feems to favor their
opinion, and to indicate a confcioufnefs in thoſe
who muſt have the experience, that this fpecies
of cultivation is at prefent in that country more
profitable than any other. It ſeems at the ſame
time, however, to indicate another opinion, that
this fuperior profit can laſt no longer than the
laws which at preſent reftrain the free cultiva-
tion of the vine. In 1731, they obtained an
order of council, prohibiting both the planting
of new vineyards, and the renewal of thoſe old
ones, of which the cultivation had been inter-
rupted for two years; without à particular per-
miſſion from the king, to be granted only in
confequence of an information from the intend-
ant of the province, certifying that he had ex-
amined the land, and that it was incapable of
any other culture. The pretence of this order
was the ſcarcity of corn and pafture, and the
;
fuper-
THE WEALTH OF NATIONS.
2.11
fuper- abundance of wine. But had this fuper-
abundance been real, it would, without any order
of council, have effectually prevented the plan-
tation of new vineyards, by reducing the profits
of this fpecies of cultivation below their natural
proportion to thoſe of corn and pafture. With re-
gard to the fuppofed fcarcity of corn occafioned by
the multiplication of vineyards, corn is nowhere in
France more carefully cultivated than in the wine
provinces, where the land is fit for producing it; as
in Burgundy, Guienne, and the Upper Languedoc.
The numerous hands employed in the one ſpecies
of cultivation neceffarily encourage the other, by
affording a ready market for its produce. To
diminiſh the number of thoſe who are capable of
paying for it, is furely a moft unpromiſing expe-
dient for encouraging the cultivation of corn. It
is like the policy which would promote agriculture
by difcouraging manufactures.
The rent and profit of thoſe productions,
therefore, which require either a greater original
expenſe of improvement in order to fit the land
for them, or a greater annual expenfe of culti-
vation, though often much fuperior to thofe of
corn and paſture, yet when they do no more
than compenſate fuch extraordinary expenfe, are
in reality regulated by the rent and profit of thoſe
common crops.
It fometimes happens, indeed, that the quan-
tity of land which can be fitted for fome parti-
cular produce, is too ſmall to fupply the effectual
demand. The whole produce can be diſpoſed
W. of N. 1.
16
242
THE NATURE AND CAUSES OF
of to thoſe who are willing to give fomewhat
more than what is fufficient to pay the whole rent,
wages and profit neceffary for raifing and bringing
it to market, according to their natural rates, or
according to the rates at which they are paid in
the greater part of other cultivated land. The fur-
plus part of the price which remains after defraying
the whole expenſe of improvement and cultivation
may commonly, in this cafe, and in this cafe only,
bear no regular proportion to the like furplus in
corn or paſture, but may exceed it in almoſt any
degree; and the greater part of this exceſs naturally
goes to the rent of the landlord.
The ufual and natural proportion, for example,
between the rent and profit of wine and thofe of
corn and paſture, muſt be underflood to take
place only with regard to thofe vineyards which
produce nothing but good common wine, fuch as
can be raiſed almoſt any where, upon any light,
gravelly, or fandy foil, and which has nothing to
recommend it but its ftrength and wholeſomeneſs.
It is with fuch vineyards only that the common
land of the country can be brought into compe-
tition; for with thofe of a peculiar quality it is
evident that it cannot.
The vine is more affected by the difference of
foils than any other fruit tree. From fome it
derives a flavor which no culture or manage-
ment can equal, it is fuppofed, upon any other.
This flavor, real or imaginary, is fometimes
peculiar to the produce of a few vineyards;
ſometimes it extends through the greater part of
THE WEALTH OF NATIONS.
243
1
a fmall district, and fometimes through a con-
fiderable part of a large province. The whole
quantity of fuch wines that is brought to market
falls fhort of the effectual demand, or the demand
of thoſe who would be willing to pay the whole
rent, profit and wages neceffary for preparing and
bringing them thither, according to the ordinary
rate, or according to the rate at which they are
paid in common vineyards. The whole quantity,
therefore, can be difpofed of to thoſe who are
willing to pay more, which neceffarily raiſes the
price above that of common wine. The difference
is greater or leſs, according as the faſhionableneſs
and ſcarcity of the wine render the competition of
the buyers more or lefs eager. Whatever it be,
the greater part of it goes to the rent of the land-
lord. For though fuch vineyards are in general
more carefully cultivated than moſt others, the
high price of the wine feems to be, not fo much
the effect, as the cauſe of this careful cultivation.
In fo valuable a produce the lofs occafioned by
negligence is fo great as to force even the moſt
careleſs to attention. A ſmall part of this high
price, therefore, is fufficient to pay the wages of
the extraordinary labor beſtowed upon their cul-
tivation, and the profits of the extraordinary ſtock
which puts that labor into motion.
·
The fugar colonies poffeffed by the European
nations in the Weft-Indies, may be compared to
thoſe precious vineyards. Their whole produce
falls fhort of the effectual demand of Europe, and
can be difpofed of to thoſe who are willing to
!
244 THE NATURE AND CAUSES OF
M
give more than what is fufficient to pay the whole
rent, profit and wages neceffary for preparing and
bringing it to market, according to the rate at
which they are commonly paid by any other pro-
duce. In Cochin-china the fineft white fugar com-
monly fells for three piafters the quintal, about
thirteen fhillings and fixpence of our money, as
we are told by * Mr. Poivre, a very careful ob-
ſerver of the agriculture of that country. What is
there called the quintal weighs from a hundred and
fifty to two hundred Paris pounds, or a hundred
and ſeventy five Paris pounds at a medium, which
reduces the price of the hundred weight Engliſh to
about eight fhillings fterling, not a fourth part of
what is commonly paid for the brown or muſkavada
fugars imported from our colonies, and not a fixth
part of what is paid for the fineft white fugar.
The greater part of the cultivated lands in Cochin-
china are employed in producing corn and rice,
the food of the great body of the people. The
reſpective prices of corn, rice, and fugar, are
there probably in the natural proportion, or in
that which naturally takes place in the different
crops of the greater part of cultivated land, and
which recompenfes the landlord and farmer, as
nearly as can be computed, according to what is
ufually the original expenſe of improvement and
the annual expenſe of cultivation. But in our ſugar
colonies the price of fugar bears no fuch propor-
tion to that of the produce of a rice or corn field
either in Europe or in America. It is commonly
* Voyages d'un Philofophe.
THE WEALTH OF NATIONS.
245
faid, that a fugar planter expects that the rum and
the molaffes fhould defray the whole expenſe of
his cultivation, and that his fugir fhould be all
clear profit. If this be true, for I pretend not to
affirm it, it is as if a corn tarmer expected to defray
the expenſe of his cultivation with the chaff and the
ſtraw, and that the grain fhould be all clear profit.
We fee frequently focieties of merchants in Londer.
and other trading towns, purchaſe wafte lands in
our fugar colonies, which they expect to improve
and cultivate with profit by means of factors and
agents; notwithſtanding the great diſtance and the
uncertain returns, from the defective adminiftra-
tion of juftice in thole countries. Nobody will
attempt to improve and cultivate in the fame
manner the moft fertile lands of Scotland, Ire-
land, or the corn provinces of North-America;
though from the more exact adminiftration of
juſtice in theſe countries, more regular returns
might be expected.
In Virginia and Maryland the cultivation of
tobacco is preferred, as more profitable, to that
of corn. Tobacco might be cultivated with
advantage through the greater part of Europe;
but in almoſt every part of Europe it has become
a principal ſubject of taxation, and to collect a
tax from every different farm in the country.
where this plant might happen to be cultivated,
would be more difficult, it has been fuppofed,
than to levy one upon its importation at the
cuftom - houfe. The cultivation of tobacco has
upon this account been moſt abfurdly prohibited
246 THE NATURE AND CAUSES OF
through the greater part of Europe, which necef-
farily gives a fort of monopoly to the countries
where it is allowed, and as Virginia and Maryland
produce the greateft quantity of it, they fhare
largely, though with fome competitors, in the
advantage of this monopoly. This cultivation of to-
bacco, however, feems not to be fo advantageous.
as that of fugar. I have never even heard of any
tobacco plantation that was improved and culti-
vated by the capital of merchants who refided in
Great Britain, and our tobacco colonies fend us
home no fuch wealthy planters as we fee frequently
arrive from our fugar iilands. Though from the
preference given in thoſe colonies to the cultivation
of tobacco above that of corn, it would appear that
the effectual demand of Europe for tobacco is not
completely ſupplied, it probably is more nearly fo
than that for ſugar: And though the prefent price
of tobacco is probably more than fufficient to pay
the whole rent, wages and profit neceffary for pre-
paring and bringing it to market, according to
the rate at which they are commonly paid in corn
land; it muſt not be fa much more as the preſent
price of fugar. Our tobacco planters, accordingly,
have ſhown the fame fear of the fuper - abundance
of tobacco, which the proprietors of the old
vineyards in France have of the fuper - abundance
of wine. By act of affembly they have reftrained
its cultivation to fix thouſand plants, fuppofed
to yield a thouſand weight of tobacco, for every
negro between fixteen and fixty years of age,
Such a negro, over and above this quantity of
THE WEALTH OF NATIONS.
247
tobacco, can manage, they reckon, four acres
of Indian corn. To prevent the market from
being overstocked too, they have fometimes, in
plentiful years, we are told by Dr. Douglas *, (I
ſuſpect he has been ill informed) burnt a certain
quantity of tobacco for every negro, in the fame
manner as the Dutch are faid to do of fpices. If
fuch violent methods are neceffary to keep up the
prefent price of tobacco, the fuperior advantage
of its culture over that of corn, if it ftill has any,
will not probably be of long continuance.
It is in this manner that the rent of the cul-
tivated land, of which the produce is human food,
regulates the rent of the greater part of other
cultivated land. No particular produce can long
afford lefs; becauſe the land would immediately
be turned to another ufe: And if any particular
produce commonly affords more, it is becauſe the
quantity of land which can be fitted for it is too
fmall to fupply the effectual demand.
In Europe corn is the principal produce of
land which ferves immediately for human food.
Except in particular fituations, therefore, the rent
of corn land regulates in Europe that of all other
cultivated land. Britain need envy neither the
vineyards of France nor the olive plantations of
Italy. Except in particular fituations, the value
of thefe is regulated by that of corn, in which the
fertility of Britain is not much inferior to that of
either of thofe two countries.
* Douglas's Summary, vol. ii. p. 372, 373.
248 THE NATURE AND CAUSES OF
A
If in any country the common and favorite
vegetable food of the people fhould be drawn
from a plant of which the most common land,
with the fame or nearly the fame culture, pro-
duced a much greater quantity than the moſt
fertile does of corn, the rent of the landlord, or
the furplus quantity of food which would remain
to him, after paying the labor and replacing the
ftock of the farmer together with its ordinary
profits, would neceffarily be much greater. What-
ever was the rate at which labor was commonly
maintained in that country, this greater furplus
could always maintain a greater quantity of it,
and confequently enable the landlord to purchaſe
or command a greater quantity of it. The real
value of his rent, his real power and authority,
his command of the neceffaries and conveniencies
of life with which the labor of other people
could ſupply him, would neceffarily be much
greater.
A rice field produces a much greater quantity
of food than the moft fertile corn field. Two crops
in the year from thirty to fixty bufhels each, are
faid to be the ordinary produce of an acre. Though
its cultivation, therefore, requires more labor, a
much greater furplus remains after maintaining all
that labor. In thoſe rice countries, therefore,
where rice is the common and favorite vegetable
food of the people, and where the cultivators are
chiefly maintained with it, a greater fhare of this
greater furplus fhould belong to the landlord
than in corn countries. In Carolina, where the
THE WEALTH OF NATIONS.
249
planters, as in other Britiſh colonies, are gene-
rally both farmers and landlords, and where rent
confequently is confounded with profit, the cul-
tivation of rice is found to be more profitable
than that of corn, though their fields produce
only one crop in the year, and though, from the
prevalence of the cuftoms of Europe, rice is not
there the common and favorite vegetable food of
the people.
A good rice field is a bog at all ſeaſons, and
at one ſeaſon a bog covered with water. It is
unfit either for corn, or pafture, or vineyard, or,
indeed, for any other vegetable produce that is
very uſeful to men: And the lands which are fit
for thoſe purpoſes, are not fit for rice. Even in
the rice countries, therefore, the rent of rice lands
cannot regulate the rent of the other cultivated.
land which can never be turned to that produce.
The food produced by a field of potatoes is
not inferior in quantity to that produced by a
field of rice, and much fuperior to what is pro-
duced by a field of wheat. Twelve thouſand
weight of potatoes from an acre of land is not a
greater produce than two thouſand weight of
wheat. The food or folid nouriſhment, indeed,
which can be drawn from each of thoſe two
plants, is not altogether in proportion to their
weight, on account of the watery nature of po-
tatoes. Allowing, however, half the weight of
this root to go to water, a very large allowance,
ſuch an acre of potatoes will ftill produce fix
thouſand weight of folid nouriſhment, three
250 THE NATURE AND CAUSES OF
times the quantity produced by the acre of wheat.
An acre of potatoes is cultivated with lefs expenſe
than an acre of wheat; the fallow, which gene-
rally precedes the fowing of wheat, more than
compenfating the hoeing and other extraordinary
culture which is always given to potatoes. Should
this root ever become in any part of Europe,
like rice in fon.e rice countries, the common and
favorite vegetable food of the people, fo as to
occupy the fame proportion of the lands in tillage
which wheat and other forts of grain for human
food do at prefent, the fame quantity of cultivated
land would maintain a much greater number of
people, and the laborers being generally fed with
poratoes, a greater furplus would remain after re-
placing all the ſtock and maintaining all the labor
employed in cultivation. A greater. fhare of this
furplus too would belong to the landlord. Po-
pulation would increaſe, and rents would rife
much beyond what they are at prefent.
The land which is fit for potatoes, is fit for
almost every other ufeful vegetable. If they oc-
cupied the fame proportion of cultivated land
which corn does at prefent, they would regulate,
in the fame manner, the rent of the greater part
of other cultivated land.
In ſome parts of Lancaſhire it is pretended,
I have been told, that bread of oatmeal is a
heartier food for laboring people than wheaten
bread, and I have frequently heard the fame doc-
trine held in Scotland. I am, however, fomewhat
doubtful of the truth of it. The common people
1
251
THE WEALTH OF NATIONS.
in Scotland, who are fed with oatmeal, are in
general neither fo ftrong, nor fo handfome as the
fame rank of people in England, who are fed
with wheaten bread. They neither work fo well,
nor look fo well; and as there is not the fame
difference between the people of fafhion in the
two countries, experience would feem to fhow,
that the food of the common people in Scot-
land is not fo fuitable to the human conftitution
as that of their neighbours of the fame rank in
England. But it ſeems to be otherwife with
potatoes. The chairmen, porters, and coalheavers
in London, and thoſe unfortunate women who
live by proſtitution, the ftrongeft men and the
moſt beautiful women perhaps in the Britiſh domi-
nions, are faid to be the greater part of them, from
the loweſt rank of people in Ireland, who are
generally fed with this root. No food can afford
a more decifive proof of its nourishing quality,
or of its being peculiarly fuitable to the health of
the human conftitution.
It is difficult to preſerve potatoes through the
year,
and impoffible to ftore them like corn,
for two or three years together. The fear of not
being able to fell them before they rot, dif-
courages their cultivation, and is, perhaps, the
chief obftacle to their ever becoming in any great
country, like bread, the principal vegetable food
of all the different ranks of the people.
252 THE NATURE AND CAUSES OF
PART II.
Of the Produce of Land which fometimes does,
and fometimes does not, afford Rent.
HUMA
UMAN food feems to be the only produce
of land which always and neceffarily affords fome
rent to the landlord. Other forts of produce
fometimes may and fometimes may not, accord-
ing to different circumftances.
After food, clothing and lodging are the two
great wants of mankind.
Land in its original rude ſtate can afford the
materials of clothing and lodging to a much
greater number of people than it can feed. In its
improved ſtate it can fometimes feed a greater num-
ber of people than it can fupply with thoſe mate-
rials; at leaſt in the way in which they require them,
and are willing to pay for them. In the one ftate,
therefore, there is always a fuper-abundance of
thofe materials, which are frequently, upon that
account, of little or no value. In the other there is
often a ſcarcity, which neceffarily augments their
value. In the one ftate a great part of them is
thrown away as uſeleſs, and the price of what is
ufed is confidered as equal only to the labor and
expenſe of fitting it for uſe, and can, therefore,
afford no rent to the landlord. In the other they are
all made uſe of, and there is frequently a demand
for more than can be had. Somebody is always
willing to give more for every part of them than
THE WEALTH OF NATIONS.
253
what is fufficient to pay the expenſe of bringing
them to market. The price; therefore, can always
afford ſome rent to the landlord.
The fkins of the larger animals were the ori-
ginal materials of clothing. Among nations of
hunters and thepherds, therefore, whofe food con-
fifts chiefly in the fleſh of thoſe animals, every
man, by providing himſelf with food provides
himſelf with the materials of more clothing than
he can wear. If there was no foreign commerce,
the greater part of them would be thrown away
as things of no value. This was probably the
cafe among the hunting nations of North-America,
before their country was diſcovered by the Euro-
peans, with whom they now exchange their fur-
plus peltry, for blankets, fire-arms, and brandy,
which gives it ſome value. In the preſent com-
mercial ſtate of the known world, the moſt bar-
barous nations, I believe, among whom land pro-
perty is eſtabliſhed, have fome foreign commerce
of this kind, and find among their wealthier neigh-
bours fuch a demand for all the materials of cloth-
ing, which their land produces, and which can
neither be wrought up nor confumed at home, as
raiſes their price above what it coſts to ſend them
to thoſe wealthier neighbours. It affords, there-
fore, fome rent to the landlord. When the
greater
part of the highland cattle were confumed on
their own hills, the exportation of their hides
made the moft confiderable article of the com-
merce of that country, and what they were ex-
changed for afforded fome addition to the rent
254 THE NATURE AND CAUSES OF
of the highland eftates. The wool of England,
which in old times could neither be confumed nor
wrought up at home, found a market in the then
wealthier and more induſtrious country of Flanders,
and its price afforded fomething to the rent of the
land which produced it. In countries not better
cultivated than England was then, or than the
highlands of Scotland are now, and which had
no foreign commerce, the materials of clothing
would evidently be fo fuper-abundant, that a great
part of them would be thrown away as ufelefs,
and no part could afford any rent to the landlord.
The materials of lodging cannot always be
tranſported to fo great a diftance as thofe of
clothing, and do not fo readily become an ob-
ject of foreign commerce. When they are fuper-
abundant in the country which produces them,
it frequently happens, even in the preſent com-
mercial ſtate of the world, that they are of no
value to the landlord. A good ftone quarry in
the neighbourhood of London would afford a
confiderable rent. In many parts of Scotland
and Wales it affords none. Barren timber for
building is of great value in a populous and
well-cultivated country and the land which pro-
duces it affords a confiderable rent. But in
many parts of North - America the landlord
would be much obliged to any body who would
carry away the greater part of his large trees.
In fome parts of the highlands of Scotland the
bark is the only part of the wood which, for
want of roads and water-carriage, can be ſent to
مجھ
THE WEALTH OF NATIONS,
255
market. The timber is left to rot upon the
ground. When the materials of lodging are fo
fuper- abundant, the part made ufe of is worth
only the labor and expenſe of fitting it for that uſe.
It affords no rent to the landlord, who generally
grants the ufe of it to whoever takes the trouble
of aſking it. The demand of wealthier nations,
however, ſometimes enables him to get a rent for
it. The paving of the ftreets of London has
enabled the owners of fome barren rocks on the
coaft of Scotland to draw a rent from what never
afforded any before. The woods of Norway and
of the coafts of the Baltic, find a market in many
parts of Great Britain which they could not find
at home, and thereby afford fome rent to their
proprietors.
Countries are populous, not in proportion to the
number of people whom their produce can clothe
and lodge, but in proportion to that of thofe whom
it can feed. When food is provided, it is eaſy to
find the necelary clothing and lodging. But
though theſe are at hand, it may often be difficult
to find food. In fome parts even of the Britiſh domi-
nions what is called A Houſe, may be built by one
day's labor of one man. The fimpleft fpecies of
clothing, the fkins of animals require fomewhat
more labor to dreſs and prepare them for ufe. They
do not, however, require a great deal. Among
favage and barbarous nations, a hundredth or lit-
tle more than a hundredth part of the labor of
the whole year, will be fufficient to provide them
with fuch clothing and lodging as fatisfy the
256 THE NATURE AND CAUSES OF
greater part of the people. All the other ninety-
nine parts are frequently no more than enough
to provide them with food.
But when by the improvement and cultivation
of land the labor of one family can provide food
for two, the labor of half the ſociety becomes
fufficient to provide food for the whole. The other
half, therefore, or at leaft the greater part of them,
can be employed in providing other things, or in
fatisfying the other wants and fancies of mankind.
Clothing and lodging, houſehold furniture, and
what is called Equipage, are the principal objects
of the greater part of thofe wants and fancies.
The rich man confumes no more food than his
poor neighbour. In quality it may be very differ-
ent,
and to felect and prepare it may require
more labor and art; but in quantity it is very
nearly the fame. But compare the fpacious palace
and great wardrobe of the one, with the hovel
and the few rags of the other, and you will be
fenfible that the difference between their cloth-
ing, lodging and houfehold furniture, is almoft as
great in quantity as it is in quality. The defire
of food is limited in every man by the narrow
capacity of the human ftomach; but the defire
of the conveniencies and ornaments of building,
dreſs, equipage, and houſehold furniture, ſeems
to have no limit or certain boundary. Thoſe,
therefore, who have the command of more food
than they themſelves can confume, are always
willing to exchange the furplus, or, what is the
fame thing, the price of it, for gratifications of
this
THE WEALTH OF NATIONS.
257
this other kind. What is over and above fatif
fying the limited defire, is given for the amuſe=
ment of thofe defires which cannot be fatisfied.
but ſeem to be altogether endleſs.
The poor,
in order to obtain food, exert themſelves to gra-
tify thoſe fancies of the rich, and to obtain it
more certainly, they vie with one another in the
cheapnefs and perfection of their work. The
number of workmen increaſes with the increafing
quantity of food, or with the growing improve-
ment and cultivation of the lands; and as the na-
ture of their bufinefs admits of the utmoſt ſubdivi-
fions of labor, the quantity of materials which they
can work up, increaſes in a much greater propor-
tion than their numbers. Hence arifes a demand
for every fort of material which human invention
can employ, either ufefully or ornamentally, in
building, dreſs, equipage, or houſehold furniture;
for the foffils and minerals contained in the bowels
of the earth; the precious metals, and the pre-
cious ftones.
Food is in this manner, not only the original
fource of rent, but every other part of the produce
of land which afterwards affords rent, derives that
part of its value from the improvement of the
powers of labor in producing food by means of the
improvement and cultivation of land.
Thofe other parts of the produce of land,
however, which afterwards afford rent, do not
afford it always. Even in improved and culti-
vated countries, the demand for them is not al-
ways fuch as to afford a greater price than what-
W. of N. 1.
17
258 THE NATURE AND CAUSES OF
is fufficient to pay the labor, and replace, to-
gether with its ordinary profits, the ſtock which
muſt be employed in bringing them to market.
Whether it is or is not fuch, depends upon
different circumftances.
Whether a coal-mine, for example, can afford
any rent, depends partly upon its fertility, and
partly upon its fituation.
A mine of any kind may be faid to be either
fertile or barren, according as the quantity of
mineral which can be brought from it by a cer-
tain quantity of labor, is greater or leſs than what
can be brought by an equal quantity from the
greater part of other mines of the fame kind.
Some coal-mines advantageoufly fituated, can-
not be wrought on account of their barrenneſs.
The produce does not pay the expenſe. They
can afford neither profit nor rent.
There are fome of which the produce is
barely fufficient to pay the labor, and replace,
together with its ordinary profits, the ftock em-
ployed in working them. They afford fome
profit to the undertaker of the work, but no rent
to the landlord. They can be wrought advan-
tageouſly by nobody but the landlord, who being
himſelf undertaker of the work, gets the ordinary
profit of the capital which he employs in it.
Many coal-mines in Scotland are wrought in
this manner, and can be wrought in no other.
The landlord will allow nobody elfe to work
them without paying fome rent, and nobody
can afford to pay any.
THE WEALTH OF NATIONS.
259
Other coal-mines in the fame country, fuffi-
ciently fertile, cannot be wrought on account of
their fituation. A quantity of mineral fufficient
to defray the expenfe of working, could be
brought from the mine by the ordinary, or even
leſs than the ordinary quantity of labor: But in
an inland country, thinly inhabited, and without
either good roads or water-carriage, this quantity
could not be fold.
Coals are a lefs agreeable fuel than wood:
they are faid too to be lefs wholeſome. The ex-
penſe of coals, therefore, at the place where they
are conſumed, muft generally be fomewhat lefs
than that of wood.
The price of wood again varies with the ſtate of
agriculture, nearly in the fame manner, and exactly
for the fame reaſon, as the price of cattle. In its
rude beginnings the greater part of every country
is covered with wood, which is then a mere en-
cumberance of no value to the landlord, who would
gladly give it to any body for the cutting. As
agriculture advances, the woods are partly cleared
by the progress of tillage, and partly go to decay
in confequence of the increaſed number of cattle:
Thefe, though they do not increaſe in the fame
proportion as corn, which is altogether the acqui-
fition of human induftry, yet multiply under the
care and protection of men; who ftore up in the
ſeaſon of plenty what may maintain them in that of
fcarcity, who through the whole year furniſh them
with a greater quantity of food than uncultivated
nature provides for them, and who by deſtroying
260 THE NATURE AND CAUSES OF
and extirpating their enemies, fecure them in the
free enjoyment of all that ſhe provides. Numerous
herds of cattle, when allowed to wander through
the woods, though they do not deſtroy the old
trees, hinder any young ones from coming up,
fo that in the courſe of a century or two the whole
foreſt goes to ruin. The ſcarcity of wood then
raiſes its price. It affords a good rent, and the
landlord fometimes finds that he can ſcarce employ
his beſt lands more advantageouſly than in growing
barren timber, of which the greatness of the profit
often compenfates the latenels of the returns. This
feems in the preſent times to be nearly the ſtate of
things in feveral parts of Great Britain, where
the profit of planting is found to be equal to
that of either corn or pafture. The advantage
which the landlord derives from planting, can
no-where exceed, at leaſt for any confiderable
time, the rent which theſe could afford him, and
in an inland country which is highly cultivated,
it will frequently not fall much fhort of this rent.
Upon the fea - coaft of a well-improved country,
indeed, if coals can conveniently be had for fuel,
it may ſometimes be cheaper to bring barren timber
for building from lefs cultivated foreign countries,
than to raiſe it at home. In the new town of
Edinburgh, built within theſe few years, there is
not, perhaps, a fingle ſtick of Scotch timber.
Whatever may be the price of wood, if that
of coals is fuch that the expenſe of a coal-fire is
nearly equal to that of a wood one, we may be
affured, that at that place
that place, and in theſe
;
THE WEALTH OF NATIONS.
261
circumftances, the price of coals is as high as it
can be. It feems to be fo in fome of the inland
parts of England, particularly in Oxfordshire,
where it is uſual, even in the fires of the common
people, to mix coals and wood together, and
where the difference in the expenſe of thoſe two
forts of fuel cannot, therefore, be very great.
