The annual labour
of every nation
is the fund
which originally supplies it
with all
the necessaries
and conveniencies
of life which
it annually consumes,
and which
consist always either
in the immediate produce
of that labour,
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 smaller proportion
to the number of those
who are
to consume it,
the nation
will be better
or worse supplied with all
the necessaries and conveniencies
for which it
has occasion.
But this proportion
must in every nation
be regulated
by two different circumstances:
first,
by the skill,
dexterity,
and judgment
with which
its labour
is generally applied;
and, secondly,
by the proportion
between the number of those
who are employed
in useful labour,
and that of those
who are not so employed.
Whatever be the soil,
climate,
or extent
of territory
of any particular nation,
the abundance
or scantiness of its annual
supply must,
in that particular situation,
depend
upon those
two circumstances.
The abundance or scantiness
of this supply, too,
seems
to depend more
upon the former
of those two circumstances
than
upon the latter.
Among the savage nations
of hunters and fishers,
every individual
who is able
to work is more or less
employed in useful labour,
and endeavours
to provide,
as well as he can,
the necessaries and conveniencies
of life,
for himself,
and such
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 so miserably poor,
that,
from mere want,
they are frequently reduced,
or at least
think themselves reduced,
to the necessity
sometimes of directly destroying,
and sometimes of abandoning
their infants,
their old people,
and those
afflicted
with lingering diseases,
to perish with hunger,
or to be devoured
by wild beasts.
Among civilized
and thriving nations,
on the contrary,
though a great number
of people
do not labour at all,
many of whom
consume the produce
of ten times,
frequently of a hundred times,
more labour
than the greater part
of those
who work;
yet the produce
of the whole labour
of the society
is so great,
that all
are often abundantly supplied;
and a workman,
even of
the lowest and poorest order,
if he
is frugal and industrious,
may enjoy
a greater share
of the necessaries and
conveniencies of life than it
is possible
for any savage
to acquire.
The causes of this improvement
in the productive powers
of labour,
and the order
according to which
its produce
is naturally distributed
among the different ranks
and conditions of men
in the society,
make the subject
of the first book
of this Inquiry.
Whatever
be the actual state
of the skill,
dexterity,
and judgment,
with which labour
is applied in any nation,
the abundance
or scantiness of its annual
supply must depend,
during the continuance
of that state,
upon the proportion
between the number of those
who are annually employed
in useful labour,
and that of those
who are not so employed.
The number
of useful
and productive labourers,
it will hereafter appear,
is everywhere
in proportion
to the quantity
of capital stock
which is employed in
setting them
to work,
and to the particular way
in which it
is so employed.
The second book,
therefore,
treats
of the nature
of capital stock,
of the manner
in which
it is gradually accumulated,
and of the different quantities
of labour which
it puts into motion,
according to
the different ways
in which it is employed.
Nations
tolerably well advanced
as to skill,
dexterity,
and judgment,
in the application of labour,
have followed very different
plans in the general conduct
or direction
of it;
and those
plans
have not all been equally
favourable
to the greatness
of its produce.
The policy of some nations
has given
extraordinary encouragement
to the industry
of the country;
that of others
to the industry of towns.
Scarce any nation
has dealt equally and impartially
with every sort
of industry.
Since the down-fall
of the Roman empire,
the policy of Europe
has been more favourable
to arts,
manufactures,
and commerce,
the industry of towns,
than to agriculture,
the Industry of the country.
The circumstances which
seem
to have introduced
and established this policy
are explained
in the third book.
Though those
different plans were,
perhaps,
first
introduced
by the private interests
and prejudices
of particular orders of men,
without any regard to,
or foresight of,
their consequences
upon the general welfare
of the society;
yet they
have given occasion
to very different theories
of political economy;
of which some
magnify the importance of that
industry
which is carried on in towns,
others of
that which
is carried on
in the country.
Those theories
have had
a considerable influence,
not only upon the opinions
of men
of learning,
but upon the public conduct
of princes
and sovereign states.
I have endeavoured,
in the fourth book,
to explain
as fully and distinctly
as I
can those different theories,
and
the principal effects which they
have produced
in different ages and nations.
To explain in what
has consisted 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 supplied
their annual consumption,
is the object
of these four first books.
The fifth and last
book treats
of the revenue
of the sovereign,
or commonwealth.
In this book
I have endeavoured
to shew,
first,
what are
the necessary expenses
of the sovereign,
or commonwealth;
which of those expenses
ought to be defrayed
by the general contribution
of the whole society,
and which of them,
by that
of some particular part only,
or of some particular members
of it:
secondly,
what are the different methods
in which the whole society
may be made
to contribute towards defraying
the expenses
incumbent on
the whole society,
and what
are the principal advantages
and inconveniencies
of each
of those methods;
and, thirdly and lastly,
what are the reasons
and causes which
have induced almost
all modern governments
to mortgage some part
of this revenue,
or to contract debts;
and what
have been the effects
of those debts
upon the real wealth,
the annual produce
of the land
and labour of the society.
OF THE CAUSES
OF IMPROVEMENT
IN THE PRODUCTIVE POWERS
OF LABOUR,
AND OF THE ORDER
ACCORDING
TO WHICH
ITS PRODUCE
IS NATURALLY DISTRIBUTED
AMONG THE DIFFERENT RANKS
OF THE PEOPLE.
OF THE DIVISION OF LABOUR.
The greatest improvements
in the productive powers
of labour,
and the greater part
of the skill,
dexterity,
and judgment,
with which
it is anywhere directed,
or applied,
seem to have been the effects
of the division of labour.
The effects
of the division of labour,
in the general business
of society,
will be more easily understood,
by considering in what
manner
it operates in some particular
manufactures.
It is commonly supposed
to be carried
furthest 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 destined
to supply
the small wants of
but a small number of people,
the whole number of workmen
must necessarily be small;
and those
employed
in every different branch
of the work
can often be collected
into the same workhouse,
and placed at
once under the view
of the spectator.
In those great
manufactures,
on the contrary,
which are destined
to supply the great wants
of the great body
of the people,
every different branch
of the work
employs so great
a number of workmen,
that it is impossible
to collect them all
into the same workhouse.
We can seldom see more,
at one time,
than those
employed in one single branch.
Though in such
manufactures,
therefore,
the work
may really be divided
into a much greater number
of parts,
than in those
of a more trifling nature,
the division
is not near so obvious,
and has accordingly been
much less observed.
To take an example,
therefore,
from a very trifling manufacture,
but one
in which
the division of labour
has been very often taken
notice of,
the trade of a pin-maker:
a workman
not educated to this business
(which
the division
of labour
has rendered a distinct trade,
nor acquainted
with the use
of the machinery
employed in it
(to the invention
of which the same division
of labour
has probably given occasion),
could scarce,
perhaps,
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 straights it;
a third cuts it;
a fourth points it;
a fifth
grinds it at the top
for receiving the head;
to make
the head
requires two
or three distinct operations;
to put it on
is a peculiar business;
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 distinct operations,
which,
in some manufactories,
are all performed
by distinct hands,
though in others
the same man
will sometimes perform two
or three
of them.
I have seen
a small manufactory
of this kind,
where ten men
only were employed,
and where some
of them consequently performed two
or three distinct operations.
But though they
were very poor,
and therefore
but indifferently accommodated
with the necessary machinery,
they
could,
when they
exerted themselves,
make among them
about twelve pounds
of pins in a day.
There
are in a pound
upwards of four thousand
pins of a middling size.
Those ten persons,
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 separately
and independently,
and without any of them
having been educated
to this peculiar business,
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 present capable
of performing,
in consequence
of a proper division
and combination
of their different operations.
In every other art
and manufacture,
the effects
of the division of labour
are similar to what they
are in this
very trifling one,
though,
in many of them,
the labour
can neither
be so much subdivided,
nor reduced to so great
a simplicity of operation.
The division of labour,
however,
so far
as it can be introduced,
occasions,
in every art,
a proportionable increase
of the productive powers
of labour.
The separation
of different trades
and employments
from one another,
seems
to have taken place
in consequence
of this advantage.
This separation, too,
is generally carried furthest
in those countries which
enjoy the highest degree
of industry and improvement;
what is the work
of one man,
in a rude state
of society,
being generally
that of several
in an improved one.
In every improved society,
the farmer
is generally nothing
but a farmer;
the manufacturer,
nothing but a manufacturer.
The labour, too,
which is necessary
to produce
any one complete manufacture,
is almost always divided
among a great number
of hands.
How many different 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 smoothers
of the linen,
or to the dyers and dressers
of the cloth!
The nature of agriculture,
indeed,
does not admit
of so many subdivisions
of labour,
nor of so complete
a separation
of one business from another,
as manufactures.
It is impossible
to separate so entirely
the business
of the grazier from
that of the corn-farmer,
as the trade of the carpenter
is commonly separated from
that of the smith.
The spinner
is almost always
a distinct person from the,
weaver;
but the ploughman,
the harrower,
the sower of the seed,
and the reaper of the corn,
are often the same.
The occasions for those
different sorts
of labour returning
with the different seasons
of the year,
it is impossible that one man
should be constantly employed
in any one
of them.
This impossibility
of making
so complete and entire
a separation
of all
the different branches
of labour
employed in agriculture,
is perhaps
the reason why the improvement
of the productive powers
of labour,
in this art,
does not always keep pace
with their improvement in
manufactures.
The most opulent nations,
indeed,
generally
excel all their neighbours
in agriculture
as well as in
manufactures;
but they
are commonly more distinguished
by their superiority
in the latter than
in the former.
Their lands
are in general better cultivated,
and having more labour
and expense
bestowed upon them,
produce more in proportion
to the
extent and natural fertility
of the ground.
But this
superiority of produce
is seldom much more than
in proportion
to the superiority
of labour and expense.
In agriculture,
the labour
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 same degree
of goodness,
come cheaper
to market than
that of the poor.
The corn of Poland,
in the same degree
of goodness,
is as cheap as
that of France,
notwithstanding
the superior opulence and improvement
of the latter country.
The corn of France is,
in the corn-provinces,
fully as good,
and in most years
nearly about the same 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 those
of France,
and the corn-lands of France
are said
to be much better
cultivated than those
of Poland.
But though the poor country,
notwithstanding
the inferiority
of its cultivation,
can,
in some measure,
rival the rich
in the cheapness and goodness
of its corn,
it can pretend
to no such competition
in its manufactures,
at least
if those
manufactures suit the soil,
climate,
and situation,
of the rich country.
The silks of France
are better and cheaper
than those
of England,
because the silk manufacture,
at least
under the present high duties
upon the importation
of raw silk,
does not
so well suit the climate
of England as
that of France.
But the hardware
and the coarse woollens
of England
are beyond all
comparison superior
to those of France,
and much cheaper, too,
in the same degree
of goodness.
In Poland
there are said
to be scarce any
manufactures of any kind,
a few
of those coarser household
manufactures excepted,
without which no country
can well subsist.
This great increase
in the quantity of work,
which,
in consequence
of the division of labour,
the same number of people
are capable
of performing,
is owing
to three different circumstances;
first,
to the increase
of dexterity
in every particular workman;
secondly,
to the saving of the time
which is commonly lost
in passing
from one species
of work to another;
and, lastly,
to the invention
of a great number
of machines which
facilitate and abridge labour,
and enable one man
to do the work of many.
First,
the improvement
of the dexterity
of the workmen,
necessarily increases
the quantity of the work
he can perform;
and the division of labour,
by reducing
every man's business
to some one simple operation,
and by making
this operation the sole
employment
of his life,
necessarily
increases very much
the dexterity of the workman.
A common smith,
who,
though accustomed
to handle the hammer,
has never been
used to make nails,
if,
upon some particular occasion,
he is obliged to attempt it,
will scarce,
I am assured,
be able
to make above two
or three hundred
nails in a day,
and those, too,
very bad ones.
A smith
who has been accustomed
to make nails,
but whose sole or principal
business has not been
that of a nailer,
can seldom,
with his utmost 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 of the
simplest operations.
The same person
blows the bellows,
stirs or mends the fire
as there is occasion,
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
of a pin,
or of a metal button,
is subdivided,
are all of them
much more simple,
and the dexterity
of the person,
of whose life
it has been
the sole business
to perform them,
is usually much greater.
The rapidity with which some
of the
operations of those
manufactures
are performed,
exceeds
what the human hand could,
by those
who had never seen them,
he supposed capable
of acquiring.
Secondly,
The advantage
which is gained
by saving
the time
commonly lost
in passing
from one sort
of work to another,
is much greater than
we should at first view
be apt
to imagine it.
It is impossible
to pass 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 small farm,
must loose a good deal
of time
in passing from his loom
to the field,
and from the field
to his loom.
When
the two trades
can be carried on
in the same workhouse,
the loss of time is,
no doubt,
much less.
It is,
even in this case,
however,
very considerable.
A man commonly saunters
a little
in turning his hand
from one sort
of employment to another.
When he first
begins the new work,
he is
seldom very keen and hearty;
his mind,
as they say,
does not go to it,
and for some time
he rather trifles than
applies to good purpose.
The habit of sauntering,
and of indolent careless
application,
which is naturally,
or rather necessarily,
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
almost every day
of his life,
renders him almost always
slothful and lazy,
and incapable
of any vigorous application,
even on
the most pressing occasions.
Independent,
therefore,
of his deficiency
in point of dexterity,
this cause alone
must always reduce considerably
the quantity of work
which he is capable
of performing.
Thirdly,
and lastly,
everybody
must be sensible how much
labour is facilitated
and abridged
by the application
of proper machinery.
It is unnecessary
to give any example.
I shall only observe,
therefore,
that
the invention of all
those machines
by which labour
is so much
facilitated
and abridged,
seems
to have been originally owing
to the division of labour.
Men are much more likely
to discover
easier and readier methods
of attaining any object,
when
the whole attention
of their minds
is directed
towards that single object,
than when
it is dissipated
among a great variety
of things.
But,
in consequence
of the division of labour,
the whole
of every man's attention
comes naturally
to be directed
towards some one
very simple object.
It
is naturally
to be expected,
therefore,
that some one or other
of those
who are employed
in each particular branch
of labour
should soon find out
easier and readier methods
of performing
their own particular work,
whenever the nature of it
admits of such improvement.
A great part
of the machines made use of
in those
manufactures in which labour
is most subdivided,
were originally
the invention
of common workmen,
who,
being each of them
employed
in some very simple operation,
naturally
turned their thoughts
towards finding out
easier and readier methods
of performing it.
Whoever
has been much accustomed
to visit such
manufactures,
must frequently have been
shewn very pretty machines,
which were the inventions
of such workmen,
in order to
facilitate
and quicken their own
particular part of the work.
In the first fire engines
(this
was the current designation
for steam engines),
a boy
was constantly employed to open
and shut alternately
the communication
between the boiler
and the cylinder,
according as the piston either
ascended or descended.
One of those boys,
who loved
to play with his companions,
observed that,
by tying
a string
from the handle
of the valve
which opened
this communication
to another part
of the machine,
the valve
would open
and shut
without his assistance,
and leave him at liberty to
divert himself
with his play-fellows.
One
of the greatest improvements
that has been made
upon this machine,
since it was first invented,
was in this manner
the discovery of a boy
who wanted
to save his own labour.
All the improvements
in machinery,
however,
have by no means
been the inventions of those
who had occasion
to use the machines.
Many
improvements
have been made
by the ingenuity
of the makers
of the machines,
when to make them became
the business
of a peculiar trade;
and some by that of those
who are called philosophers,
or men of speculation,
whose trade
it is not
to do any thing,
but to observe every thing,
and who,
upon that account,
are often capable
of combining
together the powers
of the most distant and dissimilar
objects in
the progress of society,
philosophy or speculation
becomes,
like every other employment,
the principal or sole
trade and occupation
of a particular class
of citizens.
Like every
other employment, too,
it is subdivided
into a great number
of different branches,
each of which
affords occupation
to a peculiar tribe or class
of philosophers;
and this subdivision
of employment in philosophy,
as
well as in every other business,
improve dexterity,
and saves time.
Each individual
becomes more expert
in his own peculiar branch,
more
work is done upon the whole,
and the quantity of science
is considerably increased
by it.
It is the great multiplication
of the productions
of all the different arts,
in consequence
of the division of labour,
which occasions,
in a well-governed society,
that universal 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 occasion for;
and every other workman
being exactly
in the same situation,
he is enabled
to exchange a great quantity
of his own goods
for a great quantity or,
what comes to the same thing,
for the price
of a great quantity
of theirs.
He supplies them abundantly
with what
they have
occasion for,
and they
accommodate him as amply with
what he has
occasion for,
and a general
plenty diffuses itself
through all
the different ranks
of the society.
Observe the accommodation
of the most common artificer
or daylabourer
in a civilized
and thriving country,
and you will perceive that
the number of people,
of whose 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-labourer,
as coarse and rough
as it may appear,
is the produce
of the joint labour
of a great multitude
of workmen.
The shepherd,
the sorter of the wool,
the wool-comber or carder,
the dyer,
the scribbler,
the spinner,
the weaver,
the fuller,
the dresser,
with many others,
must all join
their different arts
in order to complete
even this homely
production.
How many merchants and carriers,
besides,
must have been employed
in transporting
the materials
from some of those workmen
to others
who often live
in a very distant part
of the country?
How much commerce
and navigation in particular,
how many ship-builders,
sailors,
sail-makers,
rope-makers,
must have been employed
in order to
bring
together the
different drugs made use of
by the dyer,
which
often come
from the remotest corners
of the world?
What a variety
of labour, too,
is necessary in order to
produce the tools
of the meanest
of those workmen!
To say nothing
of such complicated machines
as the ship of the sailor,
the mill of the fuller,
or even
the loom of the weaver,
let us
consider only
what a variety of labour
is requisite
in order to
form that very simple machine,
the shears
with which
the shepherd
clips the wool.
The miner,
the builder
of the furnace
for smelting the ore
the feller of the timber,
the burner
of the charcoal
to be made use of
in the smelting-house,
the brickmaker,
the bricklayer,
the workmen
who attend the furnace,
the millwright,
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 shirt 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 utensils
of his kitchen,
all the furniture
of his table,
the knives and forks,
the earthen or pewter plates
upon which he
serves up and
divides his victuals,
the different 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 requisite
for preparing
that
beautiful and happy invention,
without which
these northern
parts of the world
could scarce
have afforded
a very comfortable habitation,
together
with the tools
of all the different workmen
employed
in producing those
different conveniencies;
if we
examine,
I say,
all these things,
and consider what
a variety of labour
is employed about each
of them,
we shall be sensible that,
without the assistance
and co-operation
of many thousands,
the very meanest person
in a civilized country
could not be provided,
even according to,
what we
very falsely imagine,
the easy and simple
manner in which
he is commonly accommodated.
Compared,
indeed,
with the
more extravagant luxury
of the great,
his accommodation
must no doubt
appear extremely
simple and easy;
and yet
it may be true,
perhaps,
that
the accommodation
of an European prince
does not always so much
exceed
that of an industrious
and frugal peasant,
as the accommodation
of the latter
exceeds
that of many an African king,
the absolute masters
of the lives and liberties
of ten thousand naked savages.
OF THE PRINCIPLE WHICH
GIVES OCCASION TO THE DIVISION
OF LABOUR.
This division of labour,
from which
so many advantages
are derived,
is not originally
the effect
of any human wisdom,
which foresees
and intends
that general opulence
to which it
gives occasion.
It is the necessary,
though very slow and gradual,
consequence of a
certain propensity
in human nature,
which has
in view no
such extensive utility;
the propensity
to truck,
barter,
and exchange one thing
for another.
Whether this propensity be one
of those original principles in
human nature,
of which no further account
can be given,
or whether,
as seems more probable,
it be
the necessary consequence
of the faculties
of reason and speech,
it belongs not
to our present subject 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 species
of contracts.
Two greyhounds,
in running
down the same hare,
have sometimes the appearance
of acting
in some sort 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 passions
in the same object
at
that particular time.
Nobody
ever saw a dog make
a fair
and deliberate exchange
of one bone
for another with another dog.
Nobody
ever saw one animal,
by its gestures and natural
cries signify to another,
this
is mine,
that yours;
I am willing
to give this for that.
When an animal wants
to obtain something either
of a man,
or of another animal,
it has no other means
of persuasion,
but to gain
the favour of those
whose service
it requires.
A puppy
fawns upon its dam,
and a spaniel endeavours,
by a thousand attractions,
to engage the attention
of its master
who is at dinner,
when it wants
to be fed by him.
Man sometimes uses
the same arts
with his brethren,
and when he
has no other means
of engaging them
to act
according to his inclinations,
endeavours
by every servile
and fawning attention
to obtain their good will.
He has not time,
however,
to do this
upon every occasion.
In civilized society he
stands at all
times in
need of the co-operation
and assistance
of great multitudes,
while his whole life
is scarce sufficient
to gain
the friendship of a few
persons.
In almost every other race
of animals,
each individual,
when it
is grown up to maturity,
is entirely independent,
and in its natural state
has occasion
for the assistance
of no other living creature.
But man
has almost constant occasion
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 interest their self-love
in his favour,
and shew them that it
is for their own advantage
to do
for him
what he requires of them.
Whoever offers to another
a bargain of any kind,
proposes
to do this.
Give me that which
I want,
and you
shall have
this which you want,
is the meaning
of every such offer;
and it
is in this manner
that
we obtain
from one another
the far greater part
of those
good offices which
we stand in need of.
It is not
from the benevolence
of the butcher the brewer,
or the baker that
we expect our dinner,
but from their regard
to their own interest.
We address ourselves,
not to their humanity,
but to their self-love,
and never talk
to them
of our own necessities,
but of their advantages.
Nobody
but a beggar chooses
to depend chiefly
upon the benevolence
of his fellow-citizens.
Even a beggar
does not depend
upon it entirely.
The charity
of well-disposed people,
indeed,
supplies him
with the whole fund
of his subsistence.
But though this principle
ultimately provides him
with all
the necessaries
of life which he has
occasion for,
it neither
does nor
can provide him with them
as he
has occasion for them.
The greater part
of his occasional wants
are supplied
in the same 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
bestows
upon him
he exchanges
for other clothes which
suit him better,
or for lodging,
or for food,
or for money,
with which he
can buy either food,
clothes,
or lodging,
as he has occasion.
As it is by treaty,
by barter,
and by purchase,
that
we obtain from one another
the greater part of those
mutual good offices which
we stand in need of,
so it is this
same trucking disposition
which originally gives
occasion
to the division
of labour.
In a tribe
of hunters or shepherds,
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 venison,
with his companions;
and he finds at last
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 sort of armourer.
Another
excels in making the frames
and covers
of their little huts
or moveable houses.
He is accustomed
to be
of use in this way
to his neighbours,
who reward him
in the same manner
with cattle and with venison,
till at last
he finds it his interest
to dedicate himself entirely
to this employment,
and to become
a sort of house-carpenter.
In the same manner
a third
becomes
a smith or a brazier;
a fourth,
a tanner or dresser
of hides or skins,
the principal part
of the clothing
of savages.
And thus the certainty
of being able to exchange all
that surplus part
of the produce
of his own labour,
which is
over and above
his own consumption,
for such parts
of the produce
of other men's labour as he
may have
occasion for,
encourages
every man
to apply himself
to a particular occupation,
and to
cultivate and bring
to perfection
whatever talent of genius
he may possess for that
particular species
of business.
The difference
of natural
talents in different men,
is, in reality,
much less than
we are aware of;
and the very different genius
which appears
to distinguish men
of different professions,
when grown up to maturity,
is not
upon many occasions
so much the cause,
as the effect
of the division of labour.
The difference
between the most dissimilar
characters,
between a philosopher
and a common street porter,
for example,
seems to arise not so much
from nature,
as from habit,
custom,
and education.
When they
came in to the world,
and for the first six
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 soon 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 last
the vanity of the philosopher
is willing
to acknowledge
scarce any resemblance.
But without the disposition
to truck,
barter,
and exchange,
every man
must have procured
to himself every necessary
and conveniency
of life which
he wanted.
All must have had
the same duties
to perform,
and the same work
to do,
and there could have been
no
such difference of employment as
could alone
give occasion
to any great difference
of talents.
As it
is this disposition
which forms
that difference of talents,
so remarkable
among men
of different professions,
so it is this
same disposition
which renders
that difference useful.
Many tribes of animals,
acknowledged
to be
all of the same species,
derive from nature
a much more remarkable distinction
of genius,
than what,
antecedent
to custom and education,
appears
to take place among men.
By nature
a philosopher
is not
in genius and disposition
half so different
from a street porter,
as a mastiff
is from a grey-hound,
or a grey-hound
from a spaniel,
or this last
from a shepherd's dog.
Those different tribes
of animals,
however,
though all of the
same species
are of scarce any use
to one another.
The strength of the mastiff
is not
in the least supported either
by the swiftness
of the greyhound,
or by the sagacity
of the spaniel,
or by the docility
of the shepherd's dog.
The effects
of those different geniuses
and talents,
for want
of the power or disposition
to barter and exchange,
cannot be brought
into a common stock,
and do not in the least
contribute
to the better accommodation
and conveniency
of the species.
Each animal
is still obliged to support
and defend itself,
separately and independently,
and derives no sort
of advantage from
that variety of talents
with which nature
has distinguished
its fellows.
Among men,
on the contrary,
the most dissimilar geniuses
are of use to one another;
the different
produces
of their respective talents,
by the general disposition
to truck,
barter,
and exchange,
being brought,
as it were,
into a common stock,
where every man
may purchase
whatever
part
of the produce
of other men's talents
he has
occasion for,
THAT THE DIVISION OF LABOUR
IS LIMITED BY THE EXTENT
OF THE MARKET.
As it
is the power
of exchanging
that gives occasion
to the division of labour,
so 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 labour,
which is
over and above
his own consumption,
for such parts
of the produce
of other men's labour
as he has
occasion for.
There
are some sorts of industry,
even of the lowest kind,
which can be carried
on nowhere
but in a great town.
A porter,
for example,
can find employment
and subsistence
in no other place.
A village
is by much
too narrow a sphere for him;
even an ordinary market-town
is scarce large enough
to afford him
constant occupation.
In the lone houses
and very small villages
which are scattered
about in so desert
a country
as the highlands of Scotland,
every farmer
must be butcher,
baker,
and brewer,
for his own family.
In such situations
we can scarce
expect
to find even a smith,
a carpenter,
or a mason,
within less than twenty miles
of another
of the same trade.
The scattered families
that 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 assistance
of those workmen.
Country workmen
are almost everywhere 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 same sort
of materials.
A country carpenter
deals in
every sort of work
that is made of wood;
a country
smith
in every sort 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 still more various.
It is impossible
there should be such 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 such
a situation
it would be impossible
to dispose of one thousand,
that is, of one day's work
in the year.
As by means
of water-carriage,
a more extensive market
is opened
to every sort of industry
than what land-carriage alone
can afford it,
so it is upon the sea-coast,
and along the banks
of navigable rivers,
that industry of every kind
naturally begins
to subdivide
and improve itself,
and it
is frequently
not till a long time
after that those improvements
extend themselves
to the inland parts
of the country.
A broad-wheeled waggon,
attended by two men,
and drawn by eight horses,
in about six weeks time,
carries and brings back
between London and Edinburgh
near four ton weight
of goods.
In about the same time
a ship
navigated
by six or eight men,
and sailing
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 same time,
the same quantity
of goods
between London and Edinburgh
as fifty broad-wheeled waggons,
attended by a hundred men,
and drawn
by four hundred horses.
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 maintenance and what
is nearly equal to maintenance
the wear
and tear
of four hundred horses,
as
well as of fifty great waggons.
Whereas,
upon the same quantity
of goods carried by water,
there
is
to be charged only the maintenance
of six or eight men,
and the wear
and tear of a ship
of two hundred tons burthen,
together
with the value
of the superior risk,
or the difference
of the insurance
between land and water-carriage.
Were there no other communication
between those two places,
therefore,
but by land-carriage,
as no
goods could be transported
from the one
to the other,
except such
whose price
was very considerable
in proportion
to their weight,
they
could carry on
but
a small part of
that commerce which at present
subsists between them,
and consequently could give
but a small part of
that encouragement which
they at present mutually
afford
to each other's industry.
There
could be little
or no commerce
of any kind
between the distant parts
of the world.
What goods could bear
the expense
of land-carriage
between London and Calcutta?
Or if
there were any so precious
as to be able to support
this expense,
with what safety
could
they be transported
through the territories
of so many barbarous nations?
Those two cities,
however,
at present
carry
on a very considerable commerce
with each other,
and by mutually affording
a market,
give a good deal
of encouragement
to each other's industry.
Since such,
therefore,
are the advantages
of water-carriage,
it is natural
that
the first improvements
of art and industry
should be made where this
conveniency
opens the whole world
for a market
to the produce
of every sort
of labour,
and that
they should always be
much later
in extending 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-coast,
and the great navigable rivers.
The extent of the market,
therefore,
must for a long time
be in proportion
to the riches
and populousness
of
that country,
and consequently
their improvement
must always be posterior
to the improvement of
that country.
In our North American colonies,
the plantations
have constantly followed either
the sea-coast or the banks
of the navigable rivers,
and have scarce
anywhere extended themselves
to any considerable distance
from both.
The nations that,
according to
the best authenticated history,
appear to have been
first civilized,
were
those
that dwelt round
the coast
of the Mediterranean sea.
That sea,
by far
the greatest inlet
that is known in the world,
having no tides,
nor consequently any waves,
except such as
are caused by the wind only,
was, by the smoothness
of its surface,
as well as by the multitude
of its islands,
and the proximity
of its neighbouring shores,
extremely favourable
to the infant navigation
of the world;
when,
from their ignorance
of the compass,
men were afraid
to quit the view
of the coast,
and from the imperfection
of the art of ship-building,
to abandon themselves
to the boisterous waves
of the ocean.
To pass
beyond the pillars
of Hercules,
that is,
to sail
out of the straits
of Gibraltar,
was, in the ancient world,
long considered
as
a most wonderful and dangerous
exploit of navigation.
It was late
before even the Phoenicians
and Carthaginians,
the most skilful navigators
and ship-builders
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 coast
of the Mediterranean sea,
Egypt
seems
to have been the first
in which either agriculture
or manufactures
were cultivated
and improved
to any considerable degree.
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 assistance
of a little art,
seem to have afforded
a communication
by water-carriage,
not only between all
the great towns,
but between all
the considerable 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 present.
The extent and easiness
of this inland navigation
was probably one
of the principal causes
of the early improvement
of Egypt.
The improvements
in agriculture
and manufactures
seem likewise
to have been
of very great antiquity
in the provinces of Bengal,
in the East Indies,
and in some of the eastern provinces
of China,
though the great extent
of this antiquity
is not authenticated
by any histories
of whose authority we,
in this part
of the world,
are well assured.
In Bengal,
the Ganges,
and several
other great rivers,
form a great number
of navigable canals,
in the same manner
as the Nile
does in Egypt.
In the eastern provinces
of China, too,
several great rivers form,
by their different branches,
a multitude of canals,
and,
by communicating
with one another,
afford
an inland
navigation much more extensive
than
that either
of the Nile or the Ganges,
or, perhaps,
than both of them
put together.
It is remarkable,
that neither
the ancient Egyptians,
nor the Indians,
nor the Chinese,
encouraged foreign commerce,
but seem
all to have derived
their great opulence
from this inland navigation.
All the inland parts
of Africa,
and all
that part of Asia
which lies
any considerable way north
of the Euxine
and Caspian seas,
the ancient Scythia,
the modern Tartary and Siberia,
seem,
in all ages
of the world,
to have been
in the same barbarous
and uncivilized state
in which we
find them at present.
The sea 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,
such as the Baltic
and Adriatic seas in Europe,
the Mediterranean
and Euxine seas in both Europe
and Asia,
and the gulfs of Arabia,
Persia, 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 another
to give occasion
to any considerable
inland navigation.
The commerce,
besides,
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 sea,
can never be very considerable,
because
it is always
in the power
of the nations
who possess
that other territory
to obstruct the communication
between the upper country
and the sea.
The navigation of the Danube
is of very little use
to the different states
of Bavaria,
Austria,
and Hungary,
in comparison of what
it would be,
if any of them
possessed
the whole of its course,
till
it falls
into the Black sea.
OF THE ORIGIN
AND USE OF MONEY.
When
the division of labour
has been once thoroughly established,
it is
but a very small part
of a man's wants which
the produce
of his own labour
can supply.
He supplies
the far greater part
of them
by exchanging
that surplus part
of the produce
of his own labour,
which is
over and above
his own consumption,
for such parts
of the produce
of other men's labour
as he has
occasion for.
Every man thus lives
by exchanging,
or becomes,
in some measure,
a merchant,
and the society itself
grows
to be
what is properly
a commercial society.
But when the division
of labour first
began to take place,
this power
of exchanging
must frequently have been
very much
clogged
and embarrassed
in its operations.
One man,
we shall suppose,
has more
of a certain commodity than
he himself
has occasion for,
while another
has less.
The former,
consequently,
would be glad to dispose of;
and the latter
to purchase,
a part of this superfluity.
But if this latter
should chance
to have nothing
that
the former
stands in need of,
no exchange
can be made between them.
The butcher
has more meat
in his shop than
he himself
can consume,
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 occasion for.
No exchange can,
in this case,
be made between them.
He cannot be their merchant,
nor they his customers;
and they
are all of them
thus mutually less serviceable
to one another.
In order to
avoid the inconveniency
of such situations,
every prudent man
in every period of society,
after the first establishment
of the division of labour,
must naturally have endeavoured
to manage
his affairs in such a manner,
as to have
at all times by him,
besides the peculiar produce
of his own industry,
a certain quantity
of some one commodity
or other,
such as he
imagined few people
would be likely
to refuse
in exchange
for the produce
of their industry.
Many different commodities,
it is probable,
were successively both
thought of
and employed
for this purpose.
In the rude ages
of society,
cattle
are said
to have been
the common instrument
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 armour of Diomede,
says Homer,
cost only nine oxen;
but that of Glaucus
cost a hundred oxen.
Salt
is said
to be the common instrument
of commerce
and exchanges in Abyssinia;
a species
of shells
in some parts
of the coast of India;
dried cod at Newfoundland;
tobacco in Virginia;
sugar
in some of
our West India colonies;
hides
or dressed leather
in some 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 shop
or the ale-house.
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 loss
as any other commodity,
scarce any thing
being less perishable than
they are,
but they can likewise,
without any loss,
be divided into any number
of parts,
as by fusion
those
parts can easily be re-united
again;
a quality which no
other
equally durable commodities
possess,
and which,
more than any other quality,
renders them fit
to be the instruments
of commerce and circulation.
The man
who wanted
to buy salt,
for example,
and had nothing
but cattle
to give in exchange for it,
must have been obliged
to buy salt to the value
of a whole ox,
or a whole sheep,
at a time.
He could seldom buy
less than this,
because what he
was to give for it
could seldom be divided
without loss;
and if he
had a mind to buy more,
he must,
for the same 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 sheep.
If,
on the contrary,
instead of sheep or oxen,
he had metals
to give in exchange for it,
he could easily proportion
the quantity
of the metal
to the precise quantity
of the commodity
which he
had immediate occasion for.
Different metals
have been made use of
by different nations
for this purpose.
Iron
was the common instrument
of commerce
among the ancient Spartans,
copper
among the ancient Romans,
and gold and silver
among all rich
and commercial nations.
Those metals
seem originally
to have been made
use of
for this purpose
in rude bars,
without any stamp or coinage.
Thus
we are told
by Pliny,
upon the authority of Timaeus,
an ancient historian,
that,
till the time
of Servius Tullius,
the Romans
had no coined money,
but
made use of unstamped bars
of copper,
to purchase whatever
they had occasion for.
These rude bars,
therefore,
performed at this time
the function of money.
The use
of metals
in this rude state
was attended
with two very
considerable inconveniences;
first,
with the trouble
of weighing,
and secondly,
with that
of assaying them.
In the precious metals,
where
a small difference
in the quantity
makes a great difference
in the value,
even the business
of weighing,
with proper exactness,
requires
at least very accurate weights
and scales.
The weighing of gold,
in particular,
is an operation
of some nicety.
In the coarser metals,
indeed,
where a small error
would be
of little consequence,
less accuracy
would,
no doubt,
be necessary.
Yet we
should find
it excessively troublesome
if every time a poor man
had occasion either to buy
or sell a farthing's worth
of goods,
he was obliged
to weigh the farthing.
The operation
of assaying
is still more difficult,
still more tedious;
and,
unless
a part of the metal
is fairly melted
in the crucible,
with proper dissolvents,
any conclusion
that can be drawn from it
is extremely uncertain.
Before the institution
of coined money,
however,
unless they
went through this
tedious and difficult operation,
people
must always have been liable
to the grossest frauds
and impositions;
and instead of a pound weight
of pure silver,
or pure copper,
might receive,
in exchange for their goods,
an adulterated composition
of the coarsest
and cheapest materials,
which had,
however,
in their outward appearance,
been made
to resemble those metals.
To prevent such abuses,
to facilitate exchanges,
and thereby
to encourage all sorts
of industry and commerce,
it has been found necessary,
in all countries
that have made any considerable
advances towards improvement,
to affix a public stamp
upon certain quantities
of such particular metals,
as were
in those countries commonly made
use of
to purchase goods.
Hence the origin
of coined money,
and of those public offices
called mints;
institutions
exactly of the same nature
with those
of the aulnagers
and stamp-masters
of woollen and linen cloth.
All
of them are equally meant to
ascertain,
by means of a public stamp,
the quantity
and uniform goodness
of those different commodities
when brought
to market.
The first public stamps
of this kind
that were affixed
to the current metals,
seem in many cases
to have been intended to
ascertain,
what it
was both most difficult
and most important to
ascertain,
the goodness or fineness
of the metal,
and to have resembled
the sterling mark
which is at present
affixed
to plate and bars of silver,
or the Spanish mark
which is sometimes affixed
to ingots of gold,
and which,
being struck only
upon one side
of the piece,
and not covering
the whole surface,
ascertains the fineness,
but not the weight
of the metal.
Abraham
weighs to Ephron
the four hundred shekels
of silver which
he had agreed
to pay
for the field of Machpelah.
They
are said,
however,
to be the current money
of the merchant,
and yet are received
by weight,
and not by tale,
in the same manner
as ingots of gold and bars
of silver
are at present.
The revenues
of the ancient Saxon kings
of England
are said
to have been paid,
not in money,
but in kind,
that is,
in victuals and provisions
of all sorts.
William the Conqueror
introduced the custom 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
those metals with exactness,
gave occasion
to the institution of coins,
of which the stamp,
covering entirely
both sides of the piece,
and sometimes the edges too,
was supposed to
ascertain not only
the fineness,
but the weight of the metal.
Such coins,
therefore,
were received by tale,
as at present,
without the trouble
of weighing.
The denominations
of those coins
seem originally
to have expressed the weight
or
quantity of metal
contained in them.
In the time
of Servius Tullius,
who first coined money
at Rome,
the Roman as or pondo
contained a Roman pound
of good copper.
It was divided,
in the same 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 silver
of a known fineness.
The Tower
pound seems
to have been something
more than the Roman pound,
and something
less than the Troyes pound.
This last
was not introduced
into the mint of England
till the 18th
of Henry the VIII.
The French livre
contained,
in the time of Charlemagne,
a pound,
Troyes weight,
of silver
of a known fineness.
The fair
of Troyes in Champaign
was at that time frequented
by all
the nations of Europe,
and the weights
and measures of so 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 silver
of the same weight
and fineness
with the English pound sterling.
English,
French,
and Scots pennies, too,
contained all of them originally
a real penny-weight
of silver,
the twentieth part
of an ounce,
and
the two hundred-and-fortieth part
of a pound.
The shilling, too,
seems originally
to have been the denomination
of a weight.
"When wheat
is at twelve shillings
the quarter,"
says an ancient statute
of Henry III,
"then wastel
bread of a farthing
shall weigh eleven shillings
and fourpence."
The proportion,
however,
between the shilling,
and either
the penny on the one hand,
or the pound on the other,
seems not
to have been so constant
and uniform
as
that between the penny
and the pound.
During the first race
of the kings of France,
the French sou or shilling
appears
upon different occasions
to have contained five,
twelve,
twenty,
and forty pennies.
Among the ancient Saxons,
a shilling
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 shilling,
and the penny,
seems
to have been uniformly the same
as
at present,
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
sovereign states,
abusing
the confidence
of their subjects,
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,
instead of weighing a pound,
came to weigh only
half an ounce.
The English pound and penny
contain at present
about a third only;
the Scots pound and penny
about a thirty-sixth;
and the French pound
and penny
about a sixty-sixth part
of their original value.
By means of those operations,
the princes
and sovereign states
which performed them
were enabled,
in appearance,
to pay
their debts and fulfil
their engagements with a smaller quantity
of silver than
would otherwise have been
requisite.
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 state
were allowed
the same privilege,
and might pay
with the same nominal sum
of the new and debased coin
whatever
they had borrowed
in the old.
Such operations,
therefore,
have always proved favourable
to the debtor,
and ruinous to the creditor,
and have sometimes produced
a greater
and more universal revolution
in the fortunes
of private persons,
than
could have been occasioned
by a very great public calamity.
It is in this manner
that money
has become,
in all civilized nations,
the universal instrument
of commerce,
by the intervention
of which goods of all kinds
are bought and sold,
or exchanged
for one another.
What are the rules which men
naturally observe,
in exchanging them either
for money,
or for one another,
I shall now proceed
to examine.
These
rules determine
what may be called
the relative or exchangeable value
of goods.
The word VALUE,
it is to be observed,
has two different meanings,
and sometimes expresses
the utility
of some particular object,
and sometimes
the power
of purchasing other goods which
the possession
of that object conveys.
The one
may be called
'value in use;'
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 use.
Nothing
is more useful than water;
but it
will purchase
scarce any thing;
scarce any thing
can be had
in exchange for it.
A diamond,
on the contrary,
has scarce 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 shall endeavour
to shew,
First,
what is the real measure
of this exchangeable value;
or wherein consists
the real price
of all commodities.
Secondly,
what are the different parts
of which this real price
is composed or made up.
And, lastly,
what are
the different circumstances which
sometimes raise some
or all of these
different parts
of price above,
and sometimes sink them below,
their natural
or ordinary rate;
or,
what are the causes which
sometimes hinder
the market price,
that is,
the actual price
of commodities,
from coinciding exactly
with what
may be called
their natural price.
I shall endeavour
to explain,
as fully and distinctly
as I can,
those three
subjects in
the three following chapters,
for which I
must very earnestly entreat
both the patience
and attention
of the reader:
his patience,
in order to
examine a detail which may,
perhaps,
in some places,
appear unnecessarily tedious;
and his attention,
in order to
understand
what may perhaps,
after
the fullest explication which
I am capable
of giving it,
appear still
in some degree obscure.
I am always willing
to run some hazard
of being tedious,
in order to
be sure
that I am perspicuous;
and, after taking
the utmost pains that
I can to be perspicuous,
some obscurity
may still appear
to remain upon a subject,
in its own nature
extremely abstracted.
OF THE REAL
AND NOMINAL PRICE
OF COMMODITIES,
OR OF THEIR PRICE
IN LABOUR,
AND THEIR PRICE IN MONEY.
Every man
is rich or poor
according to
the degree
in which he
can afford
to enjoy the necessaries,
conveniencies,
and amusements of human life.
But after the division
of labour
has once thoroughly taken place,
it is
but
a very small part of these
with which a man's own labour
can supply him.
The far greater part of them
he must derive
from the labour
of other people,
and he
must be rich or poor
according to
the quantity
of that labour which
he can command,
or which
he can afford
to purchase.
The value of any commodity,
therefore,
to the person
who possesses it,
and who means not to use
or consume it himself,
but to exchange it
for other commodities,
is equal to the quantity
of labour which
it enables him
to purchase or command.
Labour therefore,
is the real measure
of the exchangeable value
of all commodities.
The real price
of every thing,
what
every thing
really costs 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 dispose of it,
or exchange it
for something else,
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 labour,
as much as what we
acquire
by the toil
of our own body.
That money,
or those goods,
indeed,
save us this toil.
They contain the value
of a certain quantity
of labour,
which we
exchange for what
is supposed at the time
to contain the value
of an equal quantity.
Labour
was the first price,
the original purchase
money
that was paid
for all things.
It
was not
by gold or by silver,
but by labour,
that all the wealth
of the world
was originally purchased;
and its value,
to those who possess it,
and who
want to exchange it
for some new productions,
is precisely
equal to the quantity of'
labour which
it can enable them
to purchase or command.
Wealth,
as Mr Hobbes says,
is power.
But the person who either
acquires,
or succeeds
to a great fortune,
does not necessarily acquire
or succeed
to any political power,
either civil or military.
His fortune may,
perhaps,
afford him the means
of acquiring both;
but the mere possession of
that fortune
does not necessarily convey
to him either.
The power which
that possession immediately
and directly conveys to him,
is the power
of purchasing
a certain command
over all the labour,
or over all
the produce of labour
which is then in the market.
His fortune
is greater or less,
precisely in proportion
to the extent
of this power,
or to the quantity either
of other men's labour,
or,
what is the same thing,
of the produce
of other men's labour,
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
labour 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
ascertain the proportion
between two different quantities
of labour.
The time
spent
in two different sorts
of work
will not always alone
determine this proportion.
The different degrees
of hardship
endured,
and of ingenuity exercised,
must likewise
be taken into account.
There
may be more labour
in an hour's hard work,
than in two hours easy business;
or in an hour's application
to a trade which
it cost ten years labour
to learn,
than in a month's industry,
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 sorts
of labour for one another,
some allowance
is commonly made for both.
It is adjusted,
however,
not by any accurate measure,
but by the higgling
and bargaining
of the market,
according to that sort
of rough equality which,
though not exact,
is sufficient
for carrying
on the business
of common life.
Every commodity,
besides,
Is more frequently exchanged for,
and thereby compared with,
other commodities,
than with labour.
It is more natural,
therefore,
to estimate
its exchangeable value
by the quantity
of some other commodity,
than by
that of the labour which
it can produce.
The greater part
of people, too,
understand better
what is meant by a quantity
of a particular commodity,
than by a quantity
of labour.
The one
is a plain palpable object;
the other an abstract notion,
which
though it
can be made sufficiently
intelligible,
is not altogether
so natural and obvious.
But when barter ceases,
and money
has become
the common instrument
of commerce,
every particular commodity
is more frequently exchanged
for money than
for any other commodity.
The butcher seldom
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 money
for bread and for beer.
The quantity of money which
he gets for them
regulates, too,
the quantity
of bread and beer which
he can afterwards 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 say that
his butcher's meat
is worth three-pence
or fourpence a-pound,
than that
it is worth three
or four pounds
of bread,
or three or four quarts
of small beer.
Hence
it comes to pass,
that
the exchangeable value of every commodity
is more frequently estimated
by the quantity
of money,
than by the quantity either
of labour
or of any other commodity which
can be had
in exchange for it.
Gold and silver,
however,
like every other commodity,
vary in their value;
are sometimes
cheaper and sometimes dearer,
sometimes of easier and
sometimes of
more difficult purchase.
The quantity
of labour
which any particular quantity
of them
can purchase
or command,
or the quantity
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 such exchanges are made.
The discovery
of the abundant mines
of America,
reduced,
in the sixteenth century,
the value
of gold and silver
in Europe to
about a third of what it
had been before.
As it
cost less labour
to bring those metals
from the mine
to the market,
so,
when they
were brought thither,
they
could purchase
or command less labour;
and this revolution
in their value,
though perhaps the greatest,
is by no
means
the only one
of which history
gives some account.
But as a measure of quantity,
such 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;
so a commodity
which
is itself continually varying
in its own value,
can never be
an accurate measure
of the value
of other commodities.
Equal quantities of labour,
at all times and places,
may be said
to be of equal value
to the labourer.
In his ordinary state
of health,
strength,
and spirits;
in the ordinary degree
of his skill and dexterity,
he must always lay down
the same portion
of his ease,
his liberty,
and his happiness.
The price which
he pays
must always be the same,
whatever
may be the quantity
of goods which
he receives
in return for it.
Of these,
indeed,
it may sometimes purchase
a greater
and sometimes
a smaller quantity;
but it is their value
which varies,
not that of the labour
which purchases them.
At all times and places,
that is dear which
it is difficult to come at,
or which
it costs much
labour
to acquire;
and that cheap which
is to be had easily,
or with very little labour.
Labour alone,
therefore,
never
varying in its own value,
is alone
the ultimate and real standard
by which the value of all
commodities can at all times
and places be estimated
and compared.
It is their real price;
money is
their nominal price only.
But though
equal quantities of labour
are always
of equal value
to the labourer,
yet to the person
who employs him
they appear sometimes
to be of greater,
and sometimes of smaller value.
He purchases them sometimes
with a greater,
and sometimes with
a smaller quantity
of goods,
and to him
the price of labour
seems to vary like
that of all other things.
It appears
to him dear
in the one case,
and cheap in the other.
In reality,
however,
it is the goods
which are cheap
in the one case,
and dear in the other.
In this popular sense,
therefore,
labour,
like commodities,
may be said
to have a real
and a nominal price.
Its real price
may be said
to consist
in the quantity
of the necessaries
and conveniencies of life
which are given for it;
its nominal price,
in the quantity of money.
The labourer
is rich or poor,
is well or ill rewarded,
in proportion to the real,
not to
the nominal price
of his labour.
The distinction
between the real
and the nominal price
of commodities and labour
is not a matter
of mere speculation,
but may sometimes be
of considerable use in practice.
The same real price
is always of the same value;
but on account
of the variations
in the value of gold
and silver,
the same nominal price
is sometimes
of very different values.
When a landed estate,
therefore,
is sold with a reservation
of a perpetual rent,
if it
is intended that this
rent
should always be
of the same value,
it is
of importance
to the family in whose favour
it is reserved,
that it
should not consist
in a particular sum
of money.
Its value
would in this case
be liable
to variations
of two different kinds:
first,
to those which
arise
from the different quantities
of gold and silver which
are contained
at different times in coin
of the same denomination;
and, secondly,
to those which
arise
from the different values
of equal quantities
of gold and silver
at different times.
Princes and sovereign states
have frequently fancied
that they
had a temporary interest
to diminish the quantity
of pure metal
contained in their coins;
but they seldom
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 almost always
to diminish the value
of a money rent.
The discovery of the mines
of America
diminished the value
of gold and silver
in Europe.
This diminution,
it is commonly supposed,
though I
apprehend
without any certain proof,
is still going on gradually,
and is likely
to continue to do so
for a long time.
Upon this supposition,
therefore,
such variations
are more likely
to diminish than
to augment the value
of a money rent,
even though it
should be stipulated
to be paid,
not in such a quantity
of coined money
of such a denomination
(in so many pounds sterling,
for example),
but in so many ounces,
either of pure silver,
or of silver
of a certain standard.
The rents which
have been reserved in corn,
have preserved
their value much better
than those which
have been reserved 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
leases 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 Dr. Blackstone,
commonly near double of
what arises
from the other two-thirds.
The old money
rents of colleges must,
according to this account,
have sunk almost
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 since the reign
of Philip and Mary,
the denomination
of the English coin
has undergone little
or no alteration,
and the same number
of pounds,
shillings,
and pence,
have contained very nearly
the same quantity
of pure silver.