Coals, in the coal countries, are every-where
much below this higheft price. If they were
not, they could not bear the expenfe of a diftant
carriage, either by land or by water. A fmall
quantity only could be fold, and the coal- maf
ters and coal proprietors find it more for their
intereſt to ſell a great quantity at a price fome-
what above the loweft, than a fmall quantity at
the higheſt. The moft fertile coal-mine too, re-
gulates the price of coals at all the other mines.
in its neighbourhood. Both the proprietor and
the undertaker of the work find, the one that he
can get a greater rent, the other that he can get
a greater profit, by fomewhat underfelling all
their neighbours. Their neighbours are foon
obliged to fell at the fame price, though they
cannot fo well afford it, and though it always
diminiſhes, and fometimes takes away altogether
both their rent and their profit. Some works
are abandoned altogether; others can afford no
rent, and can be wrought only by the pro-
prietor.
The lowest price at which coals can be fold
for any confiderable time, is, like that of all other
commodities, the price which is barely fufficient
252 THE NATURE AND CAUSES OF
to replace, together with its ordinary profits, the
ftock which muſt be employed in bringing them
to market. At a coal mine for which the landlord
can get no rent, but which he muſt either work
himſelf or let it alone altogether, the price of coals
muft generally be nearly about this price.
Rent, even where coals afford one, has gene-
rally a ſmaller fhare in their price than in that of
moſt other parts of the rude produce of land.
The rent of an eftate above ground, commonly
amounts to what is ſuppoſed to be a third of the
grofs produce; and it is generally a rent certain
and independent of the occafional variations in
the crop. In coal-mines a fifth of the grofs pro-
duce is a very great rent; a tenth the common
rent, and it is feldom a rent certain, but depends
upon the occafional variations in the produce,
Theſe are ſo great, that in a country where thirty
years purchaſe is confidered as a moderate price
for the property of a landed eftate, ten years
purchaſe is regarded as a good price for that of
a coal-mine,
The value of a coal-mine to the proprietor
frequently depends as much upon its fituation as
upon its fertility, That of a metallic mine
depends more upon its fertility, and lefs upon
its fituation. The coarſe, and ftill more the
precious metals, when ſeparated from the ore,
are fo valuable that they can generally bear the
expenſe of a very long land, and of the moſt
diftant fea carriage. Their market is not con-
fined to the countries in the neighbourhood of
THE WEALTH OF NATIONS.
263
the mine, but extends to the whole world. The
copper of Japan makes an article of commerce
in Europe; the iron of Spain in that of Chili
and Peru. The filver of Peru finds its way, not
only to Europe, but from Europe to China.
The price of coals in Weftmoreland or Shrop-
fhire can have little effect on their price at New-
caſtle; and their price in the Lionnois can have
none at all. The productions of ſuch diſtant
coal-mines can never be brought into competi-
tion with one another. But the productions of
the moſt diſtant metallic mines frequently may,
and in fact commonly are. The price, there-
fore, of the coarſe, and ſtill more that of the
precious metals, at the moft fertile mines in the
world, muſt neceffarily more or less affect their
price at every other in it. The price of copper
in Japan muſt have fome influence upon its price
at the copper mines in Europe. The price of
filver in Peru, or the quantity either of labor
or of other goods which it will purchaſe there,
muſt have ſome influence on its price, not only
at the filver mines of Europe, but at thoſe of
China. After the diſcovery of the mines of
Peru, the filver mines of Europe were, the
greater part of them, abandoned. The value of
filver was ſo much reduced that their produce
could no longer pay the expenfe of working
them, or replace, with a profit, the food, clothes,
lodging and other neceffaries which were con-
fumed in that operation. This was the cafe too
with the mines of Cuba and St. Domingo, and
264 THE NATURE AND CAUSES OF
even with the ancient mines of Peru, after the
diſcovery of thoſe of Potofi.
The price of every metal at every mine, there-
fore, being regulated in fome meaſure by its
price at the moft fertile mine in the world that
is actually wrought, it can at the greater part of
mines do very little more than pay the expenſe
of working, and can feldom afford a very high
rent to the landlord. Rent, accordingly, feems
at the greater part of mines to have but a ſmall
ſhare in the price of the coarſe, and a ſtill ſmaller
in that of the precious metals. Labor and profit
make up the greater part of both.
A fixth part of the grofs produce may be rec-
koned the average rent of the tin mines of Cornwall,
the moſt fertile that are known in the world, as
we are told by the Reverend Mr. Borlace, vice-
warden of the ftannaries. Some, he ſays, afford
more, and fome do not afford fo much. A fixth
part of the grofs produce is the rent too of feveral
very fertile lead mines in Scotland.
In the filver mines of Peru, we are told by
Frezier and Ulloa, the proprietor frequently
exacts no other acknowledgment from the under-
taker of the mine, but that he will grind the ore
at his mill, paying him the ordinary multure or
price of grinding. Till 1736, indeed, the tax
of the king of Spain amounted to one-fifth of
the ftandard filver, which till then might be
confidered as the real rent of the greater part of
the filver mines of Peru, the richeſt which have
been known in the world. If there had been
THE WEALTH OF NATIONS.
265
no tax this fifth would naturally have belonged
to the landlord, and many mines might have
been wrought which could not then be wrought,
becauſe they could not afford this tax. The tax
of the duke of Cornwall upon tin is ſuppoſed to
amount to more than five per cent. or one-twen-
tieth part of the value; and whatever may be his
proportion, it would naturally too belong to the
proprietor of the mine, if tin was duty free. But
if
you add one-twentieth to one-fixth, you will
find that the whole average rent of the tin mines of
Cornwall, was to the whole average rent of the
filver mines of Peru, as thirteen to twelve. But
the filver mines of Peru are not now able to pay
even this low rent, and the tax upon filver was,
in 1736, reduced from one-fifth to one-tenth. Even
this tax upon filver too gives more temptation to
ſmuggling than the tax of one-twentieth upon tin;
and fmuggling must be much eafier in the precious
than in the bulky commodity. The tax of the
king of Spain accordingly is faid to be very ill
paid, and that of the duke of Cornwall very well.
Rent, therefore, it is probable, makes a greater
part of the price of tin at the moft fertile tin
mines, than it does of filver at the moſt fertile
filver mines in the world. After replacing the ftock
employed in working thofe different mines, together
with its ordinary profits, the refidue which remains
to the proprietor, is greater it ſeems in the coarſe,
than in the precious metal.
Neither are the profits of the undertakers of
filver mines commonly very great in Peru. The
266 THE NATURE AND CAUSES OF
ſame moſt refpectable and well informed authors
acquaint us, that when any perfon undertakes to
work a new mine in Peru, he is univerfally
looked upon as a man deftined to bankruptcy and
ruin, and is upon that account fhunned and avoid-
ed by every body. Mining, it ſeems, is confi-
dered there in the fame light as here, as a lottery,
in which the prices do not compenſate the blanks,
though the greatneſs of fome tempts many adven-
turers to throw away their fortunes in ſuch un-
profperous projects.
As the ſovereign, however, derives a confider-
able part of his revenue from the produce of filver
mines, the law in Peru gives every poffible encou-
ragement to the diſcovery and working of new ones.
Whoever diſcovers a new mine, is entitled to mea-
fure off two hundred and forty-fix feet in length,
according to what he fuppofes to be the direction
of the vein, and half as much in breadth. He be-
comes proprietor of this portion of the mine, and
can work it without paying any acknowledgment
to the landlord. The intereft of the duke of
Cornwall has given occafion to a regulation nearly
of the fame kind in that ancient dutchy. In vaſte
and unencloſed lands any perſon who diſcovers a tin
mine, may mark out its limits to a certain extent,
which is called bounding a mine. The bounder
becomes the real proprietor of the mine, and may
either work it himſelf, or give it in leaſe to another,
without the confent of the owner of the land, to
whom, however, a very ſmall acknowledginent
muſt be paid upon working it. In both regulations
THE WEALTH OF NATIONS.
267
the facred rights of private property are facrificed
to the ſuppoſed interefts of public revenue.
,
The fame encouragement is given in Peru to
the diſcovery and working of new gold mines;
and in gold the king's tax amounts only to a
twentieth part of the ſtandard metal. It was once
a fifth, and afterwards a tenth, as in filver; but
it was found that the work could not bear even
the loweſt of theſe two taxes. If it is rare how-
ever, ſay the ſame authors, Frezier and Ulloa,
to find a perſon who has made his fortune by a
filver, it is ftill much rarer to find one who has
done fo by a gold mine. This twentieth part
ſeems to be the whole rent which is paid by the
greater part of the gold mines in Chili and Peru.
Gold too is much more liable to be fmuggled
than even filver; not only on account of the
fuperior value of the metal in porportion to its
bulk, but on account of the peculiar way in
which nature produces it. Silver is very feldom
found virgin, but, like moft other metals, is
generally mineralized with fome other body; from
which it is impoffible to feparate it in fuch quan-
tities as will pay for the expenfe, but by a very
laborious and tedious operation, which cannot
well be carried on but in workhouſes erected
for the purpoſe, and therefore expofed to the
inſpection of the king's officers. Gold, on the
contrary, is almoft always found virgin. It is
fometimes found in pieces of fome bulk; and
even when mixed in fmall and almoft infenfible
particles with fand, earth, and other extraneous
3
268 THE NATURE AND CAUSES OF
bodies, it can be feparated from them by a very
fhort and fimple operation, which can be carried
on in any private houfe by any body who is
poffeffed of a ſmall quantity of mercury. If the
king's tax, therefore, is but ill paid upon filver,
it is likely to be much worſe paid upon gold;
and rent muft make a much smaller part of the
price of gold, than even of that of filver.
The loweſt price at which the precious metals
can be fold, or the ſmalleſt quantity of other goods
for which they can be exchanged during any con-
fiderable time, is regulated by the fame principles
which fix the loweft ordinary price of all other goods.
The ſtock which muft commonly be employed, the
food, clothes, and lodging which muft commonly
be confumed in bringing them from the mine to the
market, determine it. It muſt at leaſt be ſufficient
to replace that ſtock, with the ordinary profits.
Their higheſt price, however, ſeems not to be
neceffarily determined by any thing but the actual
fcarcity or plenty of thoſe metals themſelves. It
is not determined by that of any other commodity,
in the ſame manner as the price of coals is by
that of wood, beyond which no ſcarcity can ever
raiſe it. Increaſe the ſcarcity of gold to a certain
degree, and the ſmalleſt bit of it may become more
precious than a diamond, and exchange for a
greater quantity of other goods.
The demand for thofe metals arifes partly
from their utility, and partly from their beauty.
If you except iron, they are more ufeful than,
perhaps, any other metal. As they are lefs liable
THE WEALTH OF NATIONS.
269
to ruft and impurity, they can more eafily be
kept clean; and the utenfils either of the table or
the kitchen are often upon that account more
agreeable when made of them. A filver boiler
is more cleanly than a lead, copper, or tin one;
and the fame quality would render a gold boiler
ftill better than a filver one. Their principal
merit, however, arifes from their beauty, which
renders them peculiarly fit for the ornaments of
drefs and furniture. No paint or die can give
fo fplendid a color as gilding. The merit of
their beauty is greatly enhanced by their ſcarcity.
With the greater part of rich people, the chief
enjoyment of riches confifts in the parade of riches,
which in their eye is never fo complete as when
they appear to poflefs thofe decifive marks of opu-
lence which nobody can poffefs but themſelves. In
their eyes the merit of an object which is in any
degree either uſeful or beautiful, is greatly enhanced
by its ſcarcity, or by the great labor which it
requires to collect any confiderable quantity of
it; a labor which nobody can afford to pay but
themſelves. Such objects they are willing to
purchaſe at a higher price then things much more
beautiful and ufeful, but more common. Theſe
qualities of utility, beauty, and ſcarcity, are the
original foundation of the high price of thoſe
metals, or of the great quantity of other goods for
which they can every-where be exchanged. This
value was antecedent to and independent of their
being employed as coin, and was the quality
which fitted them for that employment. That
270 THE NATURE AND CAUSES OF
employment, however, by occafioning a new de
mand, and by diminiſhing the quantity which
could be employed in any other way, may have
afterwards contributed to keep up or increaſe
their value.
The demand for the precious ftones arifes al-
together from their beauty. They are of no ufe,
but as ornaments; and the merit of their beauty
is greatly enhanced by their ſcarcity, or by the
difficulty and expenſe of getting them from the
mine. Wages and profit accordingly make up,
upon moſt occafions, almoſt the whole of their
high price. Rent comes in but for a very ſmall
fhare; frequently for no fhare; and the moſt fertile
mines only afford any confiderable rent. When
Tavernier, a jeweller, vifited the diamond mines
of Golconda and Vifapore, he was informed that
the fovereign of the country, for whofe benefit
they were wrought, had ordered all of them to
be fhut up, except thoſe which yield the largeſt
and fineft ftones. The others, it feems, were to
the proprietor not worth the working.
As the price both of the precious metals and
of the precious ftones is regulated all over the
world by their price at the moft fertile mine in it,
the rent which a mine of either can afford to its
proprietor is in proportion, not to its abfolute;
but to what may be called its relative fertility, or
to its fuperiority over other mines of the fame
kind. If new mines were diſcovered as much
ſuperior to thoſe of Potofi as they were fuperior
to thofe of Europe, the value of filver might be
THE WEALTH OF NATIONS.
271
fo much degraded as to render even the mines of
Potofi not worth the working. Before the dif
covery of the Spaniſh Weft-Indies, the moft fer-
tile mines in Europe may have afforded as great
a rent to their proprietor as the richeſt mines in
Peru do at preſent. Though the quantity of filver
was much lefs, it might have exchanged for an
equal quantity of other goods, and the proprie-
tor's fhare might have enabled him to purchaſe
or command an equal quantity either of labor or
of commodities. The value both of the produce
and of the rent, the real revenue which they afford-
ed both to the public and to the proprietor,
might have been the ſame.
The moſt abundant mines either of the precious
metals or of the precious ftones could add little to
the wealth of the world. A produce of which the
value is principally derived from its ſcarcity, is ne-
ceffarily degraded by its abundance. A fervice of
plate, and the other frivolous ornaments of drefs
and furniture, could be purchaſed for a ſmaller quan-
tity of labor, or for a ſmaller quantity of commodi-
ties; and in this would confift the fole advantage
which the world could derive from that abundance.
It is otherwiſe in eftates above ground. The
value both of their produce and of their rent is
in proportion to their abfolute, and not to their
relative fertility. The land which produces a
certain quantity of food, clothes, and lodging,
can always feed, clothe, and lodge a certain
number of people; and whatever may be the
proportion of the landlord, it will always give
272 THE NATURE AND CAUSES OF
him a proportionable command of the labor of
thoſe people, and the commodities with which
that labor can fupply him. The value of the moſt
barren lands is not diminiſhed by the neighbourhood
of the moſt fertile. On the contrary, it is generally
increaſed by it. The great number of people
maintained by the fertile lands afford a market to
many parts of the produce of the barren, which
they could never have found among thoſe whom
their own produce could maintain.
Whatever increaſes the fertility of land in
producing food, increaſes not only the value of
the lands upon which the improvement is be-
ftowed, but contributes likewiſe to increaſe that
of many other lands, by creating a new demand
for their produce. That abundance of food, of
which, in confequence of the improvement of
land, many people have the difpofal beyond
what they themſelves can confume, is the great
cauſe of the demand both for the precious
metals and the precious ftones, as well as for
every other conveniency and ornament of dreſs;
lodging, houſehold furniture, and equipage.
Food not only conftitutes the principal part of
the riches of the world, but it is the abundance
of food which gives the principal part of their
value to many other forts of riches. The poor
inhabitants of Cuba and St. Domingo, when they
were firſt diſcovered by the Spaniards, uſed to
wear little bits of gold as ornaments in their hair
and other parts of their drefs.
value them as we would do any
They feemed to
little pebbles of
fomewhat
THE WEALTH OF NATIONS.
273
fomewhat more than ordinary beauty, and to con-
fider them as juft worth the picking up, but not
worth the refufing to any body who afked them.
They gave them to their new guefts at the firſt
requeft, without feeming to think that they had
made them any very valuable preſent. They were
aftoniſhed to obferve the rage of the Spaniards to
obtain them; and had no notion that there could
any where be a country in which many people
had the diſpoſal of fo great a fuperfluity of food,
fo ſcanty always among themſelves, that for a
very ſmall quantity of thoſe glittering baubles they
would willingly give as much as might maintain a
whole family for many years. Could they have
been made to underſtand this, the paffion of the
Spaniards would not have furpriſed them.
PART III.
Of the Variation in the Proportion between the
respective Values of that Sort of Produce which
always affords Rent, and of that which fometimes
does and fometimes does not afford Rent.
THE
HE increafing abundance of food, in con-
fequence of increafing improvement and culti-
vation, muſt neceffarily increaſe the demand for
every part of the produce of land which is not
food, and which can be applied either to uſe or
to ornament. In the whole progreſs of improve-
ment, it might therefore be expected, there
W, of N. 1.
18
274 THE NATURE AND CAUSES OF
ſhould be only one variation in the comparative
values of thoſe two different forts of produce. The
value of that fort which fometimes does and fome-
times does not afford rent, fhould conftantly riſe
in proportion to that which always affords fome
rent. As art and induftry advance, the materials
of clothing and lodging, the uſeful foffils and
minerals of the earth, the precious metals and the
precious ftones fhould gradually come to be more
and more in demand, fhould gradually exchange
for a greater and a greater quantity of food, or in
other words, fhould gradually become dearer and
dearer. This accordingly has been the cafe with
moſt of theſe things upon moſt occafions, and
would have been the cafe with all of them upon
all occafions, if particular accidents had not upon
ſome occafions increaſed the ſupply of fome of
them in a ſtill greater proportion than the demand.
The value of a free-ftone quarry, for exam-
ple, will neceffarily increaſe with the increafing
improvement and population of the country
round about it; eſpecially if it fhould be the
only one in the neighbourhood. But the value
of a filver mine, even though there fhould not be
another within a thouſand miles of it, will not
neceffarily increaſe with the improvement of the
country in which it is fituated. The market for
the produce of a free-ftone quarry can feldom
extend more than a few miles round about it, and
the demand muft generally be in proportion to
the improvement and population of that fmall
diftrict.
But the market for the produce of a
THE WEALTH OF NATIONS.
275
1
filver mine may extend over the whole known
world. Unleſs the world in general, therefore,
be advancing in improvement and population,
the demand for filver might not be at all in-
creaſed by the improvement even of a large
country in the neighbourhood of the mine. Even
though the world in general were improving, yet,
if, in the courfe of its improvement, new mines
fhould be difcovered, much more fertile than any
which had been known before, though the
demand for filver would neceffarily increaſe, yet
the fupply might increaſe in ſo much a greater
proportion, that the real price of that metal
might gradually fall; that is, any given quantity, a
pound weight of it, for example, might gradually
purchaſe or command a ſmaller and a ſmaller
quantity of labor, or exchange for a ſmaller and
a fmaller quantity of corn, the principal part of
the fubfiftence of the laborer.
The great market for filver is the commercial
and civilized part of the world.
If by the general progrefs of improvement the
demand of this market fhould increaſe, while
at the fame time the fupply did not increaſe in
the fame proportion, the value of filver would
gradually rife in proportion to that of corn.
Any given quantity of filver would exchange for
a greater and a greater quantity of corn; or, in
other words, the average money price of corn
would gradually become cheaper and cheaper.
If, on the contrary, the fupply by fome acci-
dent ſhould increaſe for many years together in a
276 THE NATURE AND CAUSES OF
greater proportion than the demand, that metal
would gradually become cheaper and cheaper;
or, in other words, the average money price of
corn would, in fpite of all improvements, gra-
dually become dearer and dearer.
But if, on the other hand, the ſupply of the
metal fhould increaſe nearly in the fame proportion
as the demand, it would continue to purchaſe or
exchange for nearly the fame quantity of corn, and
the average money price of corn would, in fpite
of all improvements, continue very nearly the fame.
Theſe three feem to exhauft all the poffible
combinations of events which can happen in the
progress of improvement; and during the courſe
of the four centuries preceding the prefent, if we
may judge by what has happened both in France.
and Great Britain, each of thoſe three different
combinations feem to have taken place in the
European market, and nearly in the fame order
too in which I have here fet them down.
}
Digreſſion concerning the Variations in the Value of
Silver during the Courfe of the Four laft Centuries.
IN
FIRST PERIOD.
N 1350, and for fome time before, the average
price of the quarter of wheat in England feems
not to have been eftimated lower than four
ounces of filver, Tower-weight, equal to about
twenty fhillings of our prefent money. From
THE WEALTH OF NATIONS.
277
this price it ſeems to have fallen gradually to
two ounces of filver, equal to about ten fhillings
of our preſent money, the price at which we find
it eſtimated in the beginning of the fixteenth cen-
tury, and at which it ſeems to have continued to
be eſtimated till about 1570.
In 1350, being the 25th of Edward III, was
enacted what is called, The ftatute of laborers. In
the preamble it complains much of the infolence
of fervants, who endeavoured to raiſe their wages
upon their mafters. It therefore ordains, that all
fervants and laborers fhould for the future be
contented with the fame wages and liveries (live-
ries in thoſe times fignified, not only clothes, but
provifions) which they had been accustomed to
receive in the 20th year of the king, and the four
preceding years; that upon this account their livery
wheat fhould no-where be eſtimated higher than
ten-pence a bufhel, and that it fhould always be
in the option of the maſter to deliver them either
the wheat or the money. Ten-pence a buſhel,
therefore, had, in the 25th of Edward III, been
reckoned a very moderate price of wheat, fince
it required a particular ftatute to oblige fervants
to accept of it in exchange for their uſual livery
of provifions; and it had been reckoned a reaſon-
able price ten years before that, or in the 16th
year of the king, the term to which the ftatute
refers. But in the 16th year of Edward III, ten-
pence contained about half an ounce of filver Tow-
er-weight, and was nearly equal to half a crown
of our preſent money. Four ounces of filver,
278 THE NATURE AND CAUSES OF
Tower-weight, therefore, equal to fix fhillings
and eight-pence of the money of thoſe times,
and to near twenty fhillings of that of the prefent,
muſt have been reckoned a moderate price for the
quarter of eight bufhels.
This ftatute is furely a better evidence of what
was reckoned in thoſe times a moderate price of
grain; than the prices of fome particular years
which have generally been recorded by hiftorians
and other writers on account of their extraordinary
dearneſs or cheapnefs, and from which, therefore,
it is difficult to form any judgment concerning
what may have been the ordinary price. There
are, befides, other reaſons for believing that in
the beginning of the fourteenth century, and for
ſome time before, the common price of wheat
was not less than four ounces of filver the quarter,
and that of other grain in proportion.
In 1309, Ralph de Born, prior of St. Auguf-
tine's, Canterbury, gave a feaſt upon his inſtalla-
tion-day, of which William Thorn has preferv-
ed, not only the bill of fare, but the prices of
many particulars. In that feaft were confumed,
ift, fifty-three quarters of wheat, which coft
nineteen pounds, or feven fhillings and two-
pence a quarter, equal to about one-and-twenty
fhillings and fix-pence of our preſent money :
2dly, Fifty eight quarters of malt, which coft
feventeen pounds ten fhillings, or fix fhillings a
quarter, equal to about eighteen fhillings of our
prefent money: 3dly, Twenty quarters of oats,
which coft four pounds, or four fhillings a quarter,
THE WEALTH OF NATIONS.
279
equal to about twelve fhillings of our preſent money.
The prices of malt and oats feems here to be higher
than their ordinary proportion to the price of wheat.
Theſe prices are not recorded on account of
their extraordinary dearneſs or cheapneſs, but are
mentioned accidentally as the prices actually paid
for large quantities of grain confumed at a feaſt
which was famous for its magnificence.
In 1262, being the, 5ift of Henry III, was re-
vived an ancient ftatute called, The Affize of
Bread and Ale, which, the king fays in the pre-
amble, had been made in the times of his pro-
genitors fometime kings of England. It is pro-
bably, therefore, as old at leaſt as the time of his
grandfather Henry II, and may have been as old
as the conqueft. It regulates the price of bread
according as the prices of wheat may happen to
be from one fhilling to twenty fhillings the
quarter of the money of thofe times. But fta-
tutes of this kind are generally preſumed to pro-
vide with equal care for all deviations from the
middle price, for thoſe below it as well as for
thoſe above it. Ten fhillings, therefore, con-
taining fix ounces of filver, Tower-weight, and
equal to about thirty fhillings of our prefent mo-
ney, muft, upon this fuppofition, have been
reckoned the middle price of the quarter of
wheat when this ftatute was firſt enacted, and
must have continued to be fo in the 51ft of
Henry III. We cannot therefore be very wrong
in fuppofing that the middle price was not lefs
than one-third of the higheſt price at which this
280 THE NATURE AND CAUSES OF
ſtatute regulates the price of bread, or than fix fhil-
lings and eight pence of the money of thoſe times
containing four ounces of filver, Tower-weight.
From thefe different facts, therefore, we ſeem
to have ſome reaſon to conclude, that about the
middle of the fourteenth century, and for a con-
fiderable time before, the average or ordinary
price of the quarter of wheat was not ſuppoſed to
be less than four ounces of filver, Tower-weight.
From about the middle of the fourteenth to
the beginning of the fixteenth century, what was
reckoned the reaſonable and moderate, that is the
ordinary or average price of wheat, feems to have
funk gradually to about one-half of this price;
fo as at laft to have fallen to about two ounces of
filver, Tower-weight, equal to about ten fhillings
of our preſent money. It continued to be efti-
mated at this price till about 1570.
In the houſehold book of Henry, the fifth earl
of Northumberland, drawn up in 1512, there are
two different eftimations of wheat. In one of
them it is computed at fix fhillings and eight-
pence the quarter, in the other at five fhillings
and eight - pence only. In 1512, fix fhillings
and eight-pence contained only two ounces of
filver, Tower-weight, and were equal to about
ten fhillings of our prefent money.
From the 25th of Edward III, to the begin-
ning of the reign of Elizabeth, during the ſpace
of more than two hundred years, fix fhillings and
eight-pence, it appears from ſeveral different
ftatutes, had continued to be confidered as what
THE WEALTH OF NATIONS.
281.
is called the moderate and reaſonable, that is the
ordinary or average price of wheat. The quan-
tity of filver, however, contained in that nomi-
nal fum was during the course of this period,
continually diminiſhing, in confequence of fome
alterations which were made in the coin. But
the increaſe of the value of filver had, it ſeems
fo far compenſated the diminution of the quan-
tity of it contained in the fame nominal fum,
that the legislature did not think it worth while
to attend to this circumftance.
9
Thus in 1436 it was enacted, that wheat might
be exported without a licence when the price was
fo low as fix fhillings and eight - pence: And in
1463 it was enacted, that no wheat fhould be im-
ported if the price was not above fix fhillings
and eight-pence the quarter. The legislature
had imagined, that when the price was fo low,
there could be no inconveniency in exportation,
but that when it rofe higher, it became prudent to
allow of importation. Six fhillings and eight pence,
therefore, containing about the fame quantity of
filver as thirteen fhillings and four-pence of our
prefent money (one third part lefs than the fame
nominal fum contained in the time of Edward III.),
had in thoſe times been confidered as what is
called the moderate and reaſonable price of wheat.
In 1554, by the 1ft and 2d of Philip and
Mary; and in 1558, by the ift of Elizabeth, the
exportation of wheat was in the fame manner
prohibited, whenever the price of the quarter
fhould exceed fix fhillings and eight - pence,
282 THE NATURE AND CAUSES OF
which did not then' contain two penny worth
more filver than the fame nominal fum does at
preſent. But it had foon been found that to reſtrain
the exportation of wheat till the price was fo very
low, was, in reality, to prohibit it altogether.
In 1562, therefore, by the 5th of Elizabeth, the
exportation of whear was allowed from certain ports
whenever the price of the quarter fhould not exceed
ten fhillings, containing nearly the fame quan-
tity of filver as the like nominal fum does at
preſent. This price had at this time, therefore,
been confidered as what is called the moderate
and reaſonable price of wheat. It agrees nearly
with the eftimation of the Northumberland book
in 1512.
That in France the average price of grain was,
in the ſame manner, much lower in the end of the
fifteenth and beginning of the fixteenth century, than
in the two centuries preceding, has been obferved
both by Mr. Dupré de St. Maur, and by the ele-
gant author of the effay on the police of grain. Its
price, during the fame period, had probably funk in
the fame manner through the greater part of Europe.
This rife in the value of filver in proportion
to that of corn, may either have been owing al-
together to the increaſe of the demand for that
metal, in confequence of increafing improve-
ment and cul ivation, the ſupply in the mean
time continuing the fame as before: Or the de-
mand continuing the fame as before, it may have
been owing altogether to the gradual diminution
of the fupply; the greater part of the mines
THE WEALTH OF NATIONS. 283
which were then known in the world, being
much exhauſted, and confequently the expenfe of
working them much increafed. Or it may have
been owing partly to the one and partly to the
other of thoſe two circumftances. In the end of
the fifteenth and beginning of the fixteenth cen-
turies, the greater part of Europe was approaching
towards a more ſettled form of government than it
had enjoyed for feveral ages before. The increaſe
of fecurity would naturally increaſe induſtry and
improvement; and the demand for the precious
metals, as well as for every other luxury and
ornament, would naturally increaſe with the in-
creaſe of riches. A greater annual produce would
require a greater quantity of coin to circulate it;
and a greater number of rich people would require
a greater quantity of plate and other ornaments
of filver. It is natural to fuppofe too, that the
greater part of the mines which then fupplied the
European market with filver, might be a good
deal exhauſted, and have become more expenſive
in the working. They had been wrought many
of them from the time of the Romans.
It has been the opinion, however, of the
greater part of thoſe who have written upon the
prices of commodities in ancient times, that,
from the Conqueft, perhaps from the invafion of
Julius Cæfar till the difcovery of the mines of
America, the value of the filver was continually
diminiſhing. This opinion they feem to have
been led into, partly by the obfervations which
they had occafion to make upon the prices both
284 THE NATURE AND CAUSES OF
of corn and of fome other parts of the rude pro-
duce of land; and partly by the popular notion,
that as the quantity of filver naturally increaſes
in every country with the increaſe of wealth, fo
its value diminishes as its quantity increaſes.
In their obſervations upon the prices of corn,
three different circumftances feem frequently to
have mifled them
Firſt, In ancient times almoft all rents were paid
in kind; in a certain quantity of corn, cattle,
poultry, &c. It fometimes happened, however,
that the landlord would ftipulate, that he fhould
be at liberty to demand of the tenant, either the
annual payment in kind, or a certain fum of money
inftead of it. The price at which the payment in
kind was in this manner exchanged for a certain
furn of money, is in Scotland called the converfion
price. As the option is always in the landlord to
take either the fubftance or the price, it is necef-
fary for the fafety of the tenant, that the converſion
price thould rather be below than above the aver-
age market price. In many places, accordingly,
it is not much above one half of this price.
Through the greater part of Scotland this cuftom
ftill continues with regard to poultry, and in fome
places with regard to cattle. It might probably
have continued to take place too with regard to
corn, had not the inftitution of the public fiars
put an end to it. Theſe are annual valuations,
according to the judgment of an affize, of the
average price of all the different forts of grain
and of all the different qualities of each, according
Ka
2
THE WEALTH OF NATIONS.
285
to the actual market price in every different
county. This inftitution rendered it fufficiently
fafe for the tenant, and much more convenient
for the landlord, to convert, as they call it, the
corn rent, rather at what fhould happen to be
the price of the fiars of each year, than at any
certain fixed price. But the writers who have
collected the prices of corn in ancient times
feem frequently to have miftaken what is called
in Scotland the converfion price for the actual
market price. Fleetwood acknowledges, upon
one occafion, that he had made this mittake.
As he wrote his book, however, for a particular
purpoſe, he does not think proper to make this
acknowledgment till after tranfcribing this con-
verfion price fifteen times. The price is eight
fhillings the quarter of wheat. This fum in 1423,
the year at which he begins with it, contained
the fame quantity of filver as fixteen fhillings of
our prefent money. But in 1562, the year at
which he ends with it, it contained no more than
the fame nominal fum does at prefent.
Secondly, They have been miſled by the flo-
venly manner in which fome ancient ftatutes of
affize had been fometimes tranfcribed by lazy
copiers; and fometimes perhaps actually compofed
by the legislature.
The ancient ftatutes of affize feem to have be-
gun always with determining what ought to be
the price of bread and ale when the price of
wheat and barley were at the loweft, and to have
proceeded gradually to determine what it ought
286 THE NATURE AND CAUSES OF
to be, according as the prices of thoſe two ſorts
of grain fhould gradually rife above this loweſt
price. But the tranfcribers of thofe ftatutes feem
frequently to have thought it fufficient, to copy
the regulation as far as the three or four firft and
lowest prices; faving in this manner their own.
labor, and judging, I fuppofe, that this was
enough to ſhow what proportion ought to be ob-
ſerved in all higher prices.
Thus in the affize of bread and ale, of the 51ft
of Henry III, the price of bread was regulated
according to the different prices of wheat, from one
filling to twenty fhillings the quarter, of the
money of thoſe times. But in the manufcripts from
which all the different editions of the ftatutes,
preceding that of Mr. Ruffhead, were printed,
the copiers had never tranfcribed this regulation
beyond the price of twelve fhillings. Several wri-
ters, therefore, being mifled by this faulty tran-
ſcription, very naturally concluded that the middle
price, or fix fhillings the quarter, equal to about
eighteen fhillings of our prefent money, was the
ordinary or average price of wheat at that time.
In the ſtatute of Tumbrel and Pillory, enacted
nearly about the fame time, the price of ale is
regulated according to every fixpence rife in the
price of barley, from two fhillings to four fhil-
lings the quarter. That four fhillings, however
was not confidered as the higheſt price to which
barley might frequently rife in thoſe times, and
that theſe prices were only given as an example
of the proportion which ought to be obferved in
THE WEALTH OF NATIONS.
287
all other prices, whether higher or lower, we may
infer from the laft words of the ftatute; " & fic
"deinceps crefcetur vel diminuetur per fex de-
"narios." The expreffion is very flovenly, but
the meaning is plain enough;
"That the price
❝ of ale is in this manner to be increaſed or di-
"miniſhed according to every fixpence rife or
"fall in the price of barley." In the compofi-
tion of this ftatute the legislature itſelf feems to
have been as negligent as the copiers were in the
tranſcription of the other.
In an ancient manufcript of the Regiam Majef-
tatem, an old Scotch law book, there is a ftatute
of afſize, in which the price of bread is regulated
according to all the different prices of wheat, from
ten-pence to three fhillings the Scotch boll, equal
to about half an Engliſh quarter. Three fhillings
Scotch, at the time when this affize is ſuppoſed
to have been enacted, were equal to about nine
fhillings fterling of our preſent money. Mr. Rud-
diman feems to conclude from this, that three
fhillings was the higheſt price to which wheat ever
rofe in thoſe times, and that ten-pence, a fhilling,
or at moſt two fhillings, were the ordinary prices.
Upon confulting the manufcript, however, it
appears evidently, that all theſe prices are only fet
down as examples of the proportion which ought to
be obſerved between the reſpective prices of wheat
and bread. The laft words of the ſtatute are, "reliqua
"judicabis fecundum præfcripta habendo reſpectum
See his preface to Anderfon's Diplomata Scotia.
288 THE NATURE AND CAUSES OF
"ad pretium bladi.” "You fhall judge of the
"remaining cafes according to what is above
"written having a reſpect to the price of corn."
Thirdly, They ſeem to have been miſled too by
the very low price at which wheat was fometimes
fold in very ancient times; and to have imagined,
that as its loweft price was then much lower than
in later times, its ordinary price muft likewiſe
have been much lower. They might have found,
however, that in thoſe ancient times, its higheſt
price was fully as much above, as its loweſt price
was below any thing that had ever been known
in later times. Thus in 1270, Fleetwood gives us
two prices of the quarter of wheat. The one is
four pounds fixteen fhillings of the money of thoſe
times, equal to fourteen pounds eight fhillings of
that of the prefent; the other is fix pounds eight
fhillings, equal to nineteen pounds four fhillings of
our preſent money. No price can be found in the
end of the fifteenth, or beginning of the fixteenth
century, which approaches to the extravagance of
thefe. The price of corn, though at all times liable
to variation, varies moſt in thoſe turbulent and
diſorderly focieties, in which the interruption of
all commerce and communication hinders the
plenty of one part of the country from relieving
the ſcarcity of another. In the diforderly ſtate
of England under the Plantagenets, who governed
it from about the middle of the twelfth, till to-
wards the end of the fifteenth century, one
diſtrict might be in plenty, while another at no
great diſtance, by having its crop deftroyed
either
THE WEALTH OF NATIONS.
289
either by fome accident of the feafons, or by the
incurfion of fome neighbouring baron, might be
fuffering all the horrors of a famine; and yet if
the lands of fome hoftile lord were interpofed
between them, the one might not be able to
give the leaſt affiftance to the other. Under the
vigorous adminiftration of the Tudors, who go-
verned England during the latter part of the
fifteenth, and through the whole of the fixteenth
century, no baron was powerful enough to dare
to diſturb the public fecurity,
The reader will find at the end of this chapter
all the prices of wheat which have been collected
by Fleetwood from 1202 to 1597, both incluſive,
reduced to the money of the prefent times, and
digefted according to the order of time, into feven
divifions of twelve years each. At the end of each
divifion too, he will find the average price of the
twelve years of which it confifts. In that long period
of time, Fleetwood has been able to collect the
prices of no more than eighty years, fo that four
years are wanting to make out the laft twelve
years. I have added, therefore, from the accounts
of Eton college, the prices of 1598, 1599, 1600,
and 1601. It is the only addition which I have
made. The reader will fee, that from the beginning
of the thirteenth, till after the middle of the fix-
teenth century, the average price of each twelve
years grows gradually lower and lower; and that
towards the end of the fixteenth century it begins
to riſe again. The prices, indeed, which Fleet-
wood has been able to collect, feem to have been
W. of N. 1.
19
290 THE NATURE AND CAUSES OF
thoſe chiefly which were remarkable for extra-
ordinary dearnefs or cheapnefs; and I do not
pretend that any very certain conclufion can be
drawn from them. So far, however, as they prove
any thing at all, they confirm the account which
I have been endeavouring to give. Fleetwood
himſelf, however, feems, with moft other writers,
to have believed, that during all this period the
value of filver, in confequence of its increaſing
abundance, was continually diminishing. The
prices of corn which he himſelf has collected, cer-
tainly do not agree with this opinion. They agree
perfectly with that of Mr. Dupré de St. Maur, and
with that which I have been endeavouring to ex-
plain. Bifhop Fleetwood and Mr. Dupré de St.
Maur are the two authors who feem to have col-
lected, with the greateſt diligence and fidelity, the
prices of things in ancient times. It is fomewhat
curious that, though their opinions are ſo very
different, their facts, fo far as they relate to the price
of corn at leaſt, fhould coincide fo very exactly.
It is not, however, fo much from the low price
of corn, as from that of fome other parts of the rude
produce of land, that the moft judicious writers
have inferred the great value of filver in thoſe very
ancient times. Corn, it has been ſaid, being a fort
of manufacture, was, in thofe rude ages, much
dearer in proportion than the greater part of other
commodities; it is meant, I fuppofe, than the
greater part of unmanufactured commodities; fuch
as cattle, poultry, game of all kinds, &c That in
thoſe times of poverty and barbariſm theſe were
THE WEALTH OF NATIONS.
291
proportionably much cheaper than corn, is un-
doubtedly true. But this cheapnefs was not the
effect of the high value of filver, but of the low
value of thofe commodities. It was not becauſe
filver would in fuch times purchaſe or repreſent a
greater quantity of labor, but becaufe fuch com-
modities would purchaſe or repreſent a much ſmal-
ler quantity than in times of more opulence and
improvement. Silver muft certainly be cheaper in
Spaniſh - America than in Europe; in the country
where it is produced, than in the country to which
it is brought, at the expenſe of a long carriage
both by land and by fea, of a freight and an en-
furance. One-and-twenty pence halfpenny fter-
ling, however, we are told by Ulloa, was, not
many years ago, at Buenos Ayres, the price of an
ox choſen from a herd of three or four hundred.
Sixteen fhillings fterling, we are told by Mr. Byron,
was the price of a good horſe in the capital of
Chili. In a country naturally fertile, but of which
the far greater part is altogether uncultivated,
cattle, poultry, game of all kinds, &c. as they
can be acquired with a very ſmall quantity of
labor, fo they will purchaſe or command but a
very fmall quantity. The low money price for
which they may be fold, is no proof that the
real value of filver is there very high, but that the
real value of thofe commodities is very low.
2
Labor, it muſt always be remembered, and
not any particular commodity or ſet of commo-
dities, is the real meaſure of the value both of
filver and of all other commodities.
292
THE NATURE AND CAUSES OF
But in countries almoft wafte, or but thinly in-
habited, cattle, poultry, game of all kinds, &c.
as they are the ſpontaneous productions of nature,
fo the frequently produces them in much greater
quantities than the confumption of the inhabitants
requires. In fuch a ſtate of things the fupply com-
monly exceeds the demand. In different ftates of
fociety, in different ftages of improvement, there-
fore, fuch commodities will reprefent, or be
equivalent to, very different quantities of labor.
In every ſtate of fociety, in every ſtage of im-
provement, corn is the production of human in-
duftry. But the average produce of every fort of
induftry is always fuited, more or less exactly, to
the average confumption; the average fupply to
the average demand. In every different ftage of
improvement, beſides, the raiſing of equal quanti-
ties of corn in the fame foil and climate, will, at
an average, require nearly equal quantities of la-
bor; or what comes to the ſame thing, the price of
nearly equal quantities; the continual increaſe of
the productive powers of labor in an improving
ftate of cultivation, being more or lefs counter-
balanced by the continually increafing price of
cattle, the principal inftruments of agriculture.
Upon all theſe accounts, therefore, we may reſt
affured, that equal quantities of corn will, in
every ſtate of ſociety, in every ſtage of improve-
ment, more nearly repreſent, or be equivalent to,
equal quantities of labor, than equal quantities of
any other part of the rude produce of land. Corn,
accordingly, it has already been obſerved, is, in
THE WEALTH OF NATIONS.
293
all the different ſtages of wealth and improvement,
a more accurate meaſure of value than any other
commodity or ſet of commodities. In all thoſe dif-
ferent ftages, therefore, we can judge better of
the real value of filver, by comparing it with
corn, than by comparing it with any other com-
modity, or ſet of commodities.
Corn, befides, or whatever elfe is the common
and favorite vegetable food of the people, con-
ſtitutes, in every civilized country, the principal
part of the fubfiftence of the laborer. In confe-
quence of the extenfion of agriculture, the land of
every country produces a much greater quantity
of vegetable than of animal food, and the la-
borer every-where lives chiefly upon the whole-
fome food that is cheapeſt and moſt abundant.
Butcher's-meat, except in the moft thriving coun-
tries, or where labor is moft highly rewarded,
makes but an infignificant part of his fubfiftence;
poultry makes a ſtill ſmaller part of it, and game
no part of it. In France, and even in Scotland,
where labor is fomewhat better rewarded than in
France, the laboring poor feldom eat butcher's-
meat, except upon holidays, and other extraor-
dinary occafions. The money price of labor,
therefore, depends much more upon the average
money price of corn, the ſubſiſtence of the laborer,
than upon that of butcher's-meat, or of any other
part of the rude produce of land. The real value
of gold and filver, therefore, the real quantity of la-
bor which they can purchaſe or command, depends
much more upon the quantity of corn which they
294 THE NATURE AND CAUSES OF
can purchaſe or command, than upon that of
butcher's-meat, or any other part of the rude
produce of land.
Such flight obfervations, however, upon the
prices either of corn or of other commodities,
would not probably have mifled fo many intelli-
gent authors, had they not been influenced, at
the fame time, by the popular notion, that as the
quantity of filver naturally increaſes in every
country with the increaſe of wealth, fo its value
diminiſhes as its quantity increaſes. This notion
however, feems to be altogether groundleſs,
The quantity of the precious metals may increaſe
in any country from two different cauſes: either,
firſt, from the increaſed abundance of the mines
which ſupply it; or, fecondly, from the increaſed
wealth of the people, from the increaſed produce
of their annual labor. The firft of thefe caufes is no
doubt neceffarily connected with the diminution of
the value of the precious metals; but the ſecond is not.
When more abundant mines are difcovered, a
greater quantity of the precious metals is brought
to market, and the quantity of the neceffaries and
conveniencies of life for which they must be ex-
changed being the fame as before, equal quantities.
of the metals must be exchanged for ſmaller quan-
tities of commodities. So far, therefore, as the in-
creaſe of the quantity of the precious metals in any
country arifes from the increafed abundance of the
mines, it is neceffarily connected with fome dimi-
nution of their value.
When, on the contrary, the wealth of any
country increaſes, when the annual produce of
THE WEALTH OF NATIONS.
295
its labor becomes gradually greater and greater,
a greater quantity of coin becomes neceflary in
order to circulate a greater quantity of commo-
dities; and the people, as they can afford it
they have more commodities to give for it, will
naturally purchaſe a greater and a greater quan-
tity of plate. The quantity of their coin will in-
creafe from neceffity; the quantity of their plate
from vanity and oftentation, or from the fame
reafon that the quantity of fine ftatues, pictures,
and of every other luxury and curiofity, is likely
to increaſe among them. But as ftatuaries and
painters are not likely to be worfe rewarded in
times of wealth and profperity, than in times of
poverty and depreffion, fo gold and filver are not
likely to be worſe paid for.
The price of gold and filver, when the accidental
difcovery of more abundant mines does not keep it
down, as it naturally rifes with the wealth of
every country, fo, whatever be the ftate of the
mines, it is at all times naturally higher in a rich
than in a poor country. Gold and filver, like all
other commodities, naturally ſeek the market where
the beſt price is given for them and the beſt price
is commonly given for every thing in the country
which can beft afford it. Labor, it muſt be re-
membered, is the ultimate price which is paid for
every thing, and in countries where labor is equally
well rewarded, the money price of labor will be in
proportion to that of the fubfiftence of the laborer.
But gold and filver will naturally exchange for a
greater quantity of fubfiftence in a rich than in a
296 THE NATURE AND CAUSES OF
poor country, in a country which abounds with
fubfiftence, than in one which is but indifferently
fupplied with it. If the two countries are at a great
diſtance, the difference may be very great; be-
cauſe though the metals naturally fly from the
worſe to the better market, yet it may be difficult
to tranſport them in fuch quantities as to bring
their price nearly to a level in both. If the countries
are near, the difference will be ſmaller, and may
fometimes be fcarce perceptible; becauſe in this
cafe the transportation will be eafy. China is a
much richer country than any part of Europe, and
the difference between the price of fubfiftence in
China and in Europe is very great. Rice in China
is much cheaper than wheat is any-where in Europe.
England is a much richer country than Scot-
land; but the difference between the money-
price of corn in thofe two countries is much
fmaller, and is but juft perceptible. In propor-
tion to the quantity or meaſure, Scotch corn
generally appears to be a good deal cheaper than
English; but in proportion to its quality, it is
certainly fomewhat dearer. Scotland receives
almoſt every year very large fupplies from Eng-
land, and every commodity must commonly be
fomewhat dearer in the country to which it is
brought than in that from which it comes.
English corn, therefore, muft be dearer in Scot-
land than in England, and yet in proportion to
its quality, or to the quantity and goodness of
the flour or meal which can be made from it, it
cannot commonly be fold higher there than the
1
THE WEALTH OF NATIONS.
297
Scotch corn which comes to market in competition
with it.
The difference between the money price of
labor in China and in Europe, is ftill greater
than that between the money price of fubfiftence;
becauſe the real recompence of labor is higher in
Europe than in China, the greater part of Europe
being in an improving ftate, while China feems
to be ſtanding ftill. The money price of labor
is lower in Scotland than in England, becauſe
the real recompence of labor is much lower;
Scotland, though advancing to greater wealth,
advancing much more flowly than England. The
frequency of emigration from Scotland, and the
rarity of it from England, fufficiently prove that
the demand for labor is very different in the two
countries. The proportion between the real recom-
pence of labor in different countries, it muſt be
remembered, is naturally regulated, not by their
actual wealth or poverty, but by their advancing,
ſtationary, or declining condition.
Gold and filver, as they are naturally of the
greateſt value among the richeſt, ſo they are na-
turally of the leaft value among the pooreft na-
tions. Among favages, the pooreft of all nations,
they are of ſcarce any value.
In great towns corn is always dearer than in
remote parts of the country. This, however, is
the effect, not of the real cheapnefs of filver, but
of the real dearnefs of corn. It does not coft lefs
labor to bring filver to the great town than to
the remote parts of the country; but it cofts a
great deal more to bring corn.
298 THE NATURE AND CAUSES OF
ด
In fome very rich and commercial countries, fuch
as Holland and the territory of Genoa, corn is dear
for the fame reafon that it is dear in great towns.
They do not produce enough to maintain their in-
habitants. They are rich in the induſtry and fkill of
their artificers and manufacturers; in every ſort of
machinery which can facilitate and abridge labor;
in ſhipping, and in all the other inftruments and
means of carriage and commerce: but they are poor
in corn, which, as it muſt be brought to them from
diſtant countries, muft, by an addition to its price
pay for the carriage from thofe countries. It does
not coſt leſs labor to bring filver to Amfterdam than
to Dantzick; but it cofts a great deal more to bring
corn. Thereal cost of filver muſt be nearly the fame
in both places; but that of corn must be very
different. Diminish the real opulence either of
Holland or of the territory of Genoa, while the
number of their inhabitants remains the fame :
diminiſh their power of fupplying themſelves from
diftant countries; and the price of corn, inftead of
fuking with that diminution in the quantity of
their filver, which muft neceffarily accompany this
declension either as its caufe or as its effect, will
rife to the price of a famine. When we are in want
of neceffaries we muft part with all fuperfluities, of
which the value, as it rifes in times of opulence
and proſperity, fo it finks in times of poverty and
diftrefs. It is otherwife with neceffaries. Their
real price, the quantity of labor which they can
purchaſe or command, rifes in times of poverty
and diſtreſs, and finks in times of opulence and
THE WEALTH OF NATIONS.
299
profperity, which are always times of great
abundance; for they could not otherwife be times
of opulence and profperity. Corn is a neceffary,
filver is only a fuperfluity.
Whatever, therefore, may have been the in-
creaſe in the quantity of the precious metals,
which, during the period between the middle of
the fourteenth and that of the fixteenth century,
arofe from the increaſe of wealth and improve-
ment, it could have no tendency to diminiſh
their value either in Great Britain, or in any other
part of Europe. If thoſe who have collected the
prices of things in ancient times, therefore, had,
during this period, no reaſon to infer the diminution
of the value of filver, from any obfervation which
they had made upon the prices either of corn or
of other commodities, they had ftill leſs reaſon to
infer it from any fuppofed increaſe of wealth and
inprovement.
SECOND PERIO D.
BUT
OUT how various foever may have been the
opinions of the learned concerning the progrefs
of the value of filver during this first period, they
are unanimous concerning it during the fecond.
From about 1570 to about 1640, during a
period of about feventy years the variation in
the proportion between the value of filver and
that of corn, held a quite oppofite courfe. Silver
300 THE NATURE AND CAUSES OF
funk in its real value, or would exchange for a
fmaller quantity of labor than before; and corn
rofe in its nominal price, and inſtead of being
commonly fold for about two ounces of filver
the quarter, or about ten fhillings of our prefent
money, came to be fold for fix and eight ounces
of filver the quarter, or about thirty and forty
fhillings of our prefent money.
The difcovery of the abundant mines of Ame-
rica, leems to have been the fole cauſe of this
diminution in the value of filver in proportion to
that of corn. It is accounted for accordingly in the
fame manner by every body; and there never has
been any dispute either about the fact, or about
the cauſe of it. The greater part of Europe was,
during this period, advancing in induſtry and
improvement, and the demand for filver muft con-
fequently have been increafing. But the increaſe of
the fupply had, it ſeems, ſo far exceeded that of the
demand, that the value of that metal funk confi-
derably. The diſcovery of the mines of America,
it is to be obferved, does not ſeem to have had any
very fenfible effect upon the prices of things in
England till after 1570; though even the mines.
of Potofi had been diſcovered more than twenty
years before.
From 1595 to 1620, both inclufive, the ave-
rage price of the quarter of nine bufhels of the
beſt wheat at Windfor market, appears from
the accounts of Eton College, to have been
2 l. 1 s. 6d. From which fum, neglecting the
fraction, and deducting a ninth, or 4s. 7 d.,
13
THE WEALTH OF NATIONS. 301
And from
the price of the quarter of eight bufhels comes
out to have been 1 l. 16s. 10 d.
this fum, neglecting likewife the fraction, and
deducting a ninth, or 4 s. 1 d., for the differ-
ence between the price of the beſt wheat and
that of the middle wheat, the price of the
middle wheat comes out to have been about
1 l. 12s, 8 d. 8, or about fix ounces and one third
of an ounce of filver.
From 1621 to 1636, both inclufive, the ave-
rage price of the fame meaſure of the beſt wheat
at the fame market, appears, from the fame ac-
counts, to have been 27. 10 s.; from which
making the like deductions as in the foregoing
cafe, the average price of the quarter of eight
bufhels of middle wheat comes out to have been
1l. 19 s. 6d. or about ſeven ounces and two-
thirds of an ounce of filver.
BE
THIRD PERIOD.
ETWEEN 1630 and 1640, or about 1636,
the effect of the difcovery of the mines of America
in reducing the value of filver, appears to have
been completed, and the value of that metal feems
never to have funk lower in proportion to that of
corn than it was about that time. It ſeems to have
rifen fomewhat in the courfe of the prefent
century, and it had probably begun to do ſo even
fome time before the end of the laſt.
From 1637 to 1700, both inclufive, being the
fixty-four laft years of the laft century, the average
302 THE NATURE AND CAUSES OF
I
I
price of the quarter of nine bufhels of the beft
wheat at Windfor market, appears, from the
fame accounts, to have been 2 l. 11 s. od. ;
which is only 1 s. od. dearer than it had been
during the fixteen years before. But in the courfe
of theſe fixty-four years there happened two
events which muft have produced a much greater
fcarcity of corn than what the courſe of the feafons
would otherwife have occafioned, and which,
therefore, without fuppofing any further reduction
in the value of filver, will much more than account
for this very ſmall enhancement of price.
The firſt of theſe events was the civil war,
which, by difcouraging tillage and interrupting
commerce, muft have raiſed the price of corn
much above what the courſe of the ſeaſons
would otherwife have occafioned. It muſt have
had this effect more or leſs at all the different
markets in the kingdom, but particularly at
thoſe in the neighbourhood of London, which
require to be ſupplied from the greateſt diſtance.
In 1648, accordingly, the price of the beft wheat
at Windſor market, appears, from the fame ac-
counts, to have been 47. 5 s. and in 1649 to have
been 41. the quarter of nine bufhels. The ex-
ceſs of thoſe two years above 27. 10 s. (the ave-
rage price of the fixteen years preceding 1637)
is 3 l. 5 s.; which divided among the fixty-four
laft years of the laſt century, will alone very
nearly account for that ſmall enhancement of
price which ſeems to have taken place in them.