This degradation,
therefore,
in the value
of the money rents
of colleges,
has arisen altogether
from the degradation
in the price of silver.
When the degradation
in the value of silver
is combined
with the diminution
of the quantity of it
contained
in the coin
of the same denomination,
the loss
is frequently still 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 undergone still
greater than it
ever did in Scotland,
some ancient rents,
originally of considerable value,
have,
in this manner,
been reduced almost
to nothing.
Equal
quantities of labour will,
at distant times,
be purchased more nearly
with equal quantities
of corn,
the subsistence
of the labourer,
than with equal quantities
of gold and silver,
or, perhaps,
of any other commodity.
Equal quantities of corn,
therefore,
will,
at distant times,
be more nearly
of the same real value,
or enable the possessor
to purchase or command
more nearly
the same quantity
of the labour
of other people.
They will do this,
I say,
more nearly
than equal quantities
of almost any other commodity;
for even equal quantities
of corn
will not do it exactly.
The subsistence
of the labourer,
or the real price of labour,
as I shall endeavour
to shew
hereafter,
is very different
upon different occasions;
more liberal
in a society advancing
to opulence,
than in one
that is standing still,
and in one
that is standing still,
than in one
that is going backwards.
Every other commodity,
however,
will,
at any particular time,
purchase
a greater or smaller quantity
of labour,
in proportion
to the quantity
of subsistence which
it can purchase
at that time.
A rent,
therefore,
reserved in corn,
is liable
only to the variations
in the quantity
of labour 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 labour
which any particular quantity
of corn
can purchase,
but to the variations
in the quantity of corn
which can be purchased
by any particular quantity of
that commodity.
Though
the real value
of a corn rent,
it is to be observed,
however,
varies much less
from century to century
than
that of a money rent,
it varies much more
from year to year.
The money price of labour,
as I shall endeavour
to shew
hereafter,
does not fluctuate
from year to year
with the money price
of corn,
but seems
to be everywhere accommodated,
not to the temporary
or occasional,
but
to the average or ordinary price
of
that necessary of life.
The average
or ordinary price of corn,
again
is regulated,
as I shall likewise endeavour
to shew
hereafter,
by the value of silver,
by the richness or barrenness
of the mines which
supply the market with
that metal,
or by the quantity
of labour
which must be employed,
and consequently of corn
which must be consumed,
in order to
bring any particular quantity
of silver from the mine
to the market.
But the value of silver,
though it
sometimes varies greatly
from century to century,
seldom
varies much
from year to year,
but frequently continues
the same,
or very nearly the same,
for half
a century or a century
together.
The ordinary
or average money price
of corn,
therefore,
may,
during so long a period,
continue the same,
or very nearly the same, too,
and along with it
the money price of labour,
provided,
at least,
the society
continues,
in other respects,
in the same,
or nearly in the same,
condition.
In the mean time,
the temporary and occasional 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 shillings
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 labour,
or of the greater part
of other commodities;
the money price of labour,
and along with it
that of most other things,
continuing the same
during all
these fluctuations.
Labour,
therefore,
it appears evidently,
is the only universal,
as well as the only accurate,
measure of value,
or the only standard
by which we
can compare the values
of different commodities,
at all times,
and at all places.
We cannot estimate,
it is allowed,
the real value of different
commodities
from century
to century
by the quantities
of silver which
were given for them.
We cannot estimate it
from year to year
by the quantities of corn.
By the quantities of labour,
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 silver,
because,
from century to century,
equal
quantities of corn
will command the same quantity
of labour more nearly
than equal quantities
of silver.
From year to year,
on the contrary,
silver
is a better measure
than corn,
because equal quantities of it
will more nearly command
the same quantity
of labour.
But though,
in establishing
perpetual rents,
or even in letting
very long leases,
it may be of use
to distinguish
between real
and nominal price;
it is of none in
buying and selling,
the more common
and ordinary transactions
of human life.
At the same 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 London market,
for example,
the more or less
labour
it will at
that time and place
enable you
to purchase or command.
At the same time
and place,
therefore,
money
is
the exact measure
of the real exchangeable value
of all commodities.
It is so,
however,
at the same time
and place only.
Though at distant 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 consider
but the money price,
or
the difference
between the quantity of silver
for which he buys them,
and that
for which he
is likely
to sell them.
Half
an ounce of silver
at Canton in China
may command a greater
quantity both
of labour
and of the necessaries
and conveniencies
of life,
than an ounce at London.
A commodity,
therefore,
which sells
for half an ounce of silver
at Canton,
may there be really dearer,
of more real importance
to the man
who possesses it there,
than a commodity
which sells
for an ounce at London
is to the man
who possesses it at London.
If a London merchant,
however,
can buy at Canton,
for half
an ounce of silver,
a commodity which
he can afterwards sell
at London for an ounce,
he gains a hundred per cent.
by the bargain,
just as much
as if
an ounce of silver
was at London
exactly of the same value
as at Canton.
It is
of no importance to him
that
half
an ounce of silver at Canton
would have given him
the command
of more labour,
and of a greater quantity
of the necessaries
and conveniencies
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 sales,
and thereby regulates almost
the whole business
of common life
in which price is concerned,
we cannot wonder
that
it should have been
so much more
attended to
than the real price.
In such a work
as this,
however,
it may sometimes be
of use
to compare
the different real values
of a particular commodity
at different times and places,
or the different degrees
of power
over the labour
of other people which
it may,
upon different occasions,
have given to those
who possessed it.
We must in this case compare,
not so much
the different quantities
of silver
for which
it was commonly sold,
as the different quantities
or labour which
those
different quantities of silver
could have purchased.
But the current prices
of labour,
at distant times and places,
can scarce
ever be known with any degree
of exactness.
Those of corn,
though they
have in few places
been regularly recorded,
are in general better known,
and
have been more frequently taken notice
of by historians and other writers.
We must generally,
therefore,
content ourselves with them,
not as being always
exactly in the same proportion
as the current prices
of labour,
but as being
the nearest approximation
which can commonly be had to
that proportion.
I shall hereafter have occasion
to make several comparisons
of this kind.
In the progress of industry,
commercial nations
have found it convenient
to coin several
different metals into money;
gold for larger payments,
silver
for purchases
of moderate value,
and copper,
or some other coarse metal,
for those
of still smaller
consideration,
They have always,
however,
considered one
of those metals
as more peculiarly the measure
of value
than any of the other two;
and this preference
seems generally
to have been given
to the metal which
they happen
first to make use of
as the instrument
of commerce.
Having once begun
to use
it as their standard,
which
they must have done
when they
had no other money,
they have generally continued
to do so even when
the necessity
was not the same.
The Romans
are said
to have had
nothing but copper money
till within five years
before the first Punic war,
when they first
began to coin silver.
Copper,
therefore,
appears
to have continued always
the measure
of value in
that republic.
At Rome all accounts
appear
to have been kept,
and the value
of all
estates
to have been computed,
either
in asses or in sestertii.
The as
was always
the denomination
of a copper coin.
The word sestertius
signifies
two asses and a half.
Though the sestertius,
therefore,
was originally a silver 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.
The northern nations
who established themselves
upon the ruins
of the Roman empire,
seem to have had silver money
from the first beginning
of their settlements,
and not to have known
either gold
or copper coins
for several ages thereafter.
There
were silver
coins in England in the time
of the Saxons;
but there was little gold
coined
till the time
of Edward III nor any copper
till that
of James I of Great Britain.
In England,
therefore,
and for the same reason,
I believe,
in all other
modern nations of Europe,
all accounts are kept,
and the value
of all goods
and of all
estates is generally computed,
in silver:
and when we
mean to express the amount
of a person's fortune,
we seldom mention
the number of guineas,
but the number
of pounds sterling which
we suppose
would be given for it.
Originally,
in all countries,
I believe,
a legal tender of payment
could be made only
in the coin of
that metal
which
was peculiarly considered
as the standard or measure
of value.
In England,
gold
was not considered
as a legal tender
for a long time
after it
was coined into money.
The proportion
between the values
of gold and silver money
was not fixed
by any public law
or proclamation,
but was left
to be settled by the market.
If a debtor offered payment
in gold,
the creditor
might
either reject such payment altogether,
or accept of it at such
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 silver coins.
In this state of things,
the distinction
between the metal
which was the standard,
and that which
was not the standard,
was something
more than
a nominal distinction.
In process of time,
and as people
became gradually more familiar
with the use
of the different metals
in coin,
and consequently better
acquainted
with the proportion
between their respective values,
it has,
in most countries,
I believe,
been found convenient to
ascertain this proportion,
and to declare
by a public law,
that a guinea,
for example,
of such a weight
and fineness,
should exchange
for one-and-twenty shillings,
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 distinction
between the metal,
which is the standard,
and that which
is not the standard,
becomes
little more than
a nominal distinction.
In consequence of any change,
however,
in this
regulated proportion,
this distinction
becomes,
or at least
seems to become,
something more than nominal
again.
If the regulated value
of a guinea,
for example,
was either reduced to twenty,
or raised
to two-and-twenty shillings,
all accounts being kept,
and almost all obligations
for debt
being expressed,
in silver money,
the greater part of payments
could in either case
be made
with the same quantity
of silver money as
before;
but would require
very different quantities
of gold money;
a greater in the one case,
and a smaller 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 silver.
The value of gold would seem
to depend
upon the quantity
of silver which
it would exchange for,
and the value of silver
would not seem
to depend
upon the quantity
of gold which
it would exchange for.
This difference,
however,
would be altogether owing
to the custom
of keeping accounts,
and of expressing the amount
of all great and small sums
rather in silver 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 still payable
with five-and-twenty
or fifty guineas,
in the same manner as
before.
It would,
after such an alteration,
be payable
with the same quantity
of gold as before,
but with
very different quantities
of silver.
In the payment
of such a note,
gold
would appear
to be more invariable
in its value than silver.
Gold
would appear
to measure the value
of silver,
and silver
would not appear
to measure the value
of gold.
If the custom
of keeping accounts,
and of expressing
promissory-notes
and other obligations
for money,
in this manner
should ever become general,
gold,
and not silver,
would be considered
as the metal which
was peculiarly
the standard
or measure of value.
In reality,
during the continuance of any
one regulated proportion
between the respective 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 avoirdupois of copper,
of not the best quality,
which,
before it is coined,
is seldom worth seven-pence
in silver.
But as,
by the regulation,
twelve such pence
are ordered
to exchange for a shilling,
they are
in the market considered
as worth a shilling,
and a shilling
can at any time
be had for them.
Even before the late reformation
of the gold coin
of Great Britain,
the gold,
that part
of it
at least which circulated
in London
and its neighbourhood,
was in general less
degraded
below its standard weight
than the greater part
of the silver.
One-and-twenty worn
and defaced shillings,
however,
were considered as equivalent
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,
perhaps,
to its standard weight
as it
is possible
to bring 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 so,
as long as that order
is enforced.
The silver coin still
continues in the same worn
and degraded state
as before the reformation
of the cold coin.
In the market,
however,
one-and-twenty shillings
of this degraded silver coin
are still considered as worth
a guinea
of this excellent gold coin.
The reformation
of the gold coin
has evidently raised
the value of the silver 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
shillings the guinea,
is
equal to forty-six pounds
fourteen shillings
and sixpence.
An ounce of such gold coin,
therefore,
is worth £3:17:10½ in silver.
In England,
no duty or seignorage
is paid upon the coinage,
and he
who carries a pound weight
or an ounce weight
of standard gold bullion
to the mint,
gets back a pound weight
or an ounce weight
of gold
in coin,
without any deduction.
Three pounds seventeen shillings
and tenpence halfpenny
an ounce,
therefore,
is said
to be the mint price
of gold in England,
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 standard gold bullion
in the market had,
for many years,
been upwards
of £3:18. sometimes £3:19s,
and very frequently £4
an ounce;
that sum,
it is probable,
in the
worn and degraded gold coin,
seldom containing
more than an ounce
of standard gold.
Since the reformation
of the gold coin,
the market price
of standard gold bullion
seldom
exceeds £3:17:7 an ounce.
Before the reformation
of the gold coin,
the market price
was always more
or less above the mint price.
Since that reformation,
the market price
has been constantly
below the mint price.
But that market price
is the same
whether it
is paid
in gold or in silver coin.
The late reformation
of the gold coin,
therefore,
has raised not only
the value of the gold coin,
but likewise
that of the silver coin
in proportion to gold
bullion,
and probably, too,
in proportion
to all other commodities;
though the price
of the greater part
of other commodities
being influenced
by so many other causes,
the rise
in the value of either gold
or silver coin
in proportion to them
may not be so distinct
and sensible.
In the English mint,
a pound weight
of standard silver bullion
is coined
into sixty-two shillings,
containing,
in the same manner,
a pound weight
of standard silver.
Five shillings
and twopence an ounce,
therefore,
is said
to be the mint price
of silver
in England,
or the quantity
of silver coin which
the mint
gives
in return
for standard silver bullion.
Before the reformation
of the gold coin,
the market price
of standard silver bullion was,
upon different occasions,
five shillings and fourpence,
five shillings and fivepence,
five shillings and sixpence,
five shillings and sevenpence,
and very often five shillings
and eightpence
an ounce.
Five shillings and sevenpence,
however,
seems
to have been
the most common price.
Since the reformation
of the gold coin,
the market price
of standard silver bullion
has fallen occasionally
to five shillings and threepence,
five shillings and fourpence,
and five shillings
and fivepence an ounce,
which last
price
it has scarce ever exceeded.
Though the market price
of silver bullion
has fallen considerably
since the reformation
of the gold coin,
it has not fallen so 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,
so silver
is rated somewhat 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 silver.
In the English coin,
it exchanges for
about fifteen ounces,
that is, for more silver
than it
is worth,
according to the common
estimation
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,
so the price of silver
in bullion
is not sunk
by the low rate
of silver in English coin.
Silver in bullion
still preserves
its proper proportion to gold,
for the same reason that
copper
in bars
preserves
its proper proportion
to silver.
Upon the reformation
of the silver coin,
in the reign
of William III,
the price of silver bullion
still continued
to be somewhat above
the mint price.
Mr Locke
imputed
this high price
to the permission
of exporting silver bullion,
and to the prohibition
of exporting silver coin.
This permission
of exporting,
he said,
rendered the demand
for silver bullion
greater than the demand
for silver coin.
But the number of people who
want silver coin
for the common uses
of buying and selling
at home,
is surely much greater than
that of those
who want silver bullion either
for the use
of exportation
or for any other use.
There
subsists
at present a like permission
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,
silver
was then,
in the same manner
as now,
under-rated
in proportion to gold;
and the gold coin
(which at that 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 silver coin
did not then reduce the price
of silver bullion
to the mint price,
it is not very probable
that
a like
reformation will do so now.
Were the silver coin
brought back
as near
to its standard weight
as the gold,
a guinea,
it is probable,
would,
according to
the present proportion,
exchange for more silver
in coin than it
would purchase in bullion.
The silver coin
containing
its full standard weight,
there
would in this case,
be a profit
in melting it down,
in order,
first
to sell the bullion
for gold coin,
and afterwards
to exchange this gold coin
for silver coin,
to be melted down
in the same manner.
Some alteration
in the present proportion
seems to be the only method
of preventing
this inconveniency.
The inconveniency,
perhaps,
would be less,
if silver
was rated
in the coin
as much above
its proper proportion
to gold
as it
is at present
rated below it,
provided
it was
at the same time enacted,
that silver
should not be a legal tender
for more than the change
of a guinea,
in the same
manner as copper
is not a legal tender
for more than the change
of a shilling.
No creditor could,
in this case,
be cheated
in consequence
of the high valuation
of silver
in coin;
as no creditor
can at present
be cheated
in consequence
of the high valuation
of copper.
The bankers
only would suffer
by this regulation.
When a run comes upon them,
they sometimes
endeavour
to gain time,
by paying in sixpences,
and they
would be precluded
by this regulation
from this discreditable method
of evading immediate payment.
They
would be obliged,
in consequence,
to keep at all
times in
their coffers
a greater quantity
of cash than at present;
and though this might,
no doubt,
be
a considerable inconveniency
to them,
it would,
at the same time,
be a considerable security
to their creditors.
Three pounds seventeen shillings
and tenpence halfpenny
(the mint price of gold)
certainly
does not contain,
even in our present
excellent gold coin,
more than an ounce
of standard gold,
and it may be thought,
therefore,
should not purchase more
standard 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 seldom be returned
in coin
to the owner
till after a delay
of several weeks.
In the present hurry
of the mint,
it
could not be returned
till after a delay
of several months.
This delay
is equivalent
to a small duty,
and renders gold
in coin somewhat more valuable
than an equal quantity
of gold
in bullion.
If,
in the English coin,
silver
was rated according to
its proper proportion to gold,
the price of silver bullion
would probably fall
below the mint price,
even without any reformation
of the silver coin;
the value even
of the present worn
and defaced silver coin
being regulated
by the value
of the excellent gold coin
for which it
can be changed.
A small seignorage or duty
upon the coinage
of both gold and silver,
would probably increase
still more the superiority
of those metals
in coin above
an equal quantity
of either of them
in bullion.
The coinage
would,
in this case,
increase
the value
of the metal coined
in proportion
to the extent
of this small duty,
for the same reason that
the fashion increases
the value
of plate
in proportion
to the price
of that fashion.
The superiority
of coin above bullion
would prevent
the melting down of the coin,
and would discourage
its exportation.
If,
upon any public exigency,
it should become necessary
to export the coin,
the greater part of it
would soon return
again,
of its own accord.
Abroad,
it could sell 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 seignorage
of about eight per cent.
is imposed upon the coinage,
and the French coin,
when exported,
is said
to return home
again,
of its own accord.
The occasional fluctuations
in the market price
of gold and silver bullion
arise
from the same causes
as the like fluctuations in
that of all other commodities.
The frequent loss
of those metals
from various accidents
by sea and by land,
the continual waste 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 waste.
The merchant importers,
like all other merchants,
we may believe,
endeavour,
as well as they can,
to suit
their occasional importations to
what they
judge is likely
to be the immediate demand.
With all their attention,
however,
they sometimes overdo
the business,
and sometimes underdo it.
When they
import more bullion than
is wanted,
rather than
incur
the risk and trouble
of exporting it again,
they
are sometimes willing
to sell a part of it
for something less than
the ordinary
or average price.
When,
on the other hand,
they import less than
is wanted,
they get something
more than this price.
But when,
under all those
occasional fluctuations,
the market price either
of gold or silver bullion
continues
for several years
together steadily
and constantly,
either more or less above,
or more
or less below the mint price,
we may be assured
that this steady and constant,
either superiority or inferiority
of price,
is the 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 less value
than the precise quantity
of bullion which
it ought to contain.
The constancy
and steadiness of the effect
supposes
a proportionable constancy
and steadiness
in the cause.
The money
of any particular country is,
at any particular time
and place,
more or less
an accurate measure or value,
according
as the current coin
is more
or less exactly agreeable
to its standard,
or contains more
or less exactly
the precise quantity
of pure gold or
pure silver which it
ought to contain.
If in England,
for example,
forty-four guineas and a half
contained exactly
a pound weight
of standard 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 particular 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 standard gold,
the diminution,
however,
being greater
in some pieces than
in others,
the measure of value
comes
to be liable
to the same sort
of uncertainty to which all
other weights
and measures
are commonly exposed.
As it rarely happens
that these
are exactly agreeable
to their standard,
the merchant
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 finds,
by experience,
they
actually are.
In consequence
of a like disorder
in the coin,
the price of goods comes,
in the same manner,
to be adjusted,
not to
the quantity
of pure gold or silver which
the coin ought to contain,
but to that which,
upon an average,
it is found,
by experience,
it actually does contain.
By the money price
of goods,
it is to be observed,
I understand always
the quantity
of pure gold or silver
for which they are sold,
without any
regard
to the denomination
of the coin.
Six shillings and eight pence,
for example,
in the time
of Edward I,
I consider
as the same money price
with a pound sterling
in the present times,
because it contained,
as nearly as we
can judge,
the same quantity
of pure silver.
OF THE COMPONENT PART
OF THE PRICE
OF COMMODITIES.
In that early and rude state
of society
which precedes
both the accumulation of stock
and the appropriation of land,
the proportion
between the quantities
of labour necessary
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 usually costs twice
the labour
to kill
a beaver
which it does
to kill a deer,
one beaver
should naturally exchange
for or be worth two deer.
It is natural that
what is usually the produce
of two days
or two hours labour,
should be
worth
double of what
is usually the produce
of one day's
or one hour's labour.
If the one species of labour
should be more severe
than the other,
some allowance
will naturally be made
for this superior hardship;
and the produce
of one hour's labour
in the one way
may frequently exchange for
that of two hour's labour
in the other.
Or if the one species
of labour
requires an uncommon degree
of dexterity and ingenuity,
the esteem which men
have for such talents,
will naturally give
a value to their produce,
superior to
what would be
due to the time employed
about it.
Such talents
can seldom be acquired but
in consequence
of long application,
and the superior value
of their produce
may frequently be no
more than
a reasonable compensation
for the time
and labour
which must be spent
in acquiring them.
In the advanced state
of society,
allowances of this kind,
for superior hardship
and superior skill,
are commonly made
in the wages
of labour;
and something
of the same kind
must probably have taken place
in its earliest and rudest period.
In this state of things,
the whole produce of labour
belongs to the labourer;
and the quantity
of labour commonly
employed
in acquiring
or producing
any commodity,
is the only circumstance which
can regulate the quantity
of labour which it ought
commonly to purchase,
command,
or exchange for.
As soon as stock
has accumulated
in the hands
of particular persons,
some of them
will naturally employ it
in setting
to work industrious people,
whom
they will supply
with materials and subsistence,
in order to make a profit
by the sale
of their work,
or by what
their labour
adds to the value
of the materials.
In exchanging
the complete manufacture either
for money,
for labour,
or for other goods,
over and above
what may be sufficient
to pay the price
of the materials,
and the wages of the workmen,
something
must be given
for the profits
of the undertaker
of the work,
who hazards his stock in this
adventure.
The value which the workmen
add
to the materials,
therefore,
resolves itself in this case
into two parts,
of which
the one
pays their wages,
the other
the profits
of their employer
upon the whole stock
of materials and wages which
he advanced.
He could have
no interest
to employ them,
unless he
expected
from the sale
of their work something
more than
what was sufficient
to replace his stock to him;
and he could have
no interest
to employ
a great stock rather than
a small one,
unless his profits
were to bear some proportion
to the extent
of his stock.
The profits of stock,
it may perhaps be thought,
are only a different name
for the wages
of a particular sort
of labour,
the labour
of inspection and direction.
They are,
however,
altogether different,
are regulated
by quite different principles,
and bear no proportion
to the quantity,
the hardship,
or the ingenuity of this
supposed labour
of inspection and direction.
They are regulated altogether
by the value
of the stock employed,
and are greater or smaller
in proportion to the extent
of this stock.
Let us
suppose,
for example,
that in some particular place,
where
the common annual profits
of manufacturing 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 cost
only seven hundred pounds,
while the finer materials
in the other cost seven thousand.
The capital
annually employed
in the one will,
in this case,
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 seven hundred
and thirty pounds.
But though their profits
are so very different,
their labour
of inspection and direction
may be either altogether
or very nearly the same.
In many great works,
almost the whole labour
of this kind
is committed
to some principal clerk.
His wages
properly express the value
of this labour
of inspection and direction.
Though in settling them some
regard
is had commonly,
not only to his labour
and skill,
but to the trust
which is reposed in him,
yet they
never bear
any regular proportion
to the capital
of which
he oversees the management;
and the owner
of this capital,
though he
is thus
discharged of almost all labour,
still
expects
that his profit
should bear
a regular proportion
to his capital.
In the price of commodities,
therefore,
the profits of stock
constitute
a component part altogether
different
from the wages
of labour,
and regulated
by quite
different principles.
In this state of things,
the whole produce of labour
does not always belong
to the labourer.
He must in most cases
share it
with the owner of the stock
which employs him.
Neither
is the quantity
of labour commonly
employed
in acquiring
or producing any commodity,
the only circumstance which
can regulate
the quantity which it
ought
commonly to purchase,
command or exchange for.
An additional quantity,
it is evident,
must be due
for the profits
of the stock which advanced
the wages
and furnished
the materials
of that labour.
As soon
as the land of any
country
has all become private property,
the landlords,
like all other men,
love
to reap where they
never sowed,
and demand a rent
even for its natural produce.
The wood of the forest,
the grass of the field,
and all
the natural fruits
of the earth,
which,
when
land was in common,
cost the labourer
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 them,
and must give
up to the landlord
a portion of what
his labour
either collects or produces.
This portion,
or,
what comes to the same thing,
the price of this portion,
constitutes 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 labour which
they can,
each of them,
purchase or command.
Labour measures the value,
not only of that part
of price
which resolves itself
into labour,
but of that which
resolves itself into rent,
and of that which
resolves itself
into profit.
In every society,
the price of every commodity
finally resolves itself
into some one or other,
or all
of those three parts;
and in every improved society,
all the three
enter,
more or less,
as component 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 labourers
and labouring cattle
employed in producing it,
and the third
pays the profit
of the farmer.
These three parts
seem either immediately or
ultimately
to make
up the whole price
of corn.
A fourth part,
it may perhaps be thought
is necessary
for replacing
the stock of the farmer,
or for compensating the wear
and tear
of his labouring cattle,
and other instruments
of husbandry.
But it must be considered,
that the price
of any instrument
of husbandry,
such as a labouring horse,
is itself made up
of the same time parts;
the rent
of the land upon which
he is reared,
the labour
of tending and rearing him,
and the profits
of the farmer,
who advances both
the rent of this land,
and the wages
of this labour.
Though the price of the corn,
therefore,
may pay
the price
as well as the maintenance
of the horse,
the whole price still
resolves itself,
either immediately or ultimately,
into the same three parts
of rent,
labour,
and profit.
In the price
of flour or meal,
we must add
to the price
of the corn,
the profits of the miller,
and the wages
of his servants;
in the price of bread,
the profits of the baker,
and the wages
of his servants;
and in the price of both,
the labour
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 labour.
The price of flax
resolves itself
into the same three parts
as that of corn.
In the price
of linen
we must add
to this price
the wages
of the flax-dresser,
of the spinner,
of the weaver,
of the bleacher,.etc. 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
resolves itself into rent.
In the progress
of the manufacture,
not only the number
of profits
increase,
but
every subsequent profit
is greater than the foregoing;
because 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 spinners;
because it not
only replaces that capital
with its profits,
but pays,
besides,
the wages of the weavers:
and the profits
must always bear some proportion
to the capital.
In the most improved societies,
however,
there
are always
a few commodities of which
the price
resolves itself into two
parts only
the wages of labour,
and the profits of stock;
and a still smaller number,
in which
it consists altogether
in the wages of labour.
In the price of sea-fish,
for example,
one part
pays the labour
of the fisherman,
and the other the profits
of the capital
employed in the fishery.
Rent very seldom
makes any part of it,
though it does sometimes,
as I shall shew hereafter.
It is otherwise,
at least
through the greater part
of Europe,
in river fisheries.
A salmon fishery
pays a rent;
and rent,
though it
cannot well be called
the rent of land,
makes a part of the price
of a salmon,
as well as wares
and profit.
In some parts
of Scotland,
a few poor people make
a trade
of gathering,
along the sea-shore,
those
little variegated stones 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 labour;
neither
rent nor profit
makes an part of it.
But the whole price of any
commodity
must still finally resolve itself
into some one
or other
or all of those three parts;
as
whatever part of it remains
after
paying
the rent of the land,
and the price
of the whole labour
employed in raising,
manufacturing,
and bringing it to market,
must necessarily be profit
to somebody.
As the price
or exchangeable value
of every particular commodity,
taken separately,
resolves itself
into some one or other,
or all of those three parts;
so that of all
the commodities which
compose
the whole annual produce
of the labour
of every country,
taken complexly,
must resolve itself
into the same three parts,
and be parcelled out
among different inhabitants
of the country,
either as the wages
of their labour,
the profits of their stock,
or the rent of their land.
The whole of
what is annually either collected
or produced
by the labour
of every society,
or,
what comes to the same thing,
the whole price of it,
is in this manner
originally distributed
among some of
its different members.
Wages,
profit,
and rent,
are the three original sources
of all revenue,
as
well as
of all exchangeable value.
All other revenue
is ultimately derived
from some one or other
of these.
Whoever
derives
his revenue from a fund
which is his own,
must draw it either
from his labour,
from his stock,
or from his land.
The revenue
derived from labour
is called wages;
that derived from stock,
by the person
who manages or employs it,
is called profit;
that derived from it
by the person
who does not employ it
himself,
but lends it to another,
is called
the interest or the use
of money.
It is the compensation which
the borrower
pays to the lender,
for the profit
which he
has an opportunity
of making
by the use
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 interest 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,
must be paid
from some other source
of revenue,
unless perhaps
the borrower
is a spendthrift,
who contracts a second debt
in order to pay
the interest 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 labour,
and partly from his stock.
To him,
land
is only the instrument
which enables him
to earn the wages
of this labour,
and to make the profits
of this stock.
All taxes,
and all
the revenue
which is founded upon them,
all salaries,
pensions,
and annuities of every kind,
are ultimately derived
from some one or other
of those
three original sources
of revenue,
and are paid either immediately
or
mediately from the wages
of labour,
the profits of stock,
or the rent of land.
When those
three different sorts
of revenue
belong to different persons,
they
are readily distinguished;
but when they
belong to the same,
they
are sometimes confounded
with one another,
at least in common language.
A gentleman
who farms a part
of his own estate,
after paying
the expense of cultivation,
should gain both
the rent of the landlord and
the profit of the farmer.
He is apt
to denominate,
however,
his whole gain,
profit,
and thus
confounds rent with profit,
at least in common language.
The greater part
of our North American
and West Indian planters
are in this situation.
They farm,
the greater part of them,
their own estates:
and accordingly we seldom
hear of the
rent of a plantation,
but
frequently of its profit.
Common farmers seldom 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,.etc.
What remains of the crop,
after paying
the rent,
therefore,
should not only replace
to them their stock
employed in cultivation,
together
with its ordinary profits,
but pay them
the wages
which are due to them,
both
as labourers 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 saving these wages,
must necessarily gain them.
Wages,
therefore,
are in this case
confounded with profit.
An independent manufacturer,
who has stock enough both
to purchase materials,
and to maintain himself
till he can carry
his work
to market,
should gain both the wages
of a journeyman
who works under a master,
and the profit which
that master
makes by the sale of
that journeyman's work.
His whole gains,
however,
are commonly called profit,
and wages are,
in this case, too,
confounded with profit.
A gardener
who cultivates his own garden
with his own hands,
unites
in his own person
the three different characters,
of landlord,
farmer,
and labourer.
His produce,
therefore,
should pay him
the rent of the first,
the profit of the second,
and the wages of the third.
The whole,
however,
is commonly considered
as the earnings
of his labour.
Both rent and profit are,
in this case,
confounded with wages.
As in a civilized country
there are but few commodities
of which
the exchangeable value
arises from labour only,
rent
and profit
contributing largely to
that of the far greater part
of them,
so the annual produce
of its labour
will always be sufficient
to purchase or command
a much greater quantity
of labour than
what was employed in raising,
preparing,
and bringing
that produce
to market.
If the society
were annually
to employ all
the labour which
it can annually purchase,
as the quantity of labour
would increase greatly
every year,
so the produce
of every succeeding year
would be
of vastly greater value than
that of the foregoing.
But there is no country
in which
the whole annual produce
is employed
in maintaining
the industrious.
The idle
everywhere consume
a great part
of it;
and,
according to
the different proportions
in which 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 same
from one year
to another.
OF THE NATURAL
AND MARKET PRICE
OF COMMODITIES.
There
is in every society
or neighbourhood
an ordinary or average rate,
both of wages and profit,
in every different employment
of labour and stock.
This rate
is naturally regulated,
as I shall shew hereafter,
partly by the
general circumstances
of the society,
their riches or poverty,
their advancing,
stationary,
or declining condition,
and partly by
the particular nature
of each employment.
There
is likewise in every society
or neighbourhood
an ordinary or average rate
of rent,
which is regulated, too,
as I shall shew hereafter,
partly by the
general circumstances
of the society or neighbourhood
in which the land
is situated,
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 sufficient to pay
the rent of the land,
the wages of the labour,
and the profits of the stock
employed in raising,
preparing,
and bringing it to market,
according to
their natural rates,
the commodity
is then sold for what
may be called
its natural price.
The commodity
is then sold precisely
for what
it is worth,
or for what
it really costs the person
who brings it to market;
for though,
in common language,
what is called the prime cost
of any commodity
does not comprehend
the profit of the person
who is to sell it
again,
yet,
if he
sells it at a price
which does not allow him
the ordinary rate
of profit
in his neighbourhood,
he is evidently a loser
by the trade;
since,
by employing his stock
in some other way,
he might have made
that profit.
His profit,
besides,
is his revenue,
the proper fund
of his subsistence.
As,
while he is preparing
and bringing
the goods
to market,
he advances
to his workmen their wages,
or their subsistence;
so he advances to himself,
in the same manner,
his own subsistence,
which is generally suitable
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 said
to have really
cost him.
Though the price,
therefore,
which leaves him this profit,
is not always
the lowest at which
a dealer
may sometimes sell his goods,
it is the lowest
at which he is likely
to sell them
for any considerable time;
at least
where there is perfect liberty,
or where he
may change
his trade as often as he
pleases.
The actual price
at which
any commodity
is commonly sold,
is called its market price.
It may either
be above,
or below,
or exactly
the same
with its natural price.
The market price
of every particular commodity
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,
labour,
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;
since it maybe sufficient
to effectuate
the bringing
of the commodity
to market.
It is different
from the absolute demand.
A very poor man
may be said,
in some sense,
to have a demand
for a coach and six;
he might like
to have it;
but his demand
is not an effectual 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 short
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.
Rather than
want it altogether,
some of them
will be willing
to give more.
A competition
will immediately begin
among them,
and the market price
will rise more
or less above
the natural price,
according as either
the greatness
of the deficiency,
or the wealth
and wanton luxury
of the competitors,
happen to animate more or
less the eagerness
of the competition.
Among competitors
of equal wealth and luxury,
the same deficiency
will generally occasion a more
or less eager competition,
according
as the acquisition
of the commodity
happens
to be
of more or less importance
to them.
Hence the exorbitant price
of the necessaries
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 sold
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 sold to those
who are willing to pay less,
and the low price which
they give for it
must reduce
the price of the whole.
The market price
will sink more
or less below
the natural price,
according as the greatness
of the excess increases more
or less the competition
of the sellers,
or according
as it happens
to be more or less important
to them
to get immediately rid
of the commodity.
The same excess
in the importation of perishable,
will occasion
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 sufficient
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 same
with the natural price.
The whole quantity upon hand
can be disposed of
for this price,
and can not be disposed of
for more.
The competition
of the different dealers
obliges them
all to accept of this price,
but does not oblige them
to accept of less.
The quantity
of every commodity
brought
to market naturally
suits itself
to the effectual demand.
It is the interest of all
those who employ their land,
labour,
or stock,
in bringing
any commodity
to market,
that the quantity
never should exceed
the effectual demand;
and it
is the interest
of all other people
that
it never should fall short
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 interest of the landlords
will immediately prompt them
to withdraw a part
of their land;
and if it is wages
or profit,
the interest
of the labourers
in the one case,
and of their employers
in the other,
will prompt them
to withdraw a part
of their labour
or stock,
from this employment.
The quantity
brought
to market will soon be
no more than sufficient
to supply
the effectual demand.
All the different parts
of its price
will rise
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 short
of the effectual demand,
some of the component parts
of its price
must rise above
their natural rate.
If it is rent,
the interest of all other
landlords
will naturally prompt them
to prepare more land
for the raising
of this commodity;
if it is wages
or profit,
the interest of all other
labourers and dealers
will soon prompt them
to employ more labour
and stock
in preparing
and bringing it to market.
The quantity
brought thither
will soon be sufficient
to supply
the effectual demand.
All the different parts
of its price
will soon sink
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 sometimes keep them
suspended
a good deal above it,
and sometimes force them
down even somewhat
below it.
But whatever
may be the obstacles which
hinder them
from settling in this centre
of repose and continuance,
they are constantly tending
towards it.
The whole quantity
of industry annually employed
in order to
bring any commodity
to market,
naturally
suits itself in this manner
to the effectual demand.
It naturally aims
at bringing always
that precise quantity
thither which
may be sufficient
to supply,
and no more than supply,
that demand.
But,
in some employments,
the same quantity
of industry will,
in different years,
produce
very different quantities
of commodities;
while,
in others,
it will produce
always the same,
or very nearly the same.
The same number
of labourers
in husbandry will,
in different years,
produce
very different quantities
of corn,
wine,
oil,
hops,.etc.
But the same number
of spinners or weavers
will every year
produce the same,
or very nearly the same,
quantity
of linen and woollen cloth.
It is only
the average produce
of the one species
of industry
which can be suited,
in any respect,
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 sometimes exceed
a good deal,
and sometimes fall
short a good deal,
of the effectual demand.
Even though that demand,
therefore,
should continue always the same,
their market price
will be liable
to great fluctuations,
will sometimes fall
a good deal
below,
and sometimes rise
a good deal above,
their natural price.
In the other species
of industry,
the produce of equal quantities
of labour
being always the same,
or very nearly the same,
it can be more exactly suited
to the effectual demand.
While
that demand
continues the same,
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 same
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 occasional
and temporary fluctuations
in the market price
of any commodity
fall chiefly
upon those parts
of its price which
resolve themselves
into wages and profit.
That part
which resolves itself
into rent
is less affected by them.
A rent certain in money
is not in the least affected
by them,
either
in its rate
or in its value.
A rent
which consists 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 occasional
and temporary fluctuations
in the market price of
that rude produce;
but it
is seldom affected
by them in its yearly rate.
In settling
the terms of the lease,
the landlord and farmer
endeavour,
according to
their best judgment,
to adjust that rate,
not to the temporary
and occasional,
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
overstocked
or understocked
with commodities
or with labour,
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 understocked
upon such occasions),
and augments
the profits of the merchants
who possess
any considerable quantity
of it.
It has no effect
upon the wages
of the weavers.
The market
is understocked
with commodities,
not with labour,
with work done,
not with work
to be done.
It raises the wages
of journeymen tailors.
The market
is here
understocked with labour.
There
is an effectual demand
for more labour,
for more work
to be done,
than
can be had.
It sinks the price
of coloured silks and cloths,
and thereby reduces
the profits of the merchants
who have
any considerable quantity
of them upon hand.
It sinks, too,
the wages of the workmen
employed
in preparing such commodities,
for which all demand
is stopped for six months,
perhaps for a twelvemonth.
The market
is here
overstocked both
with commodities
and with labour.
But though the market price
of every particular commodity
is in this
manner continually gravitating,
if one
may say so,
towards the natural price;
yet
sometimes particular accidents,
sometimes natural causes,
and sometimes particular regulations
of policy,
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 some particular commodity
happens
to rise
a good deal above the natural price,
those
who employ their stocks
in supplying that market,
are generally careful
to conceal this change.
If it was commonly known,
their great profit
would tempt
so many new rivals
to employ their stocks
in the same way,
that,
the effectual demand
being fully supplied,
the market price
would soon be reduced
to the natural price,
and, perhaps,
for some time even below it.
If the market
is at a great distance
from the residence
of those who
supply it,
they
may sometimes be
able to keep the secret
for several years together,
and may so long
enjoy
their extraordinary profits
without any new rivals.
Secrets of this kind,
however,
it must be acknowledged,
can seldom be long kept;
and the extraordinary profit
can last very little longer
than
they
are kept.
Secrets in manufactures
are capable of being longer
kept than secrets
in trade.
A dyer
who
has found the means
of producing
a particular colour
with materials which cost
only half
the price of those
commonly made use of,
may,
with good management,
enjoy
the advantage
of his discovery as long
as he lives,
and even leave
it as a legacy
to his posterity.
His extraordinary gains
arise from the high price
which is paid
for his private labour.
They properly consist
in the high wages
of that labour.
But as they
are repeated
upon every part
of his stock,
and as
their whole amount bears,
upon that account,
a regular proportion to it,
they
are commonly considered
as extraordinary profits
of stock.
Such enhancements
of the market price
are evidently the effects
of particular accidents,
of which,
however,
the operation
may sometimes last
for many years together.
Some natural productions
require such
a singularity
of soil and situation,
that all the land
in a great country,
which is fit
for producing them,
may not be sufficient
to supply
the effectual demand.
The whole quantity brought
to market,
therefore,
may be disposed of to those
who are willing
to give more than
what
is sufficient to pay
the rent of the land
which produced them,
together
with the wages
of the labour
and the profits of the stock
which were employed in
preparing and bringing them
to market,
according to
their natural rates.
Such commodities
may continue
for whole centuries together
to be sold
at this high price;
and
that part
of it
which resolves itself into the
rent of land,
is in this case
the part
which is generally paid above
its natural rate.
The rent of the land
which affords such singular
and esteemed productions,
like the
rent of some vineyards
in France
of a peculiarly happy soil
and situation,
bears
no regular proportion to the
rent of other equally fertile
and equally
well cultivated land
in its neighbourhood.
The wages of the labour,
and the profits of the stock
employed
in bringing
such commodities
to market,
on the contrary,
are seldom
out of their natural proportion
to those
of the other employments
of labour and stock
in their neighbourhood.
Such enhancements
of the market price
are evidently the effect
of natural causes,
which may hinder
the effectual demand
from ever being fully supplied,
and which may continue,
therefore,
to operate for ever.
A monopoly granted either
to an individual
or to a trading company,
has the same effect
as a secret
in trade
or manufactures.
The monopolists,
by keeping
the market
constantly understocked
by never
fully supplying
the effectual demand,
sell
their commodities much above
the natural price,
and raise their emoluments,
whether they
consist in wages or profit,
greatly above
their natural rate.
The price of monopoly
is upon every
occasion the highest which
can be got.
The natural price,
or the price
of free competition,
on the contrary,
is the lowest which
can be taken,
not upon every occasion indeed,
but for any considerable time
together.
The one
is upon every
occasion the highest which
can be squeezed
out of the buyers,
or which it is supposed
they will consent
to give;
the other
is the lowest which
the sellers
can commonly afford
to take,
and at the same time
continue their business.
The exclusive privileges
of corporations,
statutes of apprenticeship,
and all
those laws which
restrain
in particular employments,
the competition
to a smaller number
than
might otherwise go into them,
have the same tendency,
though in a less degree.
They
are a sort
of enlarged monopolies,
and may frequently,
for ages together,
and in whole classes
of employments,
keep up the market price
of particular commodities above
the natural price,
and maintain both
the wages of the labour and
the profits
of the stock employed
about them
somewhat above
their natural rate.
Such enhancements
of the market price
may last
as long as the regulations
of policy which
give occasion to them.
The market price
of any particular commodity,
though it
may continue long above,
can seldom continue long
below,
its natural price.
Whatever
part of it
was paid
below the natural rate,
the persons
whose interest
it affected
would immediately feel
the loss,
and would immediately withdraw
either so much land
or no much labour,
or so much stock,
from
being employed about it,
that the quantity
brought
to market would soon be
no more than sufficient
to supply
the effectual demand.
Its market price,
therefore,
would soon rise
to the natural price;
this at least
would be the case
where there was
perfect liberty.
The same statutes
of apprenticeship
and other corporation laws,
indeed,
which,
when
a manufacture
is in prosperity,
enable the workman
to raise
his wages
a good deal above their natural rate,
sometimes
oblige him,
when it decays,
to let them
down a good deal below it.
As in the one case
they exclude many people
from his employment,
so in the other
they exclude him
from many employments.
The effect of such regulations,
however,
is not near so durable
in sinking
the workman's wages below,
as in raising them above
their natural rate.
Their operation
in the one way
may endure for many centuries,
but in the other
it can last no longer
than the lives
of some of the workmen
who were bred
to the business
in the time
of its prosperity.
When they are gone,
the number of those
who are afterwards educated
to the trade
will naturally suit itself
to the effectual demand.
The policy
must be as violent as
that of Indostan
or ancient Egypt
(where
every man
was bound by a principle
of religion
to follow the occupation
of his father,
and was supposed
to commit
the most horrid sacrilege
if he
changed it for another),
which can in any
particular employment,
and for several generations
together,
sink either
the wages
of labour or the profits
of stock
below their natural rate.
This
is all that
I think necessary
to be observed at present
concerning the deviations,
whether
occasional 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,
stationary,
or declining condition.
I shall,
in the four following chapters,
endeavour
to explain,
as fully and distinctly
as I can,
the causes
of those
different variations.
First,
I shall endeavour
to explain
what are
the circumstances which
naturally determine the rate
of wages,
and in what manner
those circumstances
are affected
by the riches or poverty,
by the advancing,
stationary,
or declining state
of the society.
Secondly,
I shall endeavour
to shew
what are
the circumstances which
naturally determine the rate
of profit;
and in what manner, too,
those circumstances
are affected
by the like variations
in the state
of the society.
Though
pecuniary wages and profit
are very different
in the different employments
of labour and stock;
yet a certain proportion
seems commonly
to take place between both
the pecuniary
wages in all
the different employments
of labour,
and the pecuniary
profits in all
the different employments
of stock.
This proportion,
it will appear
hereafter,
depends partly upon the nature
of the different employments,
and partly upon the different laws
and policy
of the society
in which
they are carried on.
But though
in many respects dependent
upon the laws and policy,
this proportion
seems to be little
affected
by the riches or poverty of
that society,
by its advancing,
stationary,
or declining condition,
but to remain the same,
or very nearly the same,
in all those
different states.
I shall,
in the third place,
endeavour
to explain
all
the different circumstances which
regulate this proportion.
In the fourth and last place,
I shall endeavour
to shew
what are
the circumstances which
regulate the rent of land,
and which either raise
or lower
the real price
of all
the different substances which
it produces.
The produce of labour
constitutes
the natural recompence
or wages of labour.
In that original state
of things
which precedes
both the appropriation of land
and the accumulation of stock,
the whole produce of labour
belongs to the labourer.
He has
neither landlord nor master
to share with him.
Had this state continued,
the wages of labour
would have augmented with all
those improvements
in its productive powers,
to which the division
of labour
gives occasion.
All
things
would gradually have become
cheaper.
They would have been produced
by a smaller quantity
of labour;
and as the commodities
produced by equal
quantities of labour
would naturally
in this state of things
be exchanged for one another,
they
would have been purchased
likewise
with the produce
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
suppose,
for example,
that in the greater part
of employments
the productive powers
of labour
had been improved to tenfold,
or that a day's labour
could produce ten times
the quantity of work which it
had done originally;
but that
in a particular employment
they had been improved only
to double,
or that a day's labour
could produce
only twice the quantity
of work
which it had done before.
In exchanging the produce
of a day's labour
in the greater part
of employments for
that of a day's labour
in this particular one,
ten times
the original 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 required five
times the quantity
of other goods
to purchase it,
it would require only
half the quantity
of labour either to purchase
or to produce it.
The acquisition,
therefore,
would be twice as easy as
before.
But this original state
of things,
in which
the labourer
enjoyed the whole produce
of his own labour,
could not last
beyond the first introduction
of the appropriation
of land and
the accumulation of stock.
It was at an end,
therefore,
long
before
the most considerable improvements
were made
in the productive powers
of labour;
and it
would be
to no purpose
to trace further
what
might have been its effects
upon the recompence
or wages of labour.
As soon as land
becomes private property,
the landlord demands a share
of almost
all
the produce which the labourer can
either raise or collect
from it.
His rent
makes the first deduction
from the produce
of the labour
which is employed
upon land.
It seldom
happens
that the person
who tills the ground
has wherewithal
to maintain himself
till he reaps the harvest.
His maintenance
is generally advanced
to him from the stock
of a master,
the farmer who employs him,
and who would have
no interest
to employ him,
unless he
was to share
in the produce
of his labour,
or unless his stock
was to be replaced
to him with a profit.
This profit
makes a second deduction
from the produce
of the labour
which is employed
upon land.
The produce
of almost all other
labour is liable
to the like deduction
of profit.
In all arts
and manufactures,
the greater part
of the workmen stand
in need of a master,
to advance them the materials
of their work,
and their wages
and maintenance,
till it
be completed.
He shares in the produce
of their labour,
or in the value which
it adds
to the materials upon which
it is bestowed;
and in this share
consists his profit.
It sometimes happens,
indeed,
that
a single independent workman
has stock sufficient both
to purchase the materials
of his work,
and to maintain himself
till it
be completed.
He is both master
and workman,
and enjoys
the whole produce
of his own labour,
or the whole value which
it adds
to the materials upon which
it is bestowed.
It includes
what are usually
two distinct revenues,
belonging
to two distinct persons,
the profits of stock,
and the wages of labour.
Such cases,
however,
are not very frequent;
and in every part of Europe
twenty workmen serve
under a master for one
that is independent,
and the wages of labour
are everywhere understood
to be,
what they usually are,
when the labourer
is one person,
and the owner of the stock
which employs him another.
What are the common wages
of labour,
depends everywhere
upon the contract
usually made
between those two parties,
whose interests
are by no
means the same.
The workmen desire
to get as much,
the masters
to give as little,
as possible.
The former
are disposed
to combine in order to raise,
the latter in order to lower,
the wages of labour.
It is not,
however,
difficult
to foresee which
of the two parties must,
upon all ordinary occasions,
have the advantage
in the dispute,
and force the other
into a compliance
with their terms.
The masters,
being fewer
in number,
can combine much more easily:
and the law,
besides,
authorises,
or at least
does not prohibit,
their combinations,
while it
prohibits those
of the workmen.
We have no acts
of parliament against
combining
to lower the price of work,
but many
against combining to raise it.
In all such disputes,
the masters
can hold out much longer.
A landlord,
a farmer,
a master manufacturer,
or merchant,
though they
did not employ
a single workman,
could generally live a year
or two
upon the stocks,
which they
have already acquired.
Many workmen
could not subsist a week,
few could subsist a month,
and scarce any a year,
without employment.
In the long run,
the workman
may be as necessary
to his master
as his master is to him;
but the necessity
is not so immediate.
We rarely hear,
it has been said,
of the combinations
of masters,
though frequently of those
of workmen.
But whoever imagines,
upon this account,
that masters
rarely combine,
is as ignorant
of the world as
of the subject.
Masters
are always and
everywhere in a sort
of tacit,
but constant and uniform,
combination,
not to raise
the wages
of labour above
their actual rate.
To violate this combination
is everywhere
a most unpopular action,
and a sort
of reproach
to a master
among his neighbours
and equals.
We seldom,
indeed,
hear of this combination,
because
it is the usual,
and, one may say,
the natural state of things,
which nobody
ever hears of.
Masters, too,
sometimes
enter
into particular combinations
to sink
the wages
of labour even
below this rate.
These
are always conducted
with the utmost silence
and secrecy
till the moment of execution;
and when the workmen yield,
as they sometimes do
without resistance,
though severely felt by them,
they are never heard of
by other people.
Such combinations,
however,
are frequently resisted
by a contrary
defensive combination
of the workmen,
who sometimes, too,
without any provocation
of this kind,
combine,
of their own accord,
to raise tile price
of their labour.