Theſe, however, though the higheft, are by no
THE WEALTH OF NATIONS.
303
means the only high prices which feem to have
been occafioned by the civil wars.
The fecond event was the bounty upon the
exportation of corn, granted in 1688. The
bounty, it has been thought by many people, by
encouraging tillage, may, in a long courfe of
years, have occafioned a greater abundance, and
confequently a greater cheapneſs of corn in the
home market, than what would otherwiſe have
taken place there. How far the bounty could
produce this effect at any time I fhall examine
hereafter; I fhall only obſerve at preſent, that
between 1688 and 1700, it had not time to produce
any fuch effect. During this fhort period its only
effect muſt have been, by encouraging the export-
ation of the ſurplus produce of every year, and
thereby hindering the abundance of one year from
compenfating the fcarcity of another, to raiſe
the price in the home-market. The fcarcity which
prevailed in England from 1693 to 1699, both
inclufive, though no doubt principally owing to the
badneſs of the ſeaſons, and, therefore, extending
through a confiderable part of Europe, muſt have
been ſomewhat enhanced by the bounty. In 1699,
accordingly, the further exportation of corn was
prohibited for nine months.
There was
a third event which occurred in
the courſe of the fame period, and which, though
it could not occafion any ſcarcity of corn, nor,
perhaps, any augmentation in the real quantity
of filver which was ufually paid for it, muſt ne-
ceffarily have occafioned fome augmentation in
304 THE NATURE AND CAUSES OF
the nominal fum. This event was the great debafe-
ment of the filver coin, by clipping and wearing.
This evil had begun in the reign of Charles II.
and had gone on continually increafing till 1695;
at which time, as we may learn from Mr. Lowndes,
the current filver coin was, at an average, near
five-and-twenty per cent, below its ſtandard value.
But the nominal fum which conſtitutes the market-
price of every commodity it neceffarily regulated,
not ſo much by the quantity of filver, which,
according to the ftandard, ought to be contained
in it, as by that which, it is found by experience,
actually is contained in it. This nominal fum
therefore, is neceffarily higher when the coin is
much debaſed by clipping and wearing, than when
near to its ftandard value.
In the courſe of the prefent century, the filver
coin has not at any time been more below its
ſtandard weight than it is at prefent. But though
very much defaced, its value has been kept up by
that of the gold coin for which it is exchanged.
For though before the late re coinage, the gold
coin was a good deal defaced too, it was lefs fo
than the filver. In 1695, on the contrary, the
value of the filver coin was not kept up by the
gold coin; a guinea then commonly exchanging
for thirty fhillings of the worn and clipt filver.
Before the late re-coinage of the gold, the price
of filver bullion was feldom higher than five
fhillings and feven-pence an ounce, which is but
five-pence above the mint price. But in 1695,
the common price of filver bullion was fix.
fhillings
THE WEALTH OF NATIONS.
305
fhillings and five-pence an ounce*, which is
fifteen-pence above the mint price. Even before
the late re-coinage of the gold, therefore, the
coin, gold and filver together, when compared
with filver bullion, was not ſuppoſed to be more
than eight per cent. below its ftandard value. In
1695, on the contrary, it had been ſuppoſed to be
near five-and-twenty per cent. below that value.
But in the beginning of the preſent century, that
is, immediately after the great recoinage in King
William's time, the greater part of the current filver
coin muſt have been ftill nearer to its ftandard
weight than it is at preſent. In the courſe of the
prefent century too there has been no great public
calamity, ſuch as the civil war, which could either
difcourage tillage, or interrupt the interior com-
merce of the country. And though the bounty,
which has taken place through the greater part of
this century, muft always raiſe the price of corn
fomewhat higher than it otherwife would be in the
actual ftate of tillage; yet as, in the courſe of this
century, the bounty has had full time to produce
all the good effects commonly imputed to it, to
encourage tillage, and thereby to increaſe the
quantity of corn in the home market, it may, upon
the principles of a ſyſtem which I fhall explain
and examine hereafter, be fuppofed to have done
fomething to lower the price of that commodity
the one way, as well as to raiſe it the other. It
is by many people fuppofed to have done more:
* Lowndes's Effay on the Silver Coin, p. 68.
W. of N. 1.
2Q
306 THE NATURE AND CAUSES OF
32
In the fixty-four first years of the prefent century
accordingly, the average price of the quarter of
nine bushels of the beſt wheat at Windfor market,
appears, by the accounts of Eton College, to have
been 2 l. o s. 6 d. 12, which is about ten fhillings
and fixpence, or more than five-and-twenty per
cent. cheaper than it had been during the fixty four
laft years of the laft century; and about nine
fhillings and fix-pence cheaper than it had been
during the fixteen years preceding 1636, when
the diſcovery of the abundant mines of America
may be ſuppoſed to have produced its full effect;
and about one fhilling cheaper than it had been in
the twenty-fix years preceding 1620, before that
diſcovery can well be fuppofed to have produced
its full effect. According to this account, the
average price of middle wheat, during theſe fixty-
four firſt years of the prefent century, comes out
to have been about thirty-two fhillings the quarter
of eight bufhels.
The value of filver, therefore, ſeems to have
riſen ſomewhat in proportion to that of corn
during the courſe of the preſent century, and it
had probably begun to do fo even fome time
before the end of the laſt.
In 1687, the price of the quarter of nine bushels
of the beſt wheat at Windfor market was 1. l. 5 s.
2. d. the loweſt price at which it had ever been
from 1595.
In 1688, Mr. Gregory King, a man famous for
his knowledge in matters of this kind, eftimated
the average price of wheat in years of moderate
!
THE WEALTH OF NATIONS.
307
plenty to be to the grower 3 s. 6 d. the bufhel,
or eight-and-twenty fhillings the quarter. The
grower's price I underſtand to be the fame with
what is fometimes called the contract price, or the
price at which a farmer contracts for a certain
number of years to deliver a certain quantity of
corn to a dealer. As a contract of this kind faves
the farmer the expenſe and trouble of marketing,
the contract price is generally lower than what is
ſuppoſed to be the average market price. Mr. King
had judged eight-and-twenty fhillings the quarter
to be at that time the ordinary contract price in
years of moderate plenty. Before the fcarcity
occafioned by the late extraordinary courfe of bad
ſeaſons, it was, I have been aſſured, the ordinary
contract price in all common years.
In 1688 was granted the parliamentary bounty
upon the exportation of corn. The country gentle-
men, who then cumpofed a ftill greater proportion
of the legislature than they do at prefent, had
felt that the money price of corn was falling:
The bounty was an expedient to raiſe it artificially
to the high price at which it had frequently been
fold in the times of Charles I. and II. It was to
take place, therefore, till wheat was fo high as
forty-eight fhillings the quarter; that is twenty
fhillings, or ths dearer than Mr. King had in
that very year eftimated the grower's price to
be in times of moderate plenty. If his calcula-
tions deſerve any part of the reputation which
they have obtained very univerfally, eight-and-
forty fhillings the quarter was a price which 3
多
​308 THE NATURE AND CAUSES OF
without fome fuch expedient as the bounty, could
not at that time be expected, except in years of
extraordinary fcarcity. But the government of
King William was not then fully fettled. It was
in no condition to refuſe any thing to the coun-
try gentlemen, from whom it was at that very
time foliciting the firſt eſtabliſhment of the annual
land-tax.
The value of filver, therefore, in proportion to
that of corn, had probably rifen fomewhat before
the end of the laft century; and it ſeems to have
continued to do fo during the courfe of the greater
part of the prefent; though the neceffary operation
of the bounty muft have hindered that rife from
being ſo fenfible as it otherwiſe would have been
in the actual ftate of tillage.
In plentiful years the bounty, by occafioning an
extraordinary exportation, neceffarily raiſes the
price of corn above what it otherwife would be in
thoſe years. To encourage tillage, by keeping up
the price of corn even in the moſt plentiful years,
was the avowed end of the inftitution.
In years of great fcarcity, indeed, the bounty
has generally been ſuſpended. It muſt, however,
have had fome effect even upon the prices of many
of thoſe years. By the extraordinary exportation
which it occafions in years of plenty, it muſt
frequently hinder the plenty of one year from
compenſating the ſcarcity of another.
Both in years of plenty and in years of ſcarcity,
therefore, the bounty raiſes the price of corn above
what it naturally would be in the actual ftate of
THE WEALTH OF NATIONS.
30g
tillage. If, during the fixty-four firſt years of the
preſent century, therefore, the average price has
been lower than during the fixty-four laft years of
the last century, it muft, in the fame itate of
tillage, have been much more fo, had it not
been for this operation of the bounty.
I
But without the bounty, it may be ſaid, the
ftate of tillage would not have been the fame.
What may have been the effects of this inftitu-
tion upon the agriculture of the country,
fhall endeavour to explain hereafter, when I
come to treat particularly of bounties. I fhall
only obferve at prefent, that this rife in the
value of filver, in proportion to that of corn,
has not been peculiar to England. It has been
obferved to have taken place in France during
the fame period, and nearly in the fame pro-
portion too, by three very faithful, diligent,
and laborious collectors of the prices of corn,
Mr. Dupré de St. Maur, Mr. Meffance, and the
author of the Effay on the police of grain. But
in France, till 1764, the exportation of grain was
by law prohibited; and it is fomewhat difficult
to ſuppoſe, that nearly the ſame diminution, of
price which took place in one country, notwith-
flanding this prohibition, fhould in another be
owing to the extraordinary encouragement given
to exportation.
It would be more proper, perhaps, to conſider
this variation in the average money price of corn
as the effect rather of fome gradual rife in the
real value of filver in the European market, than
310 THE NATURE AND CAUSES OF
of any fall in the real average value of corn. Corn,
it has already been obſerved, is at diftant periods
of time a more accurate meaſure of value than
either filver, or perhaps any other commodity.
When, after the diſcovery of the abundant mines
of America, corn rofe to three and four times its
former money price, this change was univerſally
aſcribed, not to any rife in the real value of corn,
but to a fall in the real value of filver. If during
the fixty-four firft years of the prefent century,
therefore, the average money price of corn has
fallen fomewhat below what it had been during the
greater part of the laft century, we ſhould in the
fame manner impute this change, not to any fall
in the real value of corn, but to ſome riſe in the
real value of filver in the European market.
The high price of corn during theſe ten or
twelve years paft, indeed, has occafioned a fufpi-
cion that the real value of filver ftill continues to
fall in the European market. This high price of
corn, however, feems evidently to have been the
effect of the extraordinary unfavorableneſs of the
feafons, and ought therefore to be regarded, not as
a permanent, but as a tranfitory and occafional
event. The ſeaſons for theſe ten or twelve years
paſt have been unfavorable through the greater
part of Europe; and the diſorders of Poland have
very much increaſed the ſcarcity in all thoſe
countries, which, in dear years, ufed to be
ſupplied from that market. So long a courfe of
bad ſeaſons, though not a very common event,
is by no means a fingular one; and whoever has
THE WEALTH *
311
OF NATIONS.
inquired much into the hiſtory of the prices of
corn in former times, will be at no lofs to recollect
feveral other examples of the fame kind. Ten years
of extraordinary ſcarcity, befides, are not more
wonderful than ten years of extraordinary plenty.
The low price of corn from 1741 to 1750, both
inclufive, may very well be fet in oppofition to
its high price during theſe laft eight or ten years.
From 1741 to 1750, the average price of the quarter
of nine bufhels of the beſt wheat at Windfor
market, it appears from the accounts of Eton
College, was only 1 l. 13 s. 9 d. 2, which is
nearly 6 s. 3 d. below the average price of the
fixty-four firſt years of the preſent century. The
average price of the quarter of eight bufhels of
middle wheat, comes out, according to this
account, to have been, during theſe ten years,
only 1 l. 6 s. 8 d.
Between 1741 and 1750, however, the bounty
muſt have hindered the price of corn from falling
fo low in the home market as it naturally would
have done. During theſe ten years the quantity
of all forts of grain exported, it appears from the
cuftom-houſe books, amounted to no less than
eight millions twenty-nine thouſand one hundred
and fifty-fix quarters one bufhel. The bounty paid
for this amounted to 1,514,962 l. 17 s. 4 d. 1. In
1749 accordingly, Mr. Pelham, at that time prime
miniſter, obſerved to the Houſe of Commons, that
for the three years preceding, a very extraor-
dinary fum had been paid as bounty for the
exportation of corn. He had good reaſon to make
312 THE NATURE AND CAUSES OF
this obfervation, and in the following year he
might have had ftill better. In that fingle year the
bounty paid amounted to no leſs than 324,176 l,
10 s. 6d. It is unneceffary to obferve how much
this forced exportation muſt have raiſed the price
of corn above what it otherwife would have been
in the home market.
F
:
of
At the end of the accounts annexed to this
chapter the reader will find the particular account
of thoſe ten years feparated from the reft. He
will find there too the particular account of the
preceding ten years, of which the average is
likewiſe below, though not fo much below, the
general average of the fixty-four firft years of the
century. The year 1740, however, was a year
extraordinary ſcarcity. Thefe twenty years pre-
ceding 1750, may very well be fet in oppofition
to the twenty preceding 1770. As the former
were a good deal below the general average of
the century, notwithſtanding the intervention of
one or two dear years; for the latter have been
a good deal above it, notwithflanding the inter-
vention of one or two cheap ones, of 1759,
for example. If the former have not been as
much below the general average, as the latter
have been above it, we ought probably to im-
pute it to the bounty. The change has evidently
been too fudden to be afcribed to any change in
the value of filver, which is always flow and
gradual. The fuddennefs of the effect can be
{
1
* See Tracts on the Corn Trade; Tract 3d.
A
THE WEALTH OF NATIONS. 313
accounted for only by a caufe which can operate
fuddenly, the accidental variation of the ſeaſons.
The money price of labor in Great Britain has,
indeed, riſen during the courſe of the preſent cen-
tury. This, however, feems to be the effect, not
fo much of any diminution in the value of filver
in the European market, as of an increaſe in the
demand for labor in Great Britain, arifing from
the great, and almoft univerfal profperity of the
country. In France, a country not altogether fo
profperous, the money price of labor has, fince
the middle of the laft century, been obſerved to
fink gradually with the average money price of
corn, Both in the laft century and in the preſent,
the day-wages of common labor are there faid to
have been pretty uniformly about the twentieth
part of the average price of the feptier of wheat,
a meaſure which contains a little more than four
Wincheſter bufhels. In Great Britain the real re-
compence of labor, it has already been fhown,
the real quantities of the neceffaries and convenien-
cies of life which are given to the laborer, has in-
creaſed confiderably during the courfe of the
preſent century. The rife in its money price
ſeems to have been the effect, not of any diminu-
tion of the value of filver in the general market
of Europe, but of a rife in the real price of la-
bor in the particular market of Great Britain,
owing to the peculiarly happy circumftances of
the country.
For ſome time after the firſt diſcovery of America,
filver would continue to fell at its former, or not
314 THE NATURE AND CAUSES OF
much below its former price. The profits of mining
would for fome time be very great, and much
above their natural rate. Thoſe who imported
that metal into Europe, however, would foon
find that the whole annual importation could not
be diſpoſed of at this high price. Silver would
gradually exchange for a fmaller and a ſmaller
quantity of goods. Its price would fink gradually
lower and lower till it fell to its natural price;
or to what was juſt ſufficient to pay, according to
their natural rates, the wages of the labor, the
profits of the ſtock, and the rent of the land,
which must be paid in order to bring it from the
mine to the market. In the greater part of the
filver mines of Peru, the tax of the king of Spain
amounting to a tenth of the grofs produce, eats
up, it has already been obſerved, the whole rent
of the land. This tax was originally a half;
it ſoon afterwards fell to a third, then to a fifth,
and at laſt to a tenth, at which rate it ftill con-
tinues. In the greater part of the filver mines
of Peru this, it ſeems, is all that remains, after
replacing the ftock of the undertaker of the
work, together with its ordinary profits; and it
ſeems to be univerſally acknowledged that theſe
profits, which were once very high, are now as
low as they can well be, confiftently with carrying
on their works.
The tax of the king of Spain was reduced to
a fifth part of the regiſtered filver in 1504*, one-
*Solorzano, vol. ii.
THE WEALTH OF NATIONS.
315
and-forty years before 1545, the date of the dif-
covery of the mines of Potofi. In the courſe of
ninety years, or before 1636, thefe mines, the
moft fertile in all America, had time fufficient
to produce their full effect, or to reduce the
value of filver in the European market as low as
it could well fall, while it continued to pay this
tax to the king of Spain. Ninety years is time
fufficient to reduce any commodity, of which
there is no monopoly, to its natural price, or to
the loweſt price at which, while it pays a parti-
cular tax, it can continue to be fold for any con-
fiderable time together.
The price of filver in the European market
might perhaps have fallen ftill lower, and it
might have become neceſſary either to reduce the
tax upon it, not only to one tenth, as in 1736,
but to one twentieth, in the ſame manner as that
upon gold, or to give up working the greater
part of the American mines which are now
wrought. The gradual increaſe of the demand
for filver, or the gradual enlargement of the
market for the produce of the filver mines of
America, is probably the cauſe which has pre-
vented this from happening, and which has not
only kept up the value of filver in the European
market, but has perhaps even raiſed it ſomewhat
higher than it was about the middle of the laſt
century.
Since the firſt difcovery of America, the market
for the produce of its filver mines has been grow-
ing gradually more and more extenfive.
316 THE NATURE AND CAUSES OF
Firft, The market of Europe has become
gradually more and more extenfive. Since the dif
covery of America, the greater part of Europe has
-been much improved. England, Holland, France,
and Germany; even Sweden, Denmark, and Ruffia,
have all advanced confiderably both in agriculture
and in manufactures. Italy feems not to have gone
backwards. The fall of Italy preceded the conqueft
of Peru. Since that time it ſeems rather to have
recovered a little. Spain and Portugal, indeed,
are ſuppoſed to have gone backwards. Portugal,
however, is but a very ſmall part of Europe, and
the declenfion of Spain is not, perhaps, fo great
as is commonly imagined. In the beginning of the
fixteenth century, Spain was a very poor country,
even in compariſon with France, which has been
fo much improved fince that time. It was the
well-known remark of the Emperor Charles V.
who had travelled fo frequently through both
countries, that every thing abounded in France,
but that every thing was wanting in Spain. The
increaſing produce of the agriculture and manu-
factures of Europe muſt neceffarily have required
a gradual increaſe in the quantity of filver coin
to circulate it; and the increafing number of
wealthy individuals muſt have required the like
increaſe in the quantity of their plate and other
ornaments of filver.
Secondly, America is itſelf a new market for
the produce of its own filver mines; and as its
advances in agriculture, induftry, and popula-
tion, are much more rapid than thofe of the moſt
THE WEALTH OF NATIONS.
317
thriving countries in Europe, its demand muſt
increaſe much more rapidly. The English colonies.
are altogether a new market, which, partly for
coin and partly for plate, requires a continually
augmenting ſupply of filver through a great con-
tinent where there never was any demand before.
The greater part too of the Spaniſh and Portugueſe
colonies are altogether new markets. New Granada,
the Yucatan, Paraguay, and the Brafils were,
before diſcovered by the Europeans, inhabited by
favage nations, who had neither arts nor agricul-
ture. A confiderable degree of both has now been
introduced into all of them. Even Mexico and
Peru, though they cannot be confidered as alto-
gether new markets, are certainly much more
extenſive ones than they ever were before. After
all the wonderful tales which have been publiſhed
concerning the fplendid ftate of thofe countries
in ancient times, whoever reads, with any de-
gree of fober judgment, the hiftory of their firſt
difcovery and conqueft, will evidently difcern
that, in arts, agriculture, and commerce, their
inhabitants were much more ignorant than the
Tartars of the Ukraine are at prefent. Even the
Peruvians, the more civilized nation of the two,
though they made uſe of gold and filver as orna-
ments, had no coined money of any kind. Their
whole commerce was carried on by barter, and
there was accordingly fcarce any divifion of la-
bor among them. Thofe who cultivated the
ground were obliged to build their own houſes,
to make their own houſehold furniture, their own
318 THE NATURE AND CAUSES OF
1
clothes, fhoes, and inftruments of agriculture.
The few artificers among them are ſaid to have
been all maintained by the fovereign, the nobles,
and the prieſts, and were probably their fervants
or flaves. All the ancient arts of Mexico and
Peru have never furniſhed one fingle manufacture
to Europe. The Spaniſh armies, though they fcarce
ever exceeded five hundred men, and frequently
did not amount to half that number, found almoſt
every-where great difficulty in procuring fubfiftence:
The famines which they are faid to have occafioned
almoſt wherever they went, in countries too which
at the fame time are reprefented as very populous
and well-cultivated, fufficiently demonftrate that
the ftory of this populouſneſs and high cultivation
is in a great meaſure fabulous. The Spaniſh colonies
are under a government in many refpects lefs
favorable to agriculture, improvement and po-
pulation, than that of the English colonies.
They ſeem, however,
however, to be advancing in all
'theſe much more rapidly than any country in
Europe. In a fertile foil and happy climate,
the great abundance and cheapnefs of land, a
circumftance common to all new colonies, is, it
feems, fo great, an advantage as to compenfate
many defects in civil government. Frezier, who
vifited Peru in 1713, reprefents Lima as con-
taining between twenty-five and twenty-eight
thouſand inhabitants. Ulloa, who refided in the
fame country between 1740 and 1746, reprefents
it as containing more than fifty thoufand. The
difference in their accounts of the populoufnefs
THE WEALTH OF NATIONS.
319
of feveral other principal towns in Chili and Peru
is nearly the fame; and as there feems to be no
reaſon to doubt of the good information of either,
it marks an increaſe which is ſcarce inferior to
that of the Engliſh colonies. America, therefore,
is a new market for the produce of its own filver
mines, of which the demand muſt increaſe much
more rapidly than that of the moft thriving coun-
try in Europe.
Thirdly, The Eaſt Indies is another market for
the produce of the filver mines of America, and a
market which, from the time of the firſt diſcovery
of thoſe mines, has been continually taking off a
greater and a greater quantity of filver. Since that
time, the direct trade between America and the
Eaſt Indies, which is carried on by means of the
Acapulco fhips, has been continually augmenting,
and the indirect intercourſe by the way of Europe
has been augmenting in a ftill greater proportion.
During the fixteenth century, the Portugueſe were
the only European nation who carried on any re-
gular trade to the Eaft Indies. In the laft years of
that century the Dutch began to encroach upon
this monopoly, and in a few years expelled them
from their principal fettlements in India. During
the greater part of the laſt century thofe two na-
tions divided the moft confiderable part of the
Eaft India trade between them; the trade of the
Dutch continually augmenting in a ftill greater
proportion than that of the Portugueſe declined.
The Engliſh and French carried on fome trade.
with India in the laft century, but it has been
$20 THE NATURE AND CAUSES OF
greatly augmented in the courfe of the pres
fent. The Eaft India trade of the Swedes and
Danes began in the courfe of the prefent cen-
tury. Even the Mofcovites now trade regularly
with China by a fort of caravans which go over
land through Siberia and Tartary to Pekin. The
Eaſt India trade of all theſe nations, if we except
that of the French, which the laft war had well
nigh annihilated, has been almoft continually
augmenting.
>
The increafing confumption of
Eaft India goods in Europe is, it ſeems, fo great,
as to afford a gradual increaſe of employment to
them all. Tea, for example, was a drug very
little uſed in Europe before the middle of the laſt
century. At preſent the value of the tea an-
nually imported by the Engliſh Eaſt India Com-
pany, for the uſe of their own countrymen
amounts to more than a million and a half a
year; and even this is not enough; a great deal
more being conftantly fmuggled into the coun-
try from the ports of Holland, from Gotten-
burgh in Sweden, and from the coaſt of France
too, as long as the French Eaſt India Company
was in proſperity. The conſumption of the
porcelain of China, of the ſpiceries of the Moluc-
cas, of the piece goods of Bengal, and of innu-
merable other articles, has increaſed very nearly
in a like proportion. The tonnage accordingly
of all the European fhipping employed in the
Eaſt India trade, at any one time during the laſt
century, was not, perhaps, much greater than
that
THE WEALTH OF NATIONS. 321
that of the English Eaft India Company before
the late reduction of their fhipping.
But in the Eaft Indies, particularly in China
and Indoftan, the value of the precious metals,
when the Europeans firft began to trade to thoſe
countries, was much higher than in Europe; and
it ftill continues to be fo. In rice countries, which
generally yield two, fometimes three crops in the
year, each of them more plentiful than any common
crop of corn, the abundance of food muſt be much
greater than in any corn country of equal extent.
Such countries are accordingly much more popu-
lous. In them too the rich, having a greater ſuper-
abundance of food to difpofe of beyond what they
themſelves can confume, have the means of pur-
chafing a much greater quantity of the labor of
other people. The retinue of a grandee in China
or Indoſtan accordingly is, by all accounts, much
more numerous and fplendid than that of the
richeſt ſubjects in Europe. The fame ſuper-abund-
ance of food, of which they have the difpofal,
enables them to give a greater quantity of it for
all thoſe fingular and rare productions which
nature furniſhes but in very fmall quantities; ſuch
as the precious metals and the precious ftones,
the great objects of the competition of the rich.
Though the mines, therefore, which ſupplied
the Indian market had been as abundant as thofe
which ſupplied the European, fuch commodities
would naturally exchange for a greater quantity
of food in India than in Europe. But the mines
which fupplied the Indian market with the
W. of N. 1,
21
322 THE NATURE AND CAUSES OF
precious metals feem to have been a good deal lefs
abundant, and thole which fupplied it with the
precious ftones a good deal more fo, than the
mines which fupplied the European. The precious
metals, therefore, would naturally exchange in
India for fomewhat a greater quantity of the pre-
cious ftones, and for a much greater quantity of
foud than in Europe. The money price of diamonds,
the greateſt of all fuperfluities, would be ſomewhat
lower, and that of food, the firſt of all neceſſaries,
a great deal lower in the one country than in the
other. But the real price of labor, the real
quantity of the neceffaries of life which is given to
the laborer, it has already been obferved, is lower
both in China and Indoftan, the two great mar-
kets of India, than it is through the greater part
of Europe. The wages of the laborer will there
purchaſe a ſmaller quantity of food; and as the
money price of food is much lower in India than
in Europe, the money price of labor is there
lower upon a double account; upon account
both of the ſmall quantity of food which it will
purchaſe, and of the low price of that food. But
in countries of equal art and induſtry, the money
price of the greater part of manufactures will be
in proportion to the money price of labor, and
in manufacturing art and induſtry, China and
Indoftan, though inferior, feem not to be much
inferior to any part of Europe. The money
price of the greater part of manufactures, there-
fore, will naturally be much lower in thofe great
empires than it is any-where in Europe. Through
the greater part of Europe too the expenfe of
THE WEALTH OF NATIONS.
323
land-carriage increaſes very much both the real
and nominal price of moſt manufactures. It coſts
more labor, and therefore more money, to bring
firſt the materials, and afterwards the complete
manufacture to market. In China and Indoftan the
extent and variety of inland navigation fave the
greater part of this labor, and confequently of this
money, and thereby reduce ftill lower both the
real and the nominal price of the greater part of
their manufactures. Upon all theſe accounts, the
precious metals are a commodity which it always
has been, and ftill continues to be, extremely
advantageous to carry from Europe to India. There
is fcarce any commodity which brings a better
price there; or which, in proportion to the
quantity of labor and commodities which it coſts
in Europe, will purchaſe or command a greater
quantity of labor and commodities in India. It is
more advantageous too to carry filver thither than
gold; becauſe in China, and the greater part of
the other markets of India, the proportion be-
tween fine filver and fine gold is but as ten, or
at moft as twelve, to one; whereas in Europe it
is as fourteen or fifteen to one. In China, and
the greater part of the other markets of India,
ten, or at moſt twelve, ounces of filver will pur-
chaſe an ounce of gold: in Europe it requires
from fourteen to fifteen ounces. In the cargoes,
therefore, of the greater part of European fhips
which fail to India, filver has generally been one
of the moft valuable articles. It is the most
valuable article in the Acapulco fhips which
324 THE NATURE AND CAUSES OF
fail to Manilla. The filver of the new continent
feems in this manner to be one of the principal
commodities by which the commerce between the
two extremities of the old one is carried on; and it is
by means of it, in a great meaſure, that thoſe diſtant
parts of the world are connected with one another.
In order to fupply fo very widely extended a
market, the quantity of filver annually brought
from the mines muft not only be fufficient to
ſupport that continual increaſe both of coin and
of plate which is required in all thriving coun-
tries; but to repair that continual wafte and
conſumption of filver which takes place in all
countries where that metal is uſed.
The continual confumption of the precious
metals in coin by wearing, and in plate both by
wearing and cleaning, is very fenfible; and in
commodities of which the ufe is fo very widely
extended, would alone require a very great an-
nual ſupply. The confumption of thofe metals
in fome particular manufactures, though it may
not perhaps be greater upon the whole than this
gradual conſumption, is, however, much more
ſenſible, as it is much more rapid. In the ma-
nufactures of Birmingham alone, the quantity of
gold and filver annually employed in gilding and
plating, and thereby difqualified from ever after-
wards appearing in the fhape of thoſe metals, is
faid to amount to more than fifty thouſand
pounds fterling.
We may
from thence form
ſome notion how great muſt be the annual con-
fumption in all the different parts of the world,
THE WEALTH OF NATIONS.
325
either in manufactures of the fame kind with
thoſe of Birmingham, or in laces, embroideries
gold and filver ſtuffs, the gilding of books, fur-
niture, &c. A confiderable quantity too muſt
be annually loft in tranſporting thoſe metals
from one place to another both by fea and by
land. In the greater part of the governments of
Afia, befides, the almoſt univerſal cuſtom of con-
cealing treaſures in the bowels of the earth, of
which the knowledge frequently dies with the
perſon who makes the concealment, muft occa-
fion the loss of a ftill greater quantity.
The quantity of gold and filver imported at
both Cadiz and Liſbon (including not only what
comes under regifter, but what may be ſuppoſed
to be ſmuggled) amounts, according to the beſt
accounts, to about fix millions fterling a year.
*
According to Mr. Meggens the annual im-
portation of the precious metals into Spain, at an
average of fix years; viz. from 1748 to 1753,
both inclufive, and into Portugal, at an average
of ſeven years; viz. from 1747 to 1753, both
inclufive; amounted in filver to 1, 101, 107
pounds weight; and in gold to 49, 940 pounds
weight. The filver, at fixty-two fhillings the
pound Troy, amounts to 3,413,431 7. 10 s. fter-
ling. The gold, at forty-four guineas and a
ΙΟΙ
* Poftfcript to the Univerfal Merchant, p. 15 and 16. This
Poſtſcript was not printed till 1756, three years after the
publication of the book, which has never had a fecond edition.
The poftfcript is, therefore, to be found in few copies: It
corrects feveral errors in the book,
326 THE NATURE AND CAUSES OF
J
half the pound Troy, amounts to 2,333,446 l. 14 5.
fterling. Both together amount to 5,746,878 l. 4s.
fterling, The account of what was imported
under regiſter, he affures us is exact. He gives
us the detail of the particular places from which
the gold and filver were brought, and of the par-
ticular quantity of each metal, which, according
to the regiſter, each of them afforded. He
makes an allowance too for the quantity of each
metal which he ſuppoſes may have been ſmug-
gled. The great experience of this judicious mer-
chant renders his opinion of confiderable weight,
According to the eloquent and, fometimes,
well-informed Author of the Philofophical
and Political Hiftory of the Eſtabliſhment of
the Europeans in the two Indies, the annual
importation of regiſtered gold and filver into
Spain, at an average of eleven years; viz. from
1754 to 1764, both inclufive; amounted to
13,984,1853 piafters of ten reals. On account
of what may have been ſmuggled, however,
the whole annual importation, he fuppofes, may
have amounted to feventeen millions of pi-
afters; which, at 4 s. 6 d. the piafter, is equal
to 3,825,000l. fterling. He gives the detail too
of the particular places from which the gold and
filver were brought, and of the particular quan-
tities of each metal which, according to the re-
gifter, each of them afforded. He informs us
too, that if we were to judge of the quantity of
gold annually imported from the Brafils into
Liſbon by the amount of the tax paid to the
A
THE WEALTH OF NATIONS.
327
king of Portugal, which it ſeems is one-fifth of
the ſtandard metal, we might value it at eighteen
millions of cruzadoes, or forty-five millions of
French livres, equal to about two millions fter-
ling. On account of what may have been fmug-
gled, however, we may fafely, he ſays, add to
this fum an eighth more, or 150, 000 l. fterling,
fo that the whole will amount to 2, 250, 000 l.
fterling. According to this account, therefore,
the whole annual importation of the precious
metals into both Spain and Portugal, amounts to
about 6.075,000l. fterling.
Several other very well authenticated, though
manuſcript, accounts, I have been aſſured, agree,
in making this whole annual importation amount
at an average to about fix millions fterling;
fometimes a little more, fometimes a little lefs.
The annual importation of the precious metals
into Cadiz and Liſbon, indeed, is not equal to
the whole annual produce of the mines of Ame-
rica. Some part is fent annually by the Aca-
pulco flips to Manilla; fome part is employed
in the contraband trade which the Spanish colo-
nies carry on with thoſe of other European na-
tions; and fome part, no, doubt, remains in the
country. The mines of America, befides, are
by no means the only gold and filver mines in
the world. They are, however, by far the moſt
abundant. The produce of all the other mines
which are known, is infignificant, it is acknow-
ledged, in compariſon with theirs; and the far
greater part of their produce, it is likewife
328 THE NATURE AND CAUSES OF
acknowledged, is annually imported into Cadiz
and Liſbon. But the comfumption of Birming-
ham alone, at the rate of fifty thouſand pounds a
year, is equal to the hundred-and-twentieth part
of this annual importation at the rate of fix mil-
lions a year. The whole, annual confumption of
gold and filver, therefore, in all the different
countries of the world where thoſe metals are
uſed, may perhaps be nearly equal to the whole
annual produce. The remainder may be no
more than fufficient to fupply the increafing de-
mand of all thriving countries. It may even
have fallen fo far fhort of this demand as fome-
what to raiſe the price of thoſe metals in the
European market.
The quantity of brafs and iron annually
brought from the mine to the market is out of
all proportion greater than that of gold and fil-
ver. We do not, however, upon this account,
imagine that thoſe coarſe metals are likely to
multiply beyond the demand, or to become
gradually cheaper and cheaper. Why fhould we
imagine that the precious metals are likely to do
fo? The coarfe metals, indeed, though harder
are put to much harder uſes, and, as they are of
lefs value, lefs care is employed in their prefer-
vation. The precious metals, however, are not
neceffarily immortal any more than they, but are
liable too to be loft, wafted, and confumed in a
great variety of ways.
The price of all metals, though liable to flow
and gradual variations, varies leſs from year to
THE WEALTH OF NATIONS.
329
year than that of almoſt any other part of the
rude produce of land; and the price of the
precious metals is even lefs liable to fudden
variations than that of the coarfe ones. The
durableneſs of metals is the foundation of this
extraordinary fteadineſs of price. The corn which
was brought to market laſt year, will be all or
almoſt all confumed long before the end of this
year. But fome part of the iron which was
brought from the mine two or three hundred
years ago, may be ſtill in uſe, and perhaps fome
part of the gold which was brought from it
two or three thousand years ago. The different
maffes of corn which in different years muſt ſup-
ply the confumption of the world, will always be
nearly in proportion to the refpective produce of
thofe different years. But the proportion be-
tween the different maffes of iron which may be
in uſe in two different years, will be very little
affected by any accidental difference in the pro-
duce of the iron mines of thoſe two years; and
the proportion between the maffes of gold will
be ftill lefs affected by any fuch difference in the
produce of the gold mines. Though the pro-
duce of the greater part of metallic mines,
therefore, varies, perhaps, ftill more from year
to year than that of the greater part of corn-
fields, thofe variations have not the ſame effect
upon the price of the one fpecies of commodi-
ties, as upon that of the other.
>
330 THE NATURE AND CAUSES OF
Variations in the Proportion between the reſpective
Values of Gold and Silver.
BEFORE the difcovery of the mines of
America, the value of fine gold tó fine filver
was regulated in the different mints of Europe,
between the proportions of one to ten and one to
twelve; that is, an ounce of fine gold was fup-
poſed to be worth from ten to twelve ounces of
fine filyer. About the middle of the laft century
it came to be regulated, between the proportions
of one to fourteen and one to fifteen; that is, an
ounce of fine gold came to be fuppofed worth
between fourteen and fifteen ounces of fine filver.
Gold rofe in its nominal value, or in the quan-
tity of filver. which was given for it. Both me-
tals funk in their real value, or in the quantity
of labor which they could purchaſe; but filver
funk more than gold. Though both the gold
and filver mines of America exceeded in fertility
all thoſe which had ever been known before, the
fertility of the filver mines had, it ſeems, been pro-
portionably ſtill greater than that of the gold ones.
The great quantities of filver carried annually
from Europe to India, have, in ſome of the
Engliſh ſettlements, gradually reduced the value
of that metal in proportion to gold. In the mint
of Calcutta, an ounce of fine gold is fuppofed to
be worth fifteen ounces of fine filver, in the ſame
manner as in Europe. It is in the mint perhaps
rated too high for the value which it bears in the
market of Bengal. In China, the proportion of
THE WEALTH OF NATIONS.
331
+
gold to filver ftill continues as one to ten, or one to
twelve. In Japan, it is faid to be as one to eight.
The proportion between the quantities of gold
and filver annually imported into Europe, ac-
cording to Mr. Meggens's account, is as one to
twenty-two nearly; that is, for one ounce of gold
there are imported a little more than twenty-two
ounces of filver. The great quantity of filver
ſent annually to the Eaſt Indies, reduces, he ſup-
poſes, the quantities of thoſe metals which re-
main in Europe to the proportion of one to four-
teen or fifteen, the proportion of their values.
The proportion between their values, he ſeems
to think, muſt neceffarily be the fame as that be-
tween their quantities, and would therefore be as
one to twenty-two, were it not for this greater
exportation of filver.
But the ordinary proportion between the re-
ſpective values of two commodities is not necef-
farily the fame as that between the quantities of
them which are commonly in the market. The
price of an ox, reckoned at ten guineas, is about
threeſcore times the price of a lamb, reckoned at
3 s. 6 d. It would be abfurd, however, to infer
from thence, that there are commonly in the
market threefcore lambs for one ox: and it
would be just as abfurd to infer, becauſe an
ounce of gold will commonly purchaſe from
fourteen to fifteen ounces of filver, that there are
commonly in the market only fourteen or fifteen
ounces of filver for one ounce of gold.
The quantity of filver commonly in the market,
332 THE NATURE AND CAUSES OF
it is probable, is much greater in proportion
to that of gold, than the value of a certain
quantity of gold is to that of an equal quantity
of filver. The whole quantity of a cheap com-
modity brought to market, is commonly not
only greater, but of greater value, than the
whole quantity of a dear one. The whole
quantity of bread annually brought to market,
is not only greater, but of greater value than
the whole quantity of butcher's - meat; the
whole quantity of butcher's-meat, than the whole
quantity of poultry; and the whole quantity of
poultry, than the whole quantity of wild fowl.
There are ſo many more purchaſers for the cheap
than for the dear commodity, that, not only a
greater quantity of it, but a greater value, can
commonly be difpofed of. The whole quantity,
therefore, of the cheap commodity muft com-
monly be greater in proportion to the whole
quantity of the dear one, than the value of a cer-
tain quantity of the dear one, is to the value of
an equal quantity of the cheap one. When we
compare the precious metals with one another,
filver is a cheap, and gold a dear commodity.
We ought naturally to expect, therefore, that
there ſhould always be in the market, not only a
greater quantity, but a greater value of filver
than of gold.
Let any man, who has a little of
both, compare his own filver with his gold plate,
and he will probably find, that, not only the
quantity, but the value of the former greatly ex-
ceeds that of the latter. Many people, befides,
THE WEALTH OF NATIONS.
333
have a good deal of filver who have no gold plate,
which, even with thoſe who have it, is generally
confined to watch-cafes, fnuff-boxes, and fuch like
trinkets, of which the whole amount is feldom of
great value. In the Britiſh coin, indeed, the value
of the gold preponderates greatly, but it is not fo
in that of all countries. In the coin of fome coun-
tries the value of the two metals is nearly equal. In
the Scotch coin, before the union with England,
the gold preponderated very little, though it did
fomewhat, as it appears by the accounts of the
mint. In the coin of many countries the filver
preponderates. In France, the largeſt ſums are
commonly paid in that metal, and it is there
difficult to get more gold than what is neceſſary
to carry about in your pocket. The fuperior
value, however, of the filver plate above that
of the gold, which takes place in all countries,
will much more than compenfate the preponde-
rancy of the gold coin above the filver, which
takes place only in fome countries.
"
Though, in one fenfe of the word, filver al-
ways has been, and probably always will be,
much cheaper than gold; yet in another fenfe,
gold may, perhaps, in the preſent ſtate of the
Spaniſh market, be ſaid to be ſomewhat cheaper
than filver. A commodity may be faid to be
dear or cheap, not only according to the abſo-
lute greatneſs or fmallneſs of its ufual price, but
* See Ruddiman's Preface to Anderfon's Diplomata, &c.
Scotia.
334 THE NATURE AND CAUSES OF
according as that price is more or lefs above the
loweſt for which it is poſſible to bring it to market
for any confiderable time together. This loweſt
price is that which barely replaces, with a moderate
profit, the flock which muſt be employed in bring-
ing the commodity thither. It is the price which
affords nothing to the landlord, of which rent
makes not any component part, but which refolves
itſelf altogether into wages and profit. But, in the
preſent ſtate of the Spaniſh market, gold is certainly
ſomewhat nearer to this loweſt price than filver.
The tax of the King of Spain upon gold is only
one-twentieth part of the ftandard metal, or five
per cent.; whereas his tax upon filver amounts
to one-tenth part of it, or to ten per cent. In
theſe taxes too, it has already been obſerved,
confifts the whole rent of the greater part of the
gold and filver mines of Spaniſh America; and
that upon gold is ftill worfe paid than that upon
filver. The profits of the undertakers of gold
mines too, as they more rarely make a for-
tune, muſt, in general, be fill more moderate
than thoſe of the undertakers of filver mines.
The price of Spaniſh gold, therefore, as it af-
fords both lefs rent and leſs profit, muft, in the
Spaniſh market, be fomewhat nearer to the
lowest price for which it is poffible to bring it
thither, than the price of Spaniſh filver. When
all expenſes are computed, the whole quantity
of the one metal, it would feem, cannot in the
Spaniſh market, be diſpoſed of ſo advantageouſly
as the whole quantity of the other. The tax,
THE WEALTH OF NATIONS.
335
indeed, of the king of Portugal upon the gold of
the Brafils, is the fame with the ancient tax of
the King of Spain upon the filver of Mexico and
Peru; or one-fifth part of the ftandard metal.
It may,
therefore, be uncertain whether to the
general market of Europe the whole maſs of Ame-
rican gold comes at a price nearer to the loweſt
for which it is poffible to bring it thither, than
the whole mafs of American filver.
The price of diamonds and other precious ftones
may, perhaps, be ſtill nearer to the loweſt price
at which it is poffible to bring them to market
than even the price of gold.
Though it is not very probable, that any part of
a tax, which is not only impoſed upon one of the
moft proper fubjects of taxation, a mere luxury
and fuperfluity, but which affords fo very import-
ant a revenue, as the tax upon filver, will ever
be given up as long as it is poffible to pay it; yet
the fame impoffibility of paying it, which in 1736
made it neceffary to reduce it from one-fifth to one-
tenth, may in time make it neceffary to reduce it
ftill further; in the fame manner as it made it necef-
fary to reduce the tax upon gold to one-twentieth.
That the filver mines of Spanish America, like
all other mines, become gradually more expenſive
in the working, on account of the greater depths
at which it is neceflary to carry on the works,
and of the greater expenſe of drawing out the
water and of fupplying them with freſh air at thoſe
depths, is acknowledged by every body who has
inquired into the ſtate of thofe mines.
336 THE NATURE AND CAUSES OF
;
Theſe cauſes, which are equivalent to a growing
fcarcity of filver (for a commodity may be faid
to grow ſcarcer when it becomes more difficult
and expenfive to collect a certain quantity of it)
muft, in time, produce one or other of the three
following events. The increaſe of the expenſe muſt
either, firft, be compenfated altogether by a pro-
portionable increaſe in the price of the metal; or,
fecondly, it must be compenfated altogether by a
proportionable diminution of the tax upon filver;
or, thirdly, it muſt be compenſated partly by the
one, and partly by the other of thoſe two expe-
dients. This third event is very poffible. As gold
rofe in its price in proportion to filver, notwith-
ſtanding a great diminution of the tax upon gold;
fo filver might rife in its price in proportion to
labor and commodities, notwithſtanding an equal
diminution of the tax upon filver.
>
Such fucceffive reductions of the tax, how-
ever, though they may not prevent altogether,
muſt certainly retard, more or lefs, the riſe of the
value of filver in the European market. In con-
fequence of ſuch reductions, many mines may be
wrought which could not be wrought before
becauſe they could not afford to pay the old tax;
and the quantity of filver annually brought to
market muſt always be fomewhat greater, and
therefore, the value of any given quantity fome-
what lefs, than it otherwiſe would have been,
In confequence of the reduction in 1736, the
value of filver in the European market, though
it may not at this day be lower than before that
reduction
THE WEALTH OF NATIONS.
337
reduction, is, probably, at leaſt ten per cent.
lower than it would have been, had the Court of
Spain continued to exact the old tax.
That, notwithſtanding this reduction, the
value of filver has, during the courfe of the pre-
fent century, begun to riſe ſomewhat in the Eu-
ropean market, the facts and arguments which have
been alledged above, diſpoſe me to believe, or
more properly to fufpect and conjecture; for the
beſt opinion which I can form upon this fubject
fcarce, perhaps, deferves the name of belief. The
rife, indeed, fuppofing there has been any, has
hitherto been fo very ſmall, that after all that has
been ſaid, it may, perhaps, appear to many people
uncertain, not only whether this event has actually
taken place; but whether the contrary may not have
taken place, or whether the value of filver may not
ftill continue to fall in the European market.
!
It muſt be obſerved, however, that whatever
may be the fuppofed annual importation of gold
and filver, there muſt be a certain period, at
which the annual confumption of thoſe metals
will be equal to that annual importation. Their
conſumption muſt increaſe as their mafs increaſes,
or rather in a much greater proportion. As
their maſs increafes, their value diminiſhes. They
are more uſed, and lefs cared for, and their
confumption confequently increaſes in a greater
proportion than their mafs. After a certain period,
therefore, the annual confumption of thoſe me-
tals muft, in this manner, become equal to their
annual importation, provided that importation,
W. of N. 1.
22
338 THE NATURE AND CAUSES OF
is not continually increafing; which, in the pre-
fent times, is not fuppofed to be the cafe.
If, when the annual confumption has become
equal to the annual importation, the annual im-
portation fhould gradually diminiſh, the annual
confumption may, for fome time, exceed the
annual importation. The mafs of thoſe metals
may gradually and infenfibly diminiſh, and their
value gradually and infenfibly rife, till the annual
importation becoming again ftationary, the an-
nual conſumption will gradually and infenfibly
accommodate itſelf to what that annual importa-
tion can maintain.
Grounds of the Sufpicion that the Value of Silver ftill
continues to decreaſe.
THE increafe of the wealth of Europe, and
the popular notion that, as the quantity of the
precious metals naturally increaſes with the increaſe
of wealth, fo their value diminiſhes as their
quantity increaſes, may, perhaps, difpofe many
people to believe that their value ftill continues
to fall in the European market; and the ftill gra-
dually increafing price of many parts of the rude
produce of land may confirm them ftill further in
this opinion.
That that increaſe in the quantity of the pre-
cious metals, which arifes in any country from
the increaſe of wealth, has no tendency to di-
minifh their value, I have endeavoured to fhow
already. Gold and filver naturally refort to a
THE WEALTH OF NATIONS.
339
rich country, for the fame reaſon that all forts of
luxuries and curiofities refort to it; not becauſe
they are cheaper there than in poorer countries, but
becauſe they are dearer, or becauſe a better price.
is given for them. It is the fuperiority of price
which attracts them, and as foon as that fuperiority
ceafes, they neceffarily ceafe to go thither.
If you except corn and fuch other vegetables
as are raiſed altogether by human induftry, that
all other forts of rude produce, cattle, poultry,
game of all kinds, the uſeful foffils and minerals
of the earth, &c. naturally grow dearer as the
fociety advances in wealth and improvement, I
have endeavoured to fhow already. Though fuch
commodities, therefore, come to exchange for a
greater quantity of filver than before, it will not
from thence follow that filver has become really
cheaper, or will purchaſe leſs labor than before,
but that fuch commodities have become really
dearer, or will purchaſe more labor than before.
It is not their nominal price only, but their real
price which riſes in the progreſs of improvement.
The rife of their nominal price is the effect, not
of any degradation of the value of filver, but of
the rife in their real price.
Different Effects of the Progrefs of Improvement
upon three different Sorts of rude Produce.
THESE different forts of rude produce may
1
be divided into three claffes. The firft com-
prehends thoſe which it is fearce in the power
940 THE NATURE AND CAUSES OF
of human induſtry to multiply at all. The ſecond,
thoſe which it can multiply in proportion to the
demand. The third, thofe in which the efficacy
of induſtry is either limited or uncertain. In the
progrefs of wealth and improvement, the real price
of the first may rife to any degree of extravagance,
and ſeems not to be limited by any certain bound-
ary. That of the fecond, though it may riſe great-
ly, has, however, a certain boundary beyond
which it cannot well pafs for any confiderable time
together. That of the third, though its natural
tendency is to riſe in the progreſs of improvement,
yet in the fame degree of improvement it may
fometimes happen even to fall, fometimes to con-
tinue the fame, and fometimes to rife more or leſs,
according as different accidents, render the efforts
of human induftry, in multiplying this fort of
rude produce, more or lefs fucceſsful.
First Sort.
THE first fort of rude produce of which the price
rifes in the progreſs of improvement, is that which
it is ſcarce in the power of human induſtry to mul-
tiply at all. It confiſts in thoſe things which nature
produces only in certain quantities, and which
being of a very periſhable nature, it is impoffible to
accumulate together the produce of many different
ſeaſons. Such are the greater part of rare and fingu-
lar birds and fiſhes, many different forts of game,
almoſt all wild-fowl, all birds of paffage in particu-
lar, as well as many other things. When wealth and
THE WEALTH OF NATIONS.
341
L
the luxury which accompanies it increaſe, the
demand for thefe is likely to increaſe with them,
and no effort of human induftry may be able to
increaſe the ſupply much beyond what it was before
this increaſe of the demand. The quantity of fuch
commodities, therefore, remaining the fame, or
nearly the fame, while the competition to purchaſe
them is continually increafing, their price may
rife to any degree of extravagance, and feems
not to be limited by any certain boundary. If
woodcocks fhould become fo fashionable as to fell
for twenty guineas a-piece, no effort of human
induſtry could increaſe the number of thoſe brought
to market, much beyond what it is at preſent.
The high price paid by the Romans, in the time
of their greateſt grandeur, for rare birds and fishes,
may in this manner eafily be accounted for. Theſe
prices were not the effects of the low value of
filver in thoſe times, but of the high value of fuch
rarities and curiofities as human induſtry could not
multiply at pleaiure. The real value of filver was
higher at Rome, for fome time before and after
the fall of the republic, than it is through the
greater part of Europe at preſent. Three ſefter-
tii, equal to about fixpence fterling, was the
price which the republic paid for the modius
or peck of the tithe-wheat of Sicily. This price,
however, was probably below the average mar-
ket price, the obligation to deliver their wheat
at this rate being confidered as a tax upon the
Sicilian farmers. When the Romans, therefore
had occafion to order more corn than the tithe of
342 THE NATURE AND CAUSES OF
wheat amounted to, they were bound by capi
tulation to pay for the furplus at the rate of four
feftertii, or eight-pence fterling, the peck; and
this had probably been reckoned the moderate and
reaſonable, that is, the ordinary or average con-
tract price of thoſe times; it is equal to about
one-and twenty fhillings the quarter. Eight-and-
twenty fhillings the quarter was, before the late
years of ſcarcity, the ordinary contract price of
Engliſh wheat, which in quality is inferior to the
Sicilian, and generally fells for a lower price in the
European market. The value of filver, therefore,
in thoſe ancient times, muft have been to its value
in the preſent, as three to four inverfely; that is,
three ounces of filver would then have purchaſed
the fame quantity of labor and commodities which
four ounces will do at prefent. When we read in
Pliny, therefore, that Seius bought a white night-
ingale, as a prefent for the emprefs Agrippina, at
the price of fix thouſand ſeſtertii, equal to about
fifty pounds of our preſent money; and that Afinius.
Celer+ purchaſed a furmullet at the price of eight
thoufand feftertii, equal to about fixty-fix pounds
thirteen fhillings and four-pence of our pre-
fent money; the extravagance of thoſe prices,
how much foever it may furpriſe us, is apt, not-
withſtanding, to appear to us about one-third
lefs than it really was. Their real price, the
quantity of labor and fubfiftence which was
given away for them, was about one-third more
than their nominal price is apt to exprefs to us
† Lib. ix. c. 17.
* Lib. x. c. 29.
i
THE WEALTH OF NATIONS.
343
in the preſent times. Seius gave for the nightin-
gale the command of a quantity of labor and
fubfiftence equal to what 66 7. 13 s. 4 d. would pur-
chaſe in the preſent times; and Afinius Celer
gave
for the furmullet the command a quantity equal
to what 887. 17 s. 9 d. would purchaſe. What
occafioned the extravagance of thoſe high prices
was, not fo much the abundance of filver, as the
abundance of labor and ſubfiftence, of which thoſe
Romans had the difpofal, beyond what was necef-
fary for their own ufe. The quantity of filver,
of which they had the difpofal, was a good deal
lefs than what the command of the fame quantity
of labor and fubfiftence would have procured to
them in the preſent times.
Second Sort.
THE ſecond fort of rude produce of which the
price rifes in the progreſs of improvement, is that
which human induſtry can multiply in proportion
to the demand. It confifts in thoſe uſeful plants and
animals, which, in uncultivated countries, nature
produces with ſuch profuſe abundance, that they
are of little or no value, and which, as cultiva-
tion advances, are therefore forced to give place to
fome more profitable produce. During a long pe-
riod in the progreſs of improvement, the quantity
of theſe is continually diminiſhing, while at the
fame time the demand for them is continually
increaſing. Their real value, therefore, the real:
quantity of labor which they will purchaſe or
:
344 THE NATURE AND CAUSES OF
command, gradually rifes, till at laſt it gets fo
high as to render them as profitable a produce as
any thing elſe which human induſtry can raiſe upon
the moft fertile and beft cultivated land. When
it has got fo high it cannot well go higher. If it
did, more land and more induſtry would foon be
employed to increaſe the quantity.