Their usual pretences are,
sometimes
the high price of provisions,
sometimes
the great profit which
their masters make
by their work.
But whether their combinations
be offensive or defensive,
they are always abundantly heard of.
In order to
bring the point
to a speedy decision,
they have always recourse
to the loudest clamour,
and sometimes to the most shocking
violence
and outrage.
They
are desperate,
and act
with the folly and extravagance
of desperate men,
who must either
starve,
or frighten their masters
into an immediate compliance
with their demands.
The masters,
upon these occasions,
are just as clamorous
upon the other side,
and never cease
to call aloud
for the assistance
of the civil magistrate,
and
the rigorous execution of those laws which
have been enacted
with so much severity
against the combination
of servants,
labourers,
and journeymen.
The workmen,
accordingly,
very seldom
derive any advantage
from the violence
of those
tumultuous combinations,
which,
partly from the interposition
of the civil magistrate,
partly from
the superior steadiness
of the masters,
partly from the necessity which
the greater part
of the workmen
are under
of submitting
for the sake
of present subsistence,
generally end in nothing
but the punishment or ruin
of the ringleaders.
But though,
in disputes
with their workmen,
masters
must generally have
the advantage,
there is,
however,
a certain rate,
below which
it seems impossible
to reduce,
for any considerable time,
the ordinary
wages even
of the lowest species
of labour.
A man
must always live by his work,
and his wages
must at least
be sufficient
to maintain him.
They must even
upon most occasions
be somewhat more,
otherwise it
would be impossible
for him
to bring up a family,
and the race
of such workmen
could not last
beyond the first generation.
Mr Cantillon
seems,
upon this account,
to suppose
that the lowest species
of common
labourers
must everywhere earn
at least double their own maintenance,
in order that,
one with another,
they
may be enabled
to bring up two children;
the labour of the wife,
on account
of her necessary attendance
on the children,
being supposed
no more than sufficient
to provide for herself:
But one half
the children born,
it is computed,
die before the age
of manhood.
The poorest labourers,
therefore,
according to 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 labour
of an able-bodied slave,
the same author adds,
is computed
to be worth
double his maintenance;
and that
of the meanest labourer,
he thinks,
cannot be worth
less than
that
of an able-bodied slave.
Thus far at least
seems certain,
that,
in order to
bring up a family,
the labour
of the husband and wife
together must,
even in the lowest species
of common labour,
be able
to earn something more than
what is precisely necessary
for their own maintenance;
but in what proportion,
whether in that above-mentioned,
or many other,
I shall not take
upon me
to determine.
There
are certain circumstances,
however,
which
sometimes give
the labourers an advantage,
and enable them
to raise
their wages
considerably above this rate,
evidently the lowest which
is consistent
with common humanity.
When in any country
the demand for those
who live by wages,
labourers,
journeymen,
servants of every kind,
is continually increasing;
when every year
furnishes employment
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
occasions
a competition among masters,
who bid against one another
in order to
get workmen,
and thus
voluntarily break
through the natural combination
of masters
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
to the payment of wages.
These
funds are of two kinds,
first,
the revenue
which is over and above
what is necessary
for the maintenance;
and, secondly,
the stock
which is over and above
what is necessary
for the employment
of their masters.
When the landlord,
annuitant,
or monied man,
has a greater revenue than
what he
judges sufficient
to maintain his own family,
he employs
either the whole or a part
of the surplus
in maintaining
one or more menial servants.
Increase this surplus,
and he
will naturally increase
the number
of those servants.
When an independent workman,
such as a weaver
or shoemaker,
has
got more stock than what
is sufficient
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 surplus,
in order to make
a profit by their work.
Increase this surplus,
and he
will naturally increase
the number
of his journeymen.
The demand for those
who live by wages,
therefore,
necessarily increases
with the increase
of the revenue
and stock of every country,
and cannot possibly increase
without it.
The increase
of revenue and stock
is the increase
of national wealth.
The demand for those
who live by wages,
therefore,
naturally increases
with the increase
of national wealth,
and cannot possibly increase
without it.
It is not
the actual greatness
of national wealth,
but its continual increase,
which occasions a rise
in the wages of labour.
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 labour
are highest.
England
is certainly,
in the present times,
a much richer country
than any part
of North America.
The wages of labour,
however,
are much higher
in North America
than in any part
of England.
In the province
of New York,
common labourers
earned in 1773,
before the commencement
of the late disturbances,
three shillings
and sixpence currency,
equal to two shillings sterling,
a-day;
ship-carpenters,
ten shillings
and sixpence currency,
with a pint of rum,
worth sixpence sterling,
equal
in all
to six shillings
and sixpence sterling;
house-carpenters and bricklayers,
eight shillings currency,
equal to four shillings
and sixpence sterling;
journeymen tailors,
five shillings currency,
equal to
about two shillings
and tenpence sterling.
These
prices are
all above the London price;
and wages are said
to be as high
in the other colonies as
in New York.
The price of provisions
is everywhere
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
for themselves,
though less for exportation.
If the money price of labour,
therefore,
be higher than it
is anywhere
in the mother-country,
its real price,
the real command
of the necessaries
and conveniencies
of life which
it conveys to the labourer,
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 advancing
with much greater rapidity
to the further acquisition
of riches.
The most decisive mark
of the prosperity
of any country
is the increase
of the number
of its inhabitants.
In Great Britain,
and most other European countries,
they
are not supposed
to double
in less than
five hundred 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 increase
principally owing
to the continual importation
of new inhabitants,
but
to the great multiplication
of the species.
Those
who live to old age,
it is said,
frequently
see there
from fifty to a hundred,
and sometimes many more,
descendants from their own body.
Labour
is there so well rewarded,
that a numerous family
of children,
instead of being a burden,
is a source
of opulence and prosperity
to the parents.
The labour of each child,
before it
can leave their house,
is computed
to be
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
so little chance
for a second husband,
is there frequently courted
as a sort of fortune.
The value of children
is the greatest
of all encouragements
to marriage.
We cannot,
therefore,
wonder
that
the people in North America
should generally marry
very young.
Notwithstanding
the great increase
occasioned
by such early marriages,
there
is a continual complaint
of the scarcity
of hands in North America.
The demand for labourers,
the funds
destined
for maintaining them increase,
it seems,
still faster than
they can find
labourers
to employ.
Though the wealth
of a country
should be very great,
yet if it
has been long stationary,
we must not expect
to find the wages
of labour very high in it.
The funds
destined
for the payment of wages,
the revenue
and stock of its inhabitants,
may be
of the greatest extent;
but if they
have continued
for several centuries
of the same,
or very nearly
of the same extent,
the number of labourers
employed every year
could easily supply,
and even more than supply,
the number
wanted the following year.
There
could seldom 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 employment.
There
would be
a constant scarcity
of employment,
and the labourers
would be obliged to bid
against one another
in order to
get it.
If in such
a country
the wages off labour
had ever been
more than sufficient
to maintain the labourer,
and to enable him
to bring up a family,
the competition
of the labourers
and the interest
of the masters
would soon reduce them
to the lowest rate
which is consistent
with common humanity.
China
has been
long one of the richest,
that is, one
of the most fertile,
best
cultivated,
most industrious,
and most populous,
countries in the world.
It seems,
however,
to have been long stationary.
Marco Polo,
who visited it
more than five
hundred years ago,
describes its cultivation,
industry,
and populousness,
almost in the same 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 institutions
permits it to acquire.
The accounts
of all travellers,
inconsistent in
many other respects,
agree in the low wages
of labour,
and in the difficulty which
a labourer 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 artificers is,
if possible,
still worse.
Instead 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 services,
and, as it were,
begging employment.
The poverty
of the lower ranks
of people
in China far
surpasses
that
of the most beggarly nations
in Europe.
In the neighbourhood
of Canton,
many hundred,
it is commonly said,
many thousand families
have no habitation
on the land,
but live constantly
in little fishing-boats
upon the rivers and canals.
The subsistence which
they find there
is so scanty,
that they
are eager
to fish
up the nastiest garbage
thrown overboard
from any European ship.
Any carrion,
the carcase
of a dead dog or cat,
for example,
though half putrid
and stinking,
is as welcome
to them
as the most wholesome food
to the people
of other countries.
Marriage
is encouraged in China,
not by the profitableness
of children,
but by the liberty
of destroying them.
In all great towns,
several
are every night exposed
in the street,
or drowned
like puppies in the water.
The performance of this
horrid office
is even said
to be
the avowed business
by which some
people earn
their subsistence.
China,
however,
though it may,
perhaps,
stand still,
does not seem
to go backwards.
Its towns
are nowhere deserted
by their inhabitants.
The lands which had once been
cultivated,
are nowhere neglected.
The same,
or very nearly the same,
annual labour,
must,
therefore,
continue
to be performed,
and the funds
destined
for maintaining
it must not,
consequently,
be sensibly diminished.
The lowest class of labourers,
therefore,
notwithstanding
their scanty subsistence,
must some way
or another make shift
to continue their race so far
as
to keep
up their usual numbers.
But it
would be otherwise
in a country
where the funds
destined
for the maintenance of labour
were sensibly decaying.
Every year the demand
for servants and labourers
would,
in all
the different classes
of employments,
be less than
it had been the year before.
Many
who had been bred
in the superior classes,
not being
able to find employment
in their own business,
would be glad
to seek it in the lowest.
The lowest class
being not only overstocked
with its own workmen,
but with the overflowings
of all
the other classes,
the competition for employment
would be so great in it,
as to reduce the wages
of labour
to the
most miserable and scanty
subsistence
of the labourer.
Many
would not be
able to find employment
even upon these hard terms,
but would either
starve,
or be driven
to seek a subsistence,
either
by begging,
or by the perpetration
perhaps,
of the greatest enormities.
Want,
famine,
and mortality,
would immediately prevail
in that class,
and from
thence extend themselves
to all the superior classes,
till
the number
of inhabitants in the country
was reduced to what
could easily be maintained
by the revenue
and stock
which remained in it,
and which
had escaped either
the tyranny
or calamity
which had destroyed the rest.
This,
perhaps,
is nearly
the present state of Bengal,
and of some other
of the English settlements
in the East Indies.
In a fertile country,
which had before been
much depopulated,
where subsistence,
consequently,
should not be very difficult,
and where,
notwithstanding,
three
or
four hundred thousand people
die of hunger in one year,
we maybe
assured that the funds
destined
for the maintenance
of the labouring poor
are fast decaying.
The difference
between the genius
of the British constitution,
which protects
and governs North America,
and that
of the mercantile company
which oppresses and domineers
in the East Indies,
cannot,
perhaps,
be better
illustrated than
by the different state
of those countries.
The liberal reward of labour,
therefore,
as it
is the necessary effect,
so it is the natural symptom
of increasing
national wealth.
The scanty maintenance
of the labouring poor,
on the other hand,
is the natural symptom
that things
are at a stand,
and their starving condition,
that they
are going fast backwards.
In Great Britain,
the wages of labour seem,
in the present times,
to be evidently more than
what is precisely necessary
to enable the labourer
to bring up a family.
In order to
satisfy ourselves
upon this point,
it will not be necessary
to enter into any tedious
or doubtful calculation of what
may be
the lowest sum upon winch
it is possible
to do this.
There
are many plain symptoms,
that
the wages of labour
are nowhere
in this country
regulated by this lowest rate,
which is consistent
with common humanity.
First,
in almost every part
of Great Britain
there is a distinction,
even in the lowest species
of labour,
between summer and winter wages.
Summer
wages are always highest.
But,
on account
of the extraordinary expense
of fuel,
the maintenance of a family
is most expensive
in winter.
Wages,
therefore,
being
highest when this expense
is lowest,
it seems evident
that they
are not regulated
by what
is necessary for this expense,
but by the quantity
and supposed value
of the work.
A labourer,
it may be said,
indeed,
ought to save part
of his summer wages,
in order to
defray his winter expense;
and that,
through the whole year,
they do not exceed
what is necessary
to maintain his family
through the whole year.
A slave,
however,
or one absolutely dependent
on us for immediate subsistence,
would not be treated
in this manner.
His daily subsistence
would be proportioned
to his daily necessities.
Secondly,
the wages of labour
do not,
in Great Britain,
fluctuate with the price
of provisions.
These
vary everywhere
from year to year,
frequently from month to month.
But in many places,
the money price of labour
remains uniformly the same,
sometimes for half a century
together.
If,
in these places,
therefore,
the labouring poor
can maintain
their families in dear years,
they must be at their ease
in times of moderate plenty,
and in affluence
in those
of extraordinary cheapness.
The high price
of provisions
during these ten years past,
has not,
in many parts
of the kingdom,
been accompanied
with any sensible
rise in
the money price of labour.
It has,
indeed,
in some;
owing,
probably,
more to the increase
of the demand for labour,
than to
that of the price
of provisions.
Thirdly,
as the price of provisions
varies more from year to year
than the wages
of labour,
so,
on the other hand,
the wages of labour
vary more
from place to place
than the price of provisions.
The prices of bread
and butchers' meat
are generally the same,
or very nearly the same,
through the greater part
of the united kingdom.
These,
and most other things which
are sold by retail,
the way
in which
the labouring poor buy all things,
are generally fully as cheap,
or cheaper,
in great towns
than in the remoter parts
of the country,
for reasons which
I shall have occasion
to explain hereafter.
But the wages
of labour 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 labour
in London and
its neighbourhood.
At a few miles distance,
it falls
to fourteen and fifteen pence.
Tenpence
may be reckoned its price
in Edinburgh
and its neighbourhood.
At a few miles distance,
it falls to eightpence,
the usual price
of common labour
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 sufficient
to transport a man
from one parish to another,
would necessarily occasion
so 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 soon reduce them more nearly
to a level.
After all
that has been said
of the levity and inconstancy
of human nature,
it appears evidently
from experience,
that man is,
of all sorts of luggage,
the most difficult
to be transported.
If the labouring poor,
therefore,
can maintain
their families
in those parts
of the kingdom
where the price of labour
is lowest,
they
must be in affluence
where it is highest.
Fourthly,
the variations
in the price
of labour not
only do not correspond,
either in place or time,
with those
in the price of provisions,
but they
are frequently quite opposite.
Grain,
the food
of the common people,
is dearer
in Scotland than in England,
whence Scotland
receives almost
every year very large supplies.
But English corn
must be sold dearer
in Scotland,
the country
to which it is brought,
than in England,
the country
from which it comes;
and in proportion
to its quality
it cannot be sold 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 so much superior
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 labour,
on the contrary,
is dearer
in England than in Scotland.
If the labouring 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 same rank in England.
This difference,
however,
in the mode
of their subsistence,
is not the cause,
but the effect,
of the difference
in their wages;
though,
by a strange misapprehension,
I have frequently heard it
represented as the cause.
It is not
because one man keeps
a coach,
while his neighbour 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 present.
This
is a matter of fact
which cannot now admit
of any reasonable doubt;
and the proof of it is,
if possible,
still more decisive
with regard to Scotland
than with regard to England.
It is
in Scotland
supported
by the evidence
of the public fiars,
annual valuations
made upon oath,
according to
the actual state
of the markets,
of all the different sorts
of grain
in every different county
of Scotland.
If such direct proof
could require
any collateral evidence
to confirm it,
I would observe,
that this
has likewise
been the case in France,
and probably in most other parts
of Europe.
With regard to France,
there
is the clearest proof.
But though it
is certain,
that
in both parts
of the united kingdom grain
was somewhat dearer
in the last century than
in the present,
it is equally certain
that labour
was much cheaper.
If the labouring poor,
therefore,
could bring
up their families then,
they
must be much more
at their ease now.
In the last century,
the most usual day-wages
of common labour
through the greater part
of Scotland
were sixpence
in summer,
and fivepence
in winter.
Three shillings a-week,
the same price,
very nearly
still continues
to be paid
in some parts
of the Highlands
and Western islands.
Through the greater part
of the Low country,
the most usual wages
of common labour
are now eight pence a-day;
tenpence,
sometimes a shilling,
about Edinburgh,
in the counties which border
upon England,
probably on account of
that neighbourhood,
and in a few other places
where there has lately been
a considerable
rise in
the demand for labour,
about Glasgow,
Carron,
Ayrshire,.etc.
In England,
the improvements
of agriculture,
manufactures,
and commerce,
began much earlier than
in Scotland.
The demand for labour,
and consequently its price,
must necessarily have increased
with those improvements.
In the last century,
accordingly,
as well as in the present,
the wages of labour
were higher in England than
in Scotland.
They have risen, too,
considerably since 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,
the pay
of a foot soldier
was the same
as in the present times,
eightpence a-day.
When it was first established,
it
would naturally be regulated
by the usual wages
of common labourers,
the rank
of people
from which
foot soldiers
are commonly drawn.
Lord-chief-justice Hales,
who wrote
in the time
of Charles II,
computes
the necessary expense
of a labourer's family,
consisting of six persons,
the father and mother,
two children able
to do something,
and two not able,
at ten shillings a-week,
or twenty-six pounds a-year.
If they
cannot earn this
by their labour,
they
must make it up,
he supposes,
either
by begging or stealing.
He appears
to have enquired very carefully
into this subject
(See his scheme
for the maintenance
of the poor,
in Burn's History
of the Poor Laws.).
In 1688,
Mr Gregory King,
whose skill
in political arithmetic
is so much
extolled by Dr Davenant,
computed the ordinary income
of labourers and out-servants
to be fifteen pounds a-year
to a family,
which
he supposed
to consist,
one with another,
of three and a half persons.
His calculation,
therefore,
though different
in appearance,
corresponds very nearly
at bottom with
that of Judge Hales.
Both
suppose the weekly expense
of such families
to be
about twenty-pence a-head.
Both
the pecuniary income
and expense
of such
families
have increased considerably
since that time
through the greater part
of the kingdom,
in some places more,
and in some less,
though
perhaps
scarce anywhere so much as some
exaggerated accounts
of the present wages
of labour
have lately represented them
to the public.
The price of labour,
it must be observed,
cannot be ascertained
very accurately anywhere,
different prices
being often paid
at the same place
and for the same sort
of labour,
not only according to
the different abilities
of the workman,
but according to the easiness
or hardness
of the masters.
Where
wages are not regulated
by law,
all that we
can pretend
to determine is,
what are the most usual;
and experience seems
to shew
that law
can never regulate them properly,
though it
has often pretended
to do so.
The real recompence of labour,
the real quantity
of the necessaries
and conveniencies
of life which
it can procure
to the labourer,
has,
during the course
of the present century,
increased perhaps
in a still greater proportion
than its money price.
Not only grain
has become somewhat cheaper,
but many other things,
from which
the industrious poor
derive
an agreeable and wholesome
variety
of food,
have become a great deal
cheaper.
Potatoes,
for example,
do not at present,
through the greater part
of the kingdom,
cost half
the price which
they used to do thirty
or forty years ago.
The same thing
may be said of turnips,
carrots,
cabbages;
things
which
were formerly never raised
but
by the spade,
but which
are now commonly raised
by the plough.
All sort of garden stuff, too,
has become cheaper.
The greater part
of the apples,
and even of the onions,
consumed in Great Britain,
were, in the last century,
imported from Flanders.
The great improvements
in the coarser manufactories
of both linen
and woollen cloth
furnish the labourers
with cheaper
and better clothing;
and those
in the manufactories
of the coarser metals,
with cheaper
and better instruments
of trade,
as
well as with many agreeable
and convenient pieces
of household furniture.
Soap,
salt,
candles,
leather,
and fermented liquors,
have,
indeed,
become a good deal dearer,
chiefly from the taxes which
have been laid upon them.
The quantity of these,
however,
which the labouring
poor an under any necessity
of consuming,
is so very small,
that the increase
in their price
does not compensate
the diminution
in
that
of so many other things.
The common complaint,
that luxury
extends itself even
to the lowest ranks
of the people,
and that
the labouring poor
will not now be contented
with the same food,
clothing,
and lodging,
which satisfied them
in former times,
may convince us
that it
is not the money price
of labour 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 society?
The answer
seems
at first abundantly plain.
Servants,
labourers,
and workmen
of different kinds,
make up the far greater part
of every great political
society.
But what improves
the circumstances
of the greater part,
can never be regarded
as any inconveniency
to the whole.
No
society
can surely be flourishing
and happy,
of which the far greater
part of the members
are poor and miserable.
It is but equity,
besides,
that they who feed,
clothe,
and lodge
the whole body of the people,
should have such a share
of the produce
of their own labour as
to be themselves tolerably well fed,
clothed,
and lodged.
Poverty,
though it no doubt
discourages,
does not always prevent,
marriage.
It seems even
to be favourable
to generation.
A half-starved Highland 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.
Barrenness,
so frequent among women
of fashion,
is very rare among those
of inferior station.
Luxury,
in the fair sex,
while it inflames,
perhaps,
the passion for enjoyment,
seems always
to weaken,
and
frequently to destroy altogether,
the powers of generation.
But poverty,
though it
does not prevent
the generation,
is extremely unfavourable
to the rearing
of children.
The tender plant
is produced;
but in so cold a soil,
and so severe a climate,
soon
withers and dies.
It is not uncommon,
I have been frequently told,
in the Highlands of Scotland,
for a mother
who has born twenty children
not to have two alive.
Several officers
of great experience
have assured me,
that,
so far
from recruiting their regiment,
they have never been able
to supply it
with drums and fifes,
from all
the soldiers' children
that were born in it.
A greater number
of fine children,
however,
is seldom seen anywhere than
about a barrack
of soldiers.
Very few of them,
it seems,
arrive at the age
of thirteen or fourteen.
In some places,
one half the children
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 everywhere be found chiefly
among the children
of the common people,
who cannot afford
to tend them
with the same care
as those of better station.
Though their marriages
are generally more fruitful
than those
of people
of fashion,
a smaller proportion
of their children
arrive at maturity.
In foundling hospitals,
and among the children
brought up by parish charities,
the mortality
is still greater than
among those
of the common people.
Every species of animals
naturally multiplies
in proportion
to the means
of their subsistence,
and no
species can ever multiply
be yond it.
But in civilized society,
it is only
among the inferior ranks
of people
that
the scantiness of subsistence
can set limits
to the further multiplication
of the human species;
and it
can do so in
no other way
than by destroying
a great part
of the children which
their fruitful marriages produce.
The liberal reward of labour,
by enabling them
to provide better
for their children,
and consequently
to bring up a greater number,
naturally
tends
to widen
and extend those limits.
It deserves
to be remarked, too,
that
it necessarily does this
as nearly
as possible
in the proportion which
the demand
for labour requires.
If this demand
is continually increasing,
the reward of labour
must necessarily encourage
in such a manner the marriage
and multiplication
of labourers,
as may enable them
to supply that
continually increasing demand
by a continually increasing population.
If the reward
should at any time
be less than
what was requisite
for this purpose,
the deficiency of hands
would soon raise it;
and if it
should at any time
be more,
their excessive multiplication
would soon lower it
to this necessary rate.
The market
would be so much
understocked
with labour
in the one case,
and so much overstocked
in the other,
as would soon force back
its price to
that proper rate which
the circumstances
of the society
required.
It is in this manner that
the demand for men,
like that
for any other commodity,
necessarily
regulates the production
of men,
quickens
it
when it
goes on too slowly,
and stops
it
when it advances too fast.
It is this demand
which regulates
and determines the state
of propagation in all
the different countries
of the world;
in North America,
in Europe,
and in China;
which renders it
rapidly progressive
in the first,
slow and gradual
in the second,
and altogether stationary
in the last.
The wear
and tear of a slave,
it has been said,
is at the expense
of his master;
but that of a free servant
is at his own expense.
The wear
and tear of the latter,
however,
is, in reality,
as much
at the expense
of his master
as that of the former.
The wages
paid
to journeymen and servants
of every kind
must be such as
may enable them,
one with another
to continue the race
of journeymen and servants,
according as the increasing,
diminishing,
or stationary demand
of the society,
may happen
to require.
But though the wear
and tear of a free servant
be equally
at the expense of his master,
it generally costs him
much less
than
that of a slave.
The fund destined
for replacing or repairing,
if I may say so,
the wear
and tear of the slave,
is commonly managed
by a negligent master
or careless overseer.
That
destined
for performing
the same office
with regard to
the freeman
is managed
by the freeman himself.
The disorders which
generally prevail
in the economy
of the rich,
naturally
introduce themselves
into the management
of the former;
the strict frugality
and parsimonious attention
of the poor
as
naturally establish themselves
in
that of the latter.
Under such different management,
the same purpose
must require
very different degrees
of expense
to execute it.
It appears,
accordingly,
from the experience
of all ages and nations,
I believe,
that the work
done by freemen
comes cheaper
in the end
than that performed
by slaves.
It is found
to do so even at Boston,
New-York,
and Philadelphia,
where the wages
of common labour
are so very high.
The liberal reward of labour,
therefore,
as it
is the effect
of increasing wealth,
so it
is the cause
of increasing population.
To complain of it,
is to lament
over the necessary cause
and effect
of the greatest public prosperity.
It deserves
to be remarked,
perhaps,
that it
is in the progressive state,
while the society
is advancing
to the further acquisition,
rather than when it
has acquired
its full complement
of riches,
that the condition
of the labouring poor,
of the great body
of the people,
seems
to be the happiest
and the most comfortable.
It is hard in the stationary,
and miserable
in the declining state.
The progressive state is,
in reality,
the cheerful
and the hearty state
to all
the different orders
of the society;
the stationary
is dull;
the declining melancholy.
The liberal reward of labour,
as it
encourages the propagation,
so it
increases the industry
of the common people.
The wages of labour
are the encouragement
of industry,
which,
like every other human quality,
improves
in proportion
to the encouragement
it receives.
A plentiful subsistence
increases the bodily strength
of the labourer,
and the comfortable hope
of bettering his condition,
and of ending his days,
perhaps,
in ease and plenty,
animates him
to exert
that strength to the utmost.
Where wages are high,
accordingly,
we shall always 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 case
with the greater part.
Workmen,
on the contrary,
when they
are liberally paid
by the piece,
are very apt
to overwork themselves,
and to ruin their health
and constitution in a few
years.
A carpenter in London,
and in some other places,
is not supposed
to last in
his utmost vigour above
eight years.
Something of the same kind
happens in many other trades,
in which
the workmen
are paid by the piece;
as they
generally are in manufactures,
and even in country labour,
wherever wages
are higher than ordinary.
Almost every class
of artificers
is subject to
some peculiar infirmity occasioned
by excessive application
to their peculiar species
of work.
Ramuzzini,
an eminent Italian physician,
has written a particular book
concerning such diseases.
We do not reckon
our soldiers
the most industrious set
of people among us;
yet when
soldiers
have been employed
in some particular sorts
of work,
and liberally paid
by the piece,
their officers
have frequently been
obliged
to stipulate
with the undertaker,
that
they should not be allowed
to earn above
a certain sum every day,
according to the rate
at which they were paid.
Till
this stipulation was made,
mutual emulation,
and the desire
of greater gain,
frequently
prompted them
to overwork themselves,
and to
hurt their health
by excessive labour.
Excessive application,
during four days
of the week,
is frequently the real cause
of the idleness
of the other three,
so much and
so loudly complained of.
Great labour,
either of mind or body,
continued
for several days together is,
in most men,
naturally
followed
by a great desire
of relaxation,
which,
if not restrained by force,
or by some strong necessity,
is almost irresistible.
It is the call of nature,
which requires
to be relieved
by some indulgence,
sometimes of ease only,
but sometimes
too of dissipation and diversion.
If it is not complied with,
the consequences
are often
dangerous and sometimes fatal,
and such as almost always,
sooner or later,
bring
on the peculiar infirmity
of the trade.
If masters
would always listen
to the dictates
of reason and humanity,
they have frequently occasion
rather to moderate,
than
to animate the application
of many of their workmen.
It will be found,
I believe,
in every sort of trade,
that
the man
who works so moderately,
as to be
able to work constantly,
not only preserves
his health the longest,
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 times
more industrious
than ordinary.
A plentiful subsistence,
therefore,
it has been concluded,
relaxes,
and a scanty one
quickens their industry.
That a little more plenty
than ordinary
may render some workmen idle,
cannot be well doubted;
but that it
should have this effect
upon the greater part,
or that men in general
should work better when they
are ill fed,
than when they are well fed,
when they
are disheartened than when
they are in good spirits,
when they
are frequently sick than when
they are generally
in good health,
seems not very probable.
Years of dearth,
it is to be observed,
are generally
among the common people years
of sickness and mortality,
which cannot fail
to diminish the produce
of their industry.
In years of plenty,
servants
frequently leave
their masters,
and trust
their subsistence to
what they
can make
by their own industry.
But the same cheapness
of provisions,
by increasing
the fund
which is destined
for the maintenance
of servants,
encourages masters,
farmers especially,
to employ a greater number.
Farmers,
upon such occasions,
expect more profit
from their corn
by maintaining
a few
more labouring servants,
than by selling it
at a low price
in the market.
The demand for servants
increases,
while the number of those
who offer
to supply that demand
diminishes.
The price of labour,
therefore,
frequently
rises in cheap years.
In years
of scarcity,
the difficulty and uncertainty
of subsistence make all
such people eager
to return to service.
But the high price
of provisions,
by diminishing
the funds
destined
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 consume
the little stock
with which they
had used
to supply themselves
with the materials
of their work,
and are obliged
to become journeymen
for subsistence.
More people want employment
than
easily get it;
many
are willing
to take it
upon lower terms than ordinary;
and
the wages
of both servants and journeymen
frequently sink in dear years.
Masters of all sorts,
therefore,
frequently
make better bargains
with their servants 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 favourable
to industry.
Landlords and farmers,
besides,
two of the largest classes
of masters,
have another reason
for being pleased
with dear years.
The rents of the one,
and the profits of the other,
depend very much
upon the price
of provisions.
Nothing
can be more absurd,
however,
than
to imagine
that men in general
should work less when they
work
for themselves,
than when they work
for other people.
A poor independent workman
will generally be
more industrious
than
even a journeyman
who works by the piece.
The one
enjoys the whole produce
of his own industry,
the other
shares it with his master.
The one,
in his separate
independent state,
is less liable
to the temptations
of bad company,
which,
in large manufactories,
so frequently
ruin the morals
of the other.
The superiority
of the independent workman
over those servants
who are hired
by the month
or by the year,
and
whose wages and maintenance
are the same,
whether they
do much
or do little,
is likely
to be still greater.
Cheap years
tend to increase
the proportion
of independent workmen
to journeymen and servants
of all kinds,
and dear years
to diminish it.
A French author
of great knowledge and ingenuity,
Mr Messance,
receiver
of the taillies
in the election
of St Etienne,
endeavours
to shew 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
occasions in three different
manufactures;
one of coarse woollens,
carried on at Elbeuf;
one of linen,
and another of silk,
both which
extend
through the whole generality
of Rouen.
It appears from his account,
which is copied
from the registers
of the public offices,
that the quantity and value
of the goods made in all
those
three manufactories
has generally been
greater in cheap
than in dear years,
and that it has always been;
greatest in the cheapest,
and least in
the dearest years.
All the three
seem
to be stationary
manufactures,
or which,
though
their produce
may vary somewhat
from year to year,
are, upon the whole,
neither
going backwards nor
forwards.
The manufacture
of linen in Scotland,
and that of coarse woollens
in the West Riding of Yorkshire,
are growing
manufactures,
of which the produce
is generally,
though with some variations,
increasing both
in quantity and value.
Upon examining,
however,
the accounts which
have been published
of their annual produce,
I have not been able
to observe that its variations
have had
any sensible connection
with the dearness or cheapness
of the seasons.
In 1740,
a year of great scarcity,
both
manufactures,
indeed,
appear
to have declined very considerably.
But in 1756,
another year
or great scarcity,
the Scotch
manufactures
made more than ordinary advances.
The Yorkshire manufacture,
indeed,
declined,
and its produce
did not rise to what it
had been in 1755,
till 1766,
after the repeal
of the American stamp act.
In that
and the following year,
it greatly exceeded
what it had ever been before,
and it has continued
to advance ever since.
The produce of all great
manufactures for distant sale
must necessarily depend,
not so much
upon the dearness or cheapness
of the seasons
in the countries
where they are carried on,
as upon the
circumstances which affect
the demand in the countries
where they are consumed;
upon peace or war,
upon the prosperity
or declension of other rival
manufactures and
upon the
good or bad
humour
of their principal customers.
A great part
of the extraordinary work,
besides,
which is probably done
in cheap years,
never
enters the public registers of
manufactures.
The men-servants,
who leave their masters,
become independent labourers.
The women return
to their parents,
and commonly spin,
in order to make clothes
for themselves
and their families.
Even the independent workmen
do not always,
work for public sale,
but are employed
by some of their neighbours
in
manufactures for family use.
The produce of their labour,
therefore,
frequently
makes no figure in those
public registers,
of which
the records
are sometimes published
with so much parade,
and from which
our merchants and manufacturers
would often vainly pretend
to announce the prosperity
or declension
of the greatest empires.
Through the variations
in the price
of labour not
only do not always correspond
with those
in the price
of provisions,
but
are frequently quite opposite,
we must not,
upon this account,
imagine that
the price of provisions
has no influence upon
that of labour.
The money price of labour
is necessarily regulated
by two circumstances;
the demand for labour,
and the price
of the necessaries
and conveniencies
of life.
The demand for labour,
according
as it happens
to be increasing,
stationary,
or declining,
or to require an increasing,
stationary,
or declining population,
determines
the quantities
of the necessaries and
conveniencies of life
which must be given
to the labourer;
and the money price of labour
is determined by what
is requisite
for purchasing this quantity.
Though the money price
of labour,
therefore,
is sometimes high
where the price of provisions
is low,
it would be still higher,
the demand
continuing the same,
if the price of provisions
was high.
It is because
the demand
for labour increases
in years
of sudden
and extraordinary plenty,
and diminishes in those
of sudden
and extraordinary scarcity,
that
the money price of labour sometimes
rises in the one,
and sinks in the other.
In a year
of sudden
and extraordinary plenty,
there
are funds
in the hands
of many
of the employers of industry,
sufficient
to maintain
and employ a greater number
of industrious people
than
had been employed
the year before;
and this extraordinary number
cannot always be had.
Those masters,
therefore,
who want more workmen,
bid against one another,
in order to
get them,
which sometimes raises both
the real and the money price
of their labour.
The contrary of this
happens
in a year
of sudden
and extraordinary scarcity.
The funds
destined
for employing industry
are less than
they had been
the year before.
A considerable number
of people
are thrown out of employment,
who bid one against another,
in order to
get it,
which sometimes lowers both
the real and the money price
of labour.
In 1740,
a year of extraordinary scarcity,
many people
were willing
to work for bare subsistence.
In the succeeding years
of plenty,
it was more difficult
to get labourers
and servants.
The scarcity of a dear year,
by diminishing
the demand for labour,
tends to lower its price,
as the high price
of provisions
tends to raise it.
The plenty of a cheap year,
on the contrary,
by increasing the demand,
tends
to raise the price
of labour,
as the cheapness of provisions
tends to lower it.
In the ordinary variations
of the prices of provisions,
those two opposite causes
seem to counterbalance
one another,
which is probably,
in part,
the reason
why the wages of labour
are everywhere so much more steady
and permanent
than the price
of provisions.
The increase
in the wages
of labour necessarily
increases
the price of many commodities,
by increasing
that part of it
which resolves itself
into wages,
and so far tends
to diminish their consumption,
both at home and abroad.
The same cause,
however,
which raises
the wages of labour,
the increase of stock,
tends
to increase
its productive powers,
and to make
a smaller quantity of labour
produce a greater quantity
of work.
The owner of the stock
which employs
a great number of labourers
necessarily endeavours,
for his own advantage,
to make
such a proper division
and distribution
of employment,
that
they may be enabled
to produce
the greatest quantity
of work possible.
For the same reason,
he endeavours
to supply them
with the best machinery
which either
he or they can think of.
What takes place
among the labourers
in a particular workhouse,
takes place,
for the same reason,
among those
of a great society.
The greater their number,
the more
they
naturally divide themselves
into different classes
and subdivisions
of employments.
More
heads are occupied
in inventing
the most proper machinery
for executing
the work of each,
and it is,
therefore,
more likely to be invented.
There me many commodities,
therefore,
which,
in consequence
of these improvements,
come to be produced
by so much less labour
than before,
that the increase
of its price
is more than compensated
by the diminution
of its quantity.
The rise and fall
in the profits of stock
depend upon the same causes
with the rise
and fall
in the wages of labour,
the increasing
or declining state
of the wealth
of the society;
but those causes
affect the one
and the other very differently.
The increase of stock,
which raises wages,
tends to lower profit.
When the stocks
of many rich
merchants
are turned into
the same trade,
their mutual competition
naturally tends
to lower its profit;
and when
there is a like increase
of stock
in all the different trades
carried on
in the same society,
the same competition
must produce
the same effect
in them all.
It is not easy,
it has already been observed,
to ascertain
what are the average wages
of labour,
even in a particular place,
and at a particular time.
We can,
even in this case,
seldom
determine more than
what are
the most usual wages.
But even
this can seldom be done
with regard to
the profits of stock.
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 customers,
and by a thousand other accidents,
to which goods,
when carried either
by sea 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 almost from hour to hour.
To ascertain
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 precision,
must be altogether impossible.
But though it
may be impossible
to determine,
with any degree of precision,
what are or were
the average profits of stock,
either
in the present
or in ancient times,
some notion
may be formed
of them from the interest
of money.
It
may be laid down
as a maxim,
that wherever
a great deal
can be made
by the use of money,
a great deal
will commonly be given
for the use of it;
and that,
wherever little
can be made by it,
less
will commonly
he given for it.
Accordingly,
therefore,
as the usual market rate
of interest
varies in any country,
we may be assured
that the ordinary profits
of stock
must vary with it,
must sink as it sinks,
and rise as it rises.
The progress of interest,
therefore,
may lead us
to form some notion
of the progress
of profit.
By the 37th
of Henry VIII,
all interest above ten percent
was declared unlawful.
More,
it seems,
had sometimes been
taken before that.
In the reign
of Edward VI,
religious zeal
prohibited all interest.
This prohibition,
however,
like all others
of the same kind,
is said
to have produced no effect,
and probably rather increased
than
diminished the evil of usury.
The statute of Henry VIII
was revived by the 13th
of Elizabeth,
capped at ten percent,
continued
to be the legal rate
of interest till
the 21st of James I,
when it
was restricted
to eight per cent.
It was reduced
to six per cent.
soon after the Restoration,
and by the 12th
of Queen Anne,
to five per cent. All
these
different statutory regulations
seem to have been made
with great propriety.
They seem
to have followed,
and not to have gone before,
the market rate of interest,
or the rate at which people
of good credit usually borrowed.
Since the time of Queen Anne,
five per cent.
seems to have been
rather above than
below the market rate.
Before the late war,
the government
borrowed at three percent;
and people
of good credit
in the capital,
and in many other parts
of the kingdom,
at three and a-half,
four,
and four and a-half percent.
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
seems rather
to have been gradually accelerated
than retarded.
They seem not only
to have been going on,
but to have been going on
faster
and faster.
The wages of labour
have been continually increasing
during the same period,
and,
in the greater part
of the different branches
of trade
and manufactures,
the profits of stock
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 stocks
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 labour
are generally higher
in a great town
than in a country village.
In a thriving town,
the people
who have great stocks
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 labour,
and lowers
the profits of stock.
In the remote parts
of the country,
there
is frequently
not stock sufficient
to employ all the people,
who therefore
bid against one another,
in order to get employment,
which lowers the wages
of labour,
and raises
the profits of stock.
In Scotland,
though the legal rate
of interest
is the same as
in England,
the market rate
is rather higher.
People of the best credit
there seldom
borrow under five per cent.
Even
private bankers in Edinburgh
give four per cent.
upon their promissory-notes,
of which payment,
either in whole
or in part may be demanded
at pleasure.
Private bankers
in London
give no interest
for the money
which is deposited with them.
There
are few trades
which cannot be carried on
with a smaller stock
in Scotland than in England.
The common rate of profit,
therefore,
must be somewhat greater.
The wages of labour,
it has already been observed,
are lower
in Scotland than in England.
The country, too,
is not only much poorer,
but the steps by which
it advances
to a better condition,
for it
is evidently advancing,
seem to be
much slower and more tardy.
The legal rate
of interest in France
has not
during the course
of the present century,
been always regulated
by the market rate
(See Denisart,
Article Taux des Interests,
tom. iii,
p.13.)
In 1720,
interest
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 three
and a third per cent.
In 1725,
it was again raised
to the twentieth penny,
or to five per cent.
In 1766,
during the administration
of Mr Laverdy,
it was reduced
to the twenty-fifth penny,
or to four per cent.
The Abbé
Terray raised it
afterwards to the old rate
of five per cent.
The supposed purpose
of many of those
violent reductions of interest
was to prepare the way
for reducing
that of the public debts;
a purpose
which has sometimes been
executed.
France is,
perhaps,
in the present times,
not so rich
a country as England;
and though
the legal rate of interest
has in France
frequently been lower than
in England,
the market rate
has generally been higher;
for there,
as in other countries,
they have
several very safe and easy methods
of evading the law.
The profits of trade,
I have been assured
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 subjects chuse
rather
to employ their capitals
in a country where
trade is in disgrace,
than in one
where it is highly respected.
The wages of labour
are lower in France than
in England.
When you
go from Scotland to England,
the difference which
you may remark
between the dress and countenance
of the common people
in the one country
and in the other,
sufficiently
indicates
the difference
in their condition.
The contrast
is still greater
when you return from France.
France,
though no
doubt a richer country
than Scotland,
seems not
to be going forward so fast.
It is
a common
and even a popular opinion
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 possibly entertain
with regard to Scotland,
who sees the country now,
and who
saw it twenty
or thirty years ago.
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 labour
are said
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 some people,
is decaying,
and it
may perhaps be true
that
some particular branches of it
are so;
but these symptoms
seem to indicate sufficiently
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 stock
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 share.
The great property which
they possess
both in French
and English funds,
about forty millions,
it is said in the latter
(in which,
I suspect,
however,
there
is
a considerable exaggeration ),
the great sums which
they lend to private people,
in countries
where the rate of interest
is higher than
in their own,
are
circumstances which no doubt
demonstrate 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 demonstrate that
that business has decreased.
As the capital
of a 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,
so may likewise
the capital
of a great nation.
In our North American
and West Indian colonies,
not only the wages of labour,
but the interest of money,
and consequently
the profits of stock,
are higher than in England.
In the different colonies,
both the legal
and the market rate
of interest run
from six to eight percent.
High wages
of labour
and high profits of stock,
however,
are things,
perhaps,
which scarce
ever go together,
except
in the peculiar circumstances
of new colonies.
A new colony
must always,
for some time,
be more
understocked
in proportion to the extent
of its territory,
and more underpeopled
in proportion to the extent
of its stock,
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 most fertile
and most favourably situated,
the land near the sea-shore,
and along the banks
of navigable rivers.
Such land, too,
is frequently purchased
at a price
below the value even
of its natural produce.
Stock
employed
in the purchase and improvement
of such lands,
must yield
a very large profit,
and, consequently,
afford
to pay
a very large interest.
Its rapid accumulation
in so profitable
an employment
enables the planter
to increase the number
of his hands faster than
he can find them
in a new settlement.
Those whom
he can find,
therefore,
are very liberally rewarded.
As
the colony increases,
the profits of stock gradually
diminish.
When
the most fertile and best situated
lands have been all occupied,
less
profit can be made
by the cultivation of
what is inferior both
in soil and situation,
and less
interest
can be afforded for the stock
which is so employed.
In the greater part
of our colonies,
accordingly,
both the legal
and the market rate
of interest
have been considerably reduced
during the course
of the present century.
As riches,
improvement,
and population,
have increased,
interest
has declined.
The wages of labour
do not sink
with the profits of stock.
The demand for labour
increases
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 faster
than before.
It is with industrious nations,
who are advancing
in the acquisition of riches,
as with industrious individuals.
A great stock,
though with small profits,
generally increases faster
than a small stock
with great profits.
Money,
says the proverb,
makes money.
When you have
got a little,
it is often easy
to get more.
The great difficulty
is to get that little.
The connection
between the increase
of stock and
that of industry,
or of the demand
for useful labour,
has partly been
explained already,
but will be explained
more fully hereafter,
in treating
of the accumulation
of stock.
The acquisition
of new territory,
or of new branches
of trade,
may sometimes raise
the profits of stock,
and with them
the interest of money,
even in a country
which is fast
advancing
in the acquisition of riches.
The stock of the country,
not being sufficient
for the whole accession
of business
which such acquisitions 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 before been
employed in other trades,
is necessarily withdrawn
from them,
and turned into
some of the new
and more profitable ones.
In all those old trades,
therefore,
the competition
comes to be less than
before.
The market
comes
to be less fully supplied
with many different sorts
of goods.
Their price
necessarily rises more
or less,
and yields
a greater profit to those
who deal in them,
who can,
therefore,
afford
to borrow
at a higher interest.
For some time
after the conclusion
of the late war,
not only private people
of the best credit,
but some
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 accession both
of territory and trade
by our acquisitions
in North America
and the West Indies,
will sufficiently account
for this,
without supposing
any diminution
in the capital stock
of the society.
So great an accession of new
business
to be carried on
by the old stock,
must necessarily have diminished
the quantity
employed
in a great number
of particular branches,
in which the competition
being less,
the profits
must have been greater.
I shall hereafter have occasion
to mention the reasons which
dispose me
to believe
that the capital stock
of Great Britain
was not diminished,
even by the enormous expense
of the late war.
The diminution
of the capital stock
of the society,
or of the funds
destined
for the maintenance
of industry,
however,
as it lowers the wages
of labour,
so it
raises the profits of stock,
and consequently
the interest of money.
By the wages of labour
being lowered,
the owners of what
stock
remains in the society
can bring their goods at less
expense
to market than before;
and less stock
being employed
in supplying
the market than before,
they
can sell them dearer.
Their goods
cost them less,
and they get more for them.
Their profits,
therefore,
being augmented at both ends,
can well afford
a large interest.
The great fortunes so suddenly
and so easily acquired
in Bengal
and
the other British settlements
in the East Indies,
may satisfy us,
that
as the wages of labour
are very low,
so the profits of stock
are very high in those
ruined countries.
The interest of money
is proportionably so.
In Bengal,
money
is frequently lent
to the farmers
at forty,
fifty,
and sixty per cent.
and the succeeding crop
is mortgaged for the payment.
As the profits which
can afford such
an interest
must eat up almost
the whole rent
of the landlord,
so such enormous usury
must in its turn
eat
up the greater part
of those profits.
Before the fall
of the Roman republic,
a usury of the same kind
seems
to have been common
in the provinces,
under the ruinous administration
of their proconsuls.
The virtuous Brutus lent money
in Cyprus
at eight-and-forty percent,
as we
learn
from the letters of Cicero.
In a country
which had acquired
that full complement
of riches which the nature
of its soil and climate,
and its situation
with respect
to other countries,
allowed it to acquire,
which could,
therefore,
advance no further,
and which
was not going backwards,
both
the wages of labour and
the profits of stock
would probably be very low.
In a country
fully peopled
in proportion to what either
its territory could maintain,
or its stock employ,
the competition for employment
would necessarily be so great
as to reduce
the wages of labour to what
was barely sufficient
to keep
up the number of labourers,
and the country
being already fully peopled,
that number
could never be augmented.
In a country
fully stocked
in proportion to all
the business it
had to transact,
as great
a quantity of stock
would be employed
in every particular branch
as the nature and extent
of the trade
would admit.
The competition,
therefore,
would everywhere be as great,
and, consequently,
the ordinary profit
as low as possible.
But,
perhaps,
no
country has ever yet arrived
at this degree
of opulence.
China
seems to have been
long stationary,
and had,
probably,
long ago
acquired that
full complement
of riches which
is consistent
with the nature
of its laws and institutions.
But this complement
may be much inferior to what,
with other
laws and institutions,
the nature of its soil,
climate,
and situation,
might admit of.
A country
which neglects
or despises foreign commerce,
and which
admits the vessel
of foreign nations
into one or two
of its ports only,
cannot transact
the same quantity
of business which
it might do
with different laws
and institutions.
In a country, too,
where,
though the rich,
or the owners
of large capitals,
enjoy a good deal
of security,
the poor,
or the owners
of small capitals,
enjoy scarce any,
but are liable,
under the pretence of justice,
to be pillaged
and plundered
at any time
by the inferior mandarins,
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 oppression of the poor
must establish the monopoly
of the rich,
who,
by engrossing
the whole trade to themselves,
will be able
to make very large profits.
Twelve per cent. accordingly,
is said
to be the common interest
of money in China,
and the ordinary profits
of stock
must be sufficient
to afford
this large interest.
A defect in the law
may sometimes raise
the rate
of interest considerably above
what the condition
of the country,
as to wealth or poverty,
would require.
When
the law
does not enforce
the performance
of contracts,
it puts all borrowers
nearly upon the same footing
with bankrupts,
or people of doubtful credit,
in better regulated countries.
The uncertainty
of recovering his money
makes the lender
exact
the same usurious interest
which is usually required
from bankrupts.
Among the barbarous nations
who overran
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 justice
of their kings seldom
intermeddled in it.
The high rate of interest
which took place
in those ancient times,
may,
perhaps,
be partly accounted for
from this cause.
When the law
prohibits interest altogether,
it does not prevent it.
Many people
must borrow,
and nobody
will lend without such
a consideration for the use of their money as
is suitable,
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 interest among all
Mahometan nations
is accounted for
by M. Montesquieu,
not from their poverty,
but partly from this,
and partly from the difficulty
of recovering the money.
The lowest ordinary rate
of profit
must always be
something more than
what is sufficient
to compensate
the occasional losses
to which every employment
of stock is exposed.
It is this surplus only which
is neat
or clear profit.
What is called gross profit,
comprehends frequently not only
this surplus,
but what is retained
for compensating
such extraordinary losses.
The interest which
the borrower
can afford
to pay is
in proportion
to the clear profit only.
The lowest ordinary rate
of interest must,
in the same manner,
be something more than sufficient
to compensate
the occasional losses to which
lending,
even with tolerable prudence,
is exposed.
Were it not,
mere charity or friendship
could be the only motives
for lending.
In a country
which had acquired
its full complement
of riches,
where,
in every particular branch
of business,
there
was the greatest quantity
of stock
that could be employed in it,
as the ordinary rate
of clear profit
would be very small,
so the usual market rate
of interest
which could be afforded
out of it
would be so low
as to render
it impossible for any
but the very wealthiest people
to live
upon the interest
of their money.
All people of small
or middling fortunes
would be obliged
to superintend
themselves
the employment of their own
stocks.
It would be necessary
that almost every man
should be a man of business,
or engage
in some sort of trade.
The province of Holland
seems
to be approaching near
to this state.
It is there unfashionable
not to be a man
of business.
Necessity
makes it usual
for almost every man
to be so,
and custom
everywhere regulates fashion.
As it is ridiculous
not to dress,
so is it,
in some measure,
not to be employed
like other people.
As a man
of a civil profession
seems awkward
in a camp or a garrison,
and is even in some danger
of being despised there,
so does an idle man
among men
of business.
The highest ordinary rate
of profit
may be such as,
in the price
of the greater part
of commodities,
eats up the whole of
what
should go to the
rent of the land,
and leaves only
what is sufficient
to pay the labour of
preparing and bringing them
to market,
according to the lowest rate
at which labour
can anywhere be paid,
the bare subsistence
of the labourer.
The workman
must always have been fed
in some 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 servants
of the East India Company
carry on in Bengal
may not,
perhaps,
be very far
from this rate.
The proportion which
the usual market
rate of interest
ought to bear
to the ordinary rate
of clear profit,
necessarily
varies
as profit rises or falls.
Double
interest
is in Great Britain
reckoned what the merchants
call a good,
moderate,
reasonable profit;
terms which,
I apprehend,
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
should go
to interest,
wherever business
is carried on
with borrowed money.
The stock
is at the risk
of the borrower,
who,
as it were,
insures it to the lender;
and four
or five per cent. may,
in the greater part
of trades,
be both a sufficient profit
upon the risk
of this insurance,
and a sufficient recompence
for the trouble
of employing the stock.
But the proportion
between interest and clear
profit might not be
the same 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,
perhaps,
could not be afforded
for interest;
and more
might be afforded
if it
were a good deal higher.
In countries which
are fast advancing to riches,
the low rate of profit may,
in the price
of many commodities,
compensate
the high wages of labour,
and enable those countries
to sell
as cheap
as
their less
thriving neighbours,
among whom
the wages of labour
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-dressers,
the spinners,
the weavers,.etc.
should all of them
be advanced twopence a-day,
it would be necessary
to heighten
the price
of a piece
of linen
only by a number
of twopences equal to
the number of people
that had been employed
about it,
multiplied
by the number of days
during which
they had been so employed.
That part
of the price
of the commodity
which resolved itself
into the wages,
would,
through all
the different stages
of the manufacture,
rise only
in arithmetical proportion
to this rise 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 resolved itself
into profit
would,
through all
the different stages
of the manufacture,
rise in geometrical proportion
to this rise of profit.
The employer
of the flax dressers would,
in selling 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 the spinners
would require
an additional five per cent.
both
upon the advanced price
of the flax,
and upon the wages
of the spinners.
And the employer
of the weavers
would require
alike five per cent.
both
upon the advanced price
of the linen-yarn,
and upon the wages
of the weavers.
In raising
the price of commodities,
the rise of wages
operates
in the same
manner as simple
interest
does in the accumulation
of debt.
The rise of profit
operates
like compound interest.
Our merchants
and master manufacturers
complain much
of the bad effects
of high wages
in raising the price,
and thereby lessening
the sale of their goods,
both at home and abroad.
They say nothing
concerning the bad effects
of high profits;
they
are silent
with regard to
the pernicious effects
of their own gains;
they complain only of those
of other people.
OF WAGES AND PROFIT
IN THE DIFFERENT EMPLOYMENTS
OF LABOUR AND STOCK.
The whole
of the advantages
and disadvantages
of the different employments
of labour and stock,
must,
in the same neighbourhood,
be either
perfectly equal,
or continually tending
to equality.
If,
in the same neighbourhood,
there
was any employment
evidently either more
or less advantageous
than the rest,
so many people
would crowd into it
in the one case,
and so many
would desert it
in the other,
that its advantages
would soon return
to the level
of other employments.
This,
at least,
would be
the case in a society
where things were left
to follow
their natural course,
where there was perfect liberty,
and where every man
was perfectly free both
to choose what occupation
he thought proper,
and to change
it as often as he
thought proper.
Every man's interest
would prompt him
to seek the advantageous,
and to shun
the disadvantageous employment.
Pecuniary wages
and profit,
indeed,
are everywhere
in Europe extremely different,
according to
the different employments
of labour and stock.
But this difference
arises,
partly from certain circumstances
in the employments themselves,
which,
either really,
or at least
in the imagination of men,
make up
for a small pecuniary gain
in some,
and counterbalance
a great one in others,
and partly from the policy
of Europe,
which nowhere leaves things
at perfect liberty.
The particular consideration
of those circumstances,
and of that policy,
will divide this Chapter
into two parts.
Inequalities
arising
from the nature
of the
employments themselves.
The five
following
are
the principal circumstances which,
so far as I have been
able
to observe,
make up
for a small pecuniary gain
in some employments,
and counterbalance
a great one in others.
First,
the agreeableness
or disagreeableness
of the employments themselves;
secondly,
the easiness and cheapness,
or the difficulty and expense
of learning them;
thirdly,
the constancy or inconstancy
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 labour
vary with the ease
or hardship,
the cleanliness or dirtiness,
the honourableness
or dishonourableness,
of the employment.
Thus in most places,
take the year round,
a journeyman tailor
earns
less than
a journeyman weaver.
His work
is much easier.
A journeyman weaver
earns
less than a journeyman smith.
His work
is not always easier,
but it is much cleanlier.
A journeyman blacksmith,
though an artificer,
seldom
earns so much
in twelve hours,
as a collier,
who is only a labourer,
does in eight.
His work
is not quite so dirty,
is less dangerous,
and is carried on
in day-light,
and above ground.
Honour
makes a great part
of the reward
of all honourable professions.
In point of pecuniary gain,
all things considered,
they
are generally under-recompensed,
as I shall endeavour
to shew by and by.
Disgrace
has the contrary effect.
The trade of a butcher
is a brutal
and an odious business;
but it
is in most places
more profitable
than the greater part
of common trades.
The most detestable
of all employments,
that of public executioner,
is, in proportion
to the quantity of work done,
better
paid than any common trade
whatever.
Hunting
and fishing,
the most important employments
of mankind
in the rude state
of society,
become,
in its advanced state,
their most agreeable amusements,
and they pursue
for pleasure
what they
once followed
from necessity.
In the advanced state
of society,
therefore,
they
are all very poor people
who follow as a trade,
what other people
pursue as a pastime.
Fishermen
have been so since the time
of Theocritus.
(See Idyllium xxi.)
A poacher
is everywhere
a very poor man
in Great Britain.
In countries
where the rigour of the law
suffers no poachers,
the licensed hunter
is not
in a much better condition.
The natural taste
for those employments
makes more people
follow them,
than
can live comfortably by them;
and the produce
of their labour,
in proportion to its quantity,
comes always too cheap
to market,
to afford
any thing
but the most scanty subsistence
to the labourers.
Disagreeableness and disgrace affect
the profits
of stock
in the same manner
as the wages of labour.
The keeper
of an inn or tavern,
who is never master
of his own house,
and who
is exposed
to the brutality
of every drunkard,
exercises
neither
a very agreeable nor
a very creditable business.
But there is
scarce any common trade
in which a small stock yields
so great a profit.
Secondly,
the wages of labour
vary with the easiness
and cheapness,
or the difficulty and expense,
of learning the business.
When any expensive 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
the ordinary profits.
A man
educated
at the expense
of much labour
and time to any
of those employments which
require
extraordinary dexterity
and skill,
may be compared
to one
of those expensive machines.
The work which
he learns
to perform,
it must be expected,
over and above
the usual wages
of common labour,
will replace to him
the whole expense
of his education,
with at least
the ordinary profits
of an equally valuable capital.
It must do this
too in a reasonable time,
regard being had
to the very uncertain duration
of human life,
in the same manner
as
to the more certain duration
of the machine.
The difference
between the wages
of skilled labour and those
of common labour,
is founded
upon this principle.
The policy of Europe
considers
the labour of all mechanics,
artificers,
and manufacturers,
as skilled labour;
and that
of all
country labourers us
common labour.
It seems to suppose
that of the former
to be
of a more nice
and delicate nature
than
that of the latter.
It
is so perhaps in some cases;
but in the greater part
it is quite otherwise,
as I shall endeavour
to shew by and by.
The laws and customs
of Europe,
therefore,
in order to
qualify any person
for exercising
the one species of labour,
impose the necessity
of an apprenticeship,
though with different degrees
of rigour
in different places.
They leave
the other free
and open to every body.
During the continuance
of the apprenticeship,
the whole labour
of the apprentice
belongs to his master.
In the meantime
he must,
in many cases,
be maintained
by his parents or relations,
and, in almost all cases,
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 usual number of years;
a consideration which,
though it
is not always advantageous
to the master,
on account
of the usual idleness
of apprentices,
is always disadvantageous
to the apprentice.
In country labour,
on the contrary,
the labourer,
while he
is employed about the easier,
learns
the more difficult parts
of his business,
and his own labour
maintains him through all
the different stages
of his employment.
It is reasonable,
therefore,
that in Europe
the wages of mechanics,
artificers,
and manufacturers,
should be somewhat higher
than those
of common labourers.
They
are so accordingly,
and their superior gains
make them,
in most places,
be considered
as a superior rank
of people.
This superiority,
however,
is generally very small:
the daily or weekly earnings
of journeymen
in the more common sorts of
manufactures,
such as those
of plain linen
and woollen cloth,
computed at an average,
are, in most places,
very little more than
the day-wages
of common labourers.
Their employment,
indeed,
is more steady and uniform,
and the superiority
of their earnings,
taking
the whole year together,
may be somewhat greater.
It seems evidently,
however,
to be no greater than
what is sufficient
to compensate
the superior expense
of their education.
Education
in the ingenious arts,
and in the liberal professions,
is still
more tedious and expensive.
The pecuniary recompence,
therefore,
of painters and sculptors,
of lawyers and physicians,
ought to be
much more liberal;
and it is so accordingly.
The profits of stock
seem
to be very little
affected
by the easiness
or difficulty of learning
the trade
in which it is employed.
All
the different ways in which
stock is commonly employed
in great
towns seem,
in reality,
to be almost equally
easy and equally difficult
to learn.
One branch,
either
of foreign or domestic trade,
cannot well be
a much more intricate business
than another.
Thirdly,
the wages
of labour in different
occupations
vary with the constancy
or inconstancy
of employment.
Employment
is much more constant
in some trades than
in others.
In the greater part of
manufactures,
a journeyman maybe pretty sure
of employment
almost every day in the year
that he is able
to work.
A mason 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 occasional calls
of his customers.
He is liable,
in consequence,
to be frequently without any.
What he earns,
therefore,
while he is employed,
must not only maintain him
while he
is idle,
but make him some compensation
for those anxious
and desponding moments which
the thought of so precarious
a situation
must sometimes occasion.
Where the computed earnings
of the greater part
of manufacturers,
accordingly,
are nearly
upon a level
with the day-wages
of common labourers,
those
of masons and bricklayers
are generally
from one-half more
to double those wages.
Where common
labourers
earn four
or five shillings a-week,
masons and bricklayers
frequently earn seven and eight;
where the former
earn six,
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 species of skilled labour,
however,
seems more easy
to learn than
that
of masons and bricklayers.
Chairmen in London,
during the summer season,
are said sometimes
to be employed as
bricklayers.
The high wages
of those workmen,
therefore,
are not so much
the recompence of their skill,
as the compensation
for the inconstancy
of their employment.
A house-carpenter
seems
to exercise
rather a nicer and
a more ingenious trade
than a mason.
In most places,
however,
for it
is not universally so,
his day-wages
are somewhat lower.
His employment,
though it depends much,
does not depend so entirely
upon the occasional calls
of his customers;
and it is not liable
to be interrupted
by the weather.
When the trades which
generally afford
constant employment,
happen in a particular place
not to do so,
the wages of the workmen
always rise
a good deal above
their ordinary proportion
to those
of common labour.
In London,
almost all journeymen
artificers are liable
to be called upon
and dismissed
by their masters
from day to day,
and from week to week,
in the same
manner as day-labourers
in other places.
The lowest order
of artificers,
journeymen tailors,
accordingly,
earn
their half-a-crown a-day,
though eighteen pence
may be reckoned
the wages of common labour.
In small towns
and country villages,
the wages of journeymen
tailors frequently
scarce equal those
of common labour;
but in London
they are often many weeks
without employment,
particularly during the summer.
When
the inconstancy
of employment
is combined with the hardship,
disagreeableness,
and dirtiness of the work,
it sometimes raises the wages
of the
most common
labour above those
of the most skilful artificers.
A collier
working by the piece
is supposed,
at Newcastle,
to earn commonly about double,
and,
in many parts of Scotland,
about three times,
the wages of common labour.
His high wages
arise altogether
from the hardship,
disagreeableness,
and dirtiness of his work.
His employment may,
upon most occasions,
be as constant as he
pleases.
The coal-heavers in London
exercise a trade which,
in hardship,
dirtiness,
and disagreeableness,
almost
equals that of colliers;
and,
from the unavoidable irregularity
in the arrivals
of coal-ships,
the employment
of the greater part
of them
is necessarily very inconstant.
If colliers,
therefore,
commonly
earn
double and triple the wages
of common labour,
it ought not
to seem unreasonable
that coal-heavers
should sometimes earn four
and five
times those wages.
In 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 six
to ten shillings a-day.
Six shillings
are about four times
the wages
of common labour in London;
and,
in every particular trade,
the lowest common earnings
may always be considered
as those
of the far greater number.
How extravagant
soever those earnings
may appear,
if they
were more than sufficient
to compensate all
the disagreeable circumstances
of the business,
there
would soon be so great
a number of competitors,
as,
in a trade
which has no
exclusive privilege,
would quickly reduce them
to a lower rate.
The constancy or inconstancy
of employment
cannot affect
the ordinary profits
of stock
in any particular trade.
Whether
the stock
is
or is not constantly employed,
depends,
not upon the trade,
but the trader.
Fourthly,
the wages of labour
vary according to
the small or great trust which
must be reposed
in the workmen.
The wages
of goldsmiths and jewellers
are everywhere superior
to those
of many other workmen,
not only of equal,
but of much superior ingenuity,
on account
of the precious materials
with which they
are entrusted.
We trust our health
to the physician,
our fortune,
and sometimes our life
and reputation,
to the lawyer and attorney.
Such confidence
could not safely be reposed
in people
of a very mean
or low condition.
Their reward
must be such,
therefore,
as may give them
that rank
in the society which
so important
a trust requires.
The long time
and the great expense
which must be laid out
in their education,
when combined
with this circumstance,
necessarily
enhance still
further the price
of their labour.
When
a person
employs only
his own stock in trade,
there
is no trust;
and the credit which
he may get from other people,
depends,
not upon the nature
of the trade,
but upon their opinion
of his fortune,
probity and prudence.
The different rates of profit,
therefore,
in the different branches
of trade,
cannot arise
from the different degrees
of trust reposed
in the traders.
Fifthly,
the wages
of labour in different
employments
vary according to
the probability
or improbability
of success
in them.
The probability
that any particular person
shall ever be qualified
for the employments
to which he is educated,
is very different
in different occupations.
In the greatest part
of mechanic trades
success is almost certain;
but very uncertain
in the liberal professions.
Put your son apprentice
to a shoemaker,
there
is little doubt
of his learning
to make a pair of shoes;
but send him
to study the law,
it as at least twenty
to one
if he
ever makes such proficiency as
will enable him
to live by the business.
In a perfectly fair lottery,
those who draw the prizes
ought to gain all
that is lost by those
who draw the blanks.
In a profession,
where twenty
fail for one
that succeeds,
that one ought to gain
all that
should have been gained
by the unsuccessful twenty.
The counsellor at law,
who,
perhaps,
at near forty years of age,
begins
to make something
by his profession,
ought to receive
the retribution,
not only of his own
so tedious
and expensive education,
but of
that of more than
twenty others,
who are never likely
to make any thing by it.
How extravagant
soever
the fees
of counsellors at law
may sometimes 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
to be annually spent,
by all
the different workmen in
any common trade,
such as
that of shoemakers or weavers,
and you will find
that the former sum
will generally exceed
the latter.
But make the same computation
with regard to all
the counsellors
and students
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 honourable professions,
is, in point
of pecuniary gain,
evidently under-recompensed.
Those professions keep
their level,
however,
with other occupations;
and,
notwithstanding
these discouragements,
all
the most generous and liberal
spirits are eager
to crowd into them.
Two different causes
contribute to recommend them.
First,
the desire of the reputation
which attends
upon superior excellence in any
of them;
and, secondly,
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 profession,
in which but few
arrive at mediocrity,
it is the most decisive mark
of
what is called genius,
or superior talents.
The public admiration which
attends
upon such distinguished
abilities makes always a part
of their reward;
a greater or smaller,
in proportion
as it
is higher or lower
in degree.
It makes a considerable part
of that reward
in the profession of physic;
a still greater,
perhaps,
in that of law;
in poetry and philosophy
it makes almost the whole.
There
are
some very agreeable and beautiful talents,
of which
the possession
commands a certain sort
of admiration,
but of which the exercise,
for the sake of gain,
is considered,
whether from reason
or prejudice,
as a sort
of public prostitution.
The pecuniary recompence,
therefore,
of those
who exercise them
in this manner,
must be sufficient,
not only
to pay for the time,
labour,
and expense
of acquiring the talents,
but for the discredit
which attends
the employment of them
as the means of subsistence.
The exorbitant rewards
of players,
opera-singers,
opera-dancers,.etc.
are founded
upon those two principles;
the rarity and beauty
of the talents,
and the discredit
of employing them
in this manner.
It seems absurd
at first sight,
that we
should despise their persons,
and yet reward their talents
with the
most profuse liberality.
While we
do the one,
however,
we must
of necessity do the other,
Should the public opinion
or prejudice
ever alter
with regard to
such occupations,
their pecuniary recompence
would quickly diminish.
More people
would apply to them,
and
the competition
would quickly reduce the price
of their labour.
Such talents,
though far from being common,
are by no means so rare
as
imagined.
Many people
possess them in great perfection,
who disdain
to make this use of them;
and many more
are capable of acquiring them,
if any thing
could be made honourably
by them.
The over-weening conceit which the greater part
of men
have of their own abilities,
is an ancient evil remarked
by the philosophers
and moralists
of all ages.
Their absurd presumption
in their own
good fortune
has been less
taken
notice of.
It is,
however,
if possible,
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 loss
is by most 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 overvalued,
we may learn
from the universal success
of lotteries.
The world neither
ever saw,
nor ever will see,
a perfectly fair lottery,
or one
in which
the whole gain
compensated the whole loss;
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 sell
in the market for twenty,
thirty,
and sometimes
forty per cent. advance.
The vain hopes
of gaining some of the
great prizes
is the sole cause
of this demand.
The soberest people
scarce look
upon it
as a folly
to pay a small sum
for the chance
of gaining ten
or twenty thousand pounds,
though they know that even
that small sum
is perhaps twenty
or thirty per cent.
more than the chance
is worth.
In a lottery
in which no prize
exceeded twenty pounds,
though
in other respects it approached
much nearer
to a perfectly fair one
than the common state lotteries,
there
would not be
the same demand for tickets.
In order to
have a better chance
for some of the great prizes,
some people purchase several tickets;
and others,
small
shares in a still
greater number.
There
is not,
however,
a more certain proposition
in mathematics,
than that
the more tickets you
adventure upon,
the more likely
you are
to be a loser. Adventure
upon all
the tickets in the lottery,
and you lose for certain;
and the greater
the number of your tickets,
the nearer you
approach to this certainty.
That the chance of loss
is frequently undervalued,
and scarce ever valued
more than it
is worth,
we may learn
from the very moderate profit
of insurers.
In order to make insurance,
either
from fire or sea-risk,
a trade at all,
the common premium
must be sufficient
to compensate
the common losses,
to pay the expense
of management,
and to afford such
a profit as
might have been drawn
from an equal capital
employed in any common trade.
The person
who pays no more than this,
evidently
pays no
more than the real value
of the risk,
or the lowest price
at which he
can reasonably expect
to insure it.
But though many people
have made a little money
by insurance,
very few
have made a great fortune;
and,
from this consideration alone,
it seems
evident enough that
the ordinary balance
of profit and loss
is not more advantageous
in this
than in other common trades,
by which so many people
make fortunes.
Moderate,
however,
as the premium
of insurance commonly is,
many people
despise the risk too much
to care to pay it.
Taking the whole kingdom
at an average,
nineteen
houses in twenty,
or rather,
perhaps,
ninety-nine in a hundred,
are not insured from fire.
Sea-risk
is more alarming
to the greater part
of people;
and the proportion
of ships insured to those
not insured
is much greater.
Many sail,
however,
at all seasons,
and even in time
of war,
without any insurance.
This
may sometimes,
perhaps,
be done without any
imprudence.
When a great company,
or even a great merchant,
has twenty or thirty ships
at sea,
they may,
as it were,
insure one another.
The premium
saved up
on them all
may more than compensate
such losses
as they
are likely
to meet with
in the common course
of chances.
The neglect of insurance
upon shipping,
however,
in the same manner
as upon houses,
is, in most cases,
the effect
of no such nice calculation,
but of mere thoughtless rashness,
and presumptuous contempt
of the risk.
The contempt of risk,
and the presumptuous hope
of success,
are in no period of life
more active
than at the age
at which young people
choose their professions.
How little
the fear of misfortune
is then capable
of balancing the hope
of good luck,
appears still more evidently
in the readiness
of the common people
to enlist as soldiers,
or to go to sea,
than in the eagerness
of those
of better fashion
to enter into what are called
the liberal professions.
What a common
soldier may lose
is obvious enough.
Without regarding the danger,
however,
young volunteers
never enlist so readily
as at the beginning
of a new war;
and though they
have scarce any chance
of preferment,
they figure to themselves,
in their youthful
fancies,
a thousand occasions
of acquiring honour
and distinction which
never occur.
These romantic hopes
make the whole price
of their blood.
Their pay
is less than
that of common labourers,
and, in actual service,
their fatigues
are much greater.
The lottery of the sea
is not altogether
so disadvantageous
as
that of the army.
The son
of a creditable labourer
or artificer
may frequently go to sea
with his father's consent;
but
if he enlists as a soldier,
it is always without it.
Other people
see some chance
of his making something
by the one trade;
nobody
but himself
sees any of his making
any thing by the other.
The great admiral
is less the object
of public admiration
than the great general;
and the highest success
in the sea service promises
a less
brilliant fortune
and reputation
than equal success
in the land.
The same 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 army;
but he
does not rank
with him
in the common estimation.
As the great prizes in
the lottery
are less,
the smaller
ones must be more numerous.
Common sailors,
therefore,
more frequently
get some fortune and preferment
than common soldiers;
and the hope of those prizes
is
what principally recommends
the trade.
Though
their skill and dexterity
are much superior to
that of almost any artificers;
and though
their whole life
is one continual scene
of hardship and danger;
yet for all this dexterity
and skill,
for all
those hardships and dangers,
while they
remain
in the condition
of common sailors,
they receive
scarce any other recompence
but
the pleasure of exercising
the one
and of surmounting the other.
Their wages
are not greater than
those
of common labourers
at the port
which regulates the rate
of seamen's wages.
As they
are continually going
from port to port,
the monthly pay of those
who sail 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 sail,
that is,
the port of London,
regulates
that of all the rest.
At London,
the wages
of the greater part
of the different classes
of workmen
are about double those
of the same classes
at Edinburgh.
But the sailors
who sail
from the port of London,
seldom
earn above three
or four shillings
a month
more than those
who sail
from the port of Leith,
and the difference
is frequently not so great.
In time of peace,
and in the merchant-service,
the London price
is from a guinea to
about seven-and-twenty
shillings the calendar month.
A common labourer in London,
at the rate
of nine
or ten shillings a week,
may earn
in the calendar month
from forty
to five-and-forty shillings.
The sailor,
indeed,
over and above his pay,
is supplied with provisions.
Their value,
however,
may not perhaps always exceed
the difference
between his pay and
that of the common labourer;
and though it
sometimes should,
the excess
will not be clear gain
to the sailor,
because he
cannot share it
with his wife and family,
whom
he must maintain
out of his wages at home.
The dangers and hair-breadth
escapes of a life
of adventures,
instead of disheartening
young people,
seem frequently
to recommend a trade
to them.
A tender mother,
among the inferior ranks
of people,
is often afraid
to send her son
to school at a sea-port town,
lest the sight of the ships,
and the conversation
and adventures
of the sailors,
should entice him
to go to sea.
The distant 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 labour in any employment.
It
is otherwise
with those in which courage
and address
can be of no avail.
In trades
which are known
to be very unwholesome,
the wages of labour
are always remarkably high.
Unwholesomeness
is a species
of disagreeableness,
and its effects
upon the wages of labour
are to be ranked
under that general head.
In all
the different employments
of stock,
the ordinary rate of profit
varies more or less
with the certainty or uncertainty
of the returns.
These are,
in general,
less uncertain in the inland
than in the foreign trade,
and in some 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 rises more
or less with the risk.
it does not,
however,
seem to rise in proportion
to it,
or so
as
to compensate it completely.
Bankruptcies
are most frequent
in the most hazardous trades.
The most hazardous
of all trades,
that of a smuggler,
though,
when the adventure succeeds,
it is
likewise the most profitable,
is the infallible road
to bankruptcy.
The presumptuous hope
of success
seems to act here as
upon all other occasions,
and
to entice so many adventurers
into those hazardous trades,
that
their competition
reduces the profit below
what is sufficient
to compensate the risk.
To compensate it completely,
the common returns ought,
over and above
the ordinary profits
of stock,
not only to make
up for all occasional losses,
but to afford
a surplus profit
to the adventurers,
of the same nature
with the profit of insurers.
But if the common returns
were sufficient for all this,
bankruptcies
would not be more frequent
in these than
in other trades.
Of the five circumstances,
therefore,
which
vary the wages of labour,
two only affect the profits
of stock;
the agreeableness
or disagreeableness
of the business,
and the risk or security
with which it is attended.
In point
of agreeableness 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 labour;
and the ordinary profit
of stock,
though
it rises with the risk,
does not always seem
to rise in proportion to it.
It should follow
from all this,
that,
in the same society
or neighbourhood,
the average
and ordinary rates
of profit
in the different employments
of stock
should be more nearly
upon a level
than the pecuniary wages
of the different sorts
of labour.
They
are so accordingly.
The difference
between the earnings
of a
common labourer and those
of a well employed lawyer
or physician,
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
arising from our not
always distinguishing what
ought to be considered
as wages,
from
what ought to be considered
as profit.
Apothecaries' profit
is become a bye-word,
denoting something
uncommonly extravagant.
This great apparent profit,
however,
is frequently
no more than
the reasonable wages
of labour.
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 distress or danger
is not very great.
His reward,
therefore,
ought to be suitable
to his skill and his trust;
and it arises generally
from the price
at which
he sells his drugs.
But the whole drugs which
the best employed apothecary
in a large market-town,
will sell in a year,
may not perhaps cost him above thirty
or forty pounds.
Though he should sell them,
therefore,
for three or four hundred,
or at a thousand per
cent. profit,
this
may frequently be
no more than
the reasonable wages
of his labour,
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 sea-port town,
a little grocer
will make forty
or fifty per cent.
upon a stock
of a single hundred pounds,
while
a considerable wholesale merchant
in the same place
will scarce make eight
or ten per cent.
upon a stock of ten thousand.
The trade of the grocer
may be necessary
for the conveniency
of the inhabitants,
and the narrowness
of the market
may not admit the employment
of a larger capital
in the business.
The man,
however,
must not only live
by his trade,
but live by it
suitably to the
qualifications which
it requires.
Besides
possessing a little capital,
he must be able to read,
write,
and account
and must be
a tolerable judge, too,
of perhaps fifty
or sixty different sorts
of goods,
their prices,
qualities,
and the markets
where they
are to be had cheapest.
He must have
all the knowledge,
in short,
that is necessary
for a great merchant,
which nothing
hinders him from becoming
but the want
of a sufficient capital.
Thirty or forty pounds
a year
cannot be considered
as too great a recompence
for the labour of a
person so accomplished.
Deduct
this
from the seemingly great profits
of his capital,
and little more will remain,
perhaps,
than the ordinary profits
of stock.
The greater
part
of the apparent profit is,
in this case too,
real wages.
The difference
between the apparent profit
of the retail and
that of the wholesale trade,
is much less in the capital
than in small towns
and country villages.
Where ten thousand pounds
can be employed
in the grocery trade,
the wages
of the grocer's labour
must be
a very trifling addition
to the real profits
of so great a stock.
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
sold 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 butchers' meat
frequently
as cheap.
It costs
no more
to bring grocery goods
to the great town than
to the country village;
but it
costs
a great deal more to bring corn
and cattle,
as the greater part of them
must be brought
from a much greater distance.
The prime cost
of grocery goods,
therefore,
being
the same in both places,
they
are cheapest where
the least profit
is charged upon them.
The prime cost of bread
and butchers' meat
is greater
in the great town than
in the country village;
and though
the profit is less,
therefore they
are not always cheaper
there,
but often equally cheap.
In such articles as bread
and butchers' meat,
the same cause
which diminishes apparent profit,
increases prime cost.
The extent of the market,
by giving employment
to greater stocks,
diminishes apparent profit;
but by requiring supplies
from a greater distance,
it increases prime cost.
This diminution of the one
and increase of the other,
seem,
in most cases,
nearly to
counterbalance one another;
which is probably
the reason that,
though the prices
of corn and cattle
are commonly very different
in different parts
of the kingdom,
those of bread
and butchers' meat
are generally very nearly
the same
through the greater part
of it.
Though the profits of stock,
both in the wholesale
and retail trade,
are generally less in
the capital
than in small towns
and country villages,
yet great fortunes
are frequently acquired
from small beginnings
in the former,
and scarce
ever in the latter.
In small towns
and country villages,
on account
of the narrowness
of the market,
trade
cannot always be extended
as stock
extends.
In such places,
therefore,
though the rate
of a particular person's profits
may be very high,
the sum or amount of them
can never be very great,
nor consequently
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 faster
than his stock.
His trade
is extended
in proportion
to the amount of both;
and the sum or amount
of his profits
is in proportion
to the extent of his trade,
and his annual accumulation
in proportion
to the amount
of his profits.
It seldom
happens,
however,
that
great fortunes are made,
even in great towns,
by any one regular,
established,
and well-known branch
of business,
but in consequence
of a long life of industry,
frugality,
and attention.
Sudden fortunes,
indeed,
are sometimes made
in such places,
by
what is called
the trade of speculation.
The speculative merchant
exercises no one
regular,
established,
or well-known branch
of business.
He is a corn
merchant this year,
and a wine merchant the next,
and a sugar,
tobacco,
or tea merchant the year
after.
He enters into every trade,
when he
foresees
that it
is likely
to lie
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 losses,
therefore,
can bear no regular proportion
to those
of any one established
and well-known branch
of business.
A bold adventurer
may sometimes acquire
a considerable fortune
by two
or
three successful speculations,
but is just
as likely to lose one
by two
or three unsuccessful ones.
This trade
can be carried on nowhere
but in great towns.
It is only
in places
of the most extensive commerce
and correspondence
that
the intelligence requisite
for it
can be had.
The five circumstances
above mentioned,
though they
occasion
considerable inequalities
in the wages
of labour and profits
of stock,
occasion none
in the whole
of the advantages
and disadvantages,
real or imaginary,
of the different employments
of either.
The nature
of those circumstances
is such,
that
they make up
for a small pecuniary gain
in some,
and counterbalance
a great one in others.
In order,
however,
that
this equality
may take place
in the whole
of their advantages
or disadvantages,
three things
are requisite,
even
where there is
the most perfect freedom.
First the employments
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 sole
or principal employments
of those who
occupy them.
First,
This equality
can take place only
in those employments
which are well known,
and have been long established
in the neighbourhood.
Where all other
circumstances 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 considerable time
must pass away before he
can venture
to reduce them
to the common level.
Manufactures
for which the demand
arises altogether
from fashion
and fancy,
are continually changing,
and seldom last long enough
to be considered
as old established
manufactures.
Those,
on the contrary,
for which
the demand
arises chiefly
from use or necessity,
are less liable
to change,
and the same form or fabric
may continue
in demand
for whole centuries together.
The wages of labour,
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 wages
of labour
in those two different places
are said
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
promises himself
extraordinary profits.
These profits
sometimes are very great,
and sometimes,
more frequently,
perhaps,
they
are quite otherwise;
but,
in general,
they bear no
regular proportion
to those of other old
trades in the neighbourhood.
If the project succeeds,
they are commonly
at first very high.
When the trade or practice
becomes thoroughly
established and well known,
the competition
reduces them to the level
of other trades.
Secondly,
this equality
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock,
can take place only
in the ordinary,
or what
may be called
the natural state
of those employments.
The demand
for almost every different
species of labour
is sometimes greater,
and sometimes less than usual.
In the one case,
the advantages
of the employment
rise above,
in the other
they fall
below the common level.
The demand for country labour
is greater at hay-time
and harvest than
during the greater part
of the year;
and wages rise
with the demand.
In time of war,
when forty
or fifty thousand sailors
are forced
from the merchant service into
that of the king,
the demand
for sailors
to merchant ships necessarily
rises with their scarcity;
and their wages,
upon such occasions,
commonly rise
from a guinea
and seven-and-twenty shillings
to forty shilling's
and three pounds a-month.
In a decaying manufacture,
on the contrary,
many workmen,
rather than quit
their own trade,
are contented
with smaller wages than
would otherwise be suitable
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
rises above
the ordinary or average rate,
the profits of at least
some part of the stock
that is employed
in bringing
it to market,
rise above their proper level,
and as it falls
they sink below it.
All commodities
are more or less liable
to variations of price,
but some
are much more so
than others.
In all
commodities
which are produced
by human industry,
the quantity of industry
annually employed
is necessarily regulated
by the annual demand,
in such
a manner that
the average annual produce may,
as nearly as possible,
be equal to
the average annual consumption.
In some employments,
it has already been observed,
the same quantity of industry
will always produce the same,
or very nearly
the same quantity
of commodities.
In the linen or woollen
manufactures,
for example,
the same number of hands
will annually work
up very nearly
the same quantity
of linen and woollen cloth.
The variations
in the market price
of such commodities,
therefore,
can arise only
from some accidental variation
in the demand.
A public mourning raises
the price
of black cloth.
But as the demand
for most sorts of plain linen
and woollen cloth
is pretty uniform,
so is likewise the price.
But there are
other employments in which
the same quantity of industry
will not always produce
the same quantity
of commodities.
The same quantity of industry,
for example,
will,
in different years,
produce
very different quantities
of corn,
wine,
hops,
sugar tobacco,.etc.
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 some of the dealers
must necessarily 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 foresees that
their price
is likely
to rise,
and to sell them
when it is likely
to fall.
Thirdly,
this equality
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock,
can take place only
in such as
are the sole
or principal employments
of those
who occupy them.
When
a person
derives his subsistence
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 less wages
than
would otherwise suit
the nature
of the employment.
There
still subsists,
in many parts of Scotland,
a set
of people called cottars
or cottagers,
though they
were
more frequent some years ago
than
they
are now.
They
are a sort
of out-servants
of the landlords and farmers.
The usual reward which
they receive from their master
is a house,
a small garden for pot-herbs,
as much grass as will feed
a cow,
and, perhaps,
an acre or two
of bad arable land.
When
their master
has occasion for their labour,
he gives them,
besides,
two pecks
of oatmeal a-week,
worth
about sixteen pence sterling.
During a great part
of the year,
he has little
or no occasion
for their labour,
and the cultivation
of their own
little possession
is not sufficient
to occupy
the time
which is left
at their own disposal.
When such occupiers
were more numerous than
they are at present,
they
are said
to have been willing
to give their spare time
for a very small recompence
to any body,
and to have wrought
for less wages
than other labourers.
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 farmers
could not otherwise provide themselves
with the extraordinary number
of hands
which country labour
requires at certain seasons.
The daily or weekly
recompence
which such labourers
occasionally received
from their masters,
was evidently not
the whole price
of their labour.
Their small tenement
made a considerable part
of it.
This daily
or weekly recompence,
however,
seems
to have been considered
as the whole of it,
by many
writers
who have collected the prices
of labour and provisions
in ancient times,
and who
have taken pleasure in
representing
both as wonderfully low.
The produce of such labour
comes frequently cheaper
to market than
would otherwise be suitable
to its nature.
Stockings,
in many parts of Scotland,
are knit much cheaper than
they can anywhere be wrought
upon the loom.
They are the work
of servants and labourers
who derive the principal part
of their subsistence
from some other employment.
More than a thousand pair
of Shetland stockings
are annually imported
into Leith,
of which
the price
is from fivepence
to seven-pence a pair.
At Lerwick,
the small capital
of the Shetland islands,
tenpence a-day,
I have been assured,
is a common price
of common labour.
In the same islands,
they knit worsted stockings
to the value
of a guinea a pair
and upwards.
The spinning of linen yarn
is carried on
in Scotland
nearly in the same way
as the knitting of stockings,
by servants,
who are chiefly hired
for other purposes.
They earn
but a very scanty subsistence,
who endeavour
to get their livelihood
by either of those trades.
In most parts of Scotland,
she is a good spinner
who can earn
twentypence a-week.
In opulent countries,
the market
is generally so extensive,
that any one trade
is sufficient
to employ the whole labour
and stock of those
who occupy it.
Instances
of people living
by one employment,
and,
at the same time,
deriving some
little advantage from another,
occur chiefly in pour
countries.
The following instance,
however,
of something
of the same kind,
is to be found
in the capital
of a very rich one.
There
is no city in Europe,
I believe,
in which
house-rent
is dearer than in London,
and yet
I know no capital
in which a furnished apartment
can be hired so cheap.
Lodging
is not only much cheaper
in London than
in Paris;
it is much cheaper than
in Edinburgh,
of the same degree
of goodness;
and,
what may seem extraordinary,
the dearness of house-rent
is the cause of the cheapness
of lodging.
The dearness of house-rent
in London
arises,
not
only from those causes which
render it
dear in all great capitals,
the dearness of labour,
the dearness
of all the materials
of building,
which
must generally be brought
from a great distance,
and, above all,
the dearness of ground-rent,
every landlord
acting the part
of a monopolist,
and frequently exacting
a higher rent
for a single 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 contained
under the same roof.
In France,
Scotland,
and many other parts
of Europe,
it frequently means no
more than a single storey.
A tradesman in London
is obliged
to hire
a whole house
in that part
of the town
where his customers live.
His shop
is upon the ground floor,
and he and his family
sleep in the garret;
and he endeavours
to pay a part
of his house-rent
by letting
the two middle storeys
to lodgers.
He expects
to maintain his family
by his trade,
and not by his lodgers.
Whereas
at Paris and Edinburgh,
people who let lodgings
have commonly no other means
of subsistence;
and the price of the lodging
must pay,
not only
the rent of the house,
but the whole expense
of the family.
Inequalities
occasioned
by the Policy of Europe.
Such
are the inequalities
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock,
which
the defect
of any of the
three requisites
above mentioned
must occasion,
even
where there is
the most perfect liberty.
But the policy of Europe,
by not leaving things
at perfect liberty,
occasions other inequalities
of much greater importance.
It does this
chiefly in the
three following ways.
First,
by restraining the competition
in some employments
to a smaller number than
would otherwise be disposed
to enter into them;
secondly,
by increasing
it in others beyond what
it naturally would be;
and, thirdly,
by obstructing
the free circulation
of labour and stock,
both from employment
to employment,
and from place to place.
First,
The policy of Europe
occasions
a very important inequality
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock,
by restraining the competition
in some employments
to a smaller number than
might otherwise be disposed
to enter into them.
The exclusive privileges
of corporations
are the principal
means it makes use of
for this purpose.
The exclusive privilege
of an
incorporated trade necessarily
restrains the competition,
in the town
where it is established,
to those
who are free of the trade.
To have served
an apprenticeship
in the town,
under a master
properly qualified,
is commonly
the necessary requisite
for obtaining this freedom.
The bye-laws
of the corporation
regulate sometimes the number
of apprentices
which any master
is allowed
to have,
and almost always
the number of years
which each apprentice
is obliged
to serve.
The intention
of both regulations
is to restrain the competition
to a much smaller number
than
might otherwise be disposed
to enter into the trade.
The limitation
of the number of apprentices
restrains it directly.
A long term of apprenticeship
restrains it more indirectly,
but as effectually,
by increasing
the expense of education.
In Sheffield,
no master cutler can have
more than one apprentice
at a time,
by a bye-law
of the corporation.
In Norfolk and Norwich,
no master weaver can have
more than two apprentices,
under pain
of forfeiting five pounds a-month
to the king.
No master hatter can have
more than two apprentices
anywhere in England,
or in the English plantations,
under pain
of forfeiting;
five pounds a-month,
half to the king,
and half
to him
who shall sue
in any court of record.
Both these regulations,
though they
have been confirmed
by a public law
of the kingdom,
are evidently dictated
by the same corporation-spirit
which enacted the bye-law
of Sheffield.
The silk-weavers in London
had scarce
been incorporated a year,
when they enacted a bye-law,
restraining any master
from having
more than two apprentices
at a time.
It required a particular act
of parliament
to rescind this bye-law.
Seven years
seem anciently
to have been,
all over Europe,
the usual term
established
for the duration
of apprenticeships
in the greater part
of incorporated trades.
All such incorporations
were anciently called
universities,
which,
indeed,
is the proper Latin name
for any incorporation
whatever.
The university of smiths,
the university
of tailors,.etc.
are expressions which
we commonly meet with
in the old charters
of ancient towns.
When those
particular incorporations,
which
are now peculiarly called
universities,
were first established,
the term of years
which it was necessary
to study,
in order to
obtain the degree
of master of arts,
appears evidently
to have been copied
from the term
of apprenticeship
in common trades,
of which the incorporations
were much more ancient.
As to have wrought seven years
under a master
properly qualified,
was necessary,
in order to
entitle
my person
to become a master,
and to have himself apprentices
in a common trade;
so to have studied seven years
under a master
properly qualified,
was necessary
to entitle him
to become
a master,
teacher,
or doctor
(words anciently synonymous),
in the liberal arts,
and to have scholars
or apprentices
(words
likewise
originally synonymous)
to study under him.
By the 5th of Elizabeth,
commonly
called
the Statute of Apprenticeship,
it was enacted,
that no person
should,
for the future,
exercise any trade,
craft,
or mystery,
at that time
exercised in England,
unless he
had previously served to it
an apprenticeship
of seven years at least;
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 statute
are very general,
and seem 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 person
may exercise several
different trades,
though he
has not served
a seven years apprenticeship
to each,
they
being necessary
for the conveniency
of the inhabitants,
and the number of people
frequently
not being sufficient
to supply each
with a particular set
of hands.
By a strict interpretation
of the words, too,
the operation of this statute
has been limited
to those trades
which were established
in England
before the 5th of Elizabeth,
and has never been
extended to such as
have been introduced
since that time.
This limitation
has given occasion
to several distinctions,
which,
considered as rules of police,
appear as foolish
as can well be imagined.
It has been adjudged,
for example,
that
a coach-maker
can
neither himself make nor employ
journeymen
to make his coach-wheels,
but must buy them
of a master 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 coachmaker,
may
either himself make
or employ journeymen
to make coaches;
the trade of a coachmaker
not being within the statute,
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 statute,
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 master,
he must,
in many of them,
serve
five years more
as a journeyman.
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
regulates universally
the duration
of apprenticeships.
The term
is different
in different corporations.
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 sufficient
to purchase the freedom
of any corporation.
The weavers
of linen and hempen cloth,
the principal
manufactures of the country,
as well as all
other artificers subservient
to them,
wheel-makers,
reel-makers,.etc.
may exercise their trades
in any town-corporate
without paying any fine.
In all towns-corporate,
all persons
are free
to sell
butchers' meat
upon any lawful day
of the week. Three years is,
in Scotland,
a common term
of apprenticeship,
even in some very nice trades;
and, in general,
I know
of no country in Europe,
in which corporation
laws are so little oppressive.
The property
which every man
has in his own labour,
as it
is the original foundation
of all other property,
so it
is
the most sacred and inviolable.
The patrimony of a poor man
lies in the strength
and dexterity
of his hands;
and to hinder him
from employing
this strength and dexterity
in what manner
he thinks proper,
without injury
to his neighbour,
is
a plain violation
of this most sacred property.
It is a manifest 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 he
is fit to be employed,
may surely be trusted
to the discretion
of the employers,
whose interest it so much
concerns.
The affected anxiety
of the lawgiver,
lest they
should employ
an improper person,
is evidently as impertinent
as it is oppressive.
The institution of long
apprenticeships
can give no
security
that insufficient workmanship
shall not frequently be exposed
to public sale.
When this is done,
it is generally
the effect of fraud,
and not of inability;
and the longest apprenticeship
can give no security
against fraud.
Quite
different regulations
are necessary
to prevent this abuse.
The sterling mark upon plate,
and the stamps
upon linen and woollen cloth,
give
the purchaser much greater
security
than any statute
of apprenticeship.
He generally looks at these,
but never thinks
it worth while
to enquire whether
the workman
had served
a seven years apprenticeship.
The institution 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 apprentice
is likely
to be idle,
and almost
always is so,
because he
has no immediate interest
to be otherwise.
In the inferior employments,
the sweets of labour
consist altogether
in the recompence of labour.
They
who are soonest
in a condition
to enjoy the sweets of it,
are likely soonest
to conceive a relish
for it,
and to acquire
the early habit
of industry.
A young man
naturally conceives
an aversion
to labour,
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 usual number of years,
and they
generally turn out very idle
and worthless.
Apprenticeships
were altogether unknown
to the ancients.
The reciprocal duties
of master and apprentice
make a considerable article
in every modern code.
The Roman law
is perfectly silent
with regard to them.
I know no Greek
or Latin word
(I might venture,
I believe,
to assert
that there is none)
which expresses the idea
we now annex
to the word apprentice,
a servant bound
to work
at a particular trade
for the benefit
of a master,
during a term of years,
upon condition
that
the master
shall teach him that trade.
Long apprenticeships
are altogether unnecessary.
The arts,
which are much superior
to common trades,
such as those
of making clocks and watches,
contain no such mystery as
to require a long course
of instruction.
The first invention
of such beautiful machines,
indeed,
and even that
of some of the instruments
employed
in making them,
must no doubt
have been
the work of deep
thought and long time,
and may justly be considered
as
among the happiest efforts
of human ingenuity.
But when both
have been fairly invented,
and are well understood,
to explain to any young man,
in the completest manner,
how to apply the instruments,
and how
to construct the machines,
cannot well require
more than
the lessons of a few weeks;
perhaps
those of a few days
might be sufficient.
In the common mechanic trades,
those of a few days
might certainly be sufficient.
The dexterity of hand,
indeed,
even in common trades,
cannot be acquired
without much practice
and experience.
But a young man
would practice
with much more diligence
and attention,
if from the beginning
he wrought as a journeyman,
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 loser.
He would lose all
the wages of the apprentice,
which he now saves,
for seven years together.
In the end,
perhaps,
the apprentice himself
would be a loser.
In a trade so 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 same increase
of competition
would reduce
the profits of the masters,
as well as the wages
of workmen.
The trades,
the crafts,
the mysteries,
would all be losers.
But the public
would be a gainer,
the work of all artificers
coming
in this way much cheaper
to market.
It is
to prevent his reduction
of price,
and consequently of wages
and profit,
by restraining that free
competition
which
would most certainly occasion 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 requisite,
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 likewise necessary.
But
this prerogative of the crown
seems to have been reserved
rather
for extorting money
from the subject,
than for the defence
of the common liberty
against such oppressive monopolies.
Upon paying
a fine to the king,
the charter
seems generally
to have been readily granted;
and when any particular class
of artificers or traders thought
proper
to act as a corporation,
without a charter,
such adulterine guilds,
as they were called,
were not always disfranchised
upon
that account,
but obliged
to fine annually to the king,
for permission
to exercise
their usurped privileges
(See Madox
Firma Burgi p. 26 etc.).
The immediate 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
discipline
was exercised over them,
proceeded commonly,
not from the king,
but from
that greater incorporation
of which those subordinate
ones were only parts
or members.
The government
of towns-corporate
was altogether
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 overstocked,
as they commonly express it,
with their own
particular species
of industry;
which is in reality
to keep it
always understocked.
Each class
was eager to establish
regulations proper
for this purpose,
and,
provided
it was allowed
to do so,
was willing to consent
that every other class
should do the same.
In consequence
of such regulations,
indeed,
each class
was obliged
to buy the goods they had
occasion for from every other
within the town,
somewhat dearer than they
otherwise might have done.
But,
in recompence,
they
were enabled
to sell their own just
as much dearer;
so that,
so far it
was as
broad as long,
as they say;
and in the dealings
of the different classes
within the town
with one another,
none of them
were losers
by these regulations.
But in their dealings
with the country
they were all great gainers;
and in these latter dealings
consist
the whole trade which supports
and enriches every town.
Every town
draws its whole subsistence,
and all
the materials of its industry,
from the:
country.
It pays for these
chiefly in two ways.
First,
by sending back
to the country a part
of those materials
wrought up and manufactured;
in which case,
their price
is augmented by the wages
of the workmen,
and the profits
of their masters
or immediate employers;
secondly,
by sending
to it a part both
of the rude
and manufactured produce,
either of other countries,
or of distant parts
of the same country,
imported into the town;
in which case, too,
the original price
of those goods
is augmented
by the wages
of the carriers or sailors,
and by the profits
of the merchants
who employ them.
In
what is gained
upon the first
of those branches
of commerce,
consists 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 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 labour,
the produce
of a greater quantity
of the labour
of the country.
They give
the traders and artificers
in the town
an advantage
over the landlords,
farmers,
and labourers,
in the country,
and break down
that natural equality which
would otherwise take place
in the commerce
which is carried on
between them.
The whole annual produce
of the labour
of the society
is annually divided
between those
two different sets of people.
By means of those regulations,
a greater share of it
is given
to the inhabitants
of the town
than
would otherwise fall to them,
and a less 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 sold,
the cheaper
the former are bought.
The industry of the town
becomes more,
and that
of the
country less advantageous.
That
the industry
which is carried on
in towns is,
everywhere in Europe,
more advantageous than
that which
is carried on in the country,
without entering
into any very nice computations,
we may satisfy ourselves
by one
very simple
and obvious observation.
In every country of Europe,
we find at least
a hundred people
who have acquired
great fortunes,
from small beginnings,
by trade
and manufactures,
the industry
which properly belongs
to towns,
for one
who has done so by
that which
properly belongs
to the country,
the raising
of rude produce
by the improvement
and cultivation
of land.
Industry,
therefore,
must be better rewarded,
the wages of labour
and the profits of stock
must evidently be greater,
in the one situation
than in the other.
But stock
and labour naturally seek
the most advantageous employment.
They naturally,
therefore,
resort as much as
they can to the town,
and desert the country.
The inhabitants of a town
being collected
into one place,
can easily combine together.
The most insignificant trades
carried on in towns have,
accordingly,
in some place or other,
been incorporated;
and even where they
have never been incorporated,
yet the corporation-spirit,
the jealousy of strangers,
the aversion to take apprentices,
or to communicate the secret
of their trade,
generally
prevail in them,
and often teach them,
by voluntary
associations and agreements,
to prevent
that free competition which
they cannot prohibit
by bye-laws.
The trades
which employ
but a small number
of hands,
run most easily
into such combinations.
Half-a-dozen wool-combers,
perhaps,
are necessary
to keep a thousand spinners
and weavers
at work.
By combining not
to take apprentices,
they can not only engross
the employment,
but reduce
the whole manufacture
into a sort
of slavery to themselves,
and raise
the price of their labour much above what
is due to the nature
of their work.
The inhabitants
of the country,
dispersed in distant places,
cannot easily combine together.