When the price of cattle, for example, rifes
fo high that it is as profitable to cultivate land
in order to raife food for them, as in order to
raife food for man, it cannot well go higher.
If it did, more corn land would foon be turned
into pafture. The extenfion of tillage, by dimi-
niſhing the quantity of wild paſture, diminiſhes
the quantity of butcher's-meat which the country
naturally produces without labor or cultiva-
tion, and by increafing the number of thoſe
who have either corn, or, what comes to the
fame thing, the price of corn, to give in ex-
change for it, increaſes the demand. The price
of butcher's-meat, therefore, and confequently
of cattle, muft gradually rife till it gets fo high,
that it becomes as profitable to employ the moſt
fertile and beft cultivated lands in raifing food
for them as in raiſing corn. But it muſt always
be late in the progreſs of improvement before
tillage can be fo far extended as to raiſe the
price of cattle to this height; and till it has got
to this height, if the country is advancing at all,
their price muft be continually rifing. There
are, perhaps, fome parts of Europe in which
the price of cattle has not yet got to this height,
THE WEALTH OF NATIONS.
345
j
It had not got to this height in any part of Scot-
land before the union. Had the Scotch cattle been
always confined to the market of Scotland, in a
country in which the quantity of land, which can
be applied to no other purpoſe but the feeding of
cattle, is fo great in proportion to what can be
applied to other purpoſes, it is fcarce poffible,
perhaps, that their price could ever have riſen ſo
high as to render it profitable to cultivate land for
the fake of feeding them. In England, the price
of cattle, it has already been obſerved, ſeems, in
the neighbourhood of London, to have got to
this height about the beginning of the laft century;
but it was much later probably before it got to it
through the greater part of the remoter countries;
in ſome of which, perhaps, it may ſcarce yet have
got to it. Of all the different ſubftances, however,
which compofe this fecond fort of rude produce,
cattle is, perhaps, that of which the price, in the
progreſs of improvement, firſt riſes to this height.
Till the price of cattle, indeed, has got to this
height, it ſeems fcarce poffible that the greater
part, even of thoſe lands which are capable of the
higheſt cultivation, can be completely cultivated.
In all farms too diftant from any town to carry
manure from it, that is, in the far greater part of
thoſe of every extenfive country, the quantity of
well-cultivated land muſt be in proportion to the
quantity of manure which the farm itſelf produces;
and this again must be in proportion to the flock
of cattle which are maintained upon it. The land
is manured either by pafturing the cattle upon it,
346 THE NATURE AND CAUSES OF
or by feeding them in the ftable, and from
thence carrying out their dung to it. But unleſs
the price of the cattle be fufficient to pay both
the rent and profit of cultivated land, the farmer
cannot afford to pafture them upon it; and he
can ftill leſs afford to feed them in the ftable.
It is with the produce of improved and culti-
vated land only, that cattle can be fed in the
ſtable; becauſe to collect the ſcanty and ſcatter-
ed produce of wafte and unimproved lands would
require too much labor and be too expenſive.
If the price of the cattle, therefore, is not ſuffi-
cient to pay for the produce of improved and
cultivated land, when they are allowed to pafture
it, that price will be ftill lefs fufficient to pay
for that produce when it muſt be collected with
a good deal of additional labor, and brought
into the ftable to them. In theſe circumftances,
therefore, no more cattle can, with profit, be
fed in the ftable than what are neceſſary for til-
lage. But theſe can never afford manure enough
for keeping conftantly in good condition, all the
lands which they are capable of cultivating.
What they afford being infufficient for the whole
farm, will naturally be referved for the lands to
which it can be moft advantageoufly or conve-
niently applied; the moft fertile, or thoſe per-
haps, in the neighbourhood of the farm-yard.
Theſe, therefore, will be kept conftantly in good
condition and fit for tillage. The reft will, the
greater part of them, be allowed to lie waſte
producing ſcarce any thing but ſome miferable
1
THE WEALTH OF NATIONS.
347
pafture, juft fufficient to keep alive a few ftrag-
gling, half ſtarved cattle; the farm, though much
underſtocked in proportion to what would be ne-
ceffary for its complete cultivation, being very
frequently overſtocked in proportion to its actual
produce. A proportion of this waſte land, however,
after having been paſtured in this wretched man-
ner for fix or ſeven years together, may be ploughed
up, when it will yield, perhaps, a poor crop or
two of bad oats, or of fome other coarſe grain,
and then, being entirely exhaufted, it muſt be
reſted and paſtured again as before, and another
portion ploughed up to be in the fame manner ex-
hauſted and reſted again in its turn. Such accordingly
was the general ſyſtem of management all over the
low country of Scotland before the union. The
lands which were kept conftantly well manured
and in good condition, feldom exceeded a third or
a fourth part of the whole farm, and fometimes did
not amount to a fifth or a fixth part of it. The reſt
were never manured, buta certain portion of them
was in its turn, notwithſtanding, regularly cul-
tivated and exhaufted. Under this fyftem of ma-
nagement, it is evident, even that part of the lands.
of Scotland which is capable of good cultivation,
could produce but little in compariſon of what it
may be capable of producing. But how diſadvan-
tageous foever this fyftem may appear, yet before
the union the low price of cattle feems to have
rendered it almoſt unavoidable. If, notwithſtanding
a great rife in their price, it ftill continues to pre
vail through a confiderable part of the country, it
348 THE NATURE AND CAUSES OF
is owing, in many places, no doubt, to ignorance
and attachment to old cuftoms, but in moft places
to the unavoidable obftructions which the natural.
courſe of things oppoſes to the immediate or ſpeedy
eſtabliſhment of a better fyftem: first, to the poverty
of the tenants, to their not having yet had time to
acquire a ſtock of cattle fufficient to cultivate their
lands more completely, the fame rife of price which
would render it advantageous for them to maintain
a greater ftock, rendering it more difficult for them
to acquire it; and, fecondly, to their not having yet
had time to put their lands in condition to maintain
this greater ſtock properly, fuppofing they were
capable of acquiring it. The increaſe of ftock and
the improvement of land are two events which muſt
go hand in hand, and of which the one can no-where
much out-run the other. Without fome increaſe of
ftock, there can be fcarce any improvement of land,
but there can be no confiderable increaſe of ſtock but
in conſequence of a conſiderable improvement of
land; becauſe otherwiſe the land could not maintain
it. Theſe natural obftructions to the eſtabliſhment
of a better ſyſtem, cannot be removed but by a
long courſe of frugality and induſtry; and half a
century or a century more, perhaps, muſt paſs
away before the old fyftem, which is wearing out
gradually, can be completely aboliſhed through all
the different parts of the country. Of all the com-
mercial advantages, however, which Scotland has
derived from the union with England, this rife in
the price of cattle is, perhaps, the greateft. It has
not only raiſed the value of all highland eſtates,
THE WEALTH OF NATIONS.
349
but it has, perhaps, been the principal caufe of
the improvement of the low country.
In all new colonies the great quantity of wafte
land, which can for many years be applied to no
other purpoſe but the feeding of cattle, foon renders
them extremely abundant, and in every thing
great cheapneſs is the neceffary confequence of
great abundance. Though all the cattle of the
European colonies in America were originally car-
ried from Europe, they foon multiplied fo much
there, and became of fo little value, that even
horſes were allowed to run wild in the woods
without any owner thinking it worth while to
claim them. It must be a long time after the firſt
eſtabliſhment of fuch colonies, before it can become
profitable to feed cattle upon the produce of cul-
tivated land. The fame caufes, therefore, the want
of manure, and the difproportion between the
ftock employed in cultivation, and the land which
it is deſtined to cultivate, are likely to introduce
there a fyftem of hufbandry not unlike that which
ftill continues to take place in fo many parts of
Scotland. Mr. Kalm, the Swediſh traveller, when
he gives an account of the hufbandry of fome of
the Engliſh colonies in North-America, as he found
it in 1749, obferves, accordingly, that he can
with difficulty difcover there the character of the
English nation, fo well fkilled in all the different
branches of agriculture. They make ſcarce any
manure for their corn fields, he fays; but when
one piece of ground has been exhaufted by con-
tinual cropping, they clear and cultivate another
350 THE NATURE AND CAUSES OF
}
piece of freſh land; and when that is exhaufted,
proceed to a third. Their cattle are allowed to
wander through the woods and other uncultivated
grounds, where they are half-ftarved; having
long ago extirpated almoſt all the annual graffes
by cropping them too early in the fpring, before
they had time to form their flowers, or to ſhed
their feeds. The annual graffes were, it ſeems,
the beft natural graffes in that part of North-America;
and when the Europeans firft fettled there, they
uſed to grow very thick, and to rife three or
four feet high. A piece of ground which, when
he wrote, could not maintain one cow, would in
former times, he was affured, have maintained
four, each of which would have given four times
the quantity of milk which that one was capable
of giving. The poornefs of the paſture had, in his
opinion, occafioned the degradation of their cattle,
which degenerated fenfibly from one generation to
another. They were probably not unlike that
ftunted breed which was common all over Scot-
land thirty or forty years ago, and which is now
fo much mended through the greater part of the
low country, not ſo much by a change of the
breed, though that expedient has been employed
in fome places, as by a more plentiful method of
feeding them.
Though it is late, therefore, in the progreſs of
improvement before cattle can bring ſuch a price
as to render it profitable to cultivate land for the
* Kalm's Travels, vol. i. p. 343, 344:
THE WEALTH OF NATIONS.
351
fake of feeding them; yet of all the different parts
which compoſe this ſecond ſort of rude produce,
they are perhaps the firſt which bring this price;
becauſe till they bring it, it ſeems impoffible that
improvement can be brought near even to that
degree of perfection to which it has arrived in
many parts of Europe.
As cattle are among the firft, fo perhaps veni-
fon is among the laft parts of this fort of rude pro-
duce which bring this price. The price of veniſon
in Great Britain, how extravagant foever it may
appear, is not near ſufficient to compenſate the
expenſe of a deer park, as is well known to all
thoſe who have had any experience in the feeding
of deer. If it was otherwife, the feeding of deer
would foon become an article of common farming;
in the ſame manner as the feeding of thoſe ſmall
birds called Turdi was among the ancient Romans.
Varro and Columella affure us that it was a moft
profitable article. The fattening of ortolans, birds
of paſſage which arrive lean in the country, is faid
to be ſo in ſome parts of France. If venifon con-
tinues in faſhion, and the wealth and luxury of
Great Britain increaſe as they have done for ſome
time paft, its price may very probably riſe ſtill
higher than it is at prefent.
Between that period in the progrefs of im-
provement which brings to its height the price
of ſo neceſſary an article as cattle, and that
which brings to it the price of fuch a fuperfluity
as venifon, there is a very long interval, in the
courſe of which many other forts of rude produce
352 THE NATURE AND CAUSES OF
gradually arrive at their higheft price, fome fooner
and ſome later, according to different circumſtances.
Thus in every farm the offals of the barn and
ftables will maintain a certain number of poul-
try. Theſe, as they are fed with what would
otherwiſe be loft, are a mere fave-all; and as
they coft the farmer fcarce any thing, fo he can
afford to fell them for very little. Almoſt all
that he gets is pure gain, and their price can
ſcarce be fo low as to difcourage him from feed-
ing this number. But in countries ill culti-
vated, and, therefore, but thinly inhabited, the
poultry, which are thus raiſed without expenſe,
are often fully fufficient to fupply the whole de-
mand. In this ftate of things, therefore, they
are often as cheap as butcher's-meat, or any
other fort of animal food. But the whole quan-
tity of poultry, which the farm in this manner
produces without expenſe, muft always be much
fmaller than the whole quantity of butcher's-
meat which is reared upon it; and in times of
wealth and luxury what is rare, with only nearly
equal merit, is always preferred to what is com-
mon. As wealth and luxury increaſe, therefore,
in conſequence of improvement and cultivation,
the price of poultry gradually rifes above that of
butcher's-meat, till at laft it gets fo high that it
becomes profitable to cultivate land for the fake
of feeding them. When it has got to this height,
it cannot well go higher. If it did, more land
would foon be turned to this purpoſe. In feveral
provinces of France, the feeding of poultry is
confidered
THE WEALTH OF NATIONS.
353
"
confidered as a very important article in rural
economy, and fufficiently profitable to encou-
rage the farmer to raiſe a confiderable quantity of
Indian corn and buck-wheat for this purpoſe.
A middling farmer will there fometimes have
four hundred fowls in his yard. The feeding of
poultry feems ſcarce yet to be generally con-
fidered as a matter of fo much importance in
England. They are certainly, however, dearer
in England than in France, as England receives
confiderable ſupplies from France. In the pro-
grefs of improvement, the period at which every
particular fort of animal food is deareft, muſt
naturally be that which immediately precedes
the general practice of cultivating land for the
fake of raiſing it. For fome time before this
practice becomes general, the fcarcity muft ne-
ceffarily raiſe the price. After it has become
general, new methods of feeding are commonly
fallen upon, which enable the farmer to raiſe
upon the fame quantity of ground a much
greater quantity of that particular fort of animal
food. The plenty not only obliges him to fell
cheaper, but in confequence of theſe improve-
ments he can afford to fell cheaper; for if he
could not afford it, the plenty would not be. of
long continuance. It has been probably in this
manner that the introduction of clover, turnips,
carrots, cabbages, &c. has contributed to fink
the common price of butcher's-meat in the London
market ſomewhat below what it was about the
beginning of the laft century.
W. of N. 1.
23
354 THE NATURE AND CAUSES OF
The hog, that finds his food among ordure
and greedily devours many things rejected by
every other uſeful animal, is, like poultry, ori-
ginally kept as a fave-all. As long as the num-
ber of fuch animals, which can thus be reared at
little or no expenſe, is fully fufficient to fupply
the demand, this fort of butcher's-meat comes
to market at a much lower price than any other.
But when the demand rifes beyond what this
quantity can fupply, when it becomes neceffary
to raiſe food on purpoſe for feeding and fatten-
ing hogs, in the fame manner as for feeding and
fattening other cattle, the price neceffarily riſes,
and becomes proportionably either higher or
lower than that of other butcher's-meat, accord-
ing as the nature of the country, and the ftate of
its agriculture, happen to render the feeding of
hogs more or lefs expenfive than that of other
cattle. In France, according to Mr. Buffon, the
price of pork is nearly equal to that of beef. In
moſt parts of Great Britain it is at preſent ſome-
what higher.
The great rife in the price both of hogs and
poultry has in Great Britain been frequently im-
puted to the diminution of the number of cot-
tagers and other fmall occupiers of land; an event
which has in every part of Europe been the
immediate fore-runner of improvement and bet-
ter cultivation, but which at the ſame time may
have contributed to raiſe the price of thoſe ar-
ticles, both fomewhat fooner and ſomewhat faſter
than it would otherwiſe have riſen. As the
THE WEALTH OF NATIONS.
355
pooreft family can often maintain a cat or a dog,
without any expenfe, fo the pooreft occupiers of
land can commonly maintain a few poultry, or a
fow and a few pigs, at very little. The little offals
of their own table, their whey, fkimmed milk and
butter-milk, fupply thofe animals with a part of
their food, and they find the reft in the neighbouring
fields without doing any fenfible damage to any
body. By diminishing the number of thofe fmall
occupiers, therefore, the quantity of this fort of
provifions which is thus produced at little or no
expenſe, muſt certainly have been a good deal
diminiſhed, and their price muft confequently
have been raifed both fooner and fafter than it would
otherwiſe have rifen. Sooner or later, however •
in the progreſs of improvement, it muft at any
rate have rifen to the utmoſt height to which it is
capable of rifing; or to the price which pays the
labor and expenſe of cultivating the land which
furniſhes them with food as well as theſe are paid
upon the greater part of other cultivated land.
The bufinefs of the dairy, like the feeding of
hogs and poultry, is originally carried on as a
fave-all. The cattle neceffarily kept upon the
farm, produce more milk than either the rearing
of their own young, or the confumption of the
farmer's family requires; and they produce moſt
at one particular feafon. But of all the produc
tions of land, milk is perhaps the moſt perifh-
able. In the warm feafon, when it is moft
abundant, it will fcarce keep four-and-twenty
hours. The farmer, by making it into frelli
356 THE NATURE AND CAUSES OF
¡
butter, ftores a fmall part of it for a week: by
making it into falt butter, for a year: and by
making it into cheeſe, he ftores a much greater
part of it for ſeveral years. Part of all theſe is re-
ferved for the ufe of his own family. The reft goes
to market, in order to find the beſt price which is
to be had, and which can ſcarce be fo low as to
diſcourage him from fending thither whatever is
over and above the uſe of his own family. If it is
very low, indeed, he will be likely to manage his
dairy in a very flovenly and dirty manner, and
will ſcarce perhaps think it worth while to have a
particular room or building on purpoſe for it, but
will fuffer the bufinefs to be carried on amidſt
the ſmoke, filth, and naftineſs of his own kitchen;
as was the cafe of almoft all the farmers' dairies in
Scotland thirty or forty years ago, and as is the
cafe of many of them ftill. The fame caufes which
gradually raiſe the price of butcher's-meat, the
increaſe of the demand, and, in confequence of the
improvement of the country, the diminution of
the quantity which can be fed at little or no
expenſe, raiſe, in the fame manner, that of the
produce of the dairy, of which the price natu-
rally connects with that of butcher's-meat, or
with the expenfe of feeding cattle. The in-
creaſe of price pays for more labor, care, and
cleanlineſs. The dairy becomes more worthy of
the farmer's attention, and the quality of its
produce gradually improves. The price at laft
gets fo high that it becomes worth while to em-
ploy fome of the moft fertile and beft cultivated
THE WEALTH OF NATIONS.
357
lands in feeding cattle merely for the purpoſe of the
dairy; and when it has got to this height, it cannot
well go higher. If it did, more land would foon
be turned to this purpoſe. It ſeems to have got
to this height through the greater part of England,
where much good land is commonly employed in
this manner. If you except the neighbourhood of
a few confiderable towns, it ſeems not yet to have
got to this height any-where in Scotland, where
common farmers feldom employ much good
land in raifing food for cattle merely for
the purpoſe of the dairy. The price of the
produce, though it has rifen very confiderably
within theſe few years, is probably ſtill too low
to admit of it. The inferiority of the quality,
indeed, compared with that of the produce of
Engliſh dairies, is fully equal to that of the price.
But this inferiority of quality is, perhaps, rather
the effect of this lowness of price than the cauſe of
it. Though the quality was much better, the
greater part of what is brought to market could not,
I apprehend, in the preſent circumſtances of the
country, be diſpoſed of at a much better price;
and the preſent price, it is probable, would not pay
the expenſe of the land and labor neceſſary for
producing a much better quality. Through the
greater part of England, notwithſtanding the fupe-
riority of price, the dairy is not reckoned a more
profitable employment of land than the raiſing of
corn, or the fattening of cattle, the two great objects
of agriculture. Through the greater part of Scotland,
therefore, it cannot yet be even fo profitable.
358 THE NATURE AND CAUSES OF
The lands of no country, it is evident, can ever
be completely cultivated and improved, till once
the price of every produce, which human induſtry
is obliged to raiſe upon them, has got fo high as
to pay for the expenſe of complete improvement
and cultivation. In order to do this, the price
of each particular produce muft be fufficient, firſt,
to pay the rent of good corn-land, as it is that
which regulates the rent of the greater part of
other cultivated land; and, fecondly, to pay the
labor and expenfe of the farmer as well as they are
commonly paid upon good corn-land; or, in
other words, to replace with the ordinary profits
the ſtock which he employs about it. This rife in
the price of each particular produce, muft evidently
be previous to the improvement and cultivation of
the land which is deftined for railing it. Gain is
the end of all improvement, and nothing could
deferve that name of which lofs was to be the
neceffary confequence. But lofs must be the necef-
fary confequence of improving land for the fake
of a produce of which the price could never bring
back the expenfe. If the complete improve-
ment and cultivation of the country be, as it moſt
certainly is, the greateſt of all public advantages,
this rife in the price fo all thofe different forts of
rude produce, instead of being confidered as a
public calamity, ought to be regarded as the
neceffary forerunner and attendant of the greateſt
of all public advantages.
This rife too in the nominal or money-price
of all thoſe different forts of rude produce has
THE WEALTH 359
•
OF NATIONS.
been the effect, not of any degradation in the value
of filver, but of a rife in their real price. They
have become worth, not only a greater quantity
of filver, but a greater quantity of labor and fub-
fiftence than before. As it cofts a greater quantity
of labor and fubfiftence to bring them to market,
ſo when they are brought thither, they repreſent
or are equivalent to a greater quantity.
Third Sort.
THE third and laft fort of rude produce, of
which the price naturally rifes in the progrefs of
improvement, is that in which the efficacy of
human induſtry, in augmenting the quantity, is
either limited or uncertain. Though the real
price of this fort of rude produce, therefore, na-
turally tends to rife in the progreſs of improve-
ment, yet, according as different accidents hap-
pen to render the efforts of human induſtry more
or leſs ſucceſsful in augmenting the quantity, it
may happen ſometimes even to fall, fometimes to
continue the fame in very different periods of
improvement, and fometimes to rife more or lefs
in the fame period.
There are fome forts of rude produce which
nature has rendered a kind of appendages to
other forts; fo that the quantity of the one
which any country can afford is neceffarily li-
mited by that of the other. The quantity of
wool or of raw hides, for example, which any
360 THE NATURE AND CAUSES OF
country can afford, is neceffarily limited by the
number of great and ſmall cattle that are kept
in it. The ſtate of its improvement, and the
nature of its agriculture, again neceffarily deter
mine this number.
The fame caufes, which, in the progrefs of
improvement, gradually raiſe the price of but-
cher's-meat, fhould have the fame effect, it may
be thought, upon the prices of wool and raw
hides, and raiſe them too nearly in the ſame pro-
portion. It probably would be ſo, if in the rude
beginnings of improvement the market for the
latter commodities was confined within as narrow
bounds as that for the former. But the extent
of their reſpective markets is commonly ex-
tremely different.
The market for butcher's-meat is almoft
every-where confined to the country which pro-
duces it. Ireland, and fome part of Britiſh
America indeed, carry on a confiderable trade in
falt provifions; but they are, I believe, the only
countries in the commercial world which do fo,
or which export to other countries any confider-
able part of their butcher's-meat.
The market for wool and raw hides, on the
contrary, is in the rude beginnings of improve-
ment very feldom confined to the country which
produces them. They can eafily be tranſported
to diftant countries, wool without any prepara-
tion, and raw hides with very little and as they
are the materials of many manufactures, the in-
duftry of other countries may occafion a' demand
THE WEALTH OF NATIONS.
361
for them, though that of the country which pro-
duces them might not occafion any.
In countries ill cultivated, and therefore but
thinly inhabited, the price of the wool and the
hide bears always a much greater proportion to
that of the whole beaft, than in countries where,
improvement and population being further ad-
vanced, there is more demand for butcher's-meat.
Mr. Hume obferves, that in the Saxon times, the
fleece was eſtimated at two-fifths of the value of
the whole fheep, and that this was much above
the proportion of its prefent eftimation. In fome
provinces of Spain, I have been affured, the
fheep is frequently killed merely for the fake of
the fleece and the tallow. The carcafe is often
left to rot upon the ground, or to be devoured
by beafts and birds of prey. If this fometimes
happens even in Spain, it happens almoft con-
ſtantly in Chili, at Buenos Ayres, and in many
other parts of Spaniſh America, where the horned
cattle are almoſt conftantly killed merely for the
fake of the hide and the tallow. This too ufed
to happen almoft conftantly in Hifpaniola, while
it was infefted by the Buccaneers, and before
the ſettlement, improvement, and populoufnefs
of the French plantations (which now extend
round the coaft of almoft the whole weftern
half of the iſland) had given fome value to the
cattle of the Spaniards, who fill continue to
poffefs, not only the eaftern part of the coaft,
but the whole inland and mountainous part of
the country.
362 THE NATURE AND CAUSES OF
Though in the progrefs of improvement and
population, the price of the whole beaft neceffa-
rily rifes, yet the price of the carcafe is likely
to be much more affected by this rife than that
of the wool and the hide. The market for the
carcafe, being in the rude ftate of fociety con-
fined always to the country which produces it,
muſt neceffarily be extended in proportion to the
improvement and population of that country.
But the market for the wool and the hides even
of a barbarous country often extending to the
whole commercial world, it can very feldom be
enlarged in the fame proportion. The ftate of
the whole commercial world can feldom be much
affected by the improvement of any particular
country; and the market for fuch commodities
may remain the fame or very nearly the fame,
after fuch improvements, as before. It fhould,
however, in the natural courfe of things rather
upon the whole be. fomewhat extended in confe-
quence of them. If the manufactures, eſpecially,
of which thofe commodities are the materials,
fhould ever come to flourish in the country, the
market, though it might not be much enlarged,
would at leaſt be brought much nearer to the
place of growth than before; and the price
of thoſe materials might at leaſt be increaſed
by what had ufually been the expenſe of tranſ-
porting them to diſtant countries. Though it
might not riſe therefore in the fame proportion as
that of butcher's meat, it ought naturally to riſe
fomewhat, and it ought certainly not to fall.
THE WEALTH OF NATIONS.
363
In England, however, notwithſtanding the
flouriſhing ſtate of its woollen manufacture, the
price of Engliſh wool has fallen very confiderably
fince the time of Edward III. There are many
authentic records which demonftrate that during
the reign of that prince (towards the middle of
the fourteenth century, or about 1339) what was
reckoned the moderate and reaſonable price of the
tod or twenty-eight pounds of Engliſh wool was
not less than ten fhillings of the money of thoſe
times, containing, at the rate of twenty-pence
the ounce, fix ounces of filver Tower-weight, equal
to about thirty fhillings of our preſent money. In
the preſent times, one-and-twenty fhillings the tod
may be reckoned a good price for very good
Engliſh wool. The money-price of wool, therefore,
in the time of Edward III, was to its money-price
in the preſent times as ten to feven. The fuperiority
of its real price was ftill greater. At the rate of fix
fhillings and eight-pence the quarter, ten fhillings
was in thoſe ancient times the price of twelve
bufhels of wheat. At the rate of twenty-eight
fhillings the quarter, one-and-twenty fhillings is in
the preſent times the price of fix bushels only.
The proportion between the real prices of ancient
and modern times, therefore, is as twelve to fix,
or as two to one. In thoſe ancient times a tod of
wool would have purchaſed twice the quantity
of fubfiftence which it will purchaſe at preſent;
* See Smith's Memoirs of Wool, vol. i. c. 5, 6, and 7;
alfa, vol. ii. c. 176.
364 THE NATURE AND CAUSES OF
and conſequently twice the quantity of labor, if
the real recompence of labor had been the fame in
both periods.
This degradation both in the real and nominal
value of wool, could never have happened in
confequence of the natural courſe of things. It has
accordingly been the effect of violence and artifice:
First, of the abſolute prohibition of exporting wool
from England; Secondly, of the permiffion of
importing it from Spain duty free; Thirdly, of the
prohibition of exporting it from Ireland to any
other country but England. In confequence of
theſe regulations, the market for Engliſh wool,
inſtead of being fomewhat extended in conſe-
quence of the improvement of England, has been
confined to the home market, where the wool of
feveral other countries is allowed to come into
competition with it, and where that of Ireland is
forced into competition with it. As the woollen
manufactures too of Ireland are fully as much
diſcouraged as is confiftent with juftice and fair
dealing, the Irifh can work up but a ſmall part
of their own wool at home, and are, therefore,
obliged to ſend a greater proportion of it to Great
Britain, the only market they are allowed.