They have not only never been
incorporated,
but the incorporation
spirit never has prevailed
among them.
No
apprenticeship has ever been
thought necessary
to qualify for husbandry,
the great trade
of the country.
After
what are called
the fine arts,
and the liberal professions,
however,
there
is perhaps
no trade
which requires so great
a variety
of knowledge and experience.
The innumerable volumes which
have been written upon it
in all languages,
may satisfy us,
that
among the wisest
and most learned nations,
it has never been
regarded
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 possessed even
by the common farmer;
how contemptuously soever
the very contemptible authors
of some of them
may sometimes affect
to speak of him.
There
is
scarce any common mechanic trade,
on the contrary,
of which all the operations
may not be
as completely
and distinctly explained
in a pamphlet
of a very few pages,
as it
is possible
for words
illustrated
by figures
to explain them.
In the history
of the arts,
now publishing
by the French Academy of Sciences,
several of them
are actually explained
in this manner.
The direction of operations,
besides,
which must be varied
with every change
of the weather,
as
well as with many other accidents,
requires much more judgment
and discretion,
than that of those
which are always the same,
or very nearly the same.
Not only the art
of the farmer,
the general direction
of the operations
of husbandry,
but many inferior branches
of country labour
require much more skill
and experience
than the greater part
of mechanic trades.
The man
who works
upon brass and iron,
works with instruments,
and upon materials
of which
the temper
is always the same,
or very nearly the same.
But
the man who
ploughs the ground
with a team of horses
or oxen,
works
with instruments
of which the health,
strength,
and temper,
are very different
upon different occasions.
The condition
of the materials which
he works upon, too,
is as variable as
that of the instruments which
he works with,
and both
require
to be managed
with much judgment
and discretion.
The common ploughman,
though generally regarded
as the pattern
of stupidity and ignorance,
is seldom defective
in this judgment and discretion.
He is less accustomed,
indeed,
to social intercourse,
than the mechanic
who lives in a town.
His voice and language
are more uncouth,
and more difficult
to be understood by those
who are not used to them.
His understanding,
however,
being accustomed
to consider a greater variety
of objects,
is generally much superior to
that of the other,
whose whole attention,
from morning till night,
is commonly occupied
in performing one
or
two very simple operations.
How much
the lower ranks
of people in the country
are really superior to those
of the town,
is well known
to every man whom
either business
or curiosity
has led
to converse much with both.
In China and Indostan,
accordingly,
both the rank and the wages
of country
labourers
are said
to be superior to those
of the greater part
of artificers and manufacturers.
They
would probably be so everywhere,
if corporation laws
and the corporation
spirit did not prevent it.
The superiority which
the industry of the towns
has everywhere in Europe over
that of the country,
is not altogether owing
to corporations
and corporation laws.
It is supported
by many other regulations.
The high duties upon foreign
manufactures,
and upon all goods
imported by alien merchants,
all tend
to the same purpose.
Corporation
laws enable the inhabitants
of towns
to raise their prices,
without fearing
to be undersold
by the free competition
of their own countrymen.
Those other regulations
secure them equally against
that of foreigners.
The enhancement of price
occasioned by both
is everywhere finally paid
by the landlords,
farmers,
and labourers,
of the country,
who have seldom opposed
the establishment
of such monopolies.
They have commonly
neither inclination nor
fitness
to enter into combinations;
and the clamour
and sophistry
of merchants and manufacturers
easily persuade them,
that the private interest
of a part,
and of a subordinate part,
of the society,
is the general interest
of the whole.
In Great Britain,
the superiority
of the industry
of the towns over
that of the country
seems
to have been greater
formerly than in the present
times.
The wages
of country labour approach
nearer
to those
of manufacturing labour,
and the profits of stock
employed in agriculture to those
of trading
and manufacturing stock,
than they
are said
to have none
in the last century,
or in the beginning
of the present.
This change
may be regarded
as the necessary,
though
very late consequence
of the extraordinary encouragement
given
to the industry
of the towns.
The stocks
accumulated in them
come in time
to be so great,
that
it can no longer
be employed
with the ancient profit
in that species
of industry
which is peculiar
to them.
That industry
has its limits
like every other;
and the increase
of stock,
by increasing the competition,
necessarily
reduces the profit.
The lowering
of profit
in the town forces
out stock to the country,
where,
by creating
a new demand
for country labour,
it necessarily raises
its wages.
It then spreads itself,
if I my say so,
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 everywhere in Europe
the greatest improvements
of the country
have been owing to such
over flowings
of the stock
originally accumulated
in the towns,
I shall endeavour to shew
hereafter,
and at the same time
to demonstrate,
that though some
countries have,
by this course,
attained
to a considerable degree
of opulence,
it is
in itself necessarily slow,
uncertain,
liable
to be disturbed
and interrupted
by innumerable accidents,
and, in every respect,
contrary
to the order
of nature and of reason.
The interests,
prejudices,
laws,
and customs,
which
have given occasion to it,
I shall endeavour
to explain
as fully and distinctly
as I
can in the third
and fourth books
of this Inquiry.
People
of the same trade seldom meet
together,
even for merriment and diversion,
but the conversation
ends in a conspiracy
against the public,
or in some contrivance
to raise prices.
It is impossible,
indeed,
to prevent such meetings,
by any law which either
could be executed,
or would be consistent
with liberty and justice.
But though the law
cannot hinder people
of the same trade
from sometimes assembling together,
it ought to do nothing
to facilitate such assemblies,
much less
to render them necessary.
A regulation
which obliges all those
of the same trade
in a particular town
to enter their names
and places
of abode
in a public register,
facilitates such assemblies.
It connects individuals
who
might never otherwise be known
to one another,
and gives every man
of the trade a direction
where to find every other man
of it.
A regulation
which enables those
of the same trade
to tax themselves,
in order to
provide for their poor,
their sick,
their widows and orphans,
by giving them
a common interest
to manage,
renders such assemblies
necessary.
An incorporation not
only renders them necessary,
but makes the act
of the majority binding
upon the whole.
In a free trade,
an effectual combination
cannot be established but
by the unanimous consent
of every single trader,
and it
cannot last longer
than every single trader
continues of the same 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 necessary
for the better government
of the trade,
is without any foundation.
The real and effectual discipline
which is exercised
over a workman,
is not
that of his corporation,
but that of his customers.
It is the fear
of losing
their employment
which restrains his frauds
and corrects his negligence.
An exclusive corporation
necessarily weakens
the force of this discipline.
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
some of the most necessary trades.
If you would have
your work
tolerably executed,
it must be done
in the suburbs,
where the workmen,
having no exclusive privilege,
have nothing
but their character
to depend upon,
and you
must then smuggle
it into the town
as well as you can.
It is in this manner that
the policy
of Europe,
by restraining the competition
in some employments
to a smaller number than
would otherwise be disposed
to enter into them,
occasions
a very important inequality
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock.
Secondly,
The policy of Europe,
by increasing
the competition
in some employments beyond what
it naturally would be,
occasions another inequality,
of an opposite kind,
in the whole
of the advantages
and disadvantages
of the different employments
of labour and stock.
It has been considered as
of so much importance
that a proper number
of young people
should be educated
for certain professions,
that sometimes the public,
and sometimes the piety
of private
founders,
have established many pensions,
scholarships,
exhibitions,
bursaries,.etc. for this purpose,
which draw many more people
into those trades
than
could otherwise 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 suitable reward,
the church
being crowded with people,
who,
in order to get employment,
are willing
to accept
of a much smaller recompence
than what such
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 a chaplain
with a journeyman in
any common trade.
The pay
of a curate or chaplain,
however,
may very properly be considered
as
of the same nature
with the wages
of a journeyman.
They
are all three
paid for their work
according to
the contract which
they may happen
to make
with their respective superiors.
Till after the middle
of the fourteenth century,
five merks,
containing about
as much silver as ten pounds
of our present money,
was in England the usual pay
of a curate
or
a stipendiary parish priest,
as we find
it regulated
by the decrees
of several
different national councils.
At the same period,
fourpence a-day,
containing
the same quantity
of silver as a shilling
of our present money,
was declared
to be the pay
of a master mason;
and threepence a-day,
equal to ninepence
of our present money,
that of a journeyman mason.
(See
the Statute of Labourers, 25,
Ed.
III.)
The wages
of both these labourer's,
therefore,
supposing them
to have been constantly employed,
were much superior to those
of the curate.
The wages
of the master mason,
supposing 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 sufficient maintenance
and encouragement
to curates,
the cures have,
in several places,
been meanly supplied,
the bishop is,
therefore,
empowered
to appoint,
by writing under his hand
and seal,
a sufficient certain stipend
or allowance,
not exceeding fifty,
and not less than twenty
pounds a-year".
Forty pounds a-year
is reckoned
at present very good pay
for a curate;
and,
notwithstanding
this act of parliament,
there
are many curacies
under twenty pounds a-year.
There
are journeymen
shoemakers in London
who earn forty pounds a-year,
and there is
scarce an industrious workman
of any kind
in that metropolis
who does not earn
more than twenty.
This last sum,
indeed,
does not exceed what
frequently earned
by common labourers
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 occasions,
attempted
to raise 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 cases,
the law
seems to have been equally
ineffectual,
and has never either
been able
to raise the wages
of curates,
or to sink those
of labourers 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 situation
and the multitude
of their competitors,
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 ecclesiastical dignities support
the honour
of the church,
notwithstanding
the mean circumstances
of some of
its inferior members.
The respect paid
to the profession, too,
makes some compensation
even to them
for the meanness
of their pecuniary recompence.
In England,
and in all
Roman catholic countries,
the lottery of the church
is in reality
much more advantageous
than
is necessary.
The example
of the churches of Scotland,
of Geneva,
and of several
other protestant churches,
may satisfy us,
that in so creditable
a profession,
in which education
is so easily procured,
the hopes
of much more moderate
benefices will draw
a sufficient number
of learned,
decent,
and respectable men
into holy orders.
In professions in which
there are no benefices,
such as law and physic,
if an equal
proportion of people
were educated
at the public expense,
the competition
would soon be so great
as
to sink very much
their pecuniary reward.
It might then not be
worth any man's while
to educate his son
to either
of those professions
at his own expense.
They would be entirely abandoned
to such as
had been educated
by those public charities,
whose numbers and necessities
would oblige them
in general to content themselves
with a very miserable recompence,
to the entire degradation
of the now respectable professions
of law
and physic.
That unprosperous race of men,
commonly
called men of letters,
are pretty much
in the situation which lawyers
and
physicians
probably would be in,
upon the
foregoing supposition.
In every part of Europe,
the greater part of them
have been educated
for the church,
but have been hindered
by different reasons
from
entering into holy orders.
They have generally,
therefore,
been educated
at the public expense;
and their numbers
are everywhere so great,
as commonly
to reduce the price
of their labour
to a very paltry recompence.
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 he
had acquired himself;
and this
is still surely
a more honourable,
a more useful,
and, in general,
even
a more profitable employment than
that other of writing
for a bookseller,
to which the art
of printing
has given occasion.
The time
and study,
the genius,
knowledge,
and application requisite
to qualify an eminent teacher
of the sciences,
are at least equal to
what is necessary
for the greatest practitioners
in law and physic.
But the usual 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
those of the other two
are encumbered with very few
who have not been educated
at their own.
The usual recompence,
however,
of public
and private teachers,
small
as
it may appear,
would undoubtedly be less than
it is,
if 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 synonymous.
The different governors
of the universities,
before that 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 professions,
the rewards of eminent
teachers
appear to have been
much more considerable.
Isocrates,
in
what is called
his discourse
against the sophists,
reproaches the teachers
of his own
times with inconsistency.
"They make
the most magnificent promises
to their scholars,"
says he,
"and undertake
to teach them
to be wise,
to be happy,
and to be just;
and,
in return
for so important a service,
they stipulate
the paltry reward
of four or five minae."
"They who teach wisdom,"
continues he,
"ought
certainly to be
wise themselves;
but if any man
were to sell such a bargain
for such 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 assured that
it was not less than
he represents it.
Four minae
were
equal to thirteen pounds
six shillings
and eightpence;
five minae
to sixteen pounds
thirteen shillings
and fourpence.
Something not less than
the largest
of those two sums,
therefore,
must at that time
have been usually paid
to the most eminent teachers
at Athens.
Isocrates himself
demanded ten minae,
or £33:6:8 from each scholar.
When he taught at Athens,
he is said
to have had
a hundred scholars.
I understand
this to be the number whom
he taught at one time,
or who
attended
what we
would call one course
of lectures;
a number
which will not appear
extraordinary
from so great a city
to so famous a teacher,
who taught, too,
what was at that time
the most fashionable
of all sciences,
rhetoric.
He must have made,
therefore,
by each course of lectures,
a thousand minae,
or £3335:6:8.
A thousand minae,
accordingly,
is said by Plutarch,
in another place,
to have been his didactron,
or usual price
of teaching.
Many other eminent teachers
in those times
appear
to have acquired
great fortunes.
Georgias
made a present
to the temple
of Delphi
of his own statue in
solid gold.
We must not,
I presume,
suppose 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 splendid,
even to ostentation.
Plato himself
is said
to have lived
with a good deal
of magnificence.
Aristotle,
after having been tutor
to Alexander,
and
most munificently rewarded,
as it is universally 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 sciences
were probably
in those times less common
than
they
came to be
in an age or two afterwards,
when the competition
had probably somewhat reduced
both the price
of their labour and
the admiration
for their persons.
The most eminent of them,
however,
appear always
to have enjoyed
a degree
of consideration much superior
to any of the
like profession
in the present times.
The Athenians
sent Carneades the academic,
and Diogenes the stoic,
upon a solemn embassy
to Rome;
and though
their city
had then declined
from its former grandeur,
it was still
an independent and
considerable 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 consideration for him
must have been very great.
This inequality is,
upon the whole,
perhaps rather advantageous
than hurtful to the public.
It may somewhat degrade
the profession
of a public teacher;
but the cheapness of literary
education
is surely
an advantage
which greatly overbalances
this trifling inconveniency.
The public, too,
might derive still
greater benefit from it,
if the constitution
of those schools
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 obstructing
the free circulation
of labour and stock,
both from employment
to employment,
and from place to place,
occasions,
in some cases,
a very inconvenient inequality
in the whole
of the advantages
and disadvantages
of their different employments.
The statute
of apprenticeship obstructs
the free circulation
of labour
from one employment to another,
even in the same place.
The exclusive privileges
of corporations
obstruct it
from one place to another,
even in the same employment.
It frequently happens,
that while high wages
are given to the workmen
in one manufacture,
those in another
are obliged
to content themselves
with bare subsistence.
The one
is in an advancing state,
and has
therefore a continual demand
for new hands;
the other
is in a declining state,
and the superabundance
of hands
is continually increasing.
Those two manufactures
may sometimes be
in the same town,
and sometimes in
the same neighbourhood,
without being
able
to lend the least assistance
to one another.
The statute of apprenticeship
may oppose it
in the one case,
and both
that
and an exclusive 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 those absurd
laws did not hinder them.
The arts
of weaving
plain linen and plain silk,
for example,
are almost entirely the same.
That
of weaving plain woollen
is somewhat different;
but the difference
is so insignificant,
that either
a linen or a silk
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 prosperous condition;
and their wages
would neither
rise too high
in the thriving,
nor sink too low
in the decaying manufacture.
The linen manufacture,
indeed,
is in England,
by a particular statute,
open to every body;
but as it is not much
cultivated
through the greater part
of the country,
it can afford
no general resource
to the work men
of other
decaying
manufactures,
who,
wherever
the statute of apprenticeship
takes place,
have no other choice,
but dither to
come upon the parish,
or
to work as common labourers;
for which,
by their habits,
they
are much worse qualified
than for any sort
of manufacture
that bears
any resemblance to their own.
They generally,
therefore,
chuse to
come upon the parish.
Whatever
obstructs the free circulation
of labour
from one employment to another,
obstructs
that of stock likewise;
the quantity of stock
which can be employed
in any branch
of business
depending very much upon
that of the labour
which can be employed in it.
Corporation laws,
however,
give less obstruction
to the free circulation
of stock
from one place to another,
than to that of labour.
It is everywhere 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 obstruction
which corporation laws
give to the free
circulation of labour
is common,
I believe,
to every part of Europe.
That which
is given to it
by the poor laws is,
so far as I know,
peculiar to England.
It consists
in the difficulty which
a poor man finds
in obtaining a settlement,
or even in being allowed
to exercise
his industry in any parish
but that
to which
he belongs.
It is the labour
of artificers and manufacturers
only of which
the free
circulation
is obstructed
by corporation laws.
The difficulty
of obtaining settlements
obstructs even
that of common labour.
It may be
worth while to give
some account
of the rise,
progress,
and present state
of this disorder,
the greatest,
perhaps,
of any
in the police of England.
When,
by the destruction
of monasteries,
the poor
had been deprived
of the charity
of those religious houses,
after
some other ineffectual attempts
for their relief,
it was enacted,
by the 43d
of Elizabeth c.2,
that every parish
should be bound
to provide
for its own poor,
and that overseers
of the poor
should be annually appointed,
who,
with the church-wardens,
should raise,
by a parish rate,
competent sums
for this purpose.
By this statute,
the necessity
of providing
for their own poor
was indispensably imposed
upon every parish.
Who were
to be considered
as the poor of each parish
became,
therefore,
a question
of some importance.
This question,
after some variation,
was at last determined
by the 13th and 14th
of Charles II,
when it was enacted,
that
forty days undisturbed residence
should gain
any person a settlement
in any parish;
but that within that time
it should be lawful
for two justices
of the peace,
upon complaint
made by the church-wardens
or overseers of the poor,
to remove any new inhabitant
to the parish
where he
was last legally settled;
unless he either
rented a tenement
of ten pounds a-year,
or could give
such security
for the discharge
of the parish
where he was then living,
as those justices
should judge sufficient.
Some frauds,
it is said,
were committed
in consequence of this statute;
parish officers
sometime's bribing their own
poor
to go clandestinely
to another parish,
and,
by keeping themselves
concealed for forty days,
to gain a settlement there,
to the discharge of
that to which
they properly belonged.
It was enacted,
therefore,
by the 1st of James II,
that
the forty days
undisturbed residence
of any person necessary
to gain a settlement,
should 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 church-wardens
or overseers
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 sometimes connived
at such intrusions,
receiving the notice,
and taking no proper steps
in consequence of it.
As every person in a parish,
therefore,
was supposed
to have an interest
to prevent
as much as
possible their being burdened
by such intruders,
it was further enacted
by the 3rd
of William III,
that
the forty days residence
should be accounted
only from the publication
of such notice
in writing on
Sunday in the church,
immediately after divine service.
"After all,"
says Doctor Burn,
"this kind of settlement,
by continuing
forty days after publication
of notice
in writing,
is very seldom obtained;
and the design of the acts
is not so much for
gaining of settlements,
as for the avoiding
of them by persons
coming
into a parish clandestinely,
for the giving of notice
is only putting
a force upon the parish
to remove.
But if a person's situation
is such,
that it
is doubtful
whether he
is actually removable or not,
he shall,
by giving of notice,
compel the parish either
to allow him
a settlement uncontested,
by suffering him
to continue forty days,
or by removing him
to try the right."
This statute,
therefore,
rendered it
almost impracticable
for a poor man
to gain a new settlement
in the old way,
by forty days inhabitancy.
But that
it might not appear
to preclude altogether
the common
people
of one parish
from ever establishing themselves
with security in another,
it appointed
four other ways by which
a settlement
might be gained
without any notice
delivered
or published.
The first was,
by being taxed
to parish rates
and paying them;
the second,
by being elected
into an annual parish office,
and serving in it a year;
the third,
by serving
an apprenticeship in
the parish;
the fourth,
by being hired
into service
there for a year,
and continuing
in the same service
during the whole of it.
Nobody
can gain a settlement
by either
of the two first ways,
but by the public deed
of the whole parish,
who are too well aware
of the consequences
to adopt any new-comer,
who has nothing
but his labour
to support him,
either by taxing him
to parish rates,
or by electing him
into a parish office.
No married man
can well gain any settlement
in either
of the two last ways.
An apprentice
is scarce ever married;
and it is expressly enacted,
that no married servant
shall gain any settlement by
being hired for a year.
The principal effect
of introducing settlement
by service,
has been to put out
in a great measure
the old fashion
of
hiring for a year;
which
before had been so customary
in England,
that even at this day,
if no particular term
is agreed upon,
the law
intends that every servant
is hired for a year.
But masters
are not always willing
to give
their servants a settlement
by hiring them
in this manner;
and servants
are not always willing
to be so hired,
because,
as every last settlement
discharges all the foregoing,
they might thereby lose
their original settlement
in the places
of their nativity,
the habitation
of their parents
and relations.
No independent workman,
it is evident,
whether labourer or artificer,
is likely
to gain any new settlement,
either
by apprenticeship
or by service.
When such a person,
therefore,
carried
his industry to a new parish,
he was liable
to be removed,
how
healthy and industrious soever,
at the caprice
of any churchwarden or overseer,
unless he either
rented a tenement
of ten pounds a-year,
a thing impossible for one
who has nothing
but his labour to live by,
or could give
such security
for the discharge
of the parish
as two justices of the peace
should judge sufficient.
What security
they shall require,
indeed,
is left altogether
to their discretion;
but they
cannot well require
less than thirty pounds,
it having been enacted,
that the purchase even
of a freehold estate
of less than thirty pounds value,
shall not gain
any person a settlement,
as not being sufficient
for the discharge
of the parish.
But this
is a security
which scarce any man
who lives by labour can give;
and much greater security
is frequently demanded.
In order to
restore,
in some measure,
that free circulation
of labour which
those different statutes
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
should bring
a certificate from the parish
where he
was last legally settled,
subscribed
by the church-wardens
and overseers
of the poor,
and allowed
by two justices
of the peace,
that every other parish
should be obliged
to receive him;
that
he should 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
should be obliged
to pay the expense both
of his maintenance
and of his removal.
And in order to
give
the most perfect security
to the parish
where such certificated man
should come
to reside,
it was further enacted
by the same statute,
that
he should gain no settlement
there by any means
whatever,
except either
by renting
a tenement
of ten pounds a-year,
or by serving
upon his own account
in an annual parish office
for one whole year;
and consequently neither
by notice nor by service,
nor by apprenticeship,
nor by paying parish rates.
By the 12th
of Queen Anne, too,
stat.
1 c.18,
it was further enacted,
that neither
the servants nor apprentices
of such certificated man
should gain
any settlement in the parish
where he
resided
under such certificate.
How far this invention
has restored
that free circulation
of labour,
which the preceding statutes
had almost entirely taken away,
we may learn
from the
following very judicious
observation
of Doctor Burn.
"It is obvious,"
says he,
"that
there are divers good reasons
for requiring certificates
with persons
coming
to settle in any place;
namely,
that persons
residing under them
can gain no settlement,
neither by apprenticeship,
nor by service,
nor by giving notice,
nor by paying parish rates;
that
they can settle
neither apprentices nor servants;
that if they
become chargeable,
it is certainly known whither
to remove them,
and the parish
shall be paid
for the removal,
and for their maintenance
in the mean time;
and that,
if they
fall sick,
and cannot be removed,
the parish
which gave the certificate
must maintain them;
none of all which
can be without a certificate.
Which reasons
will hold proportionably
for parishes
not granting certificates
in ordinary cases;
for it
is far more than
an equal chance,
but that
they will have
the certificated persons
again,
and in a worse condition."
The moral of this observation
seems to be,
that certificates ought
always to be required
by the parish where
any poor man comes to reside,
and that
they ought very seldom
to be granted by
that which he
purposes
to leave.
"There
is somewhat
of hardship in this matter
of certificates,"
says
the same very intelligent author,
in his History
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 settlement,
or whatever
advantage he
may propose himself
by living elsewhere."
Though a certificate
carries along
with it no testimonial
of good behaviour,
and certifies nothing but that
the person
belongs to the parish
to which
he really does belong,
it is altogether discretionary
in the parish officers either
to grant or to refuse it.
A mandamus
was once moved for,
says Doctor Burn,
to compel the church-wardens
and overseers
to sign a certificate;
but the Court of King's Bench
rejected
the motion
as a very strange attempt.
The very unequal price
of labour 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 industry
from one parish to another
without a certificate.
A single man,
indeed who
is healthy and industrious,
may sometimes reside
by sufferance
without one;
but a man with a wife
and family
who should attempt
to do so,
would,
in most parishes,
be sure of being removed;
and,
if the single man
should afterwards marry,
he would generally be removed
likewise.
The scarcity
of hands in one parish,
therefore,
cannot always be relieved
by their superabundance
in another,
as it
is constantly in Scotland,
and.
I believe,
in all other countries
where there is no difficulty
of settlement.
In such countries,
though
wages may sometimes rise
a little
in the neighbourhood
of a great town,
or wherever else
there is
an extraordinary demand
for labour,
and sink gradually
as the distance
from such 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 sometimes find in England,
where it
is often more difficult
for a poor man
to pass
the artificial boundary
of a parish,
than an arm
of the sea,
or a ridge of high mountains,
natural boundaries which
sometimes separate very distinctly
different rates of wages
in other countries.
To remove
a man
who has committed
no misdemeanour,
from the parish
where he chooses
to reside,
is an evident violation
of natural liberty
and justice.
The common people of England,
however,
so jealous of their liberty,
but like the common people
of most other countries,
never
rightly understanding
wherein
it consists,
have now,
for more than a century
together,
suffered themselves
to be exposed to this
oppression
without a remedy.
Though men of reflection, too,
have some. times
complained
of the law
of settlements
as a public grievance;
yet it
has never been the object
of any general
popular clamour,
such as
that against general warrants,
an abusive practice undoubtedly,
but such
a one as
was not likely
to occasion any general
oppression.
There
is scarce
a poor man in England,
of forty years of age,
I will venture
to say,
who has not,
in some part
of his life,
felt himself most cruelly
oppressed
by this ill-contrived law
of settlements.
I shall conclude
this long chapter
with observing,
that though anciently
it was usual
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 years,"
says Doctor Burn,
"it seems
time to lay
aside all endeavours
to bring
under strict regulations,
what in its own nature
seems incapable
of minute limitation;
for if all persons
in the same kind
of work
were to receive equal wages,
there
would be no emulation,
and no room
left
for industry or ingenuity."
Particular acts of parliament,
however,
still attempt
sometimes to regulate wages
in particular trades,
and in particular places.
Thus
the 8th of George III
prohibits,
under heavy penalties,
all master tailors in London,
and five miles round it,
from giving,
and their workmen
from accepting,
more than two shillings
and sevenpence halfpenny a-day,
except
in the case
of a general mourning.
Whenever
the legislature attempts to regulate
the differences
between masters
and their workmen,
its counsellors
are always the masters.
When the regulation,
therefore,
is in favour of the workmen,
it is always just
and equitable;
but it is sometimes otherwise
when in favour
of the masters.
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 favour
of the workmen;
but the 8th of George III
is in favour
of the masters.
When masters 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 same kind,
not to accept
of a certain wage,
under a certain penalty,
the law
would punish them very severely;
and, if it dealt impartially,
it would treat the masters
in the same manner.
But the 8th of George III
enforces by law
that
very regulation which masters
sometimes attempt
to establish
by such combinations.
The complaint of the workmen,
that it
puts
the ablest and most industrious
upon the same footing
with an ordinary workman,
seems perfectly well founded.
In ancient times, too,
it was usual to attempt
to regulate the profits
of merchants and other dealers,
by regulating the price
of provisions and ether goods.
The assize of bread is,
so far as I know,
the only remnant
of this ancient usage.
Where there is
an exclusive 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 assize.
The method
of fixing
the assize of bread,
established by the 31st
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 third
of George III.
The want
of an
assize occasioned no
sensible inconveniency;
and the establishment
of one
in the few places
where it has yet taken place
has produced
no sensible advantage.
In the greater part
of the towns in Scotland,
however,
there
is an incorporation of bakers,
who claim
exclusive privileges,
though they
are not very strictly guarded.
The proportion
between the different rates,
both of wages and profit,
in the different employments
of labour and stock,
seems not
to be much affected,
as has already been observed,
by the riches or poverty,
the advancing,
stationary,
or declining state
of the society.
Such revolutions
in the public welfare,
though they
affect the general rates both
of wages and profit,
must,
in the end,
affect them equally
in all different employments.
The proportion between them,
therefore,
must remain the same,
and cannot well be altered,
at least
for any considerable time,
by any such revolutions.
Rent,
considered 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 lease,
the landlord endeavours
to leave him no greater share
of the produce
than
what is sufficient
to keep
up the stock
from which
he furnishes the seed,
pays the labour,
and purchases
and maintains the cattle
and other instruments
of husbandry,
together
with the ordinary profits
of farming stock
in the neighbourhood.
This
is evidently
the smallest share
with which the tenant can
content himself,
without being a loser,
and the landlord seldom 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 reserve
to himself
as the
rent of his land,
which is evidently the highest
the tenant can afford
to pay
in the actual circumstances
of the land.
Sometimes,
indeed,
the liberality,
more frequently the ignorance,
of the landlord,
makes him
accept
of somewhat
less than this portion;
and sometimes, too,
though more rarely,
the ignorance
of the tenant makes him
undertake to pay
somewhat more,
or to content himself
with somewhat less,
than the ordinary profits
of farming stock
in the neighbourhood.
This portion,
however,
may still be considered
as the natural rent
of land,
or the rent at which
it is naturally meant
that land should,
for the most part,
be let.
The rent of land,
it may be thought,
is frequently no
more than a reasonable profit
or interest
for the stock laid out
by the landlord
upon its improvement.
This,
no doubt,
may be partly
the case upon some occasions;
for it can scarce
ever be
more than partly the case.
The landlord
demands
a rent
even for unimproved land,
and the supposed interest
or profit
upon the expense
of improvement
is generally an addition
to this original rent.
Those improvements,
besides,
are not always made
by the stock
of the landlord,
but sometimes by
that of the tenant.
When
the lease
comes to be renewed,
however,
the landlord
commonly demands
the same augmentation of rent
as if they
had been all made
by his own.
He sometimes demands
rent for what
is altogether incapable
of human improvements.
Kelp
is a species of sea-weed,
which,
when burnt,
yields an alkaline salt,
useful for making glass,
soap,
and for several other purposes.
It grows
in several parts
of Great Britain,
particularly in Scotland,
upon such
rocks only as lie
within the high-water mark,
which are twice every day
covered with the sea,
and of which the produce,
therefore,
was never augmented
by human industry.
The landlord,
however,
whose estate
is bounded
by a kelp shore
of this kind,
demands a rent for it
as much as
for his corn-fields.
The sea
in the neighbourhood
of the islands
of Shetland
is more than commonly abundant
in fish,
which makes a great part
of the subsistence
of their inhabitants.
But,
in order to profit
by the produce
of the water,
they must have a habitation
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 the water.
It is partly paid
in sea-fish;
and one
of the very few instances
in which
rent
makes a part
of the price of
that commodity,
is to be found in
that country.
The rent of land,
therefore,
considered 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 afford
to take,
but to what
the farmer
can afford
to give.
Such
parts only of the produce
of land
can commonly be brought
to market,
of which the ordinary price
is sufficient
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 surplus 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 some parts
of the produce of land,
for which the demand
must always be
such as to afford
a greater price than what
is sufficient
to bring them to market;
and there are others
for which it either
may or may not be
such as
to afford this greater price.
The former
must always afford
a rent to the landlord.
The latter
sometimes may
and sometimes may not,
according to
different circumstances.
Rent,
it is to be observed,
therefore,
enters
into the composition
of the price
of commodities
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 commodity
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 sufficient to pay
those wages and profit,
that it affords a high rent,
or a low rent,
or no
rent at all.
The particular consideration,
first,
of those parts
of the produce
of land which
always afford some rent;
secondly,
of those
which sometimes may
and sometimes 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 sorts
of rude produce,
when compared both
with one another
and
with manufactured commodities,
will divide this chapter
into three parts.
Of the Produce of Land
which always affords Rent.
As men,
like all other animals,
naturally
multiply
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 labour,
and somebody
can always be found
who is willing
to do something
in order to obtain it.
The quantity of labour,
indeed,
which it can purchase,
is not always equal to
what it could maintain,
if managed
in the most economical manner,
on account
of the high wages
which are sometimes given
to labour;
but it
can always purchase such
a quantity of labour
as it can maintain,
according to the rate
at which
that sort of labour
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 labour necessary
for bringing
it to market,
in the most liberal way
in which
that labour
is ever maintained.
The surplus, too,
is always more than sufficient
to replace
the stock
which employed that labour,
together with its profits.
Something,
therefore,
always remains for a rent
to the landlord.
The most desert moors
in Norway and Scotland produce
some sort
of pasture for cattle,
of which
the milk and the increase
are always more than sufficient,
not only to maintain
all the labour necessary
for tending them,
and
to pay the ordinary profit
to the farmer or the owner
of the herd
or flock,
but to afford some
small rent to the landlord.
The rent increases
in proportion to the goodness
of the pasture.
The same extent
of ground not only maintains
a greater number of cattle,
but as they
we brought
within a smaller compass,
less labour becomes requisite
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 labour
which
must be maintained out of it.
The rent
of land not
only varies
with its fertility,
whatever be its produce,
but with its situation,
whatever be its fertility.
Land in the neighbourhood
of a town
gives a greater
rent than land equally
fertile in a distant part
of the country.
Though it
may cost no more labour
to cultivate the one
than the other,
it must always cost
more to bring the produce
of the distant land
to market.
A greater quantity of labour,
therefore,
must be maintained out of it;
and the surplus, 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 profit,
as has already been shewn,
is generally higher than
in the neighbourhood
of a large town.
A smaller proportion of this
diminished surplus,
therefore,
must belong
to the landlord.
Good roads,
canals,
and navigable rivers,
by diminishing
the expense of carriage,
put the remote 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 improvements.
They encourage the cultivation
of the remote,
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 advantageous
even to that part
of the country.
Though they
introduce
some rival commodities
into the old market,
they open many new markets
to its produce.
Monopoly,
besides,
is a great enemy
to good management,
which
can never be universally established,
but in consequence
of that free
and
universal competition which forces
every body
to have recourse to it
for the sake
of self defence.
It is not
more than fifty years ago,
that some of the
counties
in the neighbourhood of London
petitioned the parliament
against the extension
of the turnpike roads
into the remoter counties.
Those remoter counties,
they pretended,
from the cheapness of labour,
would be
able to sell their grass
and corn cheaper
in the London market
than themselves,
and would thereby reduce
their rents,
and ruin their cultivation.
Their rents,
however,
have risen,
and their cultivation
has been improved
since 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 cultivation
requires much more labour,
yet the surplus which remains
after replacing
the seed
and maintaining all
that labour,
is likewise much greater.
If a pound of butcher's meat,
therefore,
was never supposed
to be
worth more than a pound
of bread,
this greater surplus
would everywhere be
of greater value
and constitute a greater fund,
both for the profit
of the farmer
and the
rent of the landlord.
It seems
to have done so universally
in the rude beginnings
of agriculture.
But
the relative values of those
two different species of food,
bread and butcher's meat,
are very different
in the different periods
of agriculture.
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
consequently brings
the greatest price.
At Buenos Ayres,
we are told by Ulloa,
four reals,
one-and-twenty pence
halfpenny sterling,
was, forty
or fifty years ago,
the ordinary price of an ox,
chosen
from a herd
of two or three hundred.
He says nothing of the price
of bread,
probably because he
found nothing remarkable
about it.
An ox there,
he says,
costs
little more than the labour
of catching him.
But corn
can nowhere be raised
without a great deal
of labour;
and in a country
which lies
upon the river Plate,
at that time the direct road
from Europe
to the silver mines
of Potosi,
the money-price of labour
could be very cheap.
It is otherwise
when cultivation
is extended
over the greater part
of the country.
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 extension,
besides,
of cultivation,
the unimproved wilds
become insufficient
to supply 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 labour necessary
for tending them,
but the
rent which the landlord,
and the profit which
the farmer,
could have drawn
from such land
employed in tillage.
The cattle
bred
upon the most uncultivated moors,
when brought
to the same market,
are, in proportion
to their weight
or goodness,
sold at the same price
as those
which are reared
upon the most improved 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 century ago,
that in many parts
of the Highlands of Scotland,
butcher's meat
was as
cheap
or cheaper than even bread
made of oatmeal
The Union opened the market
of England
to the Highland cattle.
Their ordinary price,
at present,
is about three times
greater than
at the beginning
of the century,
and the rents of many
Highland estates
have been tripled
and quadrupled
in the same time.
In almost 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 plentiful years
it is sometimes worth three
or four pounds.
It is thus that,
in the progress
of improvement,
the rent
and profit
of unimproved pasture
come
to be regulated
in some 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 smaller quantity
of the one species
of food than
of the other,
the inferiority
of the quantity
must be compensated
by the superiority
of the price.
If it
was more than compensated,
more corn-land
would be turned into pasture;
and if it
was not compensated,
part of what
was in pasture
would be brought back
into corn.
This equality,
however,
between the rent
and profit
of grass and those
of corn;
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 some
particular local situations
it is quite otherwise,
and the rent
and profit of grass
are much superior 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 grass above what
may be called
its natural proportion to
that of corn.
This local advantage,
it is evident,
cannot be communicated
to the lands
at a distance.
Particular
circumstances
have sometimes rendered
some countries so populous,
that the whole territory,
like the lands
in the neighbourhood
of a great town,
has not been sufficient
to produce
both the grass and the corn
necessary
for the subsistence
of their inhabitants.
Their lands,
therefore,
have been principally employed
in the production
of grass,
the more bulky commodity,
and which
cannot be so 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 situation;
and a considerable part
of ancient
Italy seems to have been so
during the prosperity
of the Romans.
To feed well,
old Cato said,
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,
must have been very much
discouraged by the distributions
of corn
which were frequently made
to the people,
either gratuitously,
or at a very low price.
This corn
was brought
from the conquered provinces,
of which several,
instead of taxes,
were obliged
to furnish a tenth part
of their produce
at a stated price,
about sixpence a-peck,
to the republic.
The low price
at which this corn
was distributed to the people,
must necessarily have sunk
the price
of
what could be brought
to the Roman market
from Latium,
or the ancient territory
of Rome,
and must have discouraged
its cultivation in
that country.
In an open
country, too,
of which the principal produce
is corn,
a well-inclosed piece
of grass
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 completely inclosed.
The present
high rent of inclosed
land in Scotland
seems owing
to the scarcity of inclosure,
and will probably last
no longer
than
that scarcity.
The advantage of inclosure
is greater for pasture than
for corn.
It saves the labour
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,
must naturally regulate
upon the land
which is fit
for producing it,
the rent
and profit of pasture.
The use
of the artificial grasses,
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
than when in natural grass,
should somewhat reduce,
it might be expected,
the superiority which,
in an improved country,
the price of butcher's meat
naturally has over
that of bread.
It seems accordingly
to have done so;
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 present 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 said,
that the four quarters
of an ox,
weighing six hundred pounds,
usually
cost him
nine pounds ten shillings,
or thereabouts;
that is thirty-one shillings
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 1764,
there
was a parliamentary inquiry
into the causes
of the high price
of provisions at that time.
It was then,
among other proof
to the same purpose,
given
in evidence
by a Virginia merchant,
that in March 1763,
he had victualled
his ships
for twentyfour
or twenty-five shillings
the hundred weight of beef,
which
he considered
as the ordinary price;
whereas,
in that dear year,
he had paid
twenty-seven shillings
for the same weight
and sort.
This
high price in 1764 is,
however,
four shillings
and eight-pence cheaper
than the ordinary price
paid by Prince Henry;
and it
is the best beef only,
it must be observed,
which is fit to be salted
for those distant voyages.
The price paid
by Prince Henry amounts
to 3d 4/5ths per pound weight
of the whole carcase,
coarse
and choice
pieces taken together;
and at that rate
the choice pieces
could not have been sold
by retail
for less than 4½d or 5d
the pound.
In the parliamentary inquiry
in 1764,
the witnesses
stated the price
of the choice pieces
of the best beef to be
to the consumer 4d
and 4½d the pound;
and the coarse
pieces in general
to be from seven farthings
to 2½d and 2¾d;
and this,
they said,
was in general
one halfpenny dearer
than the same sort of pieces
had usually been
sold in the month of March.
But even this high price
is still
a good deal cheaper than
what we can well suppose
the ordinary retail price
to have been
in the time
of Prince Henry.
During the first twelve years
of the last century,
the average price of the best
wheat at the Windsor market
was £1:18:3½d
the quarter
of nine Winchester bushels.
But
in the twelve years preceding 1764
including that year,
the average price
of the same measure
of the best
wheat at the same market
was £2:1:9½d.
In the first twelve years
of the last 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.
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 less,
the land
would soon be turned into
corn
or pasture;
and if any afforded more,
some part
of the lands
in corn or pasture
would soon be turned
to that produce.
Those productions,
indeed,
which
require
either
a greater original expense
of improvement,
or a greater annual expense
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 pasture.
This superiority,
however,
will seldom be found
to amount
to more than
a reasonable interest
or compensation
for this superior 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 acorn or grass field.
But to bring
the ground into this condition
requires more expense.
Hence a greater
rent
becomes due to the landlord.
It requires, too,
a more attentive and skilful
management.
Hence
a greater profit
becomes due to the farmer.
The crop, too,
at least
in the hop and fruit garden,
is more precarious.
Its price,
therefore,
besides
compensating all
occasional losses,
must afford something like
the profit of insurance.
The circumstances
of gardeners,
generally mean,
and always moderate,
may satisfy us that
their great ingenuity
is not commonly
over-recompensed.
Their delightful art
is practised
by so many rich people
for amusement,
that little advantage
is to be made by those
who practise it for profit;
because the persons
who should naturally be
their best customers,
supply themselves
with all
their most precious productions.
The advantage which
the landlord
derives
from such improvements,
seems at no time
to have been greater than
what was sufficient
to compensate
the original expense
of making them.
In the ancient husbandry,
after the vineyard,
a well-watered kitchen garden
seems to have been
the part of the farm
which was supposed
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 inclosed
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 sun)
mouldered
with the rain
and the winter-storm,
and required continual repairs.
Columella,
who reports
this judgment of Democritus,
does not controvert it,
but proposes
a very frugal method
of inclosing
with a hedge
of brambles and briars,
which
he
says he
had found by experience
to be both
a lasting
and an impenetrable fence;
but which,
it seems,
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 those ancient improvers,
the produce
of a kitchen garden had,
it seems,
been
little more than sufficient
to pay
the extraordinary culture
and the expense
of watering;
for in countries
so near the sun,
it was thought proper,
in those times
as in the present,
to have the command
of a stream 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
supposed
to deserve a better inclosure
than mat
recommended by Columella.
In Great Britain,
and some other northern countries,
the finer fruits
cannot Be brought
to perfection
but by the assistance
of a wall.
Their price,
therefore,
in such countries,
must be sufficient
to pay
the expense
of building and maintaining
what they
cannot be had without.
The fruit-wall
frequently surrounds
the kitchen garden,
which thus
enjoys the benefit
of an inclosure which
its own produce
could seldom pay for.
That the vineyard,
when properly planted
and brought to perfection,
was the most valuable part
of the farm,
seems
to have been
an undoubted 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
ancient Italian husbandmen,
as we learn from Columella.
He decides,
like a true lover
of all curious cultivation,
in favour of the vineyard;
and endeavours
to shew,
by a comparison
of the profit and expense,
that it
was
a most advantageous improvement.
Such comparisons,
however,
between the profit
and expense of new projects
are commonly very fallacious;
and in nothing more
so than in agriculture.
Had the gain
actually made by such
plantations been commonly
as great as he imagined it
might have been,
there
could have been no dispute
about it.
The same point
is frequently
at this day a matter
of controversy
in the wine countries.
Their writers on agriculture,
indeed,
the lovers and promoters
of high cultivation,
seem generally
disposed
to decide with Columella
in favour of the vineyard.
In France,
the anxiety
of the proprietors
of the old vineyards
to prevent the planting
of any new ones,
seems
to favour their opinion,
and to indicate
a consciousness in
those
who must have the experience,
that
this species of cultivation
is at present in
that country more profitable
than any other.
It seems,
at the same time,
however,
to indicate another opinion,
that
this superior profit
can last no longer
than the laws which
at present
restrain the free cultivation
of the vine.
In 1731,
they obtained an order
of council,
prohibiting both the planting
of new vineyards,
and the renewal
of these old ones,
of which
the cultivation
had been interrupted
for two years,
without a particular permission
from the king,
to be granted only
in consequence
of an information
from the intendant
of the province,
certifying
that he
had examined the land,
and that it
was incapable
of any other culture.
The pretence of this order
was the scarcity
of corn and pasture,
and the superabundance
of wine.
But had this superabundance
been real,
it would,
without any order of council,
have effectually prevented
the plantation
of new vineyards,
by reducing the profits
of this species
of cultivation
below their natural proportion
to those
of corn and pasture.
With regard to
the supposed scarcity of corn
occasioned
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
necessarily encourage
the other,
by affording
a ready market
for its produce.
To diminish
the number of those
who are capable
of paying it,
is surely
a most unpromising expedient
for encouraging
the cultivation of corn.
It is like the policy
which would promote
agriculture,
by discouraging
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 expense
of cultivation,
though
often much superior to those
of corn and pasture,
yet when they
do no more than
compensate
such extraordinary expense,
are in reality
regulated by the rent
and profit
of those common crops.
It sometimes happens,
indeed,
that the quantity of land
which can be fitted
for some particular produce,
is too small
to supply
the effectual demand.
The whole produce
can be disposed of to those
who are willing
to give somewhat more than
what is sufficient
to pay the whole rent,
wages,
and profit,
necessary
for raising
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 surplus part
of the price which remains
after defraying
the whole expense
of improvement and cultivation,
may commonly,
in this case,
and in this case only,
bear no regular proportion
to the like surplus
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 usual and natural proportion,
for example,
between the rent
and profit of wine,
and those
of corn and pasture,
must be understood
to take place only
with regard to
those vineyards
which produce nothing
but good common wine,
such as
can be raised almost anywhere,
upon any light,
gravelly,
or sandy soil,
and which
has nothing
to recommend
it
but
its strength and wholesomeness.
It is
with such vineyards only,
that the common land
of the country
can be brought
into competition;
for with those
of a peculiar quality it
is evident
that it cannot.
The vine
is more
affected
by the difference
of soils
than any other fruit-tree.
From some
it derives
a flavour which no culture
or management
can equal,
it is supposed,
upon any other.
This flavour,
real or imaginary,
is sometimes peculiar
to the produce of a few
vineyards;
sometimes
it extends
through the greater part
of a small district,
and sometimes through
a considerable part
of a large province.
The whole quantity of such
wines that is brought
to market falls short
of the effectual demand,
or the demand of those
who would be willing
to pay the whole rent,
profit,
and wages,
necessary
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 disposed of to those
who are willing to pay more,
which necessarily raises
their 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 less eager.
Whatever
it be,
the greater part of it
goes to the
rent of the landlord.
For though
such vineyards
are in general
more carefully cultivated
than most others,
the high price of the wine
seems to be,
not so much the effect,
as the cause of this
careful cultivation.
In so valuable a produce,
the loss
occasioned by negligence
is so great,
as to force even
the most careless
to attention.
A small part
of this high price,
therefore,
is sufficient
to pay the wages
of the extraordinary labour
bestowed
upon their cultivation,
and the profits
of the extraordinary stock
which puts that labour
into motion.
The sugar
colonies possessed
by the European nations
in the West Indies
may be compared
to those precious vineyards.
Their whole produce falls short
of the effectual demand
of Europe,
and can be disposed of
to those
who are willing
to give more than
what is sufficient
to pay the whole rent,
profit,
and wages,
necessary
for preparing
and bringing it to market,
according to the rate
at which they
are commonly paid
by any other produce.
In Cochin China,
the finest white sugar generally
sells
for three piastres
the quintal,
about thirteen shillings
and sixpence
of our money,
as we
are told by Mr Poivre
(Voyages d'un Philosophe),
a very careful observer
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 shillings sterling;
not a fourth part of
what is commonly paid
for the brown
or muscovada sugars
imported from our colonies,
and not a sixth part of
what
is paid
for the finest white sugar.
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 sugar,
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
recompenses the landlord
and farmer,
as nearly
as can be computed,
according to
what is usually
the original expense
of improvement,
and the annual expense
of cultivation.
But in our sugar colonies,
the price of sugar
bears no such proportion to
that of the produce
of a rice
or corn field either
in Europe or America.
It is commonly said
that a sugar
planter expects
that the rum and the molasses
should defray
the whole expense
of his cultivation,
and that
his sugar
should be all clear profit.
If this
be true,
for I pretend not
to affirm it,
it is
as if a corn farmer
expected
to defray the expense
of his cultivation
with the chaff and the straw,
and that
the grain
should be all clear profit.
We see frequently societies
of merchants in London,
and other trading towns,
purchase waste lands
in our sugar 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 administration
of justice
in those countries.
Nobody
will attempt
to improve
and cultivate
in the same manner
the most fertile lands
of Scotland,
Ireland,
or the corn provinces
of North America,
though,
from the more exact administration
of justice in these countries,
more regular returns
might be expected.
In Virginia and Maryland,
the cultivation
of tobacco is preferred,
as most 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 supposed,
than
to levy one
upon its importation
at the custom-house.
The cultivation
of tobacco has,
upon this account,
been most absurdly prohibited
through the greater part
of Europe,
which necessarily gives
a sort
of monopoly to the countries
where it is allowed;
and as Virginia
and Maryland
produce the greatest quantity
of it,
they share largely,
though with some competitors,
in the advantage
of this monopoly.
The cultivation of tobacco,
however,
seems not
to be so advantageous as
that of sugar.
I have never even heard
of any tobacco plantation
that
was improved
and cultivated by the capital
of merchants
who resided in Great Britain;
and our tobacco
colonies send us
home no such wealthy planters
as we
see
frequently
arrive from our sugar islands.
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 so
than
that for sugar;
and though the present price
of tobacco
is probably more than sufficient
to pay the whole rent,
wages,
and profit,
necessary
for preparing
and bringing it to market,
according to the rate
at which
they are commonly paid
in corn land,
it must not be
so much more
as the present price
of sugar.
Our tobacco planters,
accordingly,
have shewn the same fear
of the superabundance
of tobacco,
which
the proprietors
of the old vineyards
in France
have
of the superabundance
of wine.
By act of assembly,
they have restrained
its cultivation
to six thousand plants,
supposed
to yield a thousand weight
of tobacco,
for every negro
between sixteen
and sixty years
of age.
Such a negro,
over and above this quantity
of tobacco,
can manage,
they reckon,
four acres of Indian corn.
To prevent the market
from being overstocked, too,
they have sometimes,
in plentiful years,
we are told by Dr Douglas
(Douglas's
Summary,vol. ii. p. 379,
373.)
(I suspect
he has been ill informed),
burnt a certain quantity
of tobacco for every negro,
in the same manner
as the Dutch
are said
to do of spices.
If such violent methods
are necessary
to keep
up the present price
of tobacco,
the superior advantage
of its culture over
that of corn,
if it still has any,
will not probably be
of long continuance.
It is in this
manner that the
rent of the cultivated 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 less,
because
the land
would immediately be turned
to another use;
and if any particular produce
commonly
affords more,
it is because
the quantity of land
which can be fitted for it
is too small
to supply
the effectual demand.