I have not been able to find any ſuch authentic
records concerning the price of raw hides in ancient
times. Wool was commonly paid as a ſubſidy to
the king, and its valuation in that fubfidy afcer-
tains, at leaſt in fome degree, what was its ordinary
price. But this feems not to have been the caſe
with raw hides. Fleetwood, however, from an
THE WEALTH 365
•
OF NATIONS.
account in 1425, between the prior of Burceſter
Oxford and one of his canons, gives us their price,
at leaſt as it was ftated, upon that particular occa-
fion; viz. five ox hides at twelve fhillings; five
cow hides at ſeven fhillings and three pence; thirty-
fix fheep fkins of two years old at nine fhillings;
fixteen calves fkins at two fhillings. In 1425,
twelve fhillings contained about the ſame quantity
of filver as four-and-twenty fhillings of our pre-
fent money, An ox hide, therefore, was in this
account valued at the fame quantity of filver as
4s. ths of our preſent money. Its nominal price
was a good deal lower than at prefent. But at the
rate of fix fhillings and eight-pence the quarter,
twelve fhillings would in thofe times have pur-
chafed fourteen bushels and four-fifths of a bufhel
of wheat, which, at three and fix-pence the buſhel,
would in the preſent times coft 51s. 4 d.
An ox
hide, therefore, would in thoſe times have pur-
chafed as much corn as ten fhillings and three-pence
would purchaſe at preſent. Its real value was equal
to ten fhillings and three-pence of our prefent
money. In thoſe ancient times, when the cattle
were half starved during the greater part of the
winter, we cannot fuppofe that they were of a
very large fize. An ox hide which weighs four
ftone of ſixteen pounds averdupois, is not in the
preſent times reckoned a bad one; and in thoſe
ancient times would probably have been reckoned
a very good one. But at half a crown the ſtone,
which at this moment (February 1773) I underſtand
to be the common price, fuch a hide would at
366 THE NATURE AND CAUSES OF
prefent coft only ten fhillings. Though its nominal
price, therefore, is higher in the prefent than it
was in thoſe ancient times, its real price, the real
quantity of fubfiftence which it will purchaſe or
command, is rather fomewhat lower. The price
of cow hides, as ftated in the above account, is
nearly in the common proportion to that of ox
hides. That of fheep fkins is a good deal above it.
They had probably been fold with the wool. That
of calves fkins, on the contrary, is greatly below
it. In countries where the price of cattle is very
low, the calves, which are not intended to be
reared in order to keep up the ftock, are generally
killed very young; as was the cafe in Scotland
twenty or thirty years ago.
It faves the milk,
which their price would not pay for. Their ſkins,
therefore, are commonly good for little.
The price of raw hides is a good deal lower at
preſent than it was a few years ago; owing proba-
bly to the taking off the duty upon feal fkins, and
to the allowing, for a limited time, the importa-
tion of raw hides from Ireland and from the
plantations duty free, which was done in 1769.
Take the whole of the prefent century at an aver-
age, their real price has probably been fomewhat
higher than it was in thoſe ancient times. The
nature of the commodity renders it not quite fo
proper for being tranſported to diftant markets as
wool. It fuffers more by keeping. A falted hide is
reckoned inferior to a freſh one, and fells for a
lower price. This circumſtance muft neceffarily
have fome tendency to fink the price of raw hides
THE WEALTH OF NATIONS.
367
produced in a country which does not manufacture
them, but is obliged to export them; and compara-
tively to raiſe that of thoſe produced in a country
with does manufacture them. It muſt have ſome
tendency to fink their price in a barbarous, and to
raiſe it in an improved and manufacturing country.
It muſt have had fome tendency therefore to fink
it in ancient, and to raiſe it in modern times. Our
tanners befides have not been quite fo fucceſsful
as our clothiers, in convincing the wifdom of the
nation, that the ſafety of the commonwealth depends
upon the profperity of their particular manufacture.
They have accordingly been much leſs favored.
The exportation of raw hides has, indeed, been
prohibited, and declared a nuifance: but their
importation from foreign countries has been ſub-
jected to a duty, and though this duty has been
taken off from thofe of Ireland and the plantations.
(for the limited time of five years only), yet Ireland
has not been confined to the market of Great
Britain for the fale of its furplus hides, or of
thoſe which are not manufactured at home. The
hides of common cattle have but within theſe few
years been put among the enumerated commodities
which the plantations can fend nowhere but to
the mother country; neither has the commerce of
Ireland been in this cafe oppreffed hitherto, in
order to ſupport the manufactures of Great Britain.
Whatever regulations tend to fink the price
either of wool or of raw hides below what it
naturally would be, muft, in an improved and
cultivated country, have fome tendency to raiſe
368 THE NATURE AND CAUSES OF
the price of butcher's-meat. The price both of
the great and fmall cattle, which are fed on
improved and cultivated land, muſt be fufficient
to pay the rent which the landlord, and the profit
which the farmer has reafon to expect from im-
proved and cultivated land. If it is not, they
will foon ceaſe to feed them. Whatever part of
paid by the wool
this price, therefore, is not
and the hide, muſt be paid by the carcafe. The
lefs there is paid for the one, the more muſt be
paid for the other. In what manner this price is
to be divided upon the different parts of the
beaft, is indifferent to the landlords and farmers,
provided it is all paid to them. In an improved
and cultivated country, therefore, their intereſt
as landlords and farmers cannot be much affected
by fuch regulations, though their intereft as
conſumers may, by the rife in the price of provi-
fions. It would be quite otherwiſe, however,
in an unimproved and uncultivated country,
where the greater part of the lands could be
applied to no other purpoſe but the feeding of
cattle, and where the wool and the hide made
the principal part of the value of thoſe cattle.
Their intereft as landlords and farmers would in
this caſe be very deeply affected by fuch regula-
tions, and their intereft as confumers very little.
The fall in the price of the wool and the hide,
would not in this cafe raiſe the price of the car-
cafe; becauſe the greater part of the lands of the
country being applicable to no other purpoſe but
the feeding of cattle, the fame number would
ftill
THE WEALTH OF NATIONS.
369
fill continue to be fed. The fame quantity of
butcher's-meat would ftill come to market. The
demand for it would be no greater than before.
Its price, therefore, would be the fame as be-
fore. The whole price of cattle would fall, and
along with it both the rent and the profit of all
thofe lands of which cattle was the principal
produce, that is, of the greater part of the lands
of the country. The perpetual prohibition of
the exportation of wool, which is commonly, but
very falſely, afcribed to Edward III, would,
in the then circumftances of the country, have
been the most deftructive regulation which could
well have been thought of. It would not only
have reduced the actual value of the greater part
of the lands of the kingdom, but by reducing
the price of the moſt important ſpecies of ſmall
cattle, it would have retarded very much its fub-
fequent improvement.
The wool of Scotland fell very confiderably
in its price in confequenee of the union with
England, by which it was excluded from the
great market of Europe, and confined to the
narrow one of great Britain. The value of the
greater part of the lands in the fouthern counties
of Scotland, which are chiefly a fheep country,
would have been very deeply affected by this event,
had not the rife in the price of butcher's-meat
fully compenſated the fall in the price of wool.
As the efficacy of human induſtry, in in-
creafing the quantity either of wool or of raw
hides, is limited, fo far as it depends upon the
W, of N. 1.
24
370 THE NATURE AND CAUSES OF
produce of the country where it is exerted; fo it
is uncertain fo far as it depends upon the pro-
duce of other countries. It fo far depends, not
ſo much upon the quantity which they produce,
as upon that which they do not manufacture ;
and upon the reftraints which they may or may
not think proper to impoſe upon the exportation
of this fort of rude produce. Thefe circumftances,
as they are altogether independent of domeſtic
induſtry, fo they neceffarily render the efficacy
of its efforts more or leſs uncertain. In multiplying
this fort of rude produce, therefore, the efficacy of
human induſtry is not only limited, but uncertain.
In multiplying another very important fort of
rude produce the quantity of fifh that is brought
to market, it is likewife both limited and un-
certain. It is limited by the local fituation of
the country, by the proximity or diftance of its
different provinces from the fea, by the number
of its lakes and rivers, and by what may be
called the fertility or barrennefs of thoſe feas,
lakes and rivers, as to this fort of rude produce.
As population increaſes, as the annual produce
of the land and labor of the country grows
greater and greater, there come to be more
buyers of fish, and thofe buyers too have a
greater quantity and variety of other goods, or,
what is the fame thing, the price of a greater
quantity and variety of other goods, to buy with.
But it will generally be impoffible. to ſupply the
great and extended market without employing a
quantity of labor greater than in proportion to
THE WEALTH OF NATIONS.
371
what had been requifite for ſupplying the narrow
and confined one. A market which, from re-
quiring only one thoufand, comes to require
annually ten thousand ton of fifh, can feldom be
ſupplied without employing more than ten times
the quantity of labor which had before been
fufficient to fupply it. The fish muft generally
be fought for at a greater diſtance, larger veffels
muſt be employed, and more expenfive machi-
nery of every kind made ufe of. The real price
of this commodity, therefore, naturally rifes in
the progreſs of improvement. It has accordingly
done fo, I believe, more or lefs in every country.
Though the fuccefs of a particular day's fifh-
ing may be a very uncertain matter, yet, the
local fituation of the country being fuppofed,
the general efficacy of induſtry in bringing a
certain quantity of fifh to market, taking the
courſe of a year, or of feveral years together, it
may perhaps be thought, is certain enough; and
it, no doubt, is fo. As it depends more, how-
ever, upon the local fituation of the country,
than upon the ſtate of its wealth and induftry;
as upon this account it may in different countries
be the fame in very different periods of improve-
ment, and very different in the fame period;
its connexion with the ftate of improvement is
uncertain, and it is of this fort of uncertainty
that I am here ſpeaking.
In increaſing the quantity of the different mi-
nerals and metals which are drawn from the
bowels of the earth, that of the more precious ones
372 THE NATURE AND CAUSES OF
particularly, the efficacy of human induſtry feems
not to be limited, but to be altogether uncertain.
The quantity of the precious metals which is
to be found in any country is not limited by any
thing in its local fituation, fuch as the fertility
or barrenneſs of its own mines. Thoſe metals
frequently abound in countries which poffefs no
mines. Their quantity in every particular coun-
try feems to depend upon two different circum-
ftances; firft, upon its power of purchafing, upon
the ſtate of its induſtry, upon the annual produce
of its land and labor, in confequence of which
it can afford to employ a greater or a ſmaller quan-
tity of labor and ſubſiſtence in bringing or pur-
chafing fuch fuperfluities as gold and filver, either
from its own mines or from thofe of other coun-
tries; and, ſecondly, upon the fertility or bar-
renneſs of the mines which may happen at any
particular time to fupply the commercial world
with thoſe metals. The quantity of thoſe metals
in the countries moft remote from the mines,
muſt be more or lefs affected by this fertility or
barrenness, on account of the eafy and cheap
tranſportation of thofe metals, of their ſmall bulk
and great value. Their quantity in China and
Indoftan muſt have been more or less affected by
the abundance of the mines of America.
So far as their quantity in any particular coun-
try depends upon the former of thoſe two cir-
cumſtances (the power of purchaſing), their real
price, like that of all other luxuries and fuper-
fluities, is likely to rile with the wealth and
THE WEALTH OF NATIONS.
373
improvement of the country, and to fall with its
poverty and depreffion. Countries which have a
great quantity of labor and ſubſiſtence to ſpare,
can afford to purchaſe any particular quantity of
thoſe metals at the expenſe of a greater quinúty
of labor and fubfiftence, than countries which
have leſs to ſpare.
So far as their quantity in any particular country
depends upon the latter of thofe two circumftances
(the fertility or barrenneſs of the mines which
happen to ſupply the commercial world) their real
price, the real quantity of labor and fubfiftence
which they will purchaſe or exchange for, will, no
doubt, fink more or lefs in proportion to the fertility,
and riſe in proportion to the barrenness of thoſe-mines.
The fertility or barrennefs of the mines, how-
ever, which may happen at any particular time
to ſupply the commercial world, is a circum-
ftance which, it is evident, may have no ſort of
connexion with the ftate of induftry in a parti-
cular country. It feems even to have no very
neceffary connexion with that of the world in
general. As arts and commerce, indeed, gra-
dually ſpread themſelves over a greater and a
greater part of the earth, the fearch for new
mines, being extended over a wider ſurface
may have ſomewhat a better chance for being
fucceſsful, than when confined within narrower
bounds. The diſcovery of new mines, however,
as the old ones come to be gradually exhaufted,
is a matter of the greateſt uncertainty, and fuch
as no human fkill or induftry can enfure. All
374 THE NATURE AND CAUSES OF
indications, it is acknowledged, are doubtful, and
the actual diſcovery and fuccefsful working of a
new mine can alone aſcertain the reality of its value,
or even of its exiftence. In this fearch there feem
to be no certain limits either to the poffible fuccefs,
or to the poffible diſappointment ofhuman induftry.
In the courfe of a century or two, it is poffible that
new mines may be diſcovered more fertile than any
that have ever yet been known; and it is juft equally
poffible that the moſt fertile mine then known may
be more barren than any that was wrought
before the difcovery of the mines of America,
Whether the one or the other of thoſe two events
may happen to take place, is of very little im-
portance to the real wealth and profperity of the
world, to the real value of the annual produce
of the land and labor of mankind.
Its no-
minal value, the quantity of gold and filver by
which this annual produce could be expreffed or
repreſented, would, no doubt, be very different;
but its real value, the real quantity of labor
which it could purchaſe or command, would be
precifely the fame. A fhilling might in the one
cafe repreſent no more labor than a penny does
at prefent; and a penny in the other might re-
preſent as much as a fhilling does now. But in
the one cafe he who had a fhilling in his pocket,
would be no richer than he who has a penny at
prefent; and in the other he who had a penny
would be just as rich as he who has a fhilling
now. The cheapneſs and abundance of gold
and filver plate, would be the fole advantage
THE WEALTH OF NATIONS.
375
which the world could derive from the one
event, and the dearneſs and ſcarcity of thoſe
trifling fuperfluities the only inconveniency it
could fuffer from the other.
Conclufion of the Digreffion concerning the Varia-
tions in the Value of Silver.
"
The greater part of the writers who have col-
lected the money prices of things in ancient
times, feem to have confidered the low money
price of corn, and of goods in general, or, in
other words, the high value of gold and filver,
as a proof, not only of the ſcarcity of thoſe metals,
but of the poverty and barbariſm of the country
at the time when it took place. This notion is
connected with the fyftem of political œconomy
which repreſents national wealth as confifting in
the abundance, and national poverty in the
fcarcity of gold and filver; a fyftem which I fhall
endeavour to explain and examine at great length
in the fourth book of this inquiry. I fhall only
obſerve at prefent, that the high value of the
precious metals can be no proof of the poverty
or barbariſm of any particular country at the
time when it took place. It is a proof only of
the barrenneſs of the mines which happened at
that time to fupply the commercial world. A
poor country, as it cannot afford to buy more,
fo it can as little afford to pay dearer for gold
and filver than a rich one; and the value of thoſe
metals, therefore, is not likely to be higher in
the former than in the latter. In China, a country
!
$76 THE NATURE AND CAUSES OF
much richer than any part of Europe, the value
of the precious metals is much higher than in any
part of Europe. As the wealth of Europe, indeed,
has increaſed greatly fince the diſcovery of the
mines of America, fo the value of gold and filver
has gradually diminiſhed. This diminution of their
value, however, has not been owing to the in-
creaſe of the real wealth of Europe, of the annual
produce of its land and labor, but to the accidental
diſcovery of more abundant mines than any that
were known before. The increaſe of the quantity
of gold and filver in Europe, and the increaſe of its
manufactures and agriculture, are two events
which, though they have happened nearly about
the fame time, yet have arifen from very different
caufes, and have fcarce any natural connexion
with one another. The one has arifen from a
mere accident, in which neither prudence nor
policy either had or could have any fhare: The
other from the fall of the feudal fyftem, and from
the eſtabliſhment of a government which afford-
ed to induftry the only encouragement which it
requires, fome tolerable fecurity that it fhall
enjoy the fruits of its own labor, Poland,
where the feudal fyftem ftill continues to take
place, is at this day as beggarly a country as it
was before the diſcovery of America. The
money price of corn, however, has rifen; the
real value of the precious metals has fallen in
Poland, in the fame manner as in other parts of
Europe. Their quantity, therefore, muſt have
increaſed there as in other places, and nearly in
:
THE WEALTH OF NATIONS.
377
the fame proportion to the annual produce of its
land and labor. This increaſe of the quantity
of thoſe metals, however, has not, it ſeems, in-
creaſed that annual produce, has neither im-
proved the manufactures and agriculture of the
country, nor mended the circumftances of its
inhabitants. Spain and Portugal, the countries
which poffefs the mines, are, after Poland, per-
haps, the two moft beggarly countries in Europe.
The value of the precious metals, however, muſt
be lower in Spain and Portugal than in any other
part of Europe; as they come from thoſe coun-
tries to all other parts of Europe, loaded, not
only with a freight and an enfurance, but with
the expenſe of ſmuggling, their exportation be-
ing either prohibited, or ſubjected to a duty. In
proportion to the annual produce of the land and
labor, therefore, their quantity muſt be greater in
thoſe countries than in any other part of Europe:
Thofe countries, however, are poorer than the
greater part of Europe. Though the feudal fyftem
has been aboliſhed in Spain and Portugal, it has
not been fucceeded by a much better.
As the low value of gold and filver, therefore,
is no proof of the wealth and flourishing ftate of
the country where it takes place; fo neither is
their high value, or the low money price either
of goods in general, or of corn in particular, any
proof of its poverty and barbariſm.
But though the low money price either of
goods in general, or of corn in particular, be no
proof of the poverty or barbariſm of the times,
378 THE NATURE AND CAUSES OF
2
the low money price of fome particular forts of
goods, fuch as cattle, poultry, game of all kinds
&c. in proportion to that of corn, is a moſt de-
cifive one. It clearly demonftrates, firft, their
great abundance in proportion to that of corn,
and confequently the great extent of the land
which they occupied in proportion to what was
occupied by corn; and, fecondly, the low value
of this land in proportion to that of corn land,
and confequently the uncultivated and unim-
proved ftate of the far greater part of the lands
of the country. It clearly demonftrates that the
ſtock and population of the country did not bear
the fame proportion to the extent of its territory,
which they commonly do in civilized countries,
and that fociety was at that time, and in that
country, but in its infancy. From the high or
low money price either of goods in general, or
of corn in particular, we can infer only that the
mines which at that time happened to fupply the
commercial world with gold and filver, were fer-
tile or barren, not that the country was rich or poor.
But from the high or low money-price of fome forts
of goods in proportion to that of others, we can
infer, with a degree of probability that approaches
almoſt to certainty, that it was rich or poor, that
the greater part of its lands were improved or unim-
proved, and that it was either tn a more or lefs
barbarous ftate, or in a more or leſs civilized one.
Any riſe in the money price of goods which
proceeded altogether from the degradation of the
value of filver, would affect all forts of goods
THE WEALTH OF NATIONS.
379
equally, and raiſe their price univerfally a third,
or a fourth, or a fifth part higher, according as
filver happened to loſe a third, or a fourth, or a
fifth part of its former value. But the rife in the
price of provifions, which has been the ſubject of
fo much reaſoning and converfation, does not
affect all forts of provifions equally. Taking the
courſe of the preſent century at an average, the
price of corn, it is acknowledged, even by thoſe
who account for this rife by the degradation of
the value of filver, has rifen much less than that
of ſome other forts of proviſions. The rife in the
price of thoſe other forts of provifions, therefore,
cannot be owing altogether to the degradation of
the value of filver.
Some other caufes muft be
taken into the account, and thoſe which have been
above affigned, will, perhaps, without having
recourſe to the fuppofed degradation of the value
of filver, fufficiently explain this rife in thoſe par-
ticular forts of provifions of which the price has
actually rifen in proportion to that of corn.
As to the price of corn itſelf, it has, during
the fixty-four firft years of the prefent century,
and before the late extraordinary courſe of bad
ſeaſons, been ſomewhat lower than it was during
the fixty-four laft years of the preceding century.
This fact is atteſted, not only by the accounts of
Windfor market, but by the public fiars of all
the different counties of Scotland, and by the
accounts of feveral different markets in France,
which have been collected with great diligence
and fidelity by Mr. Meſſance, and by Mr. Dupré
380 THE NATURE AND CAUSES OF
de St. Maur The evidence is more complete than
could well have been expected in a matter which
is naturally ſo very difficult to be afcertained.
As to the high price of corn during theſe laſt
ten or twelve years, it can be fufficiently accounted
for from the badnefs of the feafons, without fup-
pofing any degradation in the value of filver.
The opinion, therefore, that filver is con-
tinually finking in its value, feems not to be
founded upon any good obſervations, either upon
the prices of corn, or upon thoſe of other pro-
vifions.
The fame quantity of filver, it may, perhaps,
be faid, will in the prefent times, even accord-
ing to the account which has been here given,
purchaſe a much fmaller quantity of feveral
forts of provifions than it would have done
during fome part of the last century; and to
afcertain whether this change be owing to a
rife in the value of thofe goods, or to a fall in
the value of filver, is only to eſtabliſh a vain
and uſeleſs diftinction, which can be of no
fort of fervice to the man who has only a cer-
tain quantity of filver to go to market with, or
a certain fixed revenue in money. I certainly
do no pretend that the knowledge of this diftinc-
tion will enable him to buy cheaper. It may
not, however, upon that account be altogether
ufelefs.
It may be of fome ufe to the public by afford-
ing an eaſy proof of the profperous condition of
the country. If the rife in the price of fome
THE WEALTH OF NATIONS.
381
forts of provifions be owing altogether to a fall
in the value of filver, it is owing to a circum-
ſtance from which nothing can be inferred but
the fertility of the American mines. The real
wealth of the country, the annual produce of its
land and labor, may, notwithſtanding this cir-
cumſtance, be either gradually declining, as in
Portugal and Poland; or gradually advancing, as
in most other parts of Europe. But if this rife in
the price of fome forts of provifions be owing to
a riſe in the real value of the land which pro-
duces them, to its increafed fertility; or, in con-
ſequence of more extended improvement and
good cultivation, to its having been rendered fit
for producing corn; it is owing to a circum-
ftance which indicates in the cleareft manner the
profperous and advancing ftate of the country.
The land conftitutes by far the greateft, the moſt
important, and the moſt durable part of the wealth
of every extenfive country. It may ſurely be of
fome uſe, or, at leaft, it may give fome fatisfac-
tion to the Public, to have fo decifive a proof of
the increaſing value of by far the greateſt, the moſt
important, and the moft durable part of its wealth.
It may too be of fome ufe to the Public in
regulating the pecuniary reward of fome of its
inferior fervants. If this rife in the price of
fome forts of provifions be owing to a fall in the
value of filver, their pecuniary reward, provided
"it was not too large before, ought certainly to
be augmented in proportion to the extent of his
fall. If it is not augmented, their real recompence
382 THE NATURE AND CAUSES OF
will evidently be fo much diminiſhed. But if this
rife of price is owing to the increaſed value, in
confequence of the improved fertility of the land
which produces fuch provifions, it becomes a
much nicer matter to judge either in what pro-
portion any pecuniary reward ought to be
augmented, or whether it ought to be augmented
at all. The extenfion of improvement and culti-
vation, as it neceffarily raiſes more or lefs, in pro-
portion to the price of corn, that of every fort of
animal food, ſo it as neceffarily lowers that of,
I believe, every fort of vegetable food. It raifes the
price of animal food; becauſe a great part of the
land which produces it, being rendered fit for pro-
ducing corn, muft afford to the landlord and farmer
the rent and profit of corn-land. It lowers the price
of vegetable food; becauſe, by increafing the fertility
of the land, it increaſes its àbundance. The im-
provements of agriculture too introduce many
forts of vegetable food, which, requiring lefs
land and not more labor than corn, come much
cheaper to market. Such are potatoes and maize,
or what is called Indian corn, the two moſt im-
portant improvements which the agriculture of
Europe, perhaps, which Europe itſelf, has received
from the great extenſion of its commerce and na-
vigation. Many forts of vegetable food, befides,
which in the rude ftate of agriculture are con-
fined to the kitchen-garden, and raiſed only by
the ſpade, come in its improved ftated to be in-
troduced into common fields, and to be raiſed by
the plough: fuch as turnips, carrots, cabbages, &c.
THE WEALTH OF NATIONS.
383
If in the progrefs of improvement, therefore
the real price of one fpecies of food neceffarily
rifes, that of another as neceffarily falls, and it
becomes a matter of more nicety to judge how
far the rife in the one may be compenfated by
the fall in the other. When the real price of
butcher's-meat has once got to its height (which,
with regard to every fort, except, perhaps, that
of hog's flesh, it ſeems to have done through a great
part of England, more than a century ago), any rife
which can afterwards happen in that of any other
fort of animal food, cannot much affect the circum-
ſtances of the inferior ranks of people. The cir-
cumſtances of the poor through a great part of
England cannot ſurely be fo much diſtreſſed by any
rife in the price of poultry, fiſh, wild-fowl, or
venifon, as they muſt be relieved by the fall in
that of potatoes.
In the preſent ſeaſon of ſcarcity the high price
of corn no doubt diftreffes the poor. But in times
of moderate plenty, when corn is at its ordinary
or average price, the natural riſe in the price of
any other fort of rude produce cannot much affect
them. They fuffer more, perhaps, by the artifi-
cial rife which has been occafioned by taxes in
the prices of fome manufactured commodities; as
of falt, foap, leather, candles, malt, beer, and
ale, &c.
384 THE NATURE AND CAUSES OF
Effects of the Progrefs of Improvement upon the
real Price of Manufactures.
It is the natural effect of improvement, how-
ever, to diminiſh gradually the real price of
almoſt all manufactures. That of the manufac-
turing workmanſhip diminiſhes, perhaps, in all
of them without exception. In confequence of
better machinery, of greater dexterity, and of a
more proper divifion and diftribution of work
all of which are the natural effects of improve-
ment, a much ſmaller quantity of labor becomes
requifite for executing any particular piece of
work; and though, in confequence of the flouriſh-
ing circumſtances of the fociety, the real price of
labor fhould riſe very confiderably, yet the great
diminution of the quantity will generally much
more than compenfate the greateſt rife which can
happen in the price.
There are, indeed, a few manufactures, in
which the neceffary rife in the real price of the
rude materials will more than compenfate all the
advantages which improvement can introduce into
the execution of the work. In carpenters and
joiners work, and in the coarſer ſort of cabinet
work, the neceſſary riſe in the real price of barren
timber, in confequence of the improvement of land,
will more than compenſate all the advantages which
can be derived from the beſt machinery, the
greateſt dexterity, and the moſt proper divifion
and diftribution of work.
*1
But
THE WEALTH OF NATIONS.
385
But in all cafes in which the real price of the
rude materials either does not rife at all, or does
not riſe very much, that of the manufactured
commodity finks very confiderably.
"
This diminution of price has, in the courſe of
the preſent and preceding century, been moft re-
markable in thofe manufactures of which the mate-
rials are the coarfer metals. A better movement
of a watch, than about the middle of the laft
century could have been bought for twenty pounds,
may now perhaps be had for twenty fhillings. In
the work of cutlers and lockſmiths, in all the toys
which are made of the coarſer metals, and in all
thoſe goods which are commonly known by the
name of Birmingham and Sheffield ware there
has been during the fame period, a very great
reduction of price, though not altogether fo great
as in watch-work. It has, however, been fufficient
to aſtoniſh the workmen of every other part of
Europe, who in many cafes acknowledge that
they can produce no work of equal goodnefs for
double, or even for triple the price. There are
perhaps no manufactures in which the diviſion of
labor can be carried further, or in which the ma-
chinery employed admits of a greater variety of
improvements, than thofe of which the materials
are the coarfer metals.
In the clothing manufacture there has, during
the fame period, been no fuch fenfible reduction
of price. The price of fuperfine cloth, I have
been affured, on the contrary, has, within theſe
five-and-twenty or thirty years, rifen fomewhat
W. of N. 1.
85
386 THE NATURE AND CAUSES OF
in proportion to its quality; owing, it was faid,
to a confiderable rife in the price of the material,
which confifts altogether of Spanish wool. That
of the Yorkshire cloth, which is made altogether
of Engliſh wool, is ſaid indeed, during the courſe
of the prefent century, to have fallen a good
deal in porportion to its quality. Quality, how-
ever, is ſo very difputable a matter, that I look
upon all information of this kind as fomewhat
uncertain. In the clothing manufacture, the divi-
fion of labor is nearly the fame now as it was a
century ago, and the machinery employed is not
very different. There may, however, have been
fome ſmall improvements in both, which may
have occafioned ſome reduction of price.
But the reduction will appear much more fen-
fible and undeniable, if we compare the price of
this manufacture in the preſent times with what
it was in a much remoter period, towards the end
of the fifteenth century, when the labor was
probably much leſs fubdivided, and the machinery
employed much more imperfect, than it is at
prefent.
In 1487, being the 4th of Henry VII. it was
enacted, that "whofoever fhall fell by retail a
"broad yard of the fineft fcarlet grained, or of
"other grained cloth of the fineſt making, above
"fixteen fhillings, thall forfeit forty fhillings for
66 every yard fo fold." Sixteen fhillings, therefore,
containing about the fame quantity of filver as
four-and twenty fhillings of our prefent money,
was, at that time, reckoned not an unreaſonable
THE WEALTH OF NATIONS.
387
price for a yard of the fineſt cloth ; and as this is
a fumptuary law, ſuch cloth, it is probable,
had ufually been fold fomewhat dearer. A guinea
may be reckoned the higheſt price in the prefent
times. Even though the quality of the cloths,
therefore, fhould be fuppofed equal, and that
of the prefent times is moft probably much
fuperior, yet, even upon this fuppofition, the
money price of the fineſt cloth appears to have
been confiderably reduced fince the end of the
fifteenth century.
But its real price has been
much more reduced. Six-fhillings and eight-pence
was then, and long afterwards, reckoned the
average price of a quarter of wheat. Sixteen
fhillings, therefore, was the price of two quarters
and more than three bushels of wheat. Valuing
a quarter of wheat in the preſent times at eight-
and twenty fhillings, the real price of a yard of
fine cloth muft, in thofe times, have been equal
to at leaſt three pounds fix fhillings and fixpence
of our prefent money. The man who bought it
muſt have parted with the command of a quantity
of labor and ſubſiſtence equal to what that ſum
would purchaſe in the preſent times.
Gov
The reduction in the real price of the coarſe
manufacture, though confiderable, has not been
fo great as in that of the fine.
66
In 1463, being the 3d of Edward IV. it was
enacted, that no fervant in huſbandry, nor
common laborer. nor fervant to any artificer
"inhabiting out of a city or burgh, fhall ufe or
66
wear in their clothing any cloth above two
388 THE NATURE AND CAUSES OF
"fhillings the broad yard." In the 3d of Edward
IV. two fhillings contained very nearly the fame
quantity of filver as four of our preſent money.
But the Yorkshire cloth which is now fold at
four fhillings the yard, is probably much fuperior
to any that was then made for the wearing of
the very pooreft order of common fervants. Even
the money price of their clothing, therefore,
may, in proportion to the quality, be fomewhat
cheaper in the prefent than it was in thoſe ancient
times. The real price is certainly a good deal
cheaper. Ten-pence was then reckoned what is
called the moderate and reafonable price of a
bufhel of wheat. Two fhillings, therefore, was
the price of two bufhels and near two pecks of
wheat, which in the preſent times, at three
fhillings and fixpence the bufhel, would be worth
eight fhillings and nine-pence. For a yard of this
cloth the poor fervant must have parted with
the power of purchafing a quantity of fubfiftence
equal to what eight fhillings and nine-pence would
purchaſe in the preſent times. This is a fump-
tuary law too, reftraining the luxury and extra-
vagance of the poor. Their clothing, therefore,
had commonly been much more expenſive.
The fame order of people are, by the fame
law, prohibited from wearing hofe, of which the
price fhould exceed fourteen-pence the pair,
equal to about eight-and-twenty pence of our
preſent money. But fourteen pence was in thoſe
fourteen-pence
times the price of a bufhel and near two pecks of
wheat; which, in the prefent times, at three and
THE WEALTH OF NATIONS.
389
fixpence the bufhel, would coft five fhillings and
three-pence. We ſhould in the preſent times con-
fider this as a very high price for a pair of ſtockings
to a ſervant of the pooreft and loweſt order. He
muſt, however, in thoſe times have paid what
was really equivalent to this price for them.
In the time of Edward IV. the art of knitting
ftockings was probably not known in any part of
Europe. Their hofe were made of common cloth,
which may have been one of the caufes of their
dearneſs. The firſt perſon that wore ftockings
in England is faid to have been Queen Elizabeth.
She received them as a prefent from the Spaniſh
ambaffador.
Both in the coarfe and in the fine woollen
manufacture, the machinery employed was much
more imperfect in thoſe ancient, than it is in the
preſent times.
It has fince received three very
capital improvements, befides, probably, many
ſmaller ones of which it may be difficult to
aſcertain either the number or the importance.
The three capital improvements are: first, The
exchange of the rock and fpindle for the ſpin-
ning wheel, which, with the fame quantity of
labor, will perform more than double the quan-
tity of work. Secondly, the uſe of ſeveral very
ingenious machines which facilitate and abridge
in a fill greater proportion the winding of the
worfted and woollen yarn, or the proper arrange-
ment of the warp and woof before they are put
into the loom; an operation which, previous to
the invention of thoſe machines, muſt have
390 THE NATURE AND CAUSES OF
been extremely tedious and troublefome. Thirdly,
The employment of the fulling mill for thickening
the cloth, inſtead of treading it in water. Neither
wind nor water mills of any kind were known in
England fo early as the beginning of the fixteenth
century, nor, fo far as I know, in any other
part of Europe north of the Alps. They had been
introduced into Italy fome time before.
The confideration of theſe circumftances may,
perhaps, in fome meaſure explain to us why the
real price both of the coarſe and of the fine ma-
nufacture, was fo much higher in thoſe ancient,
than it is in the prefent times. It coft a greater
quantity of labor to bring the goods to market.
When they were brought thither, therefore, they-
muſt have purchaſed or exchanged for the price
of a greater quantity.
The coarfe manufacture probably was, in
thoſe ancient times, carried on in England, in
the fame manner as it always has been in coun-
tries where arts and manufactures are in their in-
fancy. It was probably a houſehold manufacture,
in which every different part of the work was
occafionally performed by all the different mem-
bers of almoſt every private family; but fo as to
be their work only when they had nothing elſe
to do, and not to be the principal buſineſs from
which any of them derived the greater part of
their fubfiftence. The work which is performed
in this manner, it has already been obſerved,
comes always much cheaper to market than that
which is the principal or fole fund of the workman's
THE WEALTH OF NATIONS.
391
fubfiftence. The fine manufacture, on the other
hand, was not in thofe times carried on in
England, but in the rich and commercial country
of Flanders; and it was probably conducted
then, in the fame manner as now, by people
who derived the whole, or the principal part
of their fubfiftence from it. It was befides a
foreign manufacture, and muft have paid fome
duty, the ancient cuſtom of tonnage and poundage
at leaſt, to the king. This duty, indeed, would
not probably be very great. It was not then the
policy of Europe to reftrain, by high duties,
the importation of foreign manufactures, but
rather to encourage it, in order that merchants
might be enabled to ſupply, at as eaſy a rate as
poffible, the great men with the conveniencies
and luxuries which they wanted, and which the
induſtry of their own country could not afford
them.
The confideration of theſe circumftances may
perhaps in fome meaſure explain to us why, in
thoſe ancient times, the real price of the coarſe
manufacture was, in proportion to that of the
fine, fo much lower than in the preſent times.
392 THE NATURE AND CAUSES OF
I
CONCLUSION of the CHAPTER.
SHALL conclude this very long chapter
with obferving that every improvement in thẹ
circumftances of the fociety tends either directly
or indirectly to raiſe the real rent of land, to in-
creaſe the real wealth of the landlord, his power
of purchafing the labor, or the produce of the
labor of other people,
The extenfion of improvement and cultivation
tends to raiſe it directly. The landlord's fhare
of the produce neceffarily increaſes with the
increaſe of the produce.
That riſe in the real price of thofe parts of
the rude produce of land, which is firft the effect
of extended improvement and cultivation, and
afterwards the cauſe of their being ftill further
extended, the rife in the price of cattle, for ex-
ample, tends too to raiſe the rent of land directly,
and in a ſtill greater proportion. The real
value of the landlord's fhare, his real command
of the labor of other people, not only rife with
the real value of the produce, but the proportion
of his fhare to the whole produce rifes with it.
That produce, after the rife in its real price,
requires no more labor to collect it, than before,
A ſmaller proportion of it will, therefore, be ſuf-
ficient to replace, with the ordinary profit, the
ftock which employs that labor. A greater propor-
tion of it muſt, conſequently, belong to the landlord,
THE WEALTH OF NATIONS.
393
All thoſe improvements in the productive
powers of labor, which tend directly to reduce
the real price of manufactures, tend indirectly to
raiſe the real rent of land. The landlord ex-
changes that part of his rude produce, which is
over and above his own confumption, or what
comes to the fame thing, the price of that part of
it, for manufactured produce. Whatever re-
duces the real price of the latter, raiſes that of
the former. An equal quantity of the former
becomes thereby equivalent to a greater quantity
of the latter; and the landlord is enabled to
purchaſe a greater quantity of the conveniencies,
ornaments, or luxuries, which he has occafion
for.
Every increaſe in the real wealth of the foci-
ety, every increaſe in the quantity of uſeful
labor employed within it, tends indirectly to
raiſe the real rent of land. A certain propor-
tion of this labor naturally goes to the land.
A greater number of men and cattle are em-
ployed in its cultivation, the produce increaſes
with the increaſe of the ftock which is thus em-
ployed in raifing it, and the rent increafes with
the produce.
The contrary circumftance, the neglect of
cultivation and improvement, the fall in the real
price of any part of the rude produce of land,
the rife in the real price of manufactures from
the decay of manufacturing art and induſtry, the
declenfion of the real wealth of the fociety, all
tend, on the other hand, to lower the real rent
394 THE NATURE AND CAUSES OF
of land, to reduce the real wealth of the land-
lord, to diminiſh his power of purchaſing either
the labor, or the produce of the labor of other
people.
The whole annual produce of the land and
labor of every country, or what comes to the
fame thing, the whole price of that annual pro-
duce, naturally divides itfelf, it has already been
obſerved, into three parts; the rent of land, the
wages of labor, and the profits of ſtock; and
conftitutes a revenue to three different orders of
people; to thoſe who live by rent, to thoſe who
live by wages, and to thofe who live by profit.
Theſe are the three great, original and confti-
tuent orders of every civilized fociety, from whoſe
revenue that of every other order is ultimately
derived.
!
The intereft of the firſt of thoſe three great
orders, it appears from what has been juft now
faid, is ſtrictly and infeparably connected with
the general intereft of the fociety. Whatever
either promotes or obftructs the one, neceffarily
promotes or obftructs the other. When the
public deliberates concerning any regulation
of commerce or police, the proprietors of land
never can miſlead it, with a view to promote the
intereft of their own particular order; at leaft, if
they have any tolerable knowledge of that in-
tereft. They are, indeed, too often defective in
this tolerable knowledge. They are the only
one of the three orders whofe revenue cofts them
neither labor nor care, but comes to them, as
THE WEALTH OF NATIONS.
395
it were, of its own accord, and independent of any
plan or project of their own. That indolence,
which is the natural effect of the eaſe and ſecurity
of their fituation, renders them too often, not only
ignorant, but incapable of that application of mind
which is neceffary in order to forefee and under-
ftand the confequences of any public regulation.
The intereft of the fecond order, that of thoſe
who live by wages, is as ftrictly connected with
the intereſt of the fociety as that of the firft. The
wages of the laborer, it has already been ſhown,
are never fo high as when the demand for labor
is continually rifing, or when the quantity em-
ployed is every year increafing confiderably.
When this real wealth of the fociety becomes
flationary, his wages are foon reduced to what is
barely enough to enable him to bring up a fa-
mily, or to continue the race of laborers. When
the fociety declines, they fall even below this.
The order of proprietors may, perhaps, gain more
by the proſperity of the fociety, than that of
laborers; but there is no order that fuffers fo
cruelly from its decline. But though the intereft
of the laborer is ftrictly connected with that of
the fociety, he is incapable either of comprehending
that intereft, or of underftanding its connexion
with his own. His condition leaves him no time
to receive the neceffary information, and his
education and habits are commonly fuch as to
render him unfit to judge even though he was
fully informed. In the public deliberations,
396 THE NATURE AND CAUSES OF
therefore, his voice is little heard and lefs regarded,
except upon fome particular occafions, when his
clamor is animated, fet on, and fupported by his
employers, not for his, but their own particular
purpoſes.
His employers conftitute the third order, that
of thoſe who live by profit. It is the ftock that is
employed for the fake of profit, which puts into
motion the greater part of the uſeful labor of every
fociety. The plans and projects of the employers
of ſtock regulate and direct all the moſt important
operations of labor, and profit is the end propofed
by all thoſe plans and projects. But the rate of
profit does not, like rent and wages, rife with the
proſperity, and fall with the declenfion of the
fociety. On the contrary, it is naturally low in
rich, and high in poor countries, and it is always
higheſt in the countries which are going faſteſt
to ruin. The intereft of this third order, therefore,
has not the fame connexion with the general
intereſt of the fociety as that of the other two.
Merchants and mafter manufacturers are, in this
order, the two claffes of people who commonly
employ the largeſt capitals, and who by their
wealth draw, to themſelves the greateſt ſhare of the
public confideration. As during their whole lives
they are engaged in plans and projects, they have
frequently more acuteness of underſtanding than
the greater part of country gentlemen. As their
thoughts, however, are commonly exerciſed rather
about the intereft of their own particular branch
THE WEALTH OF NATIONS.
397
of buſineſs, than about that of the fociety, their
judgment, even when given with the greateſt
candor (which it has not been upon every oc-
cafion) is much more to be depended upon with
regard to the former of thoſe two objects, than
with regard to the latter. Their fuperiority over
the country gentleman is, not fo much in their
knowledge of the public intereft, as in their
having a better knowledge of their own intereſt
than he has of his. It is by this fuperior know-
ledge of their own intereft that they have fre-
quently impofed upon his generofity, and per-
fuaded him to give up both his own intereft and
that of the public, from a very fimple but
honeft conviction, that their intereft, and not
his, was the intereſt of the public. The intereſt
of the dealers, however, in any particular branch
of trade or manufactures, is always in fome re-
ſpects different from, and even oppofite to, that
of the public. To widen the market and to
narrow the competition, is always the intereſt of
the dealers. To widen the market may fre-
quently be agreeable enough to the intereft of
the public; but to narrow the competition muſt
always be againſt it, and can ſerve only to enable
the dealers, by raiſing their profits above what
they naturally would be, to levy, for their own
benefit, an abfurd tax upon the reft of their
fellow-citizens. The propofal of any new law
or regulation of commerce which comes from
this order, ought always to be liftened to with
great precaution, and ought never to be adopted
398 THE NATURE AND CAUSES OF
till after having been long and carefully ex-
amined, not only with the moft fcrupulous, but
with the moſt fufpicious attention. It comes
from an order of men, whofe intereft is never
exactly the fame with that of the public, who
have generally an intereft to deceive and even to op-
preſs the public, and who accordingly have, upon
many occafions, both deceived and oppreffed it.
Years Price of the Quarter of
XII.
Wheat each Year.
Average of the dif-The average Price of
ferent Prices of the each Year in Money
fame Year.
of the prefent Times.
L. s.
d.
L. S. d.
L. S.
d.
1202
12
1 16
12
1205
13
4
13 5
or
3
15
1223
12
1
1237
3 4
1243
1
1
2
1 16
10
6
1
1
1
1244
1246
2
I
1
1
1
1
16
1
1247
1257
13 4
1 4
1
1258
15
1
1
17
1
I
I
+
1
2
2
3 12
2 11
6
8
1
1
ད
1
1270 {
1
16
4 16
6
8
2
1286 {--
{-- 16
5 12
16 16
9 4
1 8
Total, 35
9
3
Average Price,
2 19
4
THE WEALTH OF NATIONS.
399
Years Price of the Quarter of ferent Prices of the
XII.
Wheat each Year.
Average of the dif-The average Price of
each Year in Money
of the prefent Times.
fame Year.
| L. S. d.
L.
S.
d
L.
S.
d.
1287
3
48
10
1
1
ན་
1288
1289
1
8
2
боло
3
9
12
6
2
10
1
1
8
3
10
9 -
1/4
ता+
1290
16
ו רס
}
1294
16
1302
4
J
1309
7
2
1
}
1315
1
}
}
1 10 4
2
or or
13
8
8
12
1
1
1
1
1
1 6
€114
1
i
1-
10
1316
1 10 6
1 12
4 11 6
cr
2
2
4
14
1317
2 13
1 19 6
5 18 6
4
6 8
1336
1338
23
4
1
Total, 23
Average Price,
6
10
4 11/2/2
4
1 18
8
400 THE NATURE AND CAUSES OF
Years Price of the Quarter of Average of the dif- The average Price of
Wheat each Year.
ferent Prices of the each Year in Money
XII.
L.
S.
d.
1339
1349
9
2
1
}
fame Year.
of the prefent Times.
L. s.
d.
L.
S.
d.
7
Cr
1
1359
1 6 8
1361
2
·
1
1363
15
1369
1 2
1
4
1379
4
1387
2
#
1
-- 13
4
1390
14
14
1
1
3
5
24
2
8
1 15
2 9 4
9
4
5 1 13
1 13 7
16
1401
16
4
1407
1416
1
4
16
3 10
1 17
8
4
11
1 12
Total,
15
9
4
Average Price,
1
5
99393
L.
S. d.
L.
S. d.
L.
S.
d.
8
16
".
1423
1425
4
1434
1435
1
1
65
1
100
8
4
1439
1
1 6 8
1440
1 4
4
1444
4
1445
1447
1448
1449
1451
8
40655
6
8
6 8
I
8
2 13
4
1
1
1
1
1
1
1
I
10
8
8}
1 3
4
2
6
8
1
1
2
8
4 2
1
8
4
1
1
9
1
}
16
1
13
4
Total,
Average Price,
10
16
12 15
1 1
4
ماریه
THE WEALTH OF NATIONS.
401
Years Price of the Quarter of
XII.
Wheat each Year.
Average of the dif- The average Price of
ferent Prices of the each Year in Money
fame Year.
of the preſent Times.

L. S. d.
L.
S.
d.
10
8
2
4
1
4
}
1
1
L.
S.
d.
1453
5
1455
1457
1459
1460
1463 {
1464
1486
1
1
1
1491
1494
1
1
1495
1497
1 2
7
5
8
2
1 8
6
4
14
4
8
8
1
4
42
8
1
1
1
1
10
1
1
1
}
1
រ
15
10
16
1
3 8
10
1
f
}
1
1
17
1
}
1
2
1
-
6
5
}
1
11
1
Total,
8
9
- 14
L.
1
S.
4
5 8
Average Price,
L. s. d.
I
L.
S.
d.
1499
1504
1521
1
1
1551
1
I
1
1
1553
1554
1555
1556
1557
1
}
1
1
1
1
8
8
8
8
8
4
∞ ∞ ∞
I
1
I
I
1
1
1
1
1
1
1
1
}
1
1
1
6
d.
8 6
1 10
1
1
1
1
1
1
2
8
8
8
8
1
1
1
1
1
1
1
I
1
1
8
17 8
17 오늘
​2 13
4.
1558
8
1559
1560
8
1
1
1
1
1
8
1
}
8
8
8
1
}
1
}
1
W. of N. 1.
Total;
Average Price,
6
О
2;
I
5
10
12
26
402 THE NATURE AND CAUSES OF
Years Price of the Quarter of Average of the dif- The average Price of
ferent Prices of the each Year in Money
of the prefent Times.
XII.
Wheat each Year.
fame Year,
L. S. d.
L.
S.
d.
L.
S.
d.
1561
8
1562
8
1574
1587
1594
1595
1596
{
∞ A♡ ∞ or +5 +
5 216
2
}
}
1
8
8
1
4
1
3
4
1
2
16
2
13
4
1
1
1
1
1
1597
4
4
1598 2 16
8
∞∞ ∞
1599 1 19 2
1600
1601
1
17
8
1 14 10
4 12
I
}
1
1
1
1
+
1
3
4
2 16
2 13
4
2 12
8
2 16
1 19 2
8
1 17
}
1
4
}
f.
1
1
14 10
Total,
28
9 4
Average Price,
2 7
555
3
THE WEALTH OF NATIONS.
403
Prices of the Quarter of nine Bushels of the beft or
higheft priced Wheat at Windfor Market, on
Lady Day and Michaelmas, from 1596 to 1764
both inclufive; the Price of each Year being the
Medium between the higheft Prices of thofe Two
Market days.
Years.
1595,
1596,
1597,
1598,
}
L. S. d.
2 23 ∞ =
9
I
}
1
1
[
T
1
1
}
1
L. s. d.
1 10
2 18
2 12
2 8
4
8
O
2 12 O
2 9
4
1 16
1 8 0
2
2
2 15 8
2 28 O
2 13 4
2 18
Years.
O O
1621,
8
O
1622.
6
1623,
2 16 8
1624,
1599,
1 19 2
1625,
1600,
1 17 8
1626,
1601,
1 14 10
1627,
1602,
1 9 4
1628,
1603,
1 15 4
1629,
1604,
1 10
8
1630,
1605,
1 15 10
1631.
1606,
1 13
1632,
1607,
1 16 8
1633,
1608,
2 16 8
1634,
1609,
2 10 O
1635,
1610,
1 15 10
1636,
1611,
1 18 8
1612,
2 2
4
16) 40
1613,
8
8
1614,
2
1
Hid
1615,
1 18
1616,
O
1617,
2 8 8
1618,
2
68
1619,
1620,
1 15
4
1 10 4
26) 54
54 0 6
2 1 6-9
:
2
16
2 16
O
2 16 8
0 0
2 10
404 THE NATURE AND CAUSES OF
Wheat per quarter.
Wheat per quarter.
Years.
L. s. d.
Years.
L. s. d.
Brought over,79 14 10
1637,
2 13
O
1671,
1638,
2 17 4
1672,
.
1639,
1640,
1641,
1642,
1643,
1644,
1645,
1646,
1647,
1648,
1649,
1650,
1651,
1652,
1653,
16.54,
1655,
1656,
1657,
1658,
1659,
...
2 4 10
1673,
account. I
Wanting in
I the
The year 1646
fupplied
by 1
bishop Fleet-
wood.
1
1
4 ·8
1674,
1
O
1675,
1676,
1677,
}
1
сосоо юм
2 2
2 1
2
6
8
3 8
8
I
Q
1678,
O
1679,
1
}
2 8
1680,
}
1
1
3 13 8
1681,
;
4
5
1682,
4 О
1683,
1
3 16 8
1684,
}
3 13
4
1685,
1
2
9
1686,
1
1 15 6
1687,
1
t
1 6
1 13
0
1688,
1. or or on or or or or or Ċ mi ad a
I
3 4
1 18
2 2
О
2
19
O
3
0 0
2
5
O
6 8
2
4 O
2
O
0-
2.
4 О
2.
6 8
1. 14
О
5.
2.
4
1689,
2
3
1690,
1
2 68
1691,
1
3 5 Q
1692,
}
1
2 6 0
1. 10 О
1 14
8
1 14
2. 6 8
3 6
1660,
1661,
1662,
1663,
1664,
1
+
1
Q
1693,
!
1
1
2 16 6
1694,
រ
}
3 10
О
1695,
2 13
1
3 14
1696,
2 17 О
1.697,
206
1698,
1665,
2 9 4
1699,
3
1666,
1667,
1 16
O
1700,
1
1 16
1668,
1669,
1670,
2 0 O
60) 153
2 4
4
2
1 8
0
3 O O
38 8 4
2 0 0
1 8
2 11 0
01/
3
7 8
3. 4
O
O
3 11
4
Carry over, 79 14 10
THE WEALTH OF NATIONS.
405
Years.
L.
s. d.
1701,
1702,
1703,
1704,
1705,
1706,
1707,
1708,
1709,
1 17 8
I
1
1 9 6
1 16 O
Wheat per quarter.
Wheat per quarter.
Broughtover,69 8 8
L. s. d.
1 18 10
2 3 0
Years.
1734,
1735,
2 6 6
1736,
}
1 10 O
1737,
1
1
6
О
1738,
I
1
8
6
1739,
}
2 1
6
1740,
I
3 18 6
1741,
1
1
f
1710,
3 18
O
1742,
1711,
2 14
O
1743,
1712,
2
6
4
1744,
1713,
2 11
O
1745,
1
1
1
1
1
1714,
1715,
1716,
1717,
1718,
1719,
1720,
1721,
1722,
1723,
1724,
1725,
1726,
1727,
1728,
1729,
1730,
1731,
}
or of or
I
2
10 4
1746,
1
2
3
1747,
2
8
O
1748,
}
2
5 8
1749,
1
1
1
1
1 18 10
1 15 o
1 17 O
1
1
1 17 6
1 16 O
1750,
1751,
1752,
1753,
1
I
1
cr
1754,
រ
1 14
រ
1
1
}
1
1 17
1755,
1756,
1
1
8 6
1757,
༢༠
1 18
4
1 15 6
1 18 6
2 10
2 6
1 14
1
8
8
О
4 10
4 10
1 7 6
1 19
1 14 10
1 17 0
1 17 0
1 12 6
1 18 6
2 1 10
2
4
8
1 14 8
1 13 10
2
5
3
3 0 0
2
6 0
1758,
2 10 0
2
2
2
O
1759,
1 19 10
14
2 6 10
6
1760,
1 16 6
1761,
1 10 3
1
1 16 6
1762,
1 19 0
1
1 12 10
1763,
2 0
1732,
1733,
9
1 6 8
1764,
1 8
4
2 1
9
64) 129 13 6
Carry over, 69 8 8
2 0 612
406
THE NATURE AND CAUSES, &c.
Wheat per quarter.
-Years.
L. s. d.
Years.
1731,
1 12 10
1741,
1
1732,
1
6 8
1742,
1
1733,
1734,
1735,
1736,
1
1
1 8 4
1 18 10
1743,
1744,
2 3 0
1745,
2 0
1746,
1737,
1 18
1747,
1738,
1739,
1 15
6
1748,
1
1
}
T
Wheat per quarter.
L. s. d.
2 6 8
1 14
1 4 10
1
1 18 6
1749,
1740,
2 10
8
1750,
1 19
1 14 10
1 17 O
1 17
1 12 6
1
1
4 10
7 6
0
10) 18 12
8
10) 16
18
2
1 17 3x
1 13 94
END OF THE FIRST VOLUME.
1

11119
6
THE UNIVERSITY OF MICHIGAN
GRADUATE LIBRARY
AUG
71
APR 29 1977
11
NOVI 1977
DATE DUE
MAY 21 1979

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OR
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