In Europe,
corn
is the principal produce
of land,
which serves immediately
for human food.
Except in particular situations,
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 situations,
the value of these
is regulated by that of corn,
in which the fertility
of Britain
is not much inferior to
that of either
of those two countries.
If,
in any country,
the common
and favourite vegetable food
of the people
should be drawn
from a plant
of which
the most common land,
with the same,
or nearly the same culture,
produced
a much greater quantity
than the most fertile
does of corn;
the rent of the landlord,
or the surplus quantity
of food
which would remain to him,
after paying the labour,
and replacing
the stock of the farmer,
together
with its ordinary profits,
would necessarily be
much greater.
Whatever
was the rate
at which labour
was commonly maintained in
that country,
this greater surplus
could always maintain
a greater
quantity
of it,
and, consequently,
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 necessaries
and conveniencies
of life
with which the labour
of other people
could supply him,
would necessarily be
much greater.
A rice field
produces
a much greater quantity
of food
than the most fertile corn field.
Two crops in the year,
from thirty
to sixty bushels each,
are said
to be the ordinary produce
of an acre.
Though its cultivation,
therefore,
requires more labour,
a much greater surplus remains
after maintaining all
that labour.
In those rice countries,
therefore,
where rice
is the common and favourite
vegetable food of the people,
and where
the cultivators
are chiefly maintained with it,
a greater share
of this greater surplus
should belong
to the landlord than
in corn countries.
In Carolina,
where the planters,
as in other British colonies,
are generally both farmers
and landlords,
and where rent,
consequently,
is confounded with profit,
the cultivation 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 customs of Europe,
rice
is not there the common
and favourite
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 pasture,
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 cuitivated 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 superior to
what is produced 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 solid 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 potatoes.
Allowing,
however,
half the weight
of this root
to go to water,
a very large allowance,
such
an acre of potatoes
will still produce
six thousand weight
of solid nourishment,
three
times the quantity
produced
by the acre of wheat.
An acre of potatoes
is cultivated
with less expense
than an acre
of wheat;
the fallow,
which generally
precedes the sowing of wheat,
more than compensating
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 some rice countries,
the common and favourite
vegetable food of the people,
so as
to occupy the same proportion
of the lands in tillage,
which wheat and other sorts
of grain
for human food do at present,
the same quantity
of cultivated
land would maintain
a much greater number
of people;
and the labourers
being generally fed
with potatoes,
a greater surplus
would remain
after replacing all the stock,
and maintaining all the labour
employed in cultivation.
A greater share
of this surplus, too,
would belong to the landlord.
Population
would increase,
and rents
would rise much beyond what
they
are at present.
The land
which is fit for potatoes,
is fit
for almost every
other useful vegetable.
If they occupied
the same proportion
of cultivated land which corn
does at present,
they
would regulate,
in the same 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 labouring people
than wheaten bread,
and I have frequently heard
the same doctrine
held in Scotland.
I am,
however,
somewhat doubtful
of the truth of it.
The common people in Scotland,
who are fed with oatmeal,
are in general
neither
so strong nor so handsome
as the same rank
of people in England,
who are fed
with wheaten bread.
They neither work so well,
nor look so well;
and as
there is not
the same difference
between the people of fashion
in the two countries,
experience
would seem
to shew,
that
the food
of the common people
in Scotland
is not so suitable
to the human constitution as
that of their neighbours
of the same rank
in England.
But it
seems
to be otherwise
with potatoes.
The chairmen,
porters,
and coal-heavers in London,
and those unfortunate women
who live by prostitution,
the strongest men
and the most beautiful women
perhaps in the British dominions,
are said
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 decisive proof
of its nourishing quality,
or of its being peculiarly
suitable
to the health
of the human constitution.
It is difficult
to preserve potatoes
through the year,
and impossible
to store them like corn,
for two or three years
together.
The fear
of not being
able to sell them
before
they rot,
discourages their cultivation,
and is,
perhaps,
the chief obstacle
to their ever becoming
in any great country,
like bread,
the principal vegetable food
of all
the different ranks
of the people.
Of the Produce of Land,
which sometimes does,
and sometimes does not,
afford Rent.
Human food
seems
to be
the only produce of land,
which always
and necessarily affords some
rent to the landlord.
Other sorts of produce
sometimes may,
and sometimes may not,
according to
different circumstances.
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 sometimes feed
a greater number
of people than it
can supply
with those materials;
at least in the way
in which they
require them,
and are
willing
to pay for them.
In the one state,
therefore,
there
is always
a superabundance
of these materials,
which are frequently,
upon that account,
of little
or no value.
In the other,
there
is often a scarcity,
which necessarily augments
their value.
In the one state,
a great part of them
is thrown away
as useless and the price
of
what is used
is considered as equal only
to the labour 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
what is sufficient
to pay the expense of
bringing them
to market.
Their price,
therefore,
can always afford some
rent to the landlord.
The skins
of the larger animals
were the original materials
of clothing.
Among nations
of hunters and shepherds,
therefore,
whose food
consists chiefly in the flesh
of those animals,
everyman,
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 case
among the hunting nations
of North America,
before their country
was discovered
by the Europeans,
with whom they
now exchange
their surplus peltry,
for blankets,
fire-arms,
and brandy,
which gives it some value.
In the present
commercial state
of the known world,
the most barbarous nations,
I believe,
among
whom land property
is established,
have some foreign commerce
of this kind,
and find
among their
wealthier neighbours such
a demand
for all the materials
of clothing,
which their land produces,
and which can neither
be wrought up nor
consumed at home,
as raises
their price above
what it
costs to send them
to those
wealthier neighbours.
It affords,
therefore,
some
rent to the landlord.
When the greater part
of the Highland cattle
were consumed
on their own hills,
the exportation of their hides
made
the most considerable article
of the commerce of
that country,
and what they
were exchanged
for afforded
some addition to the
rent of the Highland estates.
The wool of England,
which in old times,
could neither
be consumed nor wrought
up at home,
found a market
in the
then wealthier
and more industrious
country
of Flanders,
and its price
afforded something 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
so superabundant,
that
a great part of them
would be thrown away
as useless,
and no part
could afford any rent
to the landlord.
The materials
of lodging
cannot always be transported
to so great a distance
as those
of clothing,
and do not so readily
become an object
of foreign commerce.
When they
are superabundant
in the country
which produces them,
it frequently happens,
even in the present
commercial state of the world,
that they
are of no value
to the landlord.
A good stone quarry
in the neighbourhood of London
would afford
a considerable 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 produces
it affords
a considerable 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 some 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 market;
the timber
is left
to rot upon the ground.
When the materials
of lodging
are so superabundant,
the part made use of
is worth only the labour
and expense
of fitting it for that use.
It affords no
rent to the landlord,
who generally grants the use
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 streets of London
has enabled the owners
of some barren rocks
on the coast of Scotland
to draw a rent from what
never afforded any before.
The woods of Norway,
and of the coasts
of the Baltic,
find a market
in many parts
of Great Britain,
which
they could not find at home,
and thereby afford some
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 those whom
it can feed.
When food
is provided,
it is easy
to find
the necessary clothing
and lodging.
But though
these are at hand,
it may often be difficult
to find food.
In some parts
of the British dominions,
what is called a house
may be built
by one day's labour
of one man.
The simplest species
of clothing,
the skins of animals,
require somewhat more labour
to dress
and prepare them for use.
They do not,
however,
require a great deal.
Among savage
or barbarous nations,
a hundredth,
or little more than
a hundredth part
of the labour
of the whole year,
will be sufficient
to provide them
with such clothing and lodging
as satisfy the 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 labour of one family
can provide food
for two,
the labour
of half
the society becomes sufficient
to provide food
for the whole.
The other half,
therefore,
or at least
the greater part of them,
can be employed
in providing other things,
or in satisfying
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 those wants
and fancies.
The rich man
consumes no more food
than his poor neighbour.
In quality
it may be very different,
and to select
and prepare
it may require more labour
and art;
but in quantity
it is very nearly the same.
But compare
the spacious palace
and great wardrobe
of the one,
with the hovel
and the few rags
of the other,
and you will be sensible that
the difference
between their clothing,
lodging,
and household furniture,
is almost as great
in quantity
as it is in quality.
The desire of food
is limited in every man
by the narrow capacity
of the human stomach;
but the desire
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 consume,
are always willing
to exchange the surplus,
or,
what is the same thing,
the price of it,
for gratifications
of this other kind.
What
is over and above satisfying
the limited desire,
is given
for the amusement
of those desires
which cannot be satisfied,
but seem
to be altogether endless.
The poor,
in order to
obtain food,
exert themselves
to gratify those
fancies of the rich;
and
to obtain it more certainly,
they vie
with one another
in the cheapness and perfection
of their work.
The number
of workmen increases
with the increasing quantity
of food,
or with the growing improvement
and cultivation
of the lands;
and as the nature
of their business
admits
of the utmost subdivisions
of labour,
the quantity
of materials which
they can work up,
increases
in a much greater proportion
than their numbers.
Hence
arises a demand
for every sort
of material which human invention
can employ,
either usefully or ornamentally,
in building,
dress,
equipage,
or household furniture;
for the fossils and minerals
contained
in the bowels
of the earth,
the precious metals,
and the precious stones.
Food is,
in this manner,
not only the original source
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 labour
in producing food,
by means
of the improvement
and cultivation
of land.
Those other parts
of the produce of land,
however,
which
afterwards afford rent,
do not afford it always.
Even in improved
and cultivated countries,
the demand for them
is not always
such as to afford
a greater price than what
is sufficient
to pay the labour,
and replace,
together
with its ordinary profits,
the stock
which must be employed in
bringing them
to market.
Whether it
is or is not such,
depends
upon different circumstances.
Whether a coal mine,
for example,
can afford any rent,
depends partly
upon its fertility,
and partly upon its situation.
A mine of any kind
may be said
to be either fertile
or barren,
according
as the quantity
of mineral
which can be brought from it
by a certain quantity
of labour,
is greater or less than
what can be brought
by an equal quantity
from the greater part
of other mines
of the same kind.
Some coal mines,
advantageously situated,
cannot be wrought on account
of their barrenness.
The produce
does not pay the expense.
They
can afford
neither profit nor rent.
There
are some,
of which the produce
is barely sufficient
to pay the labour,
and replace,
together
with its ordinary profits,
the stock
employed in working them.
They afford some profit
to the undertaker
of the work,
but no
rent to the landlord.
They
can be wrought advantageously
by nobody but the landlord,
who,
being himself
the 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 else
to work them
without paying some rent,
and nobody
can afford to pay any.
Other coal mines
in the same country,
sufficiently fertile,
cannot be wrought on account
of their situation.
A quantity of mineral,
sufficient
to defray the expense
of working,
could be brought
from the mine
by the ordinary,
or even less than
the ordinary quantity
of labour:
but in an inland country,
thinly inhabited,
and without either good roads
or water-carriage,
this quantity
could not be sold.
Coals
are a less
agreeable fuel than wood:
they
are said too
to be less wholesome.
The expense of coals,
therefore,
at the place
where they are consumed,
must generally be somewhat
less than
that of wood.
The price of wood,
again,
varies with the state
of agriculture,
nearly in the same manner,
and exactly for the same 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 incumbrance,
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 consequence
of the
increased number of cattle.
These,
though they
do not increase
in the same
proportion as corn,
which is altogether
the acquisition
of human industry,
yet multiply
under the care and protection
of men,
who store up
in the season of plenty
what may maintain them in
that of scarcity;
who,
through the whole year,
furnish them
with a greater quantity
of food than uncultivated nature
provides for them;
and who,
by destroying
and extirpating their enemies,
secure 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;
so 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
sometimes finds that
he can
scarce employ his best lands more
advantageously
than in growing
barren timber,
of which
the greatness
of the profit
often compensates the lateness
of the returns.
This
seems,
in the present times,
to be nearly the state
of things
in several parts
of Great Britain,
where the profit
of planting
is found
to be equal to
that of either corn
or pasture.
The advantage which
the landlord derives
from planting
can nowhere exceed,
at least
for any considerable time,
the rent which
these could afford him;
and in an inland country,
which is highly cuitivated,
it will frequently not fall
much short
of this rent.
Upon the sea-coast
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 less
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 single stick
of Scotch timber.
Whatever may be the price
of wood,
if that of coals
is such that the expense
of a coal fire
is nearly equal to
that of a wood one
we may be assured,
that at that place,
and in these circumstances,
the price of coals
is as high as it
can be.
It seems
to be so in
some 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 sorts
of fuel
cannot,
therefore,
be very great.
Coals,
in the coal countries,
are everywhere much
below this highest price.
If they were not,
they
could not bear
the expense
of a distant carriage,
either by land or by water.
A small quantity
only could be sold;
and the coal masters
and the coal proprietors
find it more
for their interest
to sell a great quantity
at a price
somewhat above the lowest,
than a small quantity
at the highest.
The most fertile coal mine, too,
regulates 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 somewhat underselling all
their neighbours.
Their neighbours
are soon obliged
to sell at the same price,
though they
cannot so well
afford it,
and though it
always diminishes,
and sometimes 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 proprietor.
The lowest price
at which
coals can be sold
for any considerable time,
is, like
that of all other commodities,
the price
which is barely sufficient
to replace,
together
with its ordinary profits,
the stock
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
must generally be nearly
about this price.
Rent,
even where coals
afford one,
has generally a smaller share
in their price than in
that of most other parts
of the rude produce
of land.
The rent
of an estate above ground,
commonly amounts to
what
is supposed
to be a third
of the gross produce;
and it
is generally
a rent certain and independent
of the occasional variations
in the crop.
In coal mines,
a fifth of the gross produce
is a very great rent,
a tenth the common rent;
and it
is seldom a rent certain,
but depends
upon the occasional variations
in the produce.
These
are so great,
that in a country
where thirty years purchase
is considered
as a moderate price
for the property
of a landed estate,
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 situation
as upon its fertility.
That of a metallic mine
depends
more upon its fertility,
and less upon its situation.
The coarse,
and still
more the precious metals,
when separated from the ore,
are so valuable,
that they
can generally bear the expense
of a very long land,
and of the
most distant sea carriage.
Their market
is not confined
to the countries
in the neighbourhood
of 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 silver of Peru
finds its way,
not only to Europe,
but from Europe to China.
The price
of coals
in Westmoreland or Shropshire
can have little effect
on their price at Newcastle;
and their price
in the Lionnois
can have none
at all.
The productions
of such distant coal
mines can never be brought
into competition
with one another.
But the productions
of the most distant metallic mines
frequently may,
and in fact
commonly are.
The price,
therefore,
of the coarse,
and still more
that of the precious metals,
at the most fertile mines
in the world,
must necessarily more
or less affect their price
at every other in it.
The price
of copper in Japan
must have some influence
upon its price
at the copper mines
in Europe.
The price of silver
in Peru,
or the quantity either
of labour
or of other goods which
it will purchase there,
must have
some influence on its price,
not only at the silver mines
of Europe,
but at those of China.
After the discovery
of the mines
of Peru,
the silver mines
of Europe were,
the greater part of them,
abandoned.
The value of silver
was so much reduced,
that
their produce
could
no longer pay the expense
of working them,
or replace,
with a profit,
the food,
clothes,
lodging,
and other necessaries
which were consumed in
that operation.
This
was the case, too,
with the mines
of Cuba and St. Domingo,
and even with the ancient mines
of Peru,
after the discovery of those
of Potosi.
The price of every metal,
at every mine,
therefore,
being regulated
in some measure
by its price
at the most 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 seldom afford
a very high rent
to the landlord.
Rent accordingly,
seems
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.
Labour and profit make
up the greater part
of both.
A sixth part
of the gross produce
may be reckoned the average
rent of the tin mines
of Cornwall,
the most fertile
that are known in the world,
as we
are told
by the Rev. Mr. Borlace,
vice-warden of the stannaries.
Some,
he says,
afford more,
and some do not afford
so much.
A sixth part
of the gross produce
is
the rent, too,
of several
very fertile lead mines
in Scotland.
In the silver mines
of Peru,
we are told
by Frezier and Ulloa,
the proprietor
frequently exacts
no other acknowledgment
from the undertaker
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 standard silver,
which
till
then might be considered
as the real rent
of the greater part
of the silver mines
of Peru,
the richest which
have been known
in the world.
If there had been 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 twentieth 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 sixth,
you will find
that the whole average rent
of the tin mines
of Cornwall,
was to the whole average rent
of the silver mines of Peru,
as thirteen to twelve.
But the silver mines of Peru
are not now able
to pay even this low rent;
and the tax upon silver was,
in 1736,
reduced from one fifth
to one tenth.
Even this tax
upon silver, too,
gives more temptation to
smuggling
than the tax
of one twentieth upon tin;
and smuggling
must be much easier
in the precious than
in the bulky commodity.
The tax
of the king of Spain,
accordingly,
is said
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 most fertile tin
mines than it
does of silver
at the most fertile silver mines
in the world.
After replacing
the stock
employed
in working those
different mines,
together
with its ordinary profits,
the residue
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 silver mines
commonly very great
in Peru.
The same most respectable
and well-informed
authors acquaint us,
that
when any person undertakes
to work a new mine
in Peru,
he is universally looked upon
as a man destined
to bankruptcy
and ruin,
and is upon that account
shunned and avoided
by every body.
Mining,
it seems,
is considered there
in the same light as here,
as a lottery,
in which the prizes
do not compensate the blanks,
though the greatness of some
tempts many adventurers
to throw away
their fortunes
in such unprosperous projects.
As the sovereign,
however,
derives a considerable part
of his revenue
from the produce
of silver mines,
the law in Peru
gives
every possible encouragement
to the discovery
and working of new ones.
Whoever discovers a new mine,
is entitled
to measure
off two hundred
and forty-six feet
in length,
according to
what he supposes
to be the direction
of the vein,
and half as much in breadth.
He becomes proprietor
of this portion of the mine,
and can work it
without paving
any acknowledgment
to the landlord.
The interest
of the duke of Cornwall
has given occasion
to a regulation
nearly of the same kind in
that ancient dutchy.
In waste
and uninclosed 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 consent
of the owner
of the land,
to whom,
however,
a very small acknowledgment
must be paid
upon working it.
In both regulations,
the sacred rights
of private property
are sacrificed
to the supposed interests
of public revenue.
The same 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 rental.
It was once a fifth,
and afterwards a tenth,
as in silver;
but it was found that
the work
could not bear even
the lowest
of these two taxes.
If it is rare,
however,
say the same authors,
Frezier and Ulloa,
to find a person
who has made his fortune
by a silver,
it is still much rarer
to find one who
has done so
by a gold mine.
This twentieth part
seems to be
the whole rent
which is paid
by the greater part
of the gold mines
of Chili and Peru.
Gold, too,
is much more liable
to be smuggled
than even silver;
not only on account
of the superior value
of the metal
in proportion to its bulk,
but on account
of the peculiar way
in which nature produces it.
Silver
is very seldom found virgin,
but,
like most other metals,
is generally mineralized
with some other body,
from which
it is impossible
to separate it
in such quantities
as
will pay for the expense,
but by a
very laborious and tedious
operation,
which
cannot well be carried
on but in work-houses
erected for the purpose,
and, therefore,
exposed
to the inspection
of the king's officers.
Gold,
on the contrary,
is almost always found
virgin.
It is sometimes found
in pieces of some bulk;
and, even when mixed,
in small
and almost insensible particles,
with sand,
earth,
and other extraneous bodies,
it can be separated
from them by a
very short and simple
operation,
which can be carried on
in any private house
by any
body
who is possessed
of a small quantity
of mercury.
If the king's tax,
therefore,
is but ill paid upon silver,
it is likely
to be much worse
paid upon gold;
and rent
must make a much smaller part
of the price
of gold than
that of silver.
The lowest price
at which the precious metals
can be sold,
or the smallest quantity
of other goods
for which they
can be exchanged,
during any considerable time,
is regulated
by the
same principles which fix
the lowest ordinary price
of all other goods.
The stock
which
must commonly be employed,
the food,
clothes,
and lodging,
which
must commonly be consumed
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 necessarily determined
by any thing
but the actual scarcity or
plenty
of these 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 those metals
arises partly
from their utility,
and partly from their beauty.
If you except iron,
they
are more useful than,
perhaps,
any other metal.
As they
are less liable
to rust and impurity,
they
can more easily be kept
clean;
and the utensils,
either
of the table or the kitchen,
are often,
upon that account,
more agreeable
when made of them.
A silver boiler
is more cleanly than a lead,
copper,
or tin one;
and the same quality
would render a gold boiler
still better
than a silver one.
Their principal merit,
however,
arises from their beauty,
which renders them
peculiarly fit
for the ornaments
of dress and furniture.
No paint
or dye
can give so splendid a colour
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
consists
in the parade of riches;
which,
in their eye,
is never so complete
as when they
appear
to possess those
decisive marks
of opulence which nobody
can possess 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 labour which
it requires
to collect
any considerable quantity
of it;
a labour which nobody
can afford
to pay but themselves.
Such objects
they are willing
to purchase
at a higher price
than things
much more beautiful and useful,
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 everywhere 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 employment,
however,
by occasioning a new demand,
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 stones
arises altogether
from their beauty.
They are
of no use 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 occasions,
almost the whole
of the high price.
Rent
comes
in but for
a very small share,
frequently for no share;
and the most fertile mines
only afford
any considerable rent.
When Tavernier,
a jeweller,
visited the diamond mines
of Golconda and Visiapour,
he was informed that
the sovereign of the country,
for whose benefit
they were wrought,
had ordered all of them
to be shut up except those
which yielded
the largest and finest stones.
The other,
it seems,
were to the proprietor not
worth the working.
As the prices,
both of the precious metals
and of the precious stones,
is regulated all
over the world
by their price
at the most fertile mine
in it,
the rent which
a mine of either
can afford to its proprietor
is in proportion,
not to its absolute,
but to
what may be called
its relative fertility,
or to its superiority
over other mines
of the same kind.
If new mines were discovered,
as much superior to those
of Potosi,
as they
were superior to those
of Europe,
the value of silver
might be so much degraded
as to render even
the mines
of Potosi not
worth the working.
Before the discovery
of the Spanish West Indies,
the most fertile mines
in Europe
may have afforded as great
a rent to their proprietors
as the richest mines
in Peru do at present.
Though the quantity of silver
was much less,
it might have exchanged
for an equal quantity
of other goods,
and the proprietor's share
might have enabled him
to purchase or command
an equal quantity either
of labour
or of commodities.
The value,
both of the produce and
of the rent,
the real revenue which
they afforded,
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 stones,
could add little
to the wealth
of the world.
A produce,
of which
the value
is principally derived
from its scarcity,
is necessarily degraded
by its abundance.
A service of plate,
and the other frivolous ornaments
of dress and furniture,
could be purchased
for a smaller quantity
of commodities;
and in this
would consist
the sole advantage which
the world
could derive from
that abundance.
It is otherwise
in estates above ground.
The value,
both of their produce
and of their rent,
is in proportion
to their absolute,
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 him
a proportionable command
of the labour
of those people,
and of the commodities
with which that labour
can supply him.
The value
of the most barren land
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 bestowed,
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 consequence
of the improvement of land,
many people
have
the disposal beyond what they
themselves can consume,
is the great cause
of the demand,
both for the precious metals
and the precious stones,
as
well as
for every other conveniency
and ornament of dress,
lodging,
household furniture,
and equipage.
Food not
only constitutes
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 sorts
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 dress.
They seemed to value them
as
we would do any little pebbles
of somewhat
more than ordinary beauty,
and to consider them
as just worth the picking up,
but not worth
the refusing to any body
who asked them,
They gave them
to their new guests
at the first request,
without seeming
to think
that they
had made them
any very valuable present.
They
were astonished
to observe the rage
of the Spaniards
to obtain them;
and had no notion
that
there could anywhere be
a country in which many people
had the disposal of so great
a superfluity of food;
so 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 passion
of the Spaniards
would not have surprised them.
Of the variations
in the Proportion
between the respective Values
of that sort of Produce
which always affords Rent,
and of
that which sometimes does,
and sometimes does not,
afford Rent.
The increasing abundance
of food,
in consequence
of the increasing improvement
and cultivation,
must necessarily 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 improvement,
it might,
therefore,
be expected there
should be only one variation
in the comparative values
of those
two different sorts
of produce.
The value of that sort
which sometimes does,
and sometimes does not afford rent,
should constantly rise in
proportion to
that
which always affords
some rent.
As art and industry advance,
the materials
of clothing and lodging,
the useful fossils and materials
of the earth,
the precious metals
and the precious stones,
should gradually
come
to be more
and more in demand,
should gradually exchange
for a greater
and a greater quantity
of food;
or, in other words,
should gradually
become dearer and dearer.
This,
accordingly,
has been the case with most
of these things
upon most occasions,
and would have been the case
with all of them
upon all occasions,
if particular
accidents had not,
upon some occasions,
increased the supply
of some of them
in a still greater proportion
than the demand.
The value
of a free-stone quarry,
for example,
will necessarily increase
with the increasing improvement
and population
of the country round
about it,
especially
if it
should be the only one
in the neighbourhood.
But the value
of a silver mine,
even though
there should not be another
within a thousand miles of it,
will not necessarily increase
with the improvement
of the country
in which it is situated.
The market
for the produce
of a free-stone quarry
can seldom extend
more than a few miles round
about it,
and the demand
must generally be
in proportion
to the improvement and population
of
that small district;
but the market
for the produce
of a silver mine
may extend
over the whole known world.
Unless the world in general.
therefore,
be advancing
in improvement and population,
the demand for silver
might not be
at all
increased
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 course
of its improvements,
new mines
should be discovered,
much more fertile
than any which
had been known before,
though the demand for silver
would necessarily increase,
yet
the supply 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 labour,
or exchange for a smaller and
a smaller quantity of corn,
the principal part
of the subsistence
of the labourer.
The great market for silver
is
the commercial and civilized part
of the world.
If,
by the general progress
of improvement,
the demand
of this market
should increase,
while,
at the same time,
the supply did not increase
in the same proportion,
the value of silver
would gradually rise in
proportion to
that of corn.
Any given quantity of silver
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 supply,
by some accident,
should increase,
for many years together,
in a 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 spite of all improvements,
gradually
become dearer and dearer.
But if,
on the other hand,
the supply of that metal
should increase nearly
in the same proportion
as the demand,
it would continue
to purchase or exchange
for nearly
the same quantity of corn;
and the average money price
of corn would,
in spite of all improvements.
continue very nearly the same.
These three
seem to exhaust all
the possible combinations
of events
which can happen
in the progress
of improvement;
and during the course
of the four centuries preceding
the present,
if we may judge by what
has happened both
in France and Great Britain,
each
of those
three different combinations
seems
to have taken place
in the European market,
and nearly in
the same order, too,
in which I
have here
set them down.
Digression
concerning the Variations
in the value
of Silver
during the Course
of the Four last Centuries.
In 1350,
and for some time before,
the average price
of the quarter
of wheat in England
seems not
to have been estimated lower
than four ounces of silver,
Tower weight,
equal to
about twenty shillings
of our present money.
From this price
it seems
to have fallen gradually
to two ounces
of silver,
equal to
about ten shillings
of our present money,
the price at which we
find
it estimated in the beginning
of the sixteenth century,
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 Statute of Labourers.
In the preamble,
it complains much
of the insolence of servants,
who endeavoured
to raise their wages
upon their masters.
It
therefore ordains,
that all servants
and labourers should,
for the future,
be contented
with the same wages
and liveries
(liveries in those times
signified not only clothes,
but provisions)
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
should nowhere be estimated
higher
than tenpence a-bushel,
and that
it should always be
in the option
of the master
to deliver them either
the wheat or the money.
Tenpence:
a-bushel,
therefore,
had,
in the 25th of Edward III
been reckoned
a very moderate price
of wheat,
since it
required a particular statute
to oblige
servants
to accept of it
in exchange
for their usual livery
of provisions;
and it
had been reckoned
a reasonable price
ten years before that,
or in the 16th year
of the king,
the term
to which the statute refers.
But in the 16th year
of Edward III,
tenpence
contained about half
an ounce of silver,
Tower weight,
and was nearly
equal to half-a-crown
of our present money.
Four ounces of silver,
Tower weight,
therefore,
equal to six shillings
and eightpence
of the money
of those times,
and to
near twenty shillings of
that of the present,
must have been reckoned
a moderate price
for the quarter
of eight bushels.
This statute
is surely a better evidence
of
what was reckoned,
in those times,
a moderate price of grain,
than the prices
of some particular years,
which
have generally been
recorded
by historians and other writers,
on account
of their extraordinary dearness
or cheapness,
and from which,
therefore,
it is difficult
to form
any judgment concerning what
may have been
the ordinary price.
There are,
besides,
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 silver the quarter,
and that
of other grain
in proportion.
In 1309,
Ralph de Born,
prior of St Augustine's,
Canterbury,
gave a feast
upon his installation-day,
of which William Thorn
has preserved,
not only the bill of fare,
but the prices
of many particulars.
In that feast
were consumed, 1st,
fifty-three quarters of wheat,
which cost nineteen pounds,
or seven shillings,
and twopence a-quarter,
equal to
about one-and-twenty shillings
and sixpence
of our present money;
2dly,
fifty-eight quarters of malt,
which cost
seventeen pounds ten shillings,
or six shillings a-quarter,
equal to
about eighteen shillings
of our present money;
3dly,
twenty quarters of oats,
which cost four pounds,
or four shillings a-quarter,
equal to
about twelve shillings
of our present money.
The prices of malt
and oats seem
here to lie 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
consumed at a feast,
which was famous
for its magnificence.
In 1262,
being the 51st of Henry III,
was revived
an ancient statute,
called the assize
of bread and ale,
which,
the king
says in the preamble,
had been made
in the times
of his progenitors,
some time kings of England.
It is probably,
therefore,
as old at least
as the time
of his grandfather,
Henry II,
and may have been
as old as the Conquest.
It regulates
the price of bread
according
as the prices of wheat
may happen
to be,
from one shilling
to twenty shillings
the quarter
of the money
of those times.
But statutes of this kind
are generally presumed
to provide with equal care
for all deviations
from the middle price,
for those below it,
as
well as for those above it.
Ten shillings,
therefore,
containing six ounces of silver,
Tower weight,
and equal to
about thirty shillings
of our present money,
must,
upon this supposition,
have been reckoned
the middle price
of the quarter
of wheat when this statute
was first enacted,
and must have continued
to be so in the 51st
of Henry III.
We cannot,
therefore,
be very wrong
in supposing that
the middle price
was not less than one-third
of the highest price at which this statute
regulates the price of bread,
or than six shillings
and eightpence
of the money
of those times,
containing four ounces of silver,
Tower weight.
From these different facts,
therefore,
we seem to have some reason
to conclude that,
about the middle
of the fourteenth century,
and for a considerable time
before,
the average or ordinary price
of the quarter of wheat
was not supposed
to be less than four ounces
of silver,
Tower weight.
From about the middle
of the fourteenth
to the beginning
of the sixteenth century,
what was reckoned
the reasonable and moderate,
that is,
the ordinary or average price
of wheat,
seems
to have sunk gradually to
about one half
of this price;
so as at last
to have fallen to
about two ounces of silver,
Tower weight,
equal to
about ten shillings
of our present money.
It continued
to be estimated
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 estimations
of wheat.
In one of them
it is computed
at six shilling
and eightpence the quarter,
in the other
at five shillings
and eightpence only.
In 1512,
six shillings and eightpence
contained only two ounces
of silver,
Tower weight,
and were equal to
about ten shillings
of our present money.
From the 25th
of Edward III
to the beginning
of the reign of Elizabeth,
during the space
of more than
two hundred years,
six shillings and eightpence,
it appears
from several
different statutes,
had continued
to be considered as
what is called the moderate
and reasonable,
that is,
the ordinary or average price
of wheat.
The quantity of silver,
however,
contained
in that nominal sum was,
during the course
of this period,
continually
diminishing in consequence
of some alterations
which were made in the coin.
But the increase
of the value of silver had,
it seems,
so far
compensated the diminution
of the quantity of it
contained
in the same nominal sum,
that
the legislature
did not think it worth while
to attend
to this circumstance.
Thus,
in 1436,
it was enacted,
that wheat
might be exported
without a licence
when the price
was so low as six shillings
and eightpence:
and in 1463,
it was enacted,
that no wheat
should be imported
if the price
was not above six shillings
and eightpence the quarter:
The legislature
had imagined,
that
when the price
was so low,
there
could be no inconveniency
in exportation,
but that
when it rose higher,
it became prudent
to allow of importation.
Six shillings and eightpence,
therefore,
containing
about the same quantity of
silver as thirteen shillings
and fourpence
of our present money
(one-third part
less than
the same nominal sum
contained
in the time
of Edward III),
had,
in those times,
been considered as
what is called
the moderate
and reasonable price
of wheat.
In 1554,
by the 1st and 2nd
of Philip and Mary,
and in 1558,
by the 1st of Elizabeth,
the exportation of wheat
was in the
same manner prohibited,
whenever the price
of the quarter
should exceed six shillings
and eightpence,
which did not then contain
two penny worth
more silver
than the same nominal sum
does at present.
But it
had soon been found,
that
to restrain
the exportation of wheat till
the price
was so very low,
was, in reality,
to prohibit it altogether.
In 1562,
therefore,
by the 5th of Elizabeth,
the exportation of wheat
was allowed
from certain ports,
whenever the price
of the quarter
should not exceed ten shillings,
containing nearly
the same quantity
of silver as the like nominal
sum does at present.
This price
had at this time,
therefore,
been considered as
what is called
the moderate
and reasonable price
of wheat.
It agrees nearly
with the estimation
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 sixteenth century,
than
in the two centuries preceding,
has been observed both
by Mr Dupré de St Maur,
and by the elegant author
of the Essay
on the Policy of Grain.
Its price,
during the same period,
had probably sunk
in the same manner
through the greater part
of Europe.
This rise
in the value of silver,
in proportion to
that of corn,
may either
have been owing altogether
to the increase
of the demand for
that metal,
in consequence
of increasing improvement
and cultivation,
the supply,
in the mean time,
continuing the same as before;
or,
the demand
continuing the same as before,
it
may have been owing altogether
to the gradual diminution
of the supply:
the greater part of the mines
which were then known
in the world
being much exhausted,
and, consequently,
the expense
of working them much
increased;
or it
may have been owing partly
to the one,
and partly to the other
of those two circumstances.
In the end
of the fifteenth and beginning
of the sixteenth centuries,
the greater part
of Europe
was approaching towards a more
settled from
of government than it
had enjoyed
for several ages before.
The increase of security
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 increase 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 silver.
It is natural
to suppose, too,
that the greater part
of the mines
which then supplied
the European market
with silver
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 Conquest,
perhaps from the invasion
of Julius Caesar,
till
the discovery of the mines
of America,
the value of silver
was continually diminishing.
This opinion
they seem
to have been led into,
partly by the observations
which they
had occasion
to make
upon the prices both
of corn
and of some other parts
of the rude produce
of land,
and partly by the popular notion,
that
as the quantity of silver
naturally increases
in every country
with the increase of wealth,
so its value
diminishes as it
quantity increases.
In their observations
upon the prices of corn,
three different circumstances
seem frequently
to have misled them.
First,
in ancient times,
almost all rents
were paid in kind;
in a certain quantity
of corn,
cattle,
poultry,.etc.
It sometimes happened,
however,
that
the landlord would stipulate,
that he should be
at liberty
to demand of the tenant,
either the annual payment
in kind
or a certain sum
of money instead of it.
The price
at which the payment
in kind
was in this manner
exchanged
for a certain sum
of money,
is in Scotland
called the conversion price.
As the option
is always
in the landlord
to take either
the substance or the price,
it is necessary,
for the safety
of the tenant,
that
the conversion price
should rather
be below
than above
the average market price.
In many places,
accordingly,
it is not much above one half
of this price.
Through the greater part
of Scotland this custom
still continues
with regard to poultry,
and in some places
with regard to cattle.
It
might probably have continued
to take place, too,
with regard to corn,
had not
the institution
of the public fiars
put an end to it.
These
are annual valuations,
according to
the judgment of an assize,
of the average price
of all
the different sorts of grain,
and of all
the different qualities
of each,
according to
the actual market price
in every different county.
This institution
rendered it sufficiently safe
for the tenant,
and much more convenient
for the landlord,
to convert,
as they call it,
the corn rent,
rather at
what should 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
seem frequently
to have mistaken
what is called in Scotland
the conversion price
for the actual market price.
Fleetwood
acknowledges,
upon one occasion,
that he
had made this mistake.
As he wrote his book,
however,
for a particular purpose,
he does not think
proper to make
this acknowledgment
till after transcribing
this conversion price
fifteen times.
The price
is eight shillings
the quarter of wheat.
This sum in 1423,
the year
at which
he begins with it,
contained
the same quantity
of silver as sixteen shillings
of our present money.
But in 1562,
the year
at which
he ends with it,
it contained
no more than
the same nominal sum
does at present.
Secondly,
they have been misled
by the slovenly manner
in which some ancient statutes
of assize
had been sometimes transcribed
by lazy copiers,
and sometimes,
perhaps,
actually
composed
by the legislature.
The ancient statutes of assize
seem
to have begun always
with determining what
ought to be the price
of bread and ale when
the price of wheat and barley
were at the lowest;
and
to have proceeded gradually
to determine
what it ought to be,
according
as the prices
of those two sorts of grain
should gradually rise above this
lowest price.
But the transcribers
of those statutes
seem frequently
to have thought it sufficient
to copy
the regulation as far
as
the three or four first and
lowest prices;
saving
in this manner
their own labour,
and judging,
I suppose,
that this
was enough
to show what proportion
ought to be observed
in all higher prices.
Thus,
in the assize
of bread and ale,
of the 51st of Henry III,
the price of bread
was regulated according to
the different prices
of wheat,
from one shilling
to twenty shillings
the quarter
of the money
of those times.
But in the manuscripts
from which all
the different editions
of the statutes,
preceding that of Mr Ruffhead,
were printed,
the copiers
had never transcribed
this regulation
beyond the price
of twelve shillings.
Several writers,
therefore,
being misled
by this faulty transcription,
very naturally
conclude that
the middle price,
or six shillings the quarter,
equal to
about eighteen shillings
of our present money,
was the ordinary
or average price
of wheat at that time.
In the statute
of Tumbrel and Pillory,
enacted nearly
about the same time,
the price of ale
is regulated according to
every sixpence
rise in
the price of barley,
from two shillings,
to four shillings
the quarter.
That four shillings,
however,
was not considered
as the highest price
to which barley
might frequently rise in
those times,
and that these
prices were only given
as an example
of the proportion
which ought to be observed
in all other prices,
whether higher or lower,
we may infer
from the last words
of the statute:
"Et sic deinceps
crescetur vel diminuetur
per sex denarios."
The expression
is very slovenly,
but the meaning
is plain enough,
"that the price of ale
is in this manner
to be increased
or diminished according to
every sixpence
rise or fall
in the price of barley."
In the composition
of this statute,
the legislature itself
seems
to have been as negligent
as the copiers
were in the transcription
of the other.
In an ancient manuscript
of the Regiam Majestatem,
an old Scotch law book,
there
is a statute of assize,
in which the price of bread
is regulated according to all
the different prices of wheat,
from tenpence
to three shillings
the Scotch boll,
equal to
about half
an English quarter.
Three shillings Scotch,
at the time
when this assize
is supposed
to have been enacted,
were equal to
about nine shillings sterling
of our present money
Mr Ruddiman seems
(See his Preface
to Anderson's Diplomata Scotiae.)
to conclude from this,
that three shillings
was
the highest price to which wheat
ever rose in those times,
and that tenpence,
a shilling,
or at most two shillings,
were the ordinary prices.
Upon consulting
the manuscript,
however,
it appears evidently,
that all these
prices are only set down
as examples of the proportion
which ought to be observed
between the respective prices
of wheat and bread.
The last
words of the statute are
"reliqua judicabis
secundum praescripta,
habendo
respectum ad pretium bladi."
-- "You shall judge
of the remaining cases,
according to
what is above written,
having respect
to the price of corn."
Thirdly,
they seem
to have been misled too,
by the very low price
at which wheat
was sometimes sold
in very ancient times;
and to have imagined,
that
as its lowest price
was then much lower
than in later times
its ordinary price
must 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 sixteen shillings
of the money
of those times,
equal to fourteen pounds
eight shillings
of
that of the present;
the other
is six pounds eight shillings,
equal to nineteen pounds
four shillings
of our present money.
No price
can be found
in the end
of the fifteenth,
or beginning
of the sixteenth century,
which approaches
to the extravagance of these.
The price of corn,
though
at all times liable
to variation
varies most in those turbulent
and disorderly societies,
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
disorderly state
of England
under the Plantagenets,
who governed it from
about the middle
of the twelfth
till towards the end
of the fifteenth century,
one district
might be in plenty,
while another,
at no great distance,
by having its crop destroyed,
either
by some accident
of the seasons,
or by the incursion
of some neighbouring baron,
might be suffering all
the horrors of a famine;
and yet
if the lands
of some hostile lord
were interposed between them,
the one
might not be able
to give the least assistance
to the other.
Under the vigorous administration
of the Tudors,
who governed England
during the latter part
of the fifteenth,
and through the whole
of the sixteenth century,
no baron was powerful enough
to dare
to disturb
the public security.
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 present
times,
and digested,
according to
the order of time,
into seven divisions
of twelve years each.
At the end
of each division, too,
he will find
the average price
of the twelve years
of which
it consists.
In that long period of time,
Fleetwood
has been
able to collect the prices
of no more than eighty years;
so that four years
are wanting
to make
out the last 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 see,
that from the beginning
of the thirteenth
till after the middle
of the sixteenth century,
the average price
of each twelve years
grows gradually lower
and lower;
and that
towards the end
of the sixteenth century it
begins
to rise
again.
The prices,
indeed,
which
Fleetwood has been able
to collect,
seem
to have been
those chiefly which
were remarkable
for extraordinary dearness
or cheapness;
and I do not pretend
that
any very certain conclusion
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,
seems,
with most other writers,
to have believed,
that,
during all this period,
the value of silver,
in consequence
of its increasing abundance,
was continually diminishing.
The prices of corn,
which he himself
has collected,
certainly
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 explain.
Bishop Fleetwood
and Mr Dupré de
St Maur
are the two authors
who seem
to have collected,
with the greatest diligence
and fidelity,
the prices
of things in ancient times.
It is some what curious that,
though their opinions
are so very different,
their facts,
so far as they
relate
to the price
of corn at least,
should coincide so very exactly.
It is not,
however,
so much
from the low price
of corn,
as from
that of some other parts
of the rude produce of land,
that
the most judicious writers
have inferred the great value
of silver
in those very ancient times.
Corn,
it has been said,
being a sort of manufacture,
was, in those rude ages,
much dearer
in proportion
than the greater part
of other commodities;
it is meant,
I suppose,
than the greater part
of unmanufactured commodities,
such as cattle,
poultry,
game of all kinds,.etc.
That in those times
of poverty and barbarism
these were proportionably
much cheaper
than corn,
is undoubtedly true.
But this cheapness
was not the effect
of the high value of silver,
but of the low value
of those commodities.
It was not because silver
would in such times
purchase
or represent a greater
quantity
of labour,
but because such commodities
would purchase
or represent
a much smaller quantity
than
in times
of more opulence
and improvement.
Silver
must 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 sea,
of a freight,
and an insurance.
One-and-twenty pence
halfpenny sterling,
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 shillings sterling,
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,.etc.
as they
can be acquired
with a very small quantity
of labour,
so they
will purchase
or command
but a very small quantity.
The low money price
for which they may be sold,
is no proof
that
the real value of silver
is there very high,
but that
the real value
of those commodities
is very low.
Labour,
it must always be remembered,
and not any particular commodity,
or set of commodities,
is the real measure
of the value both of silver
and of all other commodities.
But in countries
almost waste,
or but thinly inhabited,
cattle,
poultry,
game of all kinds,.etc.
as they
are
the spontaneous productions
of Nature,
so she
frequently produces them
in much greater
quantities
than the consumption
of the inhabitants
requires.
In such a state of things,
the supply
commonly exceeds the demand.
In different states
of society,
in different states
of improvement,
therefore,
such commodities
will represent,
or be equivalent,
to very different quantities
of labour.
In every state
of society,
in every stage of improvement,
corn
is the production
of human industry.
But the average produce
of every sort of industry
is always suited,
more or less exactly,
to the average consumption;
the average
supply to the average demand.
In every different stage
of improvement,
besides,
the raising
of equal quantities
of corn
in the same soil and climate,
will,
at an average,
require nearly
equal quantities of labour;
or,
what comes to the same thing,
the price of
nearly equal quantities;
the continual increase
of the productive powers
of labour,
in an improved state
of cultivation,
being more
or less counterbalanced
by the continual increasing price
of cattle,
the principal instruments
of agriculture.
Upon all these accounts,
therefore,
we may rest assured,
that equal quantities
of corn will,
in every state
of society,
in every stage of improvement,
more nearly
represent,
or be equivalent to,
equal quantities of labour,
than equal quantities
of any other part
of the rude produce
of land.
Corn,
accordingly,
it has already been observed,
is, in 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 different stages,
therefore,
we can judge better
of the real value of silver,
by comparing it with corn,
than by comparing it
with any other commodity
or set of commodities.
Corn,
besides,
or whatever else
is the common and favourite
vegetable food of the people,
constitutes,
in every civilized country,
the principal part
of the subsistence
of the labourer.
In consequence
of the extension
of agriculture,
the land of every country
produces
a much greater quantity
of vegetable than
of animal food,
and the labourer
everywhere lives chiefly
upon the wholesome food
that is
cheapest and most abundant.
Butcher's meat,
except
in the most thriving countries,
or where
labour
is most highly rewarded,
makes
but an insignificant part
of his subsistence;
poultry
makes a still smaller part
of it,
and game no part of it.
In France,
and even in Scotland,
where labour
is somewhat better
rewarded than in France,
the labouring
poor seldom eat
butcher's meat,
except upon holidays,
and other extraordinary occasions.
The money price of labour,
therefore,
depends much more
upon the average money price
of corn,
the subsistence
of the labourer,
than upon
that of butcher's meat,
or of any other part
of the rude produce
of land.
The real value
of gold and silver,
therefore,
the real quantity
of labour which
they can purchase
or command,
depends much more
upon the quantity
of corn which
they can purchase
or command,
than upon
that of butcher's meat,
or any other part
of the rude produce
of land.
Such slight observations,
however,
upon the prices either
of corn
or of other commodities,
would not probably have misled
so many intelligent authors,
had they
not been influenced
at the same time
by the popular notion,
that
as the quantity of silver
naturally increases
in every country
with the increase of wealth,
so its value
diminishes
as its quantity increases.
This notion,
however,
seems 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, secondly,
from the increased wealth
of the people,
from the increased produce
of their annual labour.
The first of these causes
is no doubt necessarily
connected
with the diminution
of the value
of the precious metals;
but the second is not.
When more abundant mines
are discovered,
a greater
quantity
of the precious metals
is brought
to market;
and the quantity
of the necessaries
and conveniencies
of life
for which they
must be exchanged
being the same as before,
equal
quantities of the metals
must be exchanged
for smaller quantities
of commodities.
So far,
therefore,
as the increase
of the quantity
of the
precious metals
in any country
arises
from the increased abundance
of the mines,
it is necessarily connected
with some diminution
of their value.
When,
on the contrary,
the wealth
of any country increases,
when the annual produce
of its labour
becomes gradually greater
and greater,
a greater
quantity of coin
becomes necessary
in order to
circulate a greater quantity
of commodities:
and the people,
as they can afford it,
as they
have more
commodities
to give for it,
will naturally purchase
a greater and a greater
quantity
of plate.
The quantity of their coin
will increase from necessity;
the quantity
of their plate
from vanity and ostentation,
or from the same reason
that the quantity
of fine statues,
pictures,
and of every other luxury
and curiosity,
is likely
to increase
among them.
But as statuaries and painters
are not likely
to be worse rewarded
in times
of wealth and prosperity,
than
in times
of poverty and depression,
so gold and silver
are not likely
to be worse
paid for.
The price
of gold and silver,
when the accidental discovery
of more abundant
mines does not keep it down,
as it naturally rises
with the wealth
of every country;
so,
whatever
be the state of the mines,
it is at all
times naturally higher
in a rich than
in a poor country.
Gold and silver,
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 best
afford it.
Labour,
it must be remembered,
is the ultimate price
which is paid
for every thing;
and in countries
where
labour
is equally well rewarded,
the money price of labour
will be in proportion to
that of the subsistence
of the labourer.
But gold and silver
will naturally exchange
for a greater quantity
of subsistence
in a rich than
in a poor country;
in a country
which abounds
with subsistence,
than in one
which is
but indifferently supplied
with it.
If the two countries
are at a great distance,
the difference
may be very great;
because,
though
the metals
naturally fly
from the worse
to the better market,
yet it may be difficult
to transport them
in such quantities
as to bring their price
nearly to a level in both.
If the countries are near,
the difference
will be smaller,
and may sometimes be
scarce perceptible;
because in this case
the transportation
will be easy.
China
is a much richer country
than any part of Europe,
and the difference
between the price
of subsistence
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 Scotland,
but the difference
between the money price
of corn in those
two countries
is much smaller,
and is but just perceptible.
In proportion 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 somewhat dearer.
Scotland
receives almost every year
very large supplies
from England,
and every commodity
must commonly be somewhat dearer
in the country
to which
it is brought than in
that from which
it comes.
English corn,
therefore,
must be dearer
in Scotland 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 sold
higher
there than the Scotch corn which
comes
to market
in competition with it.
The difference
between the money price
of labour
in China and in Europe,
is still greater than
that between the money price
of subsistence;
because the real recompence
of labour
is higher in Europe than
in China,
the greater part of Europe
being in an improving state,
while China seems
to be standing still.
The money price of labour
is lower in Scotland than
in England,
because the real recompence
of labour
is much lower:
Scotland,
though advancing
to greater wealth,
advances much more slowly
than England.
The frequency
of emigration from Scotland,
and the rarity of it
from England,
sufficiently
prove that
the demand for labour
is very different
in the two countries.
The proportion
between the real recompence
of labour
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 silver,
as they
are naturally
of the greatest value
among the richest,
so they
are naturally
of the least value
among the poorest nations.
Among savages,
the poorest of all nations,
they
are scarce of 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 cheapness
of silver,
but of the real dearness
of corn.
It does not cost less labour
to bring
silver
to the great town than
to the remote parts
of the country;
but it
costs a great deal more
to bring corn.
In some very rich
and commercial countries,
such as Holland
and the territory
of Genoa,
corn
is dear for the same reason
that it
is dear in great towns.
They do not produce enough
to maintain
their inhabitants.
They
are rich
in the industry and skill
of their artificers
and manufacturers,
in every sort of machinery
which can facilitate
and abridge labour;
in shipping,
and in all
the other instruments
and means
of carriage and commerce:
but they
are poor in corn,
which,
as it must be brought
to them from distant countries,
must,
by an addition
to its price,
pay for the carriage
from those countries.
It does not cost less labour
to bring
silver
to Amsterdam than to Dantzic;
but it
costs a great deal more
to bring corn.
The real cost of silver
must be nearly
the same 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 same;
diminish their power
of supplying themselves
from distant countries;
and the price of corn,
instead of sinking with
that diminution
in the quantity
of their silver,
which
must necessarily accompany
this declension,
either
as its cause or
as its effect,
will rise to the price
of a famine.
When we
are in want of necessaries,
we must part
with all superfluities,
of which the value,
as it rises
in times
of opulence and prosperity,
so it sinks
in times of poverty
and distress.
It
is otherwise
with necessaries.
Their real price,
the quantity of labour which
they can purchase
or command,
rises in times of poverty
and distress,
and sinks
in times
of opulence and prosperity,
which are always times
of great abundance;
for they
could not otherwise be
times
of opulence and prosperity.
Corn
is a necessary,
silver
is only a superfluity.
Whatever,
therefore,
may have been the increase
in the quantity
of the precious metals,
which,
during the period
between the middle
of the fourteenth
and
that of the sixteenth century,
arose from the increase
of wealth and improvement,
it could have no tendency
to diminish their value,
either in Great Britain,
or in my 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 silver
from any observations
which they
had made
upon the prices either
of corn,
or of other commodities,
they had still less reason
to infer it
from any supposed increase
of wealth and improvement.
But how various
soever may have been
the opinions
of the learned concerning
the progress
of the value of silver
during the first period,
they
are unanimous concerning it
during the second.
From about 1570 to about 1640,
during a period of
about seventy years,
the variation
in the proportion
between the value of silver
and that
of corn
held a quite opposite course.
Silver sunk
in its real value,
or would exchange
for a smaller quantity
of labour than before;
and corn
rose in its nominal price,
and,
instead of being commonly sold for
about two ounces
of silver the quarter,
or about ten shillings
of our present money,
came to be sold
for six and eight ounces
of silver the quarter,
or about thirty
and forty shillings
of our present money.
The discovery
of the abundant mines
of America
seems
to have been the sole cause
of this diminution
in the value of silver,
in proportion to
that of corn.
It is accounted for,
accordingly,
in the same 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 silver
must consequently have been increasing;
but the increase of the
supply had,
it seems,
so far
exceeded that of the demand,
that the value of
that metal
sunk considerably.
The discovery of the mines
of America,
it is to be observed,
does not seem
to have had
any very sensible effect
upon the prices
of things
in England till after 1570;
though even the mines
of Potosi
had been discovered
more than twenty years before.
From 1595 to 1620,
both inclusive,
the average price
of the quarter
of nine bushels
of the best wheat,
at Windsor market,
appears,
from the accounts
of Eton college,
to have been £2:1:6 9/13.
From which sum,
neglecting the fraction,
and deducting a ninth,
or 4s 7 1/3d,
the price
of the quarter
of eight bushels
comes out
to have been £1:16:10 2/3.
And from this sum,
neglecting likewise
the fraction,
and deducting a ninth,
or 4s 1 1/9d,
for the difference
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 £1:12:8 8/9,
or about six ounces
and one-third
of an ounce of silver.
From 1621 to 1636,
both inclusive,
the average price
of the same measure
of the best wheat,
at the same market,
appears,
from the same accounts,
to have been £2:10s;
from which,
making the like deductions as
in the foregoing case,
the average price
of the quarter
of eight bushels
of middle wheat
comes out
to have been £1:19:6,
or about seven ounces
and two-thirds
of an ounce of silver.
Between 1630 and 1640,
or about 1636,
the effect
of the discovery of the mines
of America,
in reducing
the value of silver,
appears
to have been completed,
and the value of
that metal
seems never
to have sunk lower
in proportion to
that of corn than it
was about that time.
It seems
to have risen somewhat
in the course
of the present century,
and it
had probably begun
to do so,
even some time
before the end
of the last.
From 1637 to 1700,
both inclusive,
being
the sixty-four last years
of the last
century the average price
of the quarter
of nine bushels
of the best wheat,
at Windsor market,
appears,
from the same accounts,
to have been £2:11:0 1/3,
which is only 1s 0 1/3d
dearer
than it
had been
during the sixteen years before.
But,
in the course
of these sixty-four years,
there
happened two events,
which must have produced
a much greater scarcity
of corn than what the course
of the season is
would otherwise have occasioned,
and which,
therefore,
without supposing
any further reduction
in the value of silver,
will much more
than account for this
very small enhancement
of price.
The first of these events
was the civil war,
which,
by discouraging tillage
and interrupting commerce,
must have raised
the price
of corn
much above what the course
of the seasons
would otherwise have occasioned.
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 best wheat,
at Windsor market,
appears,
from the same accounts,
to have been £4:5s,
and, in 1649,
to have been £4,
the quarter of nine bushels.
The excess
of those
two years above £2:10s
(the average price
of the sixteen years
preceding 1637)
is £3:5s,
which,
divided
among the sixty four last 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 highest,
are by no
means
the only high prices which
seem to have been occasioned
by the civil wars.
The second 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 course
of years,
have occasioned a greater
abundance,
and, consequently,
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 shall examine hereafter:
I shall only observe
at present,
that between 1688 and 1700,
it had not time
to produce any such effect.
During this short period,
its only effect
must have been,
by encouraging the exportation
of the surplus produce
of every year,
and thereby
hindering the abundance
of one year
from compensating
the scarcity of another,
to raise the price
in the home market.
The scarcity
which prevailed in England,
from 1693 to 1699,
both inclusive,
though no doubt principally
owing
to the badness
of the seasons,
and, therefore,
extending
through a considerable 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 same period,
and which,
though it
could not occasion
any scarcity
of corn,
nor,
perhaps,
any augmentation
in the real quantity
of silver which
was usually paid for it,
must necessarily have occasioned
some augmentation
in the nominal sum.
This event
was the great debasement
of the silver coin,
by clipping and wearing.
This evil
had begun
in the reign
of Charles II,
and had gone on continually
increasing till 1695;
at which time,
as we
may learn from Mr Lowndes,
the current silver coin was,
at an average,
near five-and-twenty
per cent.
below its standard value.
But the nominal sum which
constitutes the market price
of every commodity
is necessarily regulated,
not so much
by the quantity of silver,
which,
according to the standard,
ought to be contained in it,
as by that which,
it is found by experience,
actually
is contained in it.
This nominal sum,
therefore,
is necessarily higher
when the coin
is much debased by
clipping and wearing,
than when near
to its standard value.
In the course
of the present century,
the silver coin
has not at any time
been more below
its standard weight than it
is at present.
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 recoinage,
the gold coin
was a good deal
defaced too,
it was less so
than the silver.
In 1695,
on the contrary,
the value of the silver coin
was not kept up
by the gold coin;
a guinea then
commonly exchanging
for thirty shillings of the
worn and clipt silver.
Before the late recoinage
of the gold,
the price of silver bullion
was seldom higher
than five shillings
and sevenpence an ounce,
which
is
but fivepence above the mint price.
But in 1695,
the common price
of silver bullion
was six shillings
and fivepence an ounce,
(Lowndes's Essay
on the Silver Coin,
68.) which is
fifteen pence above
the mint price.
Even before the late recoinage
of the gold,
therefore,
the coin,
gold and silver together,
when compared
with silver bullion,
was not supposed
to be
more than eight per cent.
below its standard 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 silver coin
must have been still nearer
to its standard weight
than it
is at present.
In the course
of the present century, too,
there
has been
no great public calamity,
such as a civil war,
which could either
discourage tillage,
or interrupt
the interior commerce
of the country.
And though the bounty which
has taken place
through the greater part
of this century,
must always raise the price
of corn somewhat higher
than it
otherwise would be
in the actual state
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 shall explain
and examine hereafter,
be supposed
to have done something
to lower the price of
that commodity the one way,
as well as to raise it
the other.
It is by many people
supposed
to have done more.
In the sixty-four years
of the present century,
accordingly,
the average price
of the quarter
of nine bushels
of the best wheat,
at Windsor market,
appears,
by the accounts
of Eton college,
to have been £2:0:6 10/32,
which is
about ten shillings and sixpence,
or more than
five-and-twenty percent.
cheaper
than it
had been
during the sixty-four last years
of the last century;
and about nine shillings
and sixpence cheaper
than it
had been
during the sixteen years
preceding 1636,
when the discovery
of the abundant mines
of America
may be supposed
to have produced
its full effect;
and about one shilling cheaper
than it
had been
in the twenty-six years
preceding 1620,
before that discovery
can well be supposed
to have produced
its full effect.
According to this account,
the average price
of middle wheat,
during these
sixty-four first years
of the present century,
comes out
to have been
about thirty-two shillings
the quarter
of eight bushels.
The value of silver,
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 so even some time
before the end
of the last.
In 1687,
the price
of the quarter
of nine bushels
of the best wheat,
at Windsor market,
was £1:5:2,
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,
estimated
the average price of wheat,
in years of moderate plenty,
to be
to the grower 3s 6d
the bushel,
or eight-and-twenty shillings
the quarter.
The grower's price
I understand
to be
the same with what
is sometimes 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 saves
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 shillings the quarter
to be
at that time
the ordinary contract price
in years of moderate plenty.
Before the scarcity
occasioned
by the late extraordinary course
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 gentlemen,
who then composed
a still greater proportion
of the legislature than
they do at present,
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
sold in the times
of Charles I and II. It
was to take place,
therefore,
till wheat
was so high as fortyeight
shillings the quarter;
that is,
twenty shillings,
or 5-7ths dearer
than Mr King had,
in that very year,
estimated
the grower's price
to be
in times of moderate plenty.
If his calculations
deserve
any part
of the reputation which they
have obtained very universally,
eight-and-forty shillings
the quarter
was a price which,
without some such expedient
as the bounty,
could not at that time
be expected,
except
in years
of extraordinary scarcity.
But the government
of King William
was not then fully settled.
It was in no condition
to refuse anything
to the country gentlemen,
from whom it was,
at that very time,
soliciting
the first establishment
of the annual land-tax.
The value of silver,
therefore,
in proportion to
that of corn,
had probably risen somewhat
before the end
of the last century;
and it
seems to have continued
to do so
during the course
of the greater part
of the present,
though the necessary operation
of the bounty
must have hindered that rise
from being so sensible
as it
otherwise would have been
in the actual state
of tillage.
In plentiful years,
the bounty,
by occasioning
an extraordinary exportation,
necessarily
raises
the price of corn above
what it
otherwise 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 institution.
In years of great scarcity,
indeed,
the bounty
has generally been suspended.
It must,
however,
have had some effect
upon the prices of many
of those years.
By the
extraordinary exportation which
it occasions 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 state
of tillage.
If
during the sixty-four first years
of the present century,
therefore,
the average price
has been lower than
during the sixty-four last years
of the last century,
it must,
in the same state
of tillage,
have been much more so,
had it
not been for this operation
of the bounty.
But,
without the bounty,
it may be said
the state of tillage
would not have been
the same.
What may have been
the effects
of this institution
upon the agriculture
of the country,
I shall endeavour to explain
hereafter,
when I
come to treat particularly
of bounties.
I shall only observe
at present,
that this rise
in the value of silver,
in proportion to
that of corn,
has not been peculiar
to England.
It has been observed
to have taken place
in France
during the same period,
and nearly in
the same proportion, too,
by three very faithful,
diligent,
and laborious collectors
of the prices of corn,
Mr Dupré de St Maur,
Mr Messance,
and the author
of the Essay
on the Police of Grain.
But in France,
till 1764,
the exportation of grain
was by law prohibited;
and it is somewhat difficult
to suppose,
that nearly
the same diminution
of price
which took place
in one country,
notwithstanding this
prohibition,
should,
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 some gradual
rise in the real value
of silver
in the European market,
than of any
fall
in the real average value
of corn.
Corn,
it has already been observed,
is, at distant periods
of time,
a more accurate measure
of value
than either silver or,
perhaps,
any other commodity.
When,
after the discovery
of the abundant mines
of America,
corn rose to three and four
times its former money price,
this change
was universally ascribed,
not to any rise in
the real value of corn,
but to a fall
in the real value
of silver.
If,
during the sixty-four first years
of the present century,
therefore,
the average money price
of corn
has fallen somewhat
below what it
had been
during the greater part
of the last century,
we should,
in the same manner,
impute this change,
not to any
fall in the real value
of corn,
but to some
rise in the real value
of silver
in the European market.
The high price
of corn
during these ten
or twelve years past,
indeed,
has occasioned
a suspicion that
the real value of silver
still continues
to fall
in the European market.
This high price of corn,
however,
seems evidently
to have been the effect
of the extraordinary unfavourableness
of the seasons,
and ought,
therefore,
to be regarded,
not as a permanent,
but as a
transitory and occasional
event.
The seasons,
for these ten
or twelve years past,
have been unfavourable
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,
used to be supplied
from that market.
So long
a course of bad seasons,
though not
a very common event,
is by no
means a singular one;
and whoever
has inquired much
into the history
of the prices
of corn in former times,
will be
at no loss
to recollect
several other examples
of the same kind.
Ten years
of extraordinary scarcity,
besides,
are not more wonderful
than ten years
of extraordinary plenty.
The low price of corn,
from 1741 to 1750,
both inclusive,
may very well
be set
in opposition
to its high price
during these last eight
or ten years.
From 1741 to 1750,
the average price
of the quarter
of nine bushels
of the best wheat,
at Windsor market,
it appears
from the accounts
of Eton college,
was only £1:13:9 4/5,
which is nearly 6s:3d
below the average price
of the sixty-four first years
of the present century.
The average price
of the quarter
of eight bushels
of middle wheat
comes out,
according to this account,
to have been,
during these ten years,
only £1:6:8.
Between 1741 and 1750,
however,
the bounty
must have hindered the price
of corn
from falling so low
in the home market
as
it
naturally would have done.
During these ten years,
the quantity
of all sorts
of grain exported,
it appears
from the custom-house books,
amounted
to no
less than 8,029,156 quarters,
one bushel.
The bounty
paid for this amounted
to £1,514,962:17:4½.
In 1749,
accordingly,
Mr Pelham,
at that time prime minister,
observed
to the house of commons,
that,
for the three years preceding,
a very extraordinary sum
had been paid as bounty
for the exportation of corn.
He had good reason
to make this observation,
and in the following year
he might have had
still better.
In that single year,
the bounty paid amounted
to no
less than £324,176:10:6.
(See Tracts
on the Corn Trade,
Tract 3,)
It is unnecessary
to observe how much this
forced exportation
must have raised the price
of corn above
what it
otherwise would have been
in the home market.
At the end
of the accounts annexed
to this
chapter
the reader
will find
the particular account
of those
ten years separated
from the rest.
He will find there, too,
the particular account
of the preceding ten years,
of which the average
is likewise below,
though not so much below,
the general average
of the sixty-four first years
of the century.
The year 1740,
however,
was a year
of extraordinary scarcity.
These twenty years preceding 1750
may very well
be set
in opposition
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;
so the latter
have been
a good deal above it,
notwithstanding
the intervention
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 impute it to the bounty.
The change
has evidently been too sudden
to be ascribed
to any change
in the value of silver,
which is always slow
and gradual.
The suddenness of the effect
can be accounted for
only by a cause
which can operate
suddenly,
the accidental variations
of the seasons.
The money price
of labour
in Great Britain has,
indeed,
risen
during the course
of the present century.
This,
however,
seems
to be the effect,
not so much of any diminution
in the value of silver
in the European market,
as of an increase
in the demand
for labour in Great Britain,
arising from the great,
and almost universal prosperity
of the country.
In France,
a country
not altogether so prosperous,
the money price
of labour has,
since the middle
of the last century,
been observed
to sink gradually
with the average money price
of corn.
Both in the last century
and in the present,
the day wages
of common labour
are there said
to have been pretty
uniformly about the twentieth part
of the average price
of the septier
of wheat;
a measure
which contains
a little more than four
Winchester bushels.
In Great Britain,
the real recompence of labour,
it has already been shewn,
the real quantities
of the necessaries
and conveniencies of life
which are given
to the labourer,
has increased considerably
during the course
of the present century.
The rise in its money price
seems
to have been the effect,
not of any diminution
of the value of silver
in the general market
of Europe,
but of a rise
in the real price of labour,
in the particular market
of Great Britain,
owing
to the peculiarly
happy circumstances
of the country.
For some time
after the first discovery
of America,
silver
would continue
to sell at its former,
or not much
below its former price.
The profits of mining
would for some time
be very great,
and much above
their natural rate.
Those
who imported that metal
into Europe,
however,
would soon find
that
the whole annual importation
could not be disposed of
at this
high price.
Silver
would gradually exchange
for a smaller and
a smaller quantity of goods.
Its price
would sink 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 labour,
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 silver mines
of Peru,
the tax
of the king of Spain,
amounting
to a tenth
of the gross 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 late it
still continues.
In the greater part
of the silver mines
of Peru,
this,
it seems,
is all that remains,
after replacing the stock
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,
consistently with carrying
on the works.
The tax
of the king of Spain
was reduced
to a fifth of the
registered silver in 1504
(Solorzano, vol, ii.),
one-and-forty years
before 1545,
the date
of the discovery of the mines
of Potosi.
In the course
of ninety years,
or before 1636,
these mines,
the most fertile
in all America,
had time sufficient
to produce their full effect,
or to reduce the value
of silver
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 sufficient
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 particular tax,
it can continue
to be sold
for any considerable time
together.
The price of silver
in the European market
might,
perhaps,
have fallen still 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 silver,
or the gradual enlargement
of the market
for the produce
of the silver mines
of America,
is probably
the cause
which has prevented this
from happening,
and which
has not only kept
up the value of silver
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 discovery
of America,
the market
for the produce
of its silver mines
has been growing gradually more
and more extensive.
First,
the market of Europe
has become gradually more
and more extensive.
Since the discovery
of America,
the greater part of Europe
has been much improved.
England,
Holland,
France,
and Germany;
even Sweden,
Denmark,
and Russia,
have all advanced considerably,
both in agriculture and in
manufactures.
Italy
seems not
to have gone backwards.
The fall
of Italy preceded
the conquest 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 declension
of Spain is not,
perhaps,
so great
as is commonly imagined.
In the beginning
of the sixteenth century,
Spain
was a very poor country,
even in comparison
with France,
which has been so much
improved since that time.
It was the well known remark
of the emperor Charles V. who
had travelled so 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 manufactures
of Europe
must necessarily have required
a gradual increase
in the quantity
of silver coin
to circulate it;
and the increasing number
of wealthy
individuals
must have required
the like increase
in the quantity
of their plate
and other ornaments
of silver.
Secondly,
America
is itself a new market,
for the produce
of its own silver mines;
and as its advances
in agriculture,
industry,
and population,
are much more rapid
than those
of the most 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 continual augmenting supply
of silver
through a great continent 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 Brazils,
were, before discovered
by the Europeans,
inhabited by savage nations,
who had
neither arts nor agriculture.
A considerable degree of both
has now been
introduced into all of them.
Even Mexico and Peru,
though they
cannot be considered
as altogether new markets,
are certainly much more extensive
ones than they ever were before.
After all
the wonderful tales which
have been published
concerning the splendid state
of those countries in ancient times,
whoever
reads,
with any degree
of sober judgment,
the history
of their first discovery
and conquest,
will evidently discern that,
in arts,
agriculture,
and commerce,
their inhabitants
were much more ignorant
than the Tartars
of the Ukraine
are at present.
Even the Peruvians,
the more civilized nation
of the two,
though they made use of gold
and silver
as ornaments,
had no coined money
of any kind.
Their whole commerce
was carried on by barter,
and there was accordingly
scarce any division
of labour
among them.
Those who
cultivated the ground,
were obliged
to build their own houses,
to make their own
household furniture,
their own clothes,
shoes,
and instruments
of agriculture.
The few artificers among them
are said
to have been all maintained
by the sovereign,
the nobles,
and the priests,
and were probably
their servants
or slaves.
All the ancient arts
of Mexico and Peru
have never furnished
one single manufacture
to Europe.
The Spanish armies,
though they
scarce ever exceeded five hundred men,
and frequently did not amount
to half that number,
found almost everywhere
great difficulty
in procuring subsistence.
The famines
which they
are said
to have occasioned almost
wherever they went,
in countries, too,
which at the same time
are represented
as very populous
and well cultivated,
sufficiently
demonstrate
that the story
of this populousness
and high cultivation
is
in a great measure fabulous.
The Spanish
colonies
are under a government
in many respects less
favourable
to agriculture,
improvement,
and population,
than that
of the English colonies.
They seem,
however,
to be advancing
in all those much more rapidly
than any country
in Europe.
In a fertile soil
and happy climate,
the great abundance and cheapness
of land,
a circumstance common
to all new colonies,
is, it seems,
so great an advantage,
as to compensate many
defects in civil government.
Frezier,
who visited Peru in 1713,
represents Lima
as containing
between twenty-five
and
twenty-eight thousand inhabitants.
Ulloa,
who resided
in the same country
between 1740 and 1746,
represents it
as containing
more than fifty thousand.
The difference
in their accounts
of the populousness
of several other principal towns
of Chili and Peru
is nearly the same;
and as
there seems
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 silver mines,
of which the demand
must increase much more rapidly
than
that
of the most thriving country
in Europe.
Thirdly,
the East Indies
is another market
for the produce
of the silver 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 silver.
Since that time,
the direct trade
between America
and the East Indies,
which
is carried on by means
of the Acapulco ships,
has been continually augmenting,
and the indirect intercourse
by the way of Europe
has been augmenting
in a still greater proportion.
During the sixteenth century,
the Portuguese
were the only European nation
who carried
on any regular trade
to the East Indies.
In the last years of
that century,
the Dutch
began to encroach upon
this monopoly,
and in a few years
expelled them
from their principal settlements
in India.
During the greater part
of the last century,
those two nations divided
the most considerable part
of the East India trade
between them;
the trade of the Dutch
continually augmenting
in a still greater proportion
than
that
of the Portuguese declined.
The English and French
carried
on some trade
with India
in the last century,
but it
has been greatly augmented
in the course
of the present.
The East India trade
of the Swedes
and Danes
began
in the course
of the present century.
Even the Muscovites
now trade regularly
with China,
by a sort
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 last war
had well nigh annihilated,
has been almost
continually augmenting.
The increasing consumptions
of East India goods
in Europe is,
it seems,
so 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
annually imported
by the
English East India company,
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 constantly smuggled
into the country
from the ports of Holland,
from Gottenburgh 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 Moluccas,
of the piece goods
of Bengal,
and of innumerable
other articles,
has increased very nearly
in a like proportion.
The tonnage,
accordingly,
of all
the European shipping employed
in the East India trade,
at any one time
during the last century,
was not, perhaps,
much greater than
that of the
English East India company
before the late reduction
of their shipping.
But in the East Indies,
particularly in China
and Indostan,
the value
of the precious metals,
when the Europeans first
began
to trade to those countries,
was much higher than
in Europe;
and it still continues
to be so.
In rice countries,
which
generally yield two,
sometimes 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 populous.
In them, too,
the rich,
having
a greater superabundance
of food
to dispose of beyond what
they
themselves can consume,
have the means
of purchasing
a much greater quantity
of the labour
of other people.
The retinue
of a grandee
in China or Indostan
accordingly is,
by all accounts,
much more numerous and splendid
than that of the richest
subjects in Europe.
The same superabundance
of food,
of which they have
the disposal,
enables them
to give a greater quantity
of it
for all
those singular
and rare productions
which nature
furnishes
but in very small quantities;
such as the precious metals
and the precious stones,
the great objects
of the competition
of the rich.
Though the mines,
therefore,
which supplied
the Indian market,
had been
as abundant
as those
which supplied the European,
such commodities
would naturally exchange
for a greater quantity
of food in India than
in Europe.
But the mines
which supplied
the Indian market
with the precious metals
seem
to have been
a good deal less
abundant,
and those
which supplied it
with the precious stones
a good deal more so,
than the mines
which supplied the European.
The precious metals,
therefore,
would naturally exchange
in India
for a somewhat greater quantity
of the precious stones,
and for a much greater quantity
of food
than in Europe.
The money price of diamonds,
the greatest
of all superfluities,
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 labour,
the real quantity
of the necessaries of life
which is given
to the labourer,
it has already been observed,
is lower both
in China and Indostan,
the two great markets
of India,
than it
is through the greater part
of Europe.
The wages of the labourer
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 labour
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 labour;
and in manufacturing art
and industry,
China and Indostan,
though inferior,
seem not
to be much inferior
to any part
of Europe.
The money price
of the greater part of
manufactures,
therefore,
will naturally be much lower
in those
great empires than it
is anywhere in Europe.
Through the greater part
of Europe, too,
the expense
of land-carriage increases
very much both
the real and nominal price
of most
manufactures.
It costs more labour,
and therefore more money,
to bring first the materials,
and afterwards
the complete manufacture
to market.
In China and Indostan,
the extent and variety
of inland navigations
save the greater part
of this labour,
and consequently of this money,
and thereby reduce still
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 still continues
to be,
extremely advantageous
to carry
from Europe
to India. There is
scarce any commodity
which brings
a better price there;
or which,
in proportion
to the quantity
of labour and commodities which
it costs in Europe,
will purchase
or command
a greater quantity
of labour and commodities
in India.
It is more advantageous, too,
to carry silver thither
than gold;
because in China,
and the greater part
of the other markets
of India,
the proportion
between fine silver
and fine gold
is but as ten,
or at
most 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 silver,
will purchase
an ounce of gold;
in Europe,
it requires
from fourteen
to fifteen ounces.
In the cargoes,
therefore,
of the greater part
of European ships
which sail to India,
silver
has generally been one
of the most valuable articles.
It is
the most valuable article
in the Acapulco
ships which sail to Manilla.
The silver
of the new continent
seems,
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 supply
so very widely
extended a market,
the quantity
of silver annually brought
from the mines
must not only be sufficient
to support
that continued increase,
both of coin and of plate,
which is required
in all thriving countries;
but to repair
that continual waste
and consumption
of silver which
takes place
in all countries where
that metal
is used.
The continual consumption
of the precious metals
in coin by wearing,
and in plate both
by wearing and cleaning,
is very sensible;
and in commodities
of which
the use
is so very widely extended,
would alone
require
a very great annual supply.
The consumption
of those metals
in some 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 manufactures
of Birmingham
alone,
the quantity
of gold
and silver annually employed
in gilding and plating,
and thereby disqualified
from ever afterwards appearing
in the shape
of those metals,
is said
to amount
to more than fifty thousand pounds
sterling.
We may from
thence form some notion how great
must be the annual consumption
in all
the different parts
of the world,
either in
manufactures
of the same kind with those
of Birmingham,
or in
laces,
embroideries,
gold and silver
stuffs,
the gilding of books,
furniture,.etc.
A considerable quantity, too,
must be annually lost
in transporting those metals
from one place
to another both
by sea and by land.
In the greater part
of the governments of Asia,
besides,
the almost universal custom
of concealing treasures
in the bowels
of the earth,
of which
the knowledge
frequently dies
with the person
who makes the concealment,
must occasion the loss
of a still greater quantity.
The quantity
of gold and silver imported
at both Cadiz and Lisbon
(including not only what
comes under register,
but what
may be supposed
to be smuggled)
amounts,
according to
the best accounts,
to about six millions
sterling a-year.
According to Mr Meggens
(Postscript
to the Universal 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 second edition.
The postscript is,
therefore,
to be found in few copies;
it corrects several errors
in the book.), the annual importation
of the precious metals
into Spain,
at an average of six years,
viz. from 1748 to 1753,
both inclusive,
and into Portugal,
at an average of seven years,
viz. from 1747 to 1753,
both inclusive,
amounted in silver
to 1,101,107 pounds weight,
and in gold
to 49,940 pounds weight.
The silver,
at sixty two shillings
the pound troy,
amounts
to £3,413,431:10s sterling.
The gold,
at forty-four guineas
and a half the pound troy,
amounts
to £2,333,446:14s sterling.
Both together amount
to £5,746,878:4s sterling.
The account of
what was imported
under register,
he assures us,
is exact.
He gives us the detail
of the particular places
from which the gold
and silver
were brought,
and of the particular 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 smuggled.
The great experience
of this judicious merchant
renders his opinion
of considerable weight.
According to the eloquent,
and sometimes well-informed,
author
of the Philosophical
and Political History
of the Establishment
of the Europeans
in the two Indies,
the annual importation
of registered gold and silver
into Spain,
at an average
of eleven years,
viz. from 1754 to 1764,
both inclusive,
amounted
to 13,984,185 3/5 piastres
of ten reals.
On account of
what may have been smuggled,
however,
the whole annual importation,
he supposes,
may have amounted
to seventeen millions
of piastres,
which,
at 4s 6d the piastre,
is equal to £3,825,000 sterling.
He gives the detail, too,
of the particular places
from which the gold
and silver
were brought,
and of the particular quantities
of each metal,
which
according to the register,
each of them afforded.
He informs us, too,
that if we
were
to judge
of the quantity
of gold
annually imported
from the Brazils to Lisbon,
by the amount
of the tax paid
to the 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 twenty millions sterling.
On account of
what may have been smuggled,
however,
we may safely,
he says,
add to this sum
an eighth more,
or £250,000 sterling,
so that the whole
will amount
to £2,250,000 sterling.
According to this account,
therefore,
the whole annual importation
of the precious metals
into both Spain and Portugal,
mounts to
about £6,075,000 sterling.
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 six millions sterling;
sometimes a little more,
sometimes a little less.
The annual importation
of the precious metals
into Cadiz and Lisbon,
indeed,
is not
equal to
the whole annual produce
of the mines
of America.
Some part
is sent annually
by the Acapulco ships
to Manilla;
some part
is employed
in a contraband trade,
which the Spanish colonies
carry on with those
of other European nations;
and some part,
no doubt,
remains in the country.
The mines of America,
besides,
are by no
means
the only gold and silver mines
in the world.
They,
are, however,
by far the most abundant.
The produce of all
the other
mines which are known
is insignificant,
it is acknowledged,
in comparison with their's;
and the far greater part
of their produce,
it is likewise acknowledged,
is annually imported
into Cadiz and Lisbon.
But the consumption
of Birmingham
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 six millions a-year.
The whole annual consumption
of gold and silver,
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 sufficient
to supply
the increasing demand
of all thriving countries.
It
may even have fallen so far
short
of this demand,
as somewhat
to raise the price
of those metals
in the European market.
The quantity
of brass and iron annually
brought from the mine
to the market,
is out of all proportion
greater than
that of gold and silver.
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 should
we imagine that
the precious metals
are likely to do so?
The coarse metals,
indeed,
though harder,
are put to much harder uses,
and,
as they
are of less value,
less
care is employed
in their preservation.
The precious metals,
however,
are not necessarily
immortal any more than they,
but are liable, too,
to be lost,
wasted,
and consumed,
in a great variety
of ways.
The price of all metals,
though liable
to slow
and gradual variations,
varies less
from year to year than
that of almost any other part
of the rude produce
of land:
and the price
of the precious metals
is even less liable
to sudden variations than
that of the coarse ones.
The durableness of metals
is the foundation of this
extraordinary steadiness
of price.
The corn
which was brought
to market last year
will be all,
or almost all,
consumed,
long before the end
of this year.
But some part of the iron
which was brought from:
the mine two
or three hundred years ago,
may be still
in use,
and, perhaps,
some part of the gold
which was brought
from it two
or three thousand years ago.
The different masses of corn,
which,
in different years,
must supply
the consumption of the world,
will always be nearly
in proportion
to the respective produce
of those different years.
But the proportion
between the different masses
of iron
which may be
in use
in two different years,
will be very little
affected
by any accidental difference
in the produce
of the iron mines
of those two years;
and the proportion
between the masses of gold
will be still less
affected by any such difference
in the produce
of the gold mines.
Though the produce
of the greater part
of metallic mines,
therefore,
varies,
perhaps,
still more from year to year
than
that of the greater part
of corn fields,
those variations
have not the same effect
upon the price
of the one species
of commodities as upon
that of the other.
Variations
in the Proportion
between the respective
Values of Gold
and Silver.
Before the discovery
of the mines
of America,
the value of fine gold
to fine silver
was regulated
in the different mines
of Europe,
between the proportions
of one
to ten and one
to twelve;
that is,
an ounce of fine gold
was supposed
to be worth
from ten
to twelve ounces of fine silver.
About the middle
of the last 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 supposed worth
between fourteen
and fifteen ounces
of fine silver.
Gold
rose in its nominal value,
or in the quantity
of silver which
was given for it.
Both metals
sunk in their real value,
or in the quantity
of labour which
they could purchase;
but
silver sunk more than gold.
Though
both
the gold and silver mines
of America
exceeded in fertility all those
which had ever been
known before,
the fertility
of the silver mines had,
it seems,
been proportionally still
greater than
that of the gold ones.
The great quantities of silver
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 supposed
to be worth fifteen ounces
of fine silver,
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 gold to silver
still continues as one
to ten,
or one to twelve.
In Japan,
it is said
to be as one
to eight.
The proportion
between the quantities
of gold
and silver annually imported
into Europe,
according to
Mr Meggens' 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 silver.
The great quantity
of silver sent annually
to the East Indies
reduces,
he supposes,
the quantities
of those metals which
remain
in Europe
to the proportion of one
to fourteen or fifteen,
the proportion
of their values.
The proportion
between their values,
he seems
to think,
must necessarily be the same
as
that between their quantities,
and would
therefore be as one
to twenty-two,
were it
not for this greater exportation
of silver.
But the ordinary proportion
between the respective values
of two commodities
is not necessarily the same
as
that between the quantities
of them
which are commonly
in the market.
The price of an ox,
reckoned at ten guineas,
is about three score
times the price of a lamb,
reckoned at 3s 6d.
It would be absurd,
however,
to infer from thence,
that
there are commonly
in the market three
score lambs for one ox;
and it
would be just as absurd
to infer,
because an ounce of gold
will commonly purchase
from fourteen
or fifteen ounces
of silver,
that there are commonly
in the market
only fourteen or fifteen ounces
of silver
for one ounce of gold.
The quantity of silver
commonly in the market,
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 silver.
The whole quantity
of a cheap commodity
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 disposed of.
The whole quantity,
therefore,
of the cheap commodity,
must commonly be greater
in proportion
to the whole quantity
of the dear one,
than the value
of a certain 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,
silver
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 silver
than of gold.
Let any man,
who has a little of both,
compare his own silver
with his gold plate,
and he will probably find,
that not only the quantity,
but the value of the former,
greatly
exceeds that of the latter.
Many people,
besides,
have a good deal of silver
who have no gold plate,
which,
even with those
who have it,
is generally confined
to watch-cases,
snuff-boxes,
and such like trinkets,
of which the whole amount
is seldom
of great value.
In the British coin,
indeed,
the value of the gold
preponderates greatly,
but it
is not so in
that of all countries.
In the coin
of some countries,
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 somewhat
(See Ruddiman's Preface
to Anderson's Diplomata,.etc.
Scotiae.), as it appears
by the accounts
of the mint.
In the coin
of many countries
the silver 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 superior value,
however,
of the silver plate above
that of the gold,
which takes place
in all countries,
will much more than
compensate the preponderancy
of the gold coin above
the silver,
which takes place only
in some countries.
Though,
in one sense
of the word,
silver
always has been,
and probably
always will be,
much cheaper than gold;
yet,
in another sense,
gold
may perhaps,
in the present state
of the Spanish market,
be said
to be somewhat cheaper
than silver.
A commodity
may be said
to be
dear or cheap not only
according to
the absolute greatness
or smallness
of its usual price,
but according
as that price
is more or less above
the lowest
for which it
is possible
to bring it to market
for any considerable time
together.
This lowest price
is that which barely replaces,
with a moderate profit,
the stock
which must be employed
in bringing the commodity
thither.
It is the price
which affords nothing
to the landlord,
of which
rent
makes not any component part,
but which
resolves 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 silver.
The tax
of the king
of Spain upon gold
is only one-twentieth part
of the standard metal,
or five per cent.; whereas
his tax
upon silver amounts
to one-tenth part of it,
or to ten per cent.
In these taxes, too,
it has already been observed,
consists the whole rent
of the greater part
of the gold and
silver mines
of Spanish America;
and that upon gold
is still worse
paid than that upon silver.
The profits
of the undertakers
of gold mines, too,
as
they more rarely make
a fortune,
must,
in general,
be still more moderate
than those
of the undertakers
of silver mines.
The price of Spanish gold,
therefore,
as it affords both less
rent and less profit,
must,
in the Spanish market,
be somewhat nearer
to the lowest price
for which it
is possible
to bring it thither,
than the price
of Spanish silver.
When all
expenses are computed,
the whole quantity
of the one metal,
it would seem,
cannot,
in the Spanish market,
be disposed
of so advantageously
as the whole quantity
of the other.
The tax,
indeed,
of the king
of Portugal
upon the gold
of the Brazils,
is the same
with the ancient tax
of the king
of Spain
upon the silver
of Mexico and Peru;
or one-fifth part
of the standard metal.
It may
therefore be uncertain,
whether,
to the general market
of Europe,
the whole mass
of American gold
comes
at a price nearer
to the lowest
for which it
is possible
to bring it thither,
than the whole mass
of American silver.
The price
of diamonds
and other precious stones may,
perhaps,
be still nearer
to the lowest price
at which it
is possible
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 most proper subjects
of taxation,
a mere luxury and superfluity,
but which
affords so very important
a revenue
as the tax upon silver,
will ever be given up
as long
as it
is possible to pay it;
yet
the same
impossibility of paying it,
which,
in 1736. made it necessary
to reduce it
from one-fifth
to one-tenth,
may in time make it necessary
to reduce it still further;
in the same manner as it
made it necessary
to reduce the tax
upon gold to one-twentieth.
That the silver 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 necessary
to carry on the works,
and of the greater expense
of drawing
out the water,
and of supplying them
with fresh air
at those depths,
is acknowledged
by everybody
who has inquired
into the state
of those mines.
These causes,
which are equivalent
to a growing scarcity
of silver
(for a commodity
may be said
to grow scarcer
when it becomes
more difficult and expensive
to collect a certain quantity
of it),
must,
in time,
produce one
or other
of the three following events:
The increase of the expense
must either,
first,
be compensated altogether
by a proportionable increase
in the price
of the metal;
or, secondly,
it
must be compensated altogether
by a proportionable diminution
of the tax upon silver;
or, thirdly,
it must be compensated partly
by the one
and partly by the other
of those two expedients.
This third event
is very possible.
As gold
rose in its price
in proportion to silver,
notwithstanding
a great diminution
of the tax upon gold,
so silver
might rise
in its price in proportion
to labour and commodities,
notwithstanding
an equal diminution
of the tax upon silver.
Such successive reductions
of the tax,
however,
though they
may not prevent altogether,
must certainly retard,
more or less,
the rise
of the value of silver
in the European market.
In consequence
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 silver
annually brought
to market,
must always be somewhat
greater,
and, therefore,
the value
of any given quantity
somewhat less,
than it
otherwise would have been.
In consequence
of the reduction in 1736,
the value of silver
in the European market,
though it
may not at this day
be lower than before
that 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 silver has,
during the course
of the present century,
begun
to rise somewhat
in the European market,
the facts and arguments which
have been alleged above,
dispose me
to believe,
or more properly
to suspect and conjecture;
for the best opinion which
I can form upon this subject,
scarce,
perhaps,
deserves the name of belief.
The rise,
indeed,
supposing there
has been any,
has hitherto been
so 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 silver
may not still continue
to fall
in the European market.
It must be observed,
however,
that
whatever
may be
the supposed annual importation
of gold and silver,
there
must be
a certain period
at which the annual consumption
of those metals
will be equal to
that annual importation.
Their consumption
must increase as
their mass increases,
or rather
in a much greater proportion.
As their mass increases,
their value
diminishes.
They
are more used,
and less cared for,
and their consumption
consequently increases
in a greater proportion
than their mass.
After a certain period,
therefore,
the annual consumption
of those metals must,
in this manner,
become
equal to
their annual importation,
provided
that importation
is not continually increasing;
which,
in the present times,
is not supposed
to be the case.
If,
when the annual consumption
has become
equal to
the annual importation,
the annual importation
should gradually diminish,
the annual consumption may,
for some time,
exceed
the annual importation.
The mass of those metals
may gradually
and insensibly diminish,
and their value gradually
and insensibly rise,
till the annual importation
becoming again stationary,
the annual consumption
will gradually
and insensibly accommodate itself
to what
that
annual importation
can maintain.
Grounds of the suspicion
that
the Value of Silver
still continues
to decrease.
The increase
of the wealth of Europe,
and the popular notion,
that as the quantity
of the precious metals
naturally increases
with the increase of wealth,
so their value
diminishes
as their quantity increases,
may,
perhaps,
dispose many people
to believe that
their value still continues
to fall
in the European market;
and the still gradually
increasing price
of many parts
of the rude produce
of land
may confirm them still farther
in this opinion.
That that increase
in the quantity
of the precious metals,
which arises in any country
from the increase
of wealth,
has no tendency
to diminish their value,
I have endeavoured
to shew already.
Gold and silver
naturally resort
to a rich country,
for the same reason
that all sorts
of luxuries and curiosities resort
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 superiority
of price
which attracts them;
and as soon
as that superiority
ceases,
they necessarily cease
to go thither.
If you except corn,
and such other vegetables
as
are raised altogether
by human industry,
that all other sorts
of rude produce,
cattle,
poultry,
game of all kinds,
the useful fossils
and minerals
of the earth,.etc.
naturally grow dearer,
as the society
advances in wealth
and improvement,
I have endeavoured
to shew already.
Though such commodities,
therefore,
come to exchange
for a greater quantity
of silver than before,
it will not from
thence follow that silver
has become really cheaper,
or will purchase less labour
than before;
but that such commodities
have become really dearer,
or will purchase
more labour than before.
It is not
their nominal price only,
but their real price,
which rises in
the progress of improvement.
The rise
of their nominal price
is the effect,
not of any degradation
of the value of silver,
but of the rise
in their real price.
Different Effects
of the Progress of Improvement
upon three different sorts
of rude Produce.
These
different sorts
of rude produce
may be divided
into three classes.
The first
comprehends
those
which it
is scarce
in the power
of human industry
to multiply at all.
The second,
those which
it can multiply
in proportion to the demand.
The third,
those
in which the efficacy
of industry
is either limited
or uncertain.
In the progress
of wealth and improvement,
the real price of the first
may rise to any degree
of extravagance,
and seems not
to be limited
by any certain boundary.
That of the second,
though it
may rise greatly,
has,
however,
a certain boundary,
beyond which
it cannot well pass
for any considerable time
together.
That of the third,
though
its natural tendency
is to rise in
the progress of improvement,
yet in the same degree
of improvement
it may sometimes happen even
to fall,
sometimes to continue the same,
and sometimes
to rise more or less,
according
as different
accidents
render the efforts
of human industry,
in multiplying
this sort of rude produce,
more or less successful.
The first sort
of rude produce,
of which the price rises
in the progress
of improvement,
is that
which it
is scarce
in the power
of human industry
to multiply at all.
It consists
in those things which nature
produces only
in certain quantities,
and which
being
of a very perishable nature,
it is impossible
to accumulate
together the produce
of many different seasons.
Such
are the greater part
of rare and singular birds
and fishes,
many different sorts of game,
almost all wild-fowl,
all birds
of passage in particular,
as
well as many other things.
When wealth,
and the luxury which
accompanies it,
increase,
the demand for these
is likely
to increase with them,
and no effort
of human industry
may be able
to increase
the supply much beyond what
it
was before this increase
of the demand.
The quantity of such commodities,
therefore,
remaining the same,
or nearly the same,
while the competition
to purchase them
is continually increasing,
their price
may rise to any degree
of extravagance,
and seems not
to be limited
by any certain boundary.
If woodcocks
should become so fashionable
as to sell
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
easily be accounted for.
These
prices were not the effects
of the low value of silver
in those times,
but of the high value
of such rarities
and curiosities
as human industry
could not multiply
at pleasure.
The real value of silver
was higher
at Rome,
for sometime before,
and after the fall
of the republic,
than it
is through the greater part
of Europe
at present.
Three sestertii equal to
about sixpence sterling,
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 market price,
the obligation
to deliver
their wheat at this rate
being considered
as a tax
upon the Sicilian farmers.
When the Romans,
therefore,
had occasion
to order more corn
than the tithe
of wheat amounted to,
they were bound
by capitulation
to pay for the surplus
at the rate
of four sestertii,
or eightpence sterling
the peck;
and this had probably been
reckoned the moderate
and reasonable,
that is,
the ordinary
or average contract price
of those times;
it is equal to
about one-and-twenty
shillings the quarter.
Eight-and-twenty shillings
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 sells
for a lower price
in the European market.
The value of silver,
therefore,
in those ancient times,
must have been to its value
in the present,
as three to four inversely;
that is,
three ounces of silver
would then have purchased
the same quantity
of labour and commodities
which four ounces
will do at present.
When we read in Pliny,
therefore,
that Seius
(Lib. X, c.29.)
bought a white nightingale,
as a present
for the empress Agrippina,
at the price
of six thousand sestertii,
equal to
about fifty pounds
of our present money;
and that Asinius Celer
(Lib. IX, c.17.)
purchased a surmullet
at the price
of eight thousand sestertii,
equal to
about sixty-six pounds
thirteen shillings
and fourpence
of our present money;
the extravagance
of those prices,
how much soever
it may surprise us,
is apt,
notwithstanding,
to appear
to us
about one third less than it
really was.
Their real price,
the quantity
of labour and subsistence
which was given away
for them,
was
about
one-third more than their nominal price
is apt to express
to us
in the present times.
Seius
gave for the nightingale
the command
of a quantity
of labour and subsistence,
equal to what £66:13:4d
would purchase
in the present times;
and Asinius Celer
gave for a surmullet
the command
of a quantity equal to
what £88:17:9d
would purchase.
What occasioned
the extravagance
of those high prices was,
not so much
the abundance of silver,
as the abundance
of labour and subsistence,
of which those Romans
had the disposal,
beyond
what was necessary
for their own use.
The quantity of silver,
of which
they had the disposal,
was a good deal less than
what the command
of the same quantity
of labour and subsistence
would have procured
to them
in the present times.
The second sort
of rude produce,
of which the price rises
in the progress
of improvement,
is that which human industry
can multiply in proportion
to the demand.
It consists
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 cultivation advances,
are therefore
forced
to give place
to some more profitable produce.
During a long period
in the progress
of improvement,
the quantity of these
is continually diminishing,
while,
at the same time,
the demand for them
is continually increasing.
Their real value,
therefore,
the real quantity
of labour which
they will purchase
or command,
gradually rises,
till at last
it gets so high
as to render them
as profitable a produce
as any thing
else which human industry
can raise
upon the most fertile
and best cultivated land.
When it has
got so high,
it cannot well go higher.
If it did,
more land and more industry
would soon be employed
to increase their quantity.
When the price of cattle,
for example,
rises so high,
that it
is as profitable
to cultivate land
in order to raise food
for them as
in order to raise food
for man,
it cannot well go higher.
If it did,
more corn land
would soon be turned into pasture.
The extension of tillage,
by diminishing
the quantity of wild pasture,
diminishes
the quantity
of butcher's meat,
which
the country
naturally produces
without labour or cultivation;
and, by increasing
the number of those
who have either corn,
or,
what comes to the same thing,
the price of corn,
to give in exchange for it,
increases the demand.
The price of butcher's meat,
therefore,
and, consequently,
of cattle,
must gradually rise,
till it
gets so high,
that
it becomes as profitable
to employ
the most fertile
and best cultivated lands
in raising food
for them as
in raising corn.
But it
must always be late
in the progress of improvement
before tillage
can be so 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
must be continually rising.
There are,
perhaps,
some parts of Europe
in which the price of cattle
has not yet
got to this height.
It had not
got to this height
in any part of Scotland
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 so great in proportion to
what
can be applied
to other purposes,
it is scarce possible,
perhaps,
that
their price
could ever have risen so high
as to render it profitable
to cultivate land
for the sake
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 last century;
but it was much later,
probably,
before it
got through the greater part
of the remoter counties,
in some of which,
perhaps,
it may scarce
yet have
got to it.
Of all
the different substances,
however,
which
compose this second sort
of rude produce,
cattle is,
perhaps,
that of which the price,
in the progress
of improvement,
rises first to this height.
Till the price of cattle,
indeed,
has got to this height,
it seems scarce possible
that the greater part,
even of those lands which
are capable
of the highest cultivation,
can be completely cultivated.
In all
farms too distant from any
town to carry manure from it,
that is,
in the far greater part
of those
of every extensive 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 stock
of cattle
which are maintained upon it.
The land
is manured,
either
by pasturing
the cattle upon it,
or by feeding them
in the stable,
and from thence carrying
out their dung to it.
But unless the price
of the cattle
be sufficient to pay both
the rent
and profit of cultivated land,
the farmer
cannot afford
to pasture them upon it;
and he can still
less afford
to feed them in the stable.
It is
with the produce of improved
and cultivated land only
that cattle
can be fed in the stable;
because,
to collect
the scanty and scattered produce
of waste and unimproved lands,
would require too much labour,
and be too expensive.
It the price of the cattle,
therefore,
is not sufficient
to pay
for the produce
of improved
and cuitivated land,
when they
are allowed to pasture it,
that price
will be still less sufficient
to pay for that produce,
when it
must be collected
with a good deal
of additional labour,
and brought
into the stable to them.
In these circumstances,
therefore,
no more
cattle can with profit
be fed in the stable than
what are necessary
for tillage.
But these
can never afford
manure
enough for keeping constantly
in good condition all
the lands
which they
are capable
of cultivating.
What they
afford,
being insufficient
for the whole farm,
will naturally be reserved
for the lands
to which it
can be most advantageously
or conveniently applied;
the most fertile,
or those,
perhaps,
in the neighbourhood
of the farm-yard.
These,
therefore,
will be kept constantly
in good condition,
and fit for tillage.
The rest will,
the greater part of them,
be allowed to lie waste,
producing
scarce any thing
but some miserable pasture,
just sufficient
to keep
alive a few straggling,
half-starved cattle;
the farm,
though much
overstocked in proportion to
what would be necessary
for its complete cultivation,
being very frequently overstocked
in proportion
to its actual produce.
A portion of this waste land,
however,
after having been pastured
in this wretched manner
for six or seven years together,
may be ploughed up,
when it will yield,
perhaps,
a poor crop or two
of bad oats,
or of some other coarse grain;
and then,
being entirely exhausted,
it must be rested
and pastured again as before,
and another portion ploughed up,
to be in the same manner
exhausted
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 constantly
well manured
and in good condition seldom
exceeded a third
or fourth part
of the whole farm,
and sometimes did not amount
to a fifth or
a sixth part of it.
The rest
were never manured,
but a certain portion of them
was in its turn,
notwithstanding,
regularly
cultivated and exhausted.
Under
this system of management,
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 disadvantageous
soever this system
may appear,
yet,
before the Union,
the low price of cattle
seems to have rendered it
almost unavoidable.
If,
notwithstanding
a great rise in the price,
it still continues
to prevail
through a considerable part
of the country,
it is owing in many places,
no doubt,
to ignorance and attachment
to old customs,
but,
in most places,
to the unavoidable
obstructions which
the natural course of things
opposes
to the
immediate or speedy
establishment
of a better system:
first,
to the poverty
of the tenants,
to
their not having yet had time
to acquire a stock
of cattle sufficient
to cultivate
their lands more completely,
the same rise of price,
which would render it
advantageous
for them
to maintain a greater stock,
rendering it more difficult
for them
to acquire it;
and, secondly,
to
their not having yet had time
to put
their lands
in condition
to maintain
this greater stock properly,
supposing
they were capable
of acquiring it.
The increase of stock
and the improvement of land
are two events
which must go hand in hand,
and of which the one
can nowhere much
outrun the other.
Without some increase
of stock,
there
can be
scarce any improvement
of land,
but there can be no
considerable increase
of stock,
but in consequence
of a considerable improvement
of land;
because otherwise
the land
could not maintain it.
These natural obstructions
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 system,
which is wearing out
gradually,
can be completely abolished
through all
the different parts
of the country.
Of all
the commercial advantages,
however,
which
Scotland
has derived
from the Union with England,
this rise
in the price
of cattle is,
perhaps,
the greatest.
It has not only raised
the value
of all highland estates,
but it has,
perhaps,
been the principal cause
of the improvement
of the low country.
In all new colonies,
the great quantity
of waste land,
which can for many
years be applied
to no other purpose
but the feeding of cattle,
soon
renders them extremely abundant;
and in every thing
great cheapness
is the necessary consequence
of great abundance.
Though all the cattle
of the European colonies
in America
were originally carried
from Europe,
they soon multiplied so much
there,
and became
of so 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 such colonies,
before it
can become profitable
to feed cattle
upon the produce
of cultivated land.
The same causes,
therefore,
the want of manure,
and the disproportion
between the stock
employed
in cultivation and the land
which it
is destined
to cultivate,
are likely
to introduce there a system
of husbandry,
not unlike
that
which still continues
to take place
in so many parts
of Scotland.
Mr Kalm,
the Swedish traveller,
when he
gives an account
of the husbandry
of some
of the English colonies
in North America,
as he found it in 1749,
observes,
accordingly,
that he can with difficulty
discover there the character
of the English nation,
so well skilled
in all
the different branches
of agriculture.
They make scarce any manure
for their corn fields,
he says;
but when
one piece of ground
has been exhausted
by continual cropping,
they clear
and cultivate another piece
of fresh land;
and when
that is exhausted,
proceed to a third.
Their cattle
are allowed
to wander
through the woods
and
other uncultivated grounds,
where they
are half-starved;
having
long ago extirpated almost all
the annual grasses,
by cropping them too early
in the spring,
before they
had time
to form their flowers,
or to shed their seeds.
(Kalm's Travels,
vol 1,
pp.
343,
344.)
The annual grasses were,
it seems,
the best natural grasses
in that part
of North America;
and when
the Europeans first settled
there,
they used to grow very thick,
and to rise three
or four feet high.
A piece of ground which,
when he wrote,
could not maintain one cow,
would in former times,
he was assured,
have maintained four,
each of which
would have given
four times
the quantity
of milk which that one
was capable of giving.
The poorness
of the pasture had,
in his opinion,
occasioned
the degradation
of their cattle,
which degenerated sensibly
from me generation to another.
They
were probably not unlike
that stunted breed
which was common all
over Scotland thirty
or forty years ago,
and which
is now so 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 some 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 sake
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 impossible
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 first,
so perhaps venison
is among the last parts
of this sort
of rude produce which
bring this price.
The price
of venison in Great Britain,
how extravagant
soever
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 otherwise,
the feeding of deer
would soon
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
assure us,
that it
was
a most profitable article.
The fattening of ortolans,
birds of passage which
arrive
lean in the country,
is said
to be so in some parts
of France.
If venison
continues in fashion,
and the wealth and luxury
of Great Britain increase
as they
have done for some time past,
its price
may very probably rise still
higher
than it
is at present.
Between
that period
in the progress
of improvement,
which brings to its height
the price of so necessary
an article as cattle,
and that which
brings to it the price
of such
a superfluity as venison,
there
is a very long interval,
in the course
of which many other sorts
of rude produce gradually
arrive at their highest price,
some sooner and some later,
according to
different circumstances.
Thus,
in every farm,
the offals
of the barn and stable
will maintain
a certain number of poultry.
These,
as they
are fed with what
would otherwise be lost,
are a mere save-all;
and as they
cost the farmer scarce any
thing,
so he
can afford
to sell them
for very little.
Almost all that he gets
is pure gain,
and their price
can scarce
be so low
as to discourage him
from feeding this number.
But in countries
ill cultivated,
and therefore
but thinly inhabited,
the poultry,
which are thus raised
without expense,
are often fully sufficient
to supply the whole demand.
In this state of things,
therefore,
they
are often
as cheap as butcher's meat,
or any other sort
of animal food.
But the whole quantity
of poultry which the farm
in this manner
produces without expense,
must always be much smaller
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 common.
As wealth and luxury increase,
therefore,
in consequence
of improvement and cultivation,
the price of poultry
gradually rises above
that of butcher's meat,
till at last
it gets so high,
that
it becomes profitable
to cultivate land
for the sake
of feeding them.
When it has
got to this height,
it cannot well go higher.
If it did,
more
land would soon be turned
to this purpose.
In several provinces
of France,
the feeding of poultry
is considered
as a
very important article
in rural economy,
and sufficiently profitable
to encourage the farmer
to raise
a considerable quantity
of Indian corn and buckwheat
for this purpose.
A middling farmer
will there sometimes have
four hundred fowls
in his yard.
The feeding of poultry
seems
scarce yet
to be generally considered
as a matter
of so much importance
in England.
They
are certainly,
however,
dearer in England
than in France,
as England
receives
considerable supplies
from France.
In the progress
of improvements,
the period
at which every particular sort
of animal food
is dearest,
must naturally be
that which immediately precedes
the general practice
of cultivating land
for the sake
of raising it.
For some time
before this practice
becomes general,
the scarcity
must necessarily raise
the price.
After it has become general,
new methods of feeding
are commonly
fallen upon,
which
enable the farmer
to raise
upon the same quantity
of ground
a much greater quantity
of
that
particular sort
of animal food.
The plenty not
only obliges him
to sell cheaper,
but,
in consequence
of these improvements,
he can afford
to sell 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,.etc.
has contributed
to sink the common price
of butcher's meat
in the London market,
somewhat below what
it was about the beginning
of the last century.
The hog,
that finds
his food among ordure,
and greedily devours
many things rejected
by every other useful animal,
is, like poultry,
originally
kept as a save-all.
As long as the number
of such animals,
which can thus
be reared
at little or no expense,
is fully sufficient
to supply the demand,
this sort of butcher's meat
comes to market
at a much lower price
than any other.
But when the demand rises
beyond what this quantity
can supply,
when it
becomes necessary
to raise food
on purpose
for feeding
and fattening hogs,
in the same manner
as for feeding
and fattening other cattle,
the price
necessarily rises,
and becomes proportionably
either higher or lower
than
that of other butcher's meat,
according
as the nature of the country,
and the state
of its agriculture,
happen to render the feeding
of hogs more
or less expensive
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 somewhat higher.
The great
rise in the price both
of hogs and poultry,
has,
in Great Britain,
been frequently imputed
to the diminution
of the number of cottagers
and other small occupiers
of land;
an event
which has
in every part of Europe
been the immediate forerunner
of improvement
and better cultivation,
but which
at the same time
may have contributed
to raise the price
of those articles,
both somewhat sooner
and somewhat faster
than it
would otherwise have risen.
As the poorest family
can often maintain
a cat or a dog
without any expense,
so the poorest occupiers
of land
can commonly maintain a few
poultry,
or
a sow and a few pigs,
at very little.
The little offals
of their own table,
their whey,
skimmed milk,
and butter milk,
supply those animals
with a part
of their food,
and they
find the rest
in the neighbouring fields,
without doing
any sensible damage
to any body.
By diminishing the number
of those small occupiers,
therefore,
the quantity
of this sort of provisions,
which is thus
produced
at little or no expense,
must certainly have been
a good deal diminished,
and their price
must consequently have been raised
both sooner and faster
than it
would otherwise have risen.
Sooner or later,
however,
in the progress
of improvement,
it must at any rate
have risen
to the utmost height
to which it
is capable
of rising;
or to the price
which pays the labour
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 business of the dairy,
like the feeding
of hogs and poultry,
is originally carried on
as a save-all.
The cattle
necessarily kept
upon the farm produce more milk
than either the rearing
of their own young,
or the consumption
of the farmer's family
requires;
and they produce most
at one particular season.
But of all
the productions of land,
milk
is perhaps
the most perishable.
In the warm season,
when it
is most abundant,
it will
scarce keep
four-and-twenty hours.
The farmer,
by making it
into fresh butter,
stores a small part of it
for a week;
by making it
into salt butter,
for a year;
and by making it into cheese,
he stores a much greater part
of it
for several years.
Part of all
these is reserved
for the use
of his own family;
the rest
goes to market,
in order to find
the best price
which is to be had,
and which can scarce
be so low
is to discourage him
from sending 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 slovenly and dirty
manner,
and will scarce,
perhaps,
think it worth while
to have
a particular room
or building
on purpose for it,
but will suffer
the business
to be carried on
amidst the smoke,
filth,
and nastiness
of his own kitchen,
as was the case
of almost
all the farmers' dairies
in Scotland thirty
or forty years ago,
and as
is the case
of many of them still.
The same causes which
gradually raise the price
of butcher's meat,
the increase of the demand,
and,
in consequence
of the improvement
of the country,
the diminution of the quantity
which can be fed
at little or no expense,
raise,
in the same manner,
that of the produce
of the dairy,
of which the price
naturally connects with
that of butcher's meat,
or with the expense
of feeding cattle.
The increase of price
pays for more labour,
care,
and cleanliness.
The dairy
becomes more worthy
of the farmer's attention,
and the quality
of its produce
gradually improves.
The price at last
gets so high,
that
it becomes
worth while to employ
some of the most fertile
and best cultivated 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 soon 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
considerable towns,
it seems not yet
to have got to this height
anywhere in Scotland,
where common
farmers seldom employ
much good land
in raising food for cattle,
merely for the purpose
of the dairy.
The price of the produce,
though it
has risen very considerably
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 labour necessary
for producing
a much better quality.
Through the greater part
of England,
notwithstanding
the superiority 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
so profitable.
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 so high
as to pay
for the expense
of complete improvement
and cultivation.
In order to
do this,
the price
of each particular produce
must be sufficient,
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, secondly,
to pay the labour and expense
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 rise
in the price
of each particular produce;
must evidently be previous
to the improvement
and cultivation
of the land
which is destined
for raising it.
Gain
is the end
of all improvement;
and nothing
could deserve that name,
of which loss was
to be
the necessary consequence.
But loss
must be
the necessary consequence
of improving land
for the sake
of a produce
of which the price
could never bring back
the expense.
If the complete improvement
and cultivation
of the country be,
as it
most certainly is,
the greatest
of all public advantages,
this rise
in the price
of all those different sorts
of rude produce,
instead of being considered
as a public calamity,
ought to be regarded
as
the necessary forerunner and
attendant
of the greatest
of all public advantages.
This rise, too,
in the nominal or money price
of all those different sorts
of rude produce,
has been the effect,
not of any degradation
in the value of silver,
but of a rise
in their real price.
They have become worth,
not only a greater quantity
of silver,
but a greater quantity
of labour and subsistence
than before.
As it costs a greater
quantity
of labour and subsistence
to bring them to market,
so,
when they
are brought thither
they represent,
or are
equivalent to a
greater quantity.
The third and last sort
of rude produce,
of which
the price
naturally rises
in the progress
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 sort
of rude produce,
therefore,
naturally
tends to rise in
the progress of improvement,
yet,
according as different
accidents
happen to render the efforts
of human industry more
or less successful
in augmenting the quantity,
it may happen sometimes even
to fall,
sometimes to continue the same,
in very different periods
of improvement,
and sometimes
to rise more
or less in
the same period.
There
are some sorts
of rude produce which nature
has rendered a kind
of appendages
to other sorts;
so that the quantity
of the
one which any
country can afford,
is necessarily limited by
that of the other.
The quantity
of wool or of raw hides,
for example,
which any country
can afford,
is necessarily 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
necessarily determine
this number.
The same causes which,
in the progress
of improvement,
gradually
raise the price
of butcher's meat,
should have the same effect,
it may be thought,
upon the prices
of wool and raw hides,
and raise them, too,
nearly in the same proportion.
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 extremely
different.
The market for butcher's meat
is almost everywhere confined
to the country
which produces it.
Ireland,
and some part
of British America,
indeed,
carry on a considerable trade
in salt provisions;
but they are,
I believe,
the only countries
in the commercial world
which
do so,
or which export
to other countries any
considerable part
of their butcher's meat.
The market
for wool and raw hides,
on the contrary,
is, in the rude beginnings
of improvement,
very seldom confined
to the country
which produces them.
They
can easily be transported
to distant countries;
wool without any preparation,
and raw hides
with very little;
and as they
are the materials of many
manufactures,
the industry
of other
countries may occasion
a demand
for them,
though that of the country
which produces them
might not occasion 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 beast,
than in countries where,
improvement and population
being further advanced,
there
is more demand
for butcher's meat.
Mr Hume
observes,
that in the Saxon times,
the fleece
was estimated
at two-fifths
of the value
of the whole sheep
and that this
was much above the proportion
of its present estimation.
In some provinces of Spain,
I have been assured,
the sheep
is frequently killed merely
for the sake
of the fleece
and the tallow.
The carcase
is often left
to rot upon the ground,
or to be devoured
by beasts and birds
of prey.
If this
sometimes happens
even in Spain,
it happens almost
constantly in Chili,
at Buenos Ayres,
and in many other parts
of Spanish America,
where the horned cattle
are almost
constantly killed merely
for the sake
of the hide and the tallow.
This, too,
used to happen almost
constantly in Hispaniola,
while it was infested
by the buccaneers,
and before the settlement,
improvement,
and populousness
of the French plantations
( which
now extend round the coast
of almost
the whole western half
of the island)
had given some value
to the cattle
of the Spaniards,
who still continue to possess,
not only the eastern part
of the coast,
but
the whole inland mountainous part
of the country.
Though,
in the progress
of improvement and population,
the price of the whole beast
necessarily rises,
yet the price of the carcase
is likely
to be much more
affected by this rise than
that of the wool
and the hide.
The market for the carcase
being
in the rude state
of society
confined always
to the country
which produces it,
must necessarily 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 seldom
be enlarged
in the same proportion.
The state
of the whole commercial world
can seldom be much
affected
by the improvement
of any particular country;
and the market
for such
commodities
may remain the same,
or very nearly the same,
after such improvements,
as before.
It should,
however,
in the natural course
of things,
rather,
upon the whole,
be somewhat extended
in consequence
of them.
If the manufactures,
especially,
of which
those commodities
are the materials,
should 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 usually been the expense
of transporting them
to distant countries.
Though it might not rise,
therefore,
in the same proportion
as that of butcher's meat,
it ought
naturally to rise somewhat,
and it ought certainly
not to fall.
In England,
however,
notwithstanding
the flourishing state
of its woollen manufacture,
the price of English wool
has fallen very considerably
since the time
of Edward III.
There
are
many authentic records which
demonstrate 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 shillings
of the money
of those times
(See Smith's Memoirs of Wool,
vol. i c.5, 6,
7. also vol. ii.), containing,
at the rate
of twenty-pence the ounce,
six ounces of silver,
Tower weight,
equal to
about thirty shillings
of our present money.
In the present times,
one-and-twenty shillings
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 seven.
The superiority
of its real price
was still greater.
At the rate
of six shillings
and eightpence the quarter,
ten shillings
was in those
ancient times the price
of twelve bushels of wheat.
At the rate
of twenty-eight shillings
the quarter,
one-and-twenty shillings
is in the present
times the price
of six bushels only.
The proportion
between the real price
of ancient and modern times,
therefore,
is as twelve to six,
or as two to one.
In those ancient times,
a tod of wool
would have purchased twice
the quantity
of subsistence which
it will purchase at present,
and consequently twice
the quantity of labour,
if the real recompence
of labour
had been
the same in both periods.
This degradation,
both in the real
and nominal value of wool,
could never have happened
in consequence
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 permission
of importing it from Spain,
duty free:
thirdly,
of the prohibition of exporting
it from Ireland
to another country
but England.
In consequence
of these regulations,
the market for English wool,
instead of being somewhat extended,
in consequence
of the improvement of England,
has been confined
to the home market,
where
the wool
of several 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 consistent
with justice and fair dealing,
the Irish
can work up
but a smaller 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 subsidy
ascertains,
at least in some degree,
what was its ordinary price.
But this seems not
to have been the case
with raw hides.
Fleetwood,
however,
from an account in 1425,
between the prior
of Burcester Oxford and one
of his canons,
gives us their price,
at least
as it
was stated upon
that particular occasion,
viz. five ox hides
at twelve shillings;
five cow hides
at seven shillings
and threepence;
thirtysix sheep skins
of two years old
at nine shillings;
sixteen calf skins
at two shillings.
In 1425,
twelve shillings contained
about the same quantity of
silver as four-and-twenty
shillings
of our present money.
An ox hide,
therefore,
was in this account
valued
at the same quantity
of silver as 4s 4/5ths
of our present money.
Its nominal price
was a good deal lower
than at present.
But at the rate
of six shillings
and eightpence the quarter,
twelve shillings
would in those times
have purchased fourteen bushels
and four-fifths
of a bushel
of wheat,
which,
at three and sixpence
the bushel,
would in the present
times cost 51s 4d.
An ox hide,
therefore,
would in those times
have purchased as much corn
as ten shillings and threepence
would purchase at present.
Its real value
was equal to ten shillings
and threepence
of our present money.
In those ancient times,
when the cattle
were half
starved
during the greater part
of the winter,
we cannot suppose
that they
were of a very large size.
An ox hide
which weighs four stone
of sixteen pounds
of avoirdupois,
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,
such
a hide
would at present cost
only ten shillings.
Through its nominal price,
therefore,
is higher
in the present than it
was in those ancient times,
its real price,
the real quantity
of subsistence which
it will purchase
or command,
is rather
somewhat lower.
The price of cow hides,
as stated
in the above account,
is nearly
in the common proportion to
that of ox hides.
That of sheep
skins is
a good deal above it.
They had probably been
sold with the wool.
That of calves skins,
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 stock,
are generally killed very young,
as was the case
in Scotland twenty
or thirty years ago.
It saves 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 probably
to the taking off the duty
upon seal skins,
and to the allowing,
for a limited time,
the importation
of raw hides from Ireland,
and from the plantations,
duty free,
which was done in 1769.
Take the whole
of the present century
at an average,
their real price
has probably been somewhat
higher
than it
was in those ancient times.
The nature of the commodity
renders it not
quite
so proper
for being transported
to distant markets as wool.
It suffers more by keeping.
A salted hide
is reckoned inferior
to a fresh one,
and sells for a lower price.
This circumstance
must necessarily have
some tendency
to sink
the price of raw hides
produced in a country
which
does not manufacture them,
but is obliged
to export them,
and comparatively
to raise
that of those produced
in a country
which does manufacture them.
It must have some
tendency
to sink their price
in a barbarous,
and to raise it
in an improved
and manufacturing country.
It must have had
some tendency,
therefore,
to sink it in ancient,
and to raise it
in modern times.
Our tanners,
besides,
have not been quite
so successful as
our clothiers,
in convincing
the wisdom of the nation,
that the safety
of the commonwealth
depends
upon the prosperity
of their particular manufacture.
They have accordingly been
much less favoured.
The exportation
of raw hides has,
indeed,
been prohibited,
and declared a nuisance;
but their importation
from foreign
countries
has been subjected to a duty;
and though
this duty
has been taken off
from those
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 sale
of its surplus 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 send nowhere but
to the mother country;
neither
has the commerce of Ireland
been in this case
oppressed hitherto,
in order to
support the manufactures
of Great Britain.
Whatever regulations
tend to sink the price,
either
of wool
or of raw hides,
below what
it naturally would he,
must,
in an improved
and cultivated country,
have some
tendency
to raise the price
of butcher's meat.
The price both
of the great and small cattle,
which are fed on improved
and cultivated land,
must be sufficient to pay
the rent which the landlord,
and the profit which
the farmer,
has reason
to expect from improved
and cultivated land.
If it is not,
they
will soon cease
to feed them.
Whatever part of this price,
therefore,
is not paid
by the wool and the hide,
must be paid by the carcase.
The less 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 beast,
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 such regulations,
though
their interest as
consumers may,
by the rise
in the price of provisions.
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 interest
as landlords and farmers
would in this case
be very deeply affected
by such regulations,
and their interest
as consumers very little.
The fall
in the price
of the wool
and the hide
would not in this case raise
the price of the carcase;
because the greater part
of the lands
of the country
being applicable
to no other purpose
but the feeding of cattle,
the same number
would still continue
to be fed.
The same quantity
of butcher's meat would still
come to market.
The demand for it
would be no greater than
before.
Its price,
therefore,
would be the same as
before.
The whole price of cattle
would fall,
and along with it both
the rent and the profit
of all those 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,
ascribed to Edward III,
would,
in the then circumstances
of the country,
have been
the most
destructive regulation which
could well have been thought of.
It would not only have reduced
the actual value
of the greater part
of the lands
in the kingdom,
but by reducing the price
of the most important species
of small cattle,
it would have retarded
very much
its subsequent improvement.
The wool of Scotland
fell very considerably
in its price
in consequence 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 southern counties
of Scotland,
which are chiefly a sheep
country,
would have
been very deeply affected
by this event,
had not
the rise
in the price
of butcher's meat
fully compensated the fall
in the price of wool.
As the efficacy
of human industry,
in increasing
the quantity either
of wool
or of raw hides,
is limited,
so far
as it depends
upon the produce
of the country
where it is exerted;
so it is uncertain so far
as it depends
upon the produce
of other countries.
It so far depends not
so much
upon the quantity which
they produce,
as upon that which they
do not manufacture;
and upon the restraints which
they may
or may not think proper
to impose
upon the exportation
of this sort
of rude produce.
These circumstances,
as they
are altogether independent
of domestic industry,
so they
necessarily render
the efficacy
of its efforts more
or less uncertain.
In multiplying
this sort of rude produce,
therefore,
the efficacy of human industry
is not only limited,
but uncertain.
In multiplying another
very important sort
of rude produce,
the quantity of fish
that is brought
to market,
it is
likewise
both limited and uncertain.
It is limited
by the local situation
of the country,
by the proximity
or distance
of its different provinces
from the sea,
by the number
of its lakes and rivers,
and by
what may be called
the fertility
or barrenness
of those seas,
lakes,
and rivers,
as to this sort
of rude produce.
As population increases,
as the annual produce
of the land
and labour of the country
grows greater and greater,
there
come to be more buyers
of fish;
and those buyers, too,
have a greater quantity
and variety
of other goods,
or,
what is the same thing,
the price
of a greater quantity and
variety
of other goods,
to buy with.
But it
will generally be impossible
to supply
the great and extended market,
without employing a quantity
of labour
greater than in proportion to
what had been requisite
for supplying the narrow
and confined one.
A market which,
from requiring only
one thousand,
comes
to require annually
ten thousand ton
of fish,
can seldom be supplied,
without employing
more than ten
times the quantity of labour
which had before been sufficient
to supply it.
The fish
must generally be sought for
at a greater distance,
larger vessels
must be employed,
and more expensive machinery
of every kind made use of.
The real price
of this commodity,
therefore,
naturally
rises in
the progress of improvement.
It has accordingly done so,
I believe,
more or
less in every country.
Though the success
of a particular day's fishing maybe
a very uncertain matter,
yet the local situation
of the country
being supposed,
the general efficacy
of industry
in bringing a certain quantity
of fish
to market,
taking the course of a year,
or of several years together,
it may,
perhaps,
be thought
is certain enough;
and it,
no doubt,
is so.
As it depends more,
however,
upon the local situation
of the country,
than upon the state
of its wealth
and industry;
as upon this
account
it may in different
countries
be
the same in very different periods
of improvement,
and very different
in the same period;
its connection
with the state of improvement
is uncertain;
and it
is of this sort
of uncertainty
that
I am here speaking.
In increasing the quantity
of the different minerals
and metals
which are drawn
from the bowels
of the earth,
that
of the more precious ones
particularly,
the efficacy of human industry
seems 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 situation,
such as the fertility
or barrenness
of its own mines.
Those metals
frequently abound
in countries which
possess no mines.
Their quantity,
in every particular country,
seems
to depend
upon two different circumstances;
first,
upon its power
of purchasing,
upon the state
of its industry,
upon the annual produce
of its land
and labour,
in consequence
of which it can afford
to employ
a greater
or a smaller quantity
of labour and subsistence,
in bringing or purchasing
such superfluities as gold
and silver,
either from its own mines,
or from those
of other countries;
and, secondly,
upon the fertility
or barrenness of the mines
which may happen
at any particular time
to supply the commercial world
with those metals.
The quantity
of those metals
in the countries most remote
from the mines,
must be more or less
affected
by this fertility or barrenness,
on account
of the
easy and cheap transportation
of those metals,
of their small bulk
and great value.
Their quantity
in China and Indostan
must have been more or less
affected
by the abundance of the mines
of America.
So far
as
their
quantity
in any particular country
depends upon the former
of those two circumstances
(the power
of purchasing),
their real price,
like that
of all other luxuries
and superfluities,
is likely
to rise
with the wealth and improvement
of the country,
and to fall
with its poverty and depression.
Countries
which
have a great quantity
of labour and subsistence
to spare,
can afford
to purchase
any particular quantity
of those metals
at the expense
of a greater quantity
of labour and subsistence,
than countries which
have less to spare.
So far
as
their
quantity
in any particular country
depends
upon the latter
of those two circumstances
(the fertility or barrenness
of the mines which
happen
to supply
the commercial world),
their real price,
the real quantity
of labour and subsistence which
they will purchase or
exchange for,
will,
no doubt,
sink more
or less in proportion
to the fertility,
and rise in proportion
to the barrenness
of those mines.
The fertility or barrenness
of the mines,
however,
which may happen
at any particular time
to supply
the commercial world,
is a circumstance which,
it is evident,
may have no sort
of connection
with the state of industry
in a particular country.
It seems even
to have
no very necessary connection
with
that of the world
in general.
As arts and commerce,
indeed,
gradually
spread themselves
over a greater
and a greater part
of the earth,
the search for new mines,
being extended
over a wider surface,
may have somewhat
a better chance
for being successful than when
confined within narrower bounds.
The discovery of new mines,
however,
as the old
ones come
to be gradually exhausted,
is a matter
of the greatest uncertainty,
and such as no human skill
or industry
can insure.
All indications,
it is acknowledged,
are doubtful;
and
the actual discovery
and successful working
of a new mine can alone
ascertain the reality
of its value,
or even of its existence.
In this search
there seem
to be no certain limits,
either
to the possible success,
or to the possible disappointment
of human industry.
In the course
of a century or two,
it is possible
that
new mines may be discovered,
more fertile than any
that have ever yet been known;
and it
is just equally possible,
that the most fertile mine
then known
may be more barren than any
that was wrought
before the discovery
of the mines
of America.
Whether
the one or the other
of those
two events
may happen
to take place,
is of very little importance
to the real wealth
and prosperity
of the world,
to the real value
of the annual produce
of the land
and labour of mankind.
Its nominal value,
the quantity
of gold
and silver by which
this annual produce
could be expressed
or represented,
would,
no doubt,
be very different;
but its real value,
the real quantity
of labour which
it could purchase
or command,
would be precisely the same.
A shilling
might,
in the one case,
represent no
more
labour than a penny
does at present;
and a penny,
in the other,
might represent
as much as a shilling
does now.
But in the one case,
he who
had a shilling in his pocket
would be no richer than he
who has a penny at present;
and in the other,
he who had a penny
would be just
as rich as he
who has a shilling now.
The cheapness and abundance
of gold and silver plate
would be
the sole advantage which
the world
could derive
from the one event;
and the dearness and scarcity
of those
trifling superfluities,
the only inconveniency it
could suffer
from the other.
Conclusion
of the Digression
concerning the Variations
in the Value of Silver.
The greater part
of the writers
who have collected
the money price
of things in ancient times,
seem to have considered
the low money price
of corn,
and of goods in general,
or, in other words,
the high value
of gold and silver,
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 system
of political economy,
which represents
national wealth
as consisting in the abundance
and national poverty
in the scarcity,
of gold and silver;
a system which
I shall endeavour
to explain
and examine at great length
in the fourth book
of this Inquiry.
I shall only observe
at present,
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 supply
the commercial world.
A poor country,
as it cannot afford
to buy more,
so it can as little
afford to pay dearer
for gold and silver
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 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
since the discovery
of the mines
of America,
so the value of gold
and silver
has gradually diminished.
This diminution
of their value,
however,
has not been owing
to the increase
of the real wealth
of Europe,
of the annual produce
of its land
and labour,
but
to the accidental discovery
of more abundant
mines than any
that were known before.
The increase
of the quantity
of gold and silver
in Europe,
and the increase
of its manufactures
and agriculture,
are two events which,
though they
have happened nearly
about the same time,
yet have arisen
from very different causes,
and have
scarce any natural connection
with one another.
The one
has arisen
from a mere accident,
in which
neither prudence nor
policy either
had or could have
any share;
the other,
from the fall
of the feudal system,
and from the establishment
of a government
which afforded to industry
the only encouragement which it
requires,
some tolerable security
that it
shall enjoy the fruits
of its own labour.
Poland,
where the feudal system
still 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 risen;
the real value
of the precious metals
has fallen in Poland,
in the same manner
as in other parts of Europe.
Their quantity,
therefore,
must have increased there as
in other places,
and nearly in the same proportion
to the annual produce
of its land
and labour.
This increase
of the quantity
of those metals,
however,
has not,
it seems,
increased that annual produce,
has neither
improved the manufactures
and agriculture
of the country,
nor mended the circumstances
of its inhabitants.
Spain and Portugal,
the countries which
possess the mines,
are, after Poland,
perhaps
the two most 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 countries
to all other parts
of Europe,
loaded,
not only with a freight
and an insurance,
but with the expense
of smuggling,
their exportation
being
either prohibited or subjected
to a duty.
In proportion
to the annual produce
of the land
and labour,
therefore,
their quantity
must be greater
in those countries
than in any other part
of Europe;
those countries,
however,
are poorer
than the greater part
of Europe.
Though
the feudal system
has been abolished
in Spain and Portugal,
it has not been succeeded
by a much better.
As the low value of gold
and silver,
therefore,
is no proof
of the wealth
and flourishing state
of the country
where it takes place;
so 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,
the low money price
of some particular sorts
of goods,
such as cattle,
poultry,
game of all kinds,.etc.
in proportion to
that of corn,
is a most decisive one.
It clearly demonstrates,
first,
their great abundance
in proportion to
that of corn,
and, consequently,
the great extent
of the land which
they occupied in proportion to
what was occupied by corn;
and, secondly,
the low value
of this land
in proportion to
that of corn land,
and, consequently,
the uncultivated
and unimproved state
of the far greater part
of the lands
of the country.
It clearly demonstrates,
that the stock and population
of the country
did not bear
the same proportion
to the extent
of its territory,
which
they commonly do
in civilized countries;
and that society
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 supply the commercial world
with gold and silver,
were fertile or barren,
not that the country
was rich or poor.
But
from the high
or low money price
of some sorts
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 unimproved,
and that it
was either
in a more
or less barbarous state,
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 silver,
would affect all sorts
of goods equally,
and raise
their price universally,
a third,
or a fourth,
or a fifth part higher,
according as silver
happened
to lose a third,
or a fourth,
or a fifth part
of its former value.
But the rise
in the price of provisions,
which has been the subject
of so much reasoning
and conversation,
does not affect all sorts
of provisions 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 rise
by the degradation
of the value of silver,
has risen much less than
that of some other sorts
of provisions.
The rise
in the price
of those other sorts
of provisions,
therefore,
cannot be owing altogether
to the degradation
of the value of silver.
Some other causes
must be taken
into the account;
and those which
have been above assigned,
will,
perhaps,
without having recourse
to the supposed degradation
of the value of silver,
sufficiently
explain this rise in those
particular sorts
of provisions,
of which the price
has actually risen
in proportion to
that of corn.
As to the price
of corn itself,
it has,
during the sixty-four first years
of the present century,
and before
the late extraordinary course
of bad seasons,
been somewhat lower than it
was
during the sixty-four last years
of the preceding century.
This fact
is attested,
not only by the accounts
of Windsor market,
but by the public fiars
of all
the different counties
of Scotland,
and by the accounts
of several different
markets in France,
which
have been collected
with great diligence and fidelity
by Mr Messance,
and by Mr Dupré
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 ascertained.
As to the high price
of corn during these last
ten
or twelve years,
it can be sufficiently accounted
for
from the badness
of the seasons,
without supposing
any degradation
in the value of silver.
The opinion,
therefore,
that silver
is continually sinking
in its value,
seems not
to be founded
upon any good observations,
either
upon the prices of corn,
or upon those
of other provisions.
The same quantity of silver,
it may perhaps be said,
will,
in the present times,
even according to
the account
which has been here given,
purchase
a much smaller quantity
of several sorts
of provisions than it
would have done
during some part
of the last century;
and to
ascertain whether
this change
be owing
to a rise
in the value
of those goods,
or to a fall
in the value of silver,
is only
to establish
a vain and useless
distinction,
which can be
of no sort
of service to the man
who has only
a certain quantity
of silver
to go to market with,
or a certain fixed revenue
in money.
I certainly do not pretend
that
the knowledge of this distinction
will enable him
to buy cheaper.
It may not,
however,
upon that account
be altogether useless.
It may be
of some use to the public,
by affording an easy proof
of the prosperous condition
of the country.
If the rise
in the price
of some sorts of provisions
be owing altogether
to a fall
in the value of silver,
it is owing
to a circumstance,
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 labour,
may,
notwithstanding this
circumstance,
be either gradually declining,
as in Portugal and Poland;
or gradually advancing,
as in most other parts
of Europe.
But if this rise
in the price
of some sorts of provisions
be owing
to a rise
in the real value
of the land
which produces them,
to its increased fertility,
or,
in consequence
of more extended improvement
and good cultivation,
to its having been rendered
fit
for producing corn;
it is owing to a circumstance
which indicates,
in the clearest manner,
the prosperous
and advancing state
of the country.
The land
constitutes by far
the greatest,
the most important,
and the most durable part
of the wealth
of every extensive country.
It
may surely be of some use,
or, at least,
it may give some satisfaction
to the public,
to have so decisive a proof
of the increasing value
of by far the greatest,
the most important,
and the most durable part
of its wealth.
It may, too,
be of some use
to the public,
in regulating
the pecuniary reward
of some of
its inferior servants.
If this rise
in the price
of some sorts of provisions
be owing
to a fall
in the value of silver,
their pecuniary reward,
provided
it was not too large before,
ought
certainly
to be augmented
in proportion
to the extent
of this fall.
If it is not augmented,
their real recompence
will evidently be so much
diminished.
But if this rise of price
is owing
to the increased value,
in consequence
of the improved fertility
of the land
which produces
such provisions,
it becomes
a much nicer matter
to judge,
either in what proportion
any pecuniary reward
ought to be augmented,
or whether
it ought to be augmented
at all.
The extension
of improvement and cultivation,
as it necessarily raises more
or less,
in proportion
to the price of corn,
that of every sort
of animal food,
so it
as necessarily lowers that of,
I believe,
every sort of vegetable food.
It raises the price
of animal food;
because
a great part of the land
which produces it,
being rendered fit
for producing corn,
must afford
to the landlord anti farmer
the rent
and profit of corn land.
It lowers the price
of vegetable food;
because,
by increasing
the fertility of the land,
it increases its abundance.
The improvements
of agriculture, too,
introduce many sorts
of vegetable food,
which requiring less land,
and not more labour
than corn,
come much cheaper
to market.
Such
are potatoes and maize,
or what
is called Indian corn,
the two most important
improvements which
the agriculture
of Europe,
perhaps,
which Europe itself,
has received
from the great extension
of its commerce and navigation.
Many sorts of vegetable food,
besides,
which
in the rude state
of agriculture
are confined
to the kitchen-garden,
and raised only by the spade,
come,
in its improved state,
to be introduced
into common fields,
and to be raised
by the plough;
such as turnips,
carrots,
cabbages,.etc.
If,
in the progress
of improvement,
therefore,
the real price
of one species of food
necessarily rises,
that of another
as necessarily falls;
and it
becomes a matter
of more nicety
to judge how far
the rise in the one
may be compensated
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 sort,
except perhaps
that of hogs flesh,
it seems
to have done
through a great part
of England
more than a century ago),
any rise
which can afterwards happen in
that of any other
sort of animal food,
cannot
much affect the circumstances
of the inferior ranks
of people.
The circumstances of the poor,
through a great part
of England,
cannot surely be so much
distressed by any
rise in
the price of poultry,
fish,
wild-fowl,
or venison,
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 distresses 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
sort of rude produce
cannot much
affect them.
They suffer more,
perhaps,
by the artificial rise
which has been occasioned
by taxes
in the price
of some manufactured commodities,
as of salt,
soap,
leather,
candles,
malt,
beer,
ale,.etc.
Effects
of the Progress of Improvement
upon the real
Price of Manufactures.
It is the natural effect
of improvement,
however,
to diminish gradually
the real price
of almost all
manufactures.
That
of the manufacturing workmanship
diminishes,
perhaps,
in all of them
without exception.
In consequence
of better machinery,
of greater dexterity,
and of a more proper division
and distribution
of work,
all of which
are the natural effects
of improvement,
a much smaller quantity
of labour
becomes requisite
for executing
any particular piece of work;
and though,
in consequence
of the flourishing circumstances
of the society,
the real price
of labour
should rise very considerably,
yet the great diminution
of the quantity
will generally much more than
compensate
the greatest rise
which can happen
in the price.
There are,
indeed,
a few
manufactures,
in which
the necessary rise in
the real price
of the rude materials
will more than compensate
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 consequence
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 division
and distribution
of work.
But in all cases
in which
the real price
of the rude material either
does not rise at all,
or does not rise very much,
that
of the manufactured commodity
sinks very considerably.
This diminution of price has,
in the course
of the present
and preceding century,
been most remarkable in those
manufactures of which
the materials
are the coarser metals.
A better movement
of a watch,
than about the middle
of the last
century
could have been bought
for twenty pounds,
may now perhaps be had
for twenty shillings.
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 same period,
a very great reduction
of price,
though
not altogether
so great as in watch-work.
It has,
however,
been sufficient
to astonish the workmen
of every other part
of Europe,
who in many cases
acknowledge that
they can produce no work
of equal goodness
for double
or even for triple
the price.
There
are perhaps no manufactures,
in which the division
of labour
can be carried further,
or in which the machinery
employed
admits of'
a greater variety
of improvements,
than those
of which
the materials
are the coarser metals.
In the clothing manufacture
there has,
during the same period,
been no
such sensible reduction
of price.
The price of superfine cloth,
I have been assured,
on the contrary,
has,
within these five-and-twenty
or thirty years,
risen somewhat
in proportion to its quality,
owing,
it was said,
to a considerable
rise in
the price of the material,
which consists altogether
of Spanish wool.
That of the Yorkshire cloth,
which is made altogether
of English wool,
is said,
indeed,
during the course
of the present century,
to have fallen a good deal
in proportion
to its quality.
Quality,
however,
is so very disputable
a matter,
that
I look
upon all information
of this kind
as somewhat uncertain.
In the clothing manufacture,
the division of labour
is nearly
the same now
as it
was a century ago,
and the machinery
employed
is not very different.
There may,
however,
have been
some small improvements in both,
which may have occasioned
some reduction
of price.
But the reduction
will appear
much more sensible 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 labour
was probably much less
subdivided,
and the machinery
employed much more imperfect,
than it
is at present.
In 1487,
being the 4th of Henry VII,
it was enacted,
that
"whosoever
shall sell by retail
a broad yard
of the finest scarlet grained,
or of other grained cloth
of the finest making,
above sixteen shillings,
shall forfeit forty shillings
for every yard
so sold."
Sixteen shillings,
therefore,
containing
about the same quantity of
silver as four-and-twenty
shillings
of our present money,
was, at that time,
reckoned not
an unreasonable price
for a yard
of the finest cloth;
and as this
is a sumptuary law,
such cloth,
it is probable,
had usually been
sold somewhat dearer.
A guinea
may be reckoned
the highest price
in the present times.
Even though the quality
of the cloths,
therefore,
should be supposed equal,
and that of the present
times is most probably
much superior,
yet,
even upon this supposition,
the money price
of the finest cloth
appears
to have been considerably reduced
since the end
of the fifteenth century.
But its real price
has been much more reduced.
Six shillings and eightpence
was then,
and long afterwards,
reckoned the average price
of a quarter of wheat.
Sixteen shillings,
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 shillings,
the real price
of a yard
of fine cloth must,
in those times,
have been
equal to at least
three pounds six shillings
and sixpence
of our present money.
The man
who bought it
must have parted
with the command
of a quantity
of labour and subsistence
equal to
what that sum
would purchase
in the present times.
The reduction
in the real price
of the coarse manufacture,
though considerable,
has not been so great
as in
that of the fine.
In 1463,
being the 3rd of Edward IV,
it was enacted,
that
"no servant
in husbandry nor common labourer,
nor servant to any artificer
inhabiting
out of a city or burgh,
shall use
or wear
in their clothing any cloth
above two shillings
the broad yard."
In the 3rd of Edward IV,
two shillings
contained very nearly
the same quantity
of
silver as four
of our present money.
But the Yorkshire cloth
which is now sold
at four shillings the yard,
is probably much superior
to any
that was then made
for the wearing
of the very poorest order
of common servants.
Even the money price
of their clothing,
therefore,
may,
in proportion to the quality,
be somewhat cheaper
in the present than it
was in those ancient times.
The real price
is certainly a good deal
cheaper.
Tenpence
was then reckoned
what is called
the moderate
and reasonable price
of a bushel
of wheat.
Two shillings,
therefore,
was the price
of two bushels
and near two pecks
of wheat,
which in the present times,
at three shillings
and sixpence
the bushel,
would be worth eight shillings
and ninepence.
For a yard of this cloth
the poor servant
must have parted
with the power
of purchasing a quantity
of subsistence
equal to what eight shillings
and ninepence
would purchase
in the present times.
This
is a sumptuary law, too,
restraining the luxury
and extravagance
of the poor.
Their clothing,
therefore,
had commonly been
much more expensive.
The same order of people are,
by the same law,
prohibited from wearing hose,
of which the price
should exceed fourteen-pence
the pair,
equal to
about eight-and-twenty pence
of our present money.
But fourteen-pence
was in those times the price
of a bushel
and near two pecks
of wheat;
which in the present times,
at three and sixpence
the bushel,
would cost five shillings
and threepence.
We should in the present
times consider
this as a very high price
for a pair
of stockings
to a servant
of the poorest 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 stockings
was probably not known
in any part of Europe.
Their hose
were made of common cloth,
which may have been one
of the causes
of their dearness.
The first person
that wore stockings in England
is said
to have been Queen Elizabeth.
She received them
as a present
from the Spanish ambassador.
Both in the coarse
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 since received
three very capital improvements,
besides,
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 spindle
for the spinning-wheel,
which,
with the same quantity
of labour,
will perform more than double
the quantity of work.
Secondly,
the use
of several
very ingenious machines,
which
facilitate
and abridge,
in a still greater proportion,
the winding
of the worsted
and woollen yarn,
or the proper arrangement
of the warp and woof
before they
are put into the loom;
an operation which,
previous
to the invention
of those machines,
must have been extremely
tedious and troublesome.
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 so early
as the beginning
of the sixteenth century,
nor,
so far as I know,
in any other part
of Europe north
of the Alps.
They had been introduced
into Italy some time
before.
The consideration
of these circumstances may,
perhaps,
in some measure,
explain to us
why the real price both
of the coarse
and of the fine manufacture
was so much higher
in those ancient than it
is in the present times.
It cost a greater quantity
of labour
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 coarse manufacture probably was,
in those ancient times,
carried on
in England
in the same manner as it
always has been in countries
where arts and manufactures
are in their infancy.
It was probably
a household manufacture,
in which
every different part
of the work
was occasionally performed
by all
the different members
of almost every private family,
but so
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 subsistence.
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 sole
fund
of the workman's subsistence.
The fine manufacture,
on the other hand,
was not, in those times,
carried on in England,
but in the
rich and commercial country
of Flanders;
and it
was probably conducted then,
in the same manner
as now,
by people
who derived the whole,
or the principal part
of their subsistence from it.
It was,
besides,
a foreign manufacture,
and must have paid some 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 restrain,
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 possible,
the great men
with the conveniencies
and luxuries which
they wanted,
and which the industry
of their own country
could not afford them.
The consideration
of these circumstances may,
perhaps,
in some measure
explain to us why,
in those ancient times,
the real price
of the coarse manufacture was,
in proportion to
that of the fine,
so much lower
than in the present
times.
I shall conclude
this very long chapter
with observing,
that
every improvement
in the circumstances
of the society
tends,
either directly or indirectly,
to raise the real rent
of land
to increase the real wealth
of the landlord,
his power
of purchasing the labour,
or the produce
of the labour
of other people.
The extension
of improvement and cultivation
tends to raise it directly.
The landlord's share
of the produce
necessarily increases
with the increase
of the produce.
That rise
in the real price
of those parts
of the rude produce
of land,
which is first the effect
of the extended improvement
and cultivation,
and afterwards
the cause of their being
still further extended,
the rise
in the price of cattle,
for example,
tends, too,
to raise
the rent of land directly,
and in a still
greater proportion.
The real value
of the landlord's share,
his real command
of the labour
of other people,
not only rises
with the real value
of the produce,
but the proportion
of his share
to the whole produce
rises with it.
That produce,
after the rise
in its real price,
requires
no more labour
to collect it than
before.
A smaller proportion
of it will,
therefore,
be sufficient
to replace,
with the ordinary profit,
the stock
which employs that labour.
A greater proportion of it
must consequently belong
to the landlord.
All those improvements
in the productive powers
of labour,
which
tend directly
to reduce the rent price of
manufactures,
tend indirectly
to raise the real rent
of land.
The landlord exchanges
that part
of his rude produce,
which is
over and above
his own consumption,
or,
what comes to the same thing,
the price
of that part of it,
for manufactured produce.
Whatever reduces
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
occasion for.
Every increase
in the real wealth
of the society,
every increase
in the quantity
of useful labour
employed within it,
tends indirectly
to raise the real rent
of land.
A certain proportion
of this labour
naturally goes to the land.
A greater number of men
and cattle
are employed
in its cultivation,
the produce increases
with the increase
of the stock
which is thus
employed
in raising it,
and the rent increases
with the produce.
The contrary circumstances,
the neglect
of cultivation and improvement,
the fall
in the real price
of any part
of the rude produce
of land,
the rise
in the real price of
manufactures
from the decay
of manufacturing art
and industry,
the declension
of the real wealth
of the society,
all tend,
on the other hand,
to lower the real rent
of land,
to reduce the real wealth
of the landlord,
to diminish his power
of purchasing either
the labour,
or the produce of the labour,
of other people.
The whole annual produce
of the land
and labour of every country,
or,
what comes to the same thing,
the whole price of
that annual produce,
naturally
divides itself,
it has already been observed,
into three parts;
the rent of land,
the wages of labour,
and the profits of stock;
and constitutes a revenue
to three different orders
of people;
to those
who live by rent,
to those
who live by wages,
and to those
who live by profit.
These
are the three great,
original,
and constituent,
orders
of every civilized society,
from whose revenue
that of every other
order
is ultimately derived.
The interest
of the first
of those three great orders,
it appears from what
has been just now said,
is strictly
and inseparably connected
with the general interest
of the society.
Whatever either
promotes or obstructs the one,
necessarily
promotes or obstructs
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 interest
of their own particular order;
at least,
if they
have any tolerable knowledge
of that interest.
They are,
indeed,
too often defective
in this tolerable knowledge.
They are the only one
of the three orders
whose revenue
costs them
neither labour nor care,
but comes to them,
as 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 situation,
renders them too often,
not only ignorant,
but incapable of
that application of mind,
which is necessary
in order to
foresee
and understand
the consequence
of any public regulation.
The interest
of the second order,
that of those
who live by wages,
is as strictly connected
with the interest
of the society as
that of the first.
The wages of the labourer,
it has already been shewn,
are never so high as when
the demand for labour
is continually rising,
or when the quantity
employed
is every year
increasing considerably.
When this
real wealth of the society
becomes stationary,
his wages
are soon reduced to what
is barely enough
to enable him
to bring up a family,
or to continue the race
of labourers.
When the society declines,
they fall even below this.
The order of proprietors
may perhaps gain more
by the prosperity
of the society than
that of labourers;
but there is
no order
that suffers so cruelly
from its decline.
But though the interest
of the labourer
is strictly connected with
that of the society,
he is incapable either
of comprehending that interest,
or of understanding
its connexion with his own.
His condition
leaves him no time
to receive
the necessary information,
and his education and habits
are commonly
such as to render him unfit
to judge,
even though
he was fully informed.
In the public deliberations,
therefore,
his voice
is little heard,
and less
regarded;
except
upon particular occasions,
when his clamour is animated,
set on,
and supported
by his employers,
not for his,
but
their own
particular purposes.
His employers
constitute the third order,
that of those
who live by profit.
It is the stock
that is employed for the sake
of profit,
which puts
into motion the greater part
of the useful labour
of every society.
The plans
and projects
of the employers of stock
regulate and direct all
the most important operation
of labour,
and profit
is the end proposed
by all those plans
and projects.
But the rate
of profit does not,
like rent and wages,
rise with the prosperity,
and fall
with the declension
of the society.
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 interest
of this third order,
therefore,
has not the same connexion
with the general interest
of the society,
as that of the other two.
Merchants
and master manufacturers are,
in this order,
the two classes of people
who commonly employ
the largest capitals,
and who
by their wealth draw
to themselves
the greatest share
of the public consideration.
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 interest
of their own particular branch
of business. than about
that of the society,
their judgment,
even when given
with the greatest candour
(which it
has not been
upon every occasion),
is much more
to be depended upon
with regard to
the former
of those two objects,
than with regard to
the latter.
Their superiority
over the country gentleman is,
not so much
in their knowledge
of the public interest,
as in their having
a better knowledge
of their own interest
than
he has of his.
It is
by this superior knowledge
of their own
interest that they
have frequently imposed
upon his generosity,
and persuaded him
to give up both
his own interest and that
of the public,
from a very simple
but honest conviction,
that their interest,
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 some respects different from,
and even opposite 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 frequently be
agreeable enough
to the interest
of the public;
but to narrow the competition
must always be against it,
and can only serve
to enable the dealers,
by raising
their profits above
what they naturally would be,
to levy,
for their own benefit,
an absurd tax
upon the rest
of their fellow-citizens.
The proposal
of any new law or regulation
of commerce
which comes from this order,
ought
always to be listened to
with great precaution,
and ought
never to be adopted till
after having been long
and carefully examined,
not
only with the most scrupulous,
but
with the most suspicious
attention.
It comes
from an order of men,
whose interest
is never exactly the same
with
that of the public,
who have generally an interest
to deceive and even
to oppress the public,
and who
accordingly have,
upon many occasions,
both deceived
and oppressed it.