Adam Smith: Wealth of Nations Book 1

AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS.

Book 1

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.

By Adam Smith

Taken from Gutenberg Project
http://www.gutenberg.org/cache/epub/3300/pg3300.txt

INTRODUCTION AND PLAN OF THE WORK.

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.

BOOK I. 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.

CHAPTER I. 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, be 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.

CHAPTER II. 

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.

CHAPTER III. 

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.

CHAPTER IV. 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
(Plin. Hist Nat. lib. 33, cap. 3), 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.

CHAPTER V. 

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 (Pliny, lib. xxxiii. cap. 3),
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 £3:18s.
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.

CHAPTER VI. 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.

CHAPTER VII. 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.

CHAPTER VIII. OF THE WAGES OF LABOUR.

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 the 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.

CHAPTER IX. OF THE PROFITS OF STOCK.

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 per cent. 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, cap. 8. and ten per cent. 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 per cent.; 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 per cent.

Since the time of Henry VIII. the wealth and revenue of the country have
been continually advancing, and in the course of their progress, their
pace 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 Jess 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 per cent. as we
learn from the letters of Cicero.

In a country which had acquired that full complement of riches which the
nature of its 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.

CHAPTER X. 

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.


PART I. 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.


PART II.--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.

CHAPTER XI. OF THE RENT OF LAND.

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.

PART I.--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.


PART II.--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.


PART III.--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.

First Period.--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.

Second Period.--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.

Third Period.--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 £ 1,514,962:17:4 1/2. 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.

First Sort.--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.

Second sort.--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.

Third Sort.--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.

Conclusion of the Chapter.

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.



# PRICES OF WHEAT


  Year    Prices/Quarter  Average of different   Average prices of
          in each year     prices in one year    each year in money
                                                    of 1776

            £   s   d         £   s   d             £   s   d
  1202      0  12   0                               1  16   0
  1205      0  12   0
            0  13   4         0  13   5             2   0   3
            0  15   0
  1223      0  12   0                               1  16   0
  1237      0   3   4                               0  10   0
  1243      0   2   0                               0   6   0
  1244      0   2   0                               0   6   0
  1246      0  16   0                               2   8   0
  1247      0  13   5                               2   0   0
  1257      1   4   0                               3  12   0
  1258      1   0   0
            0  15   0         0  17   0             2  11   0
            0  16   0
  1270      4  16   0
            6   8   0         5  12   0            16  16   0
  1286      0   2   8
            0  16   0         0   9   4             1   8   0
                                          Total    35   9   3
                                          Average   2  19   1¼

  1287      0   3   4                               0  10   0
  1288      0   0   8
            0   1   0
            0   1   4
            0   1   6
            0   1   8         0   3   0¼            0   9   1¾
            0   2   0
            0   3   4
            0   9   4
  1289      0  12   0
            0   6   0
            0   2   0         0  10   1½            1  10   4½
            0  10   8
            1   0   0
  1290      0  16   0                               2   8   0
  1294      0  16   0                               2   8   0
  1302      0   4   0                               0  12   0
  1309      0   7   2                               1   1   6
  1315      1   0   0                               3   0   0
  1316      1   0   0
            1  10   0         1  10   6             4  11   6
            1  12   0
            2   0   0
  1317      2   4   0
            0  14   0
            2  13   0         1  19   6             5  18   6
            4   0   0
            0   6   8
  1336      0   2   0                               0   6   0
  1338      0   3   4                               0  10   0
                                          Total    23   4  11¼
                                          Average   1  18   8

  1339      0   9   0                               1   7   0
  1349      0   2   0                               0   5   2
  1359      1   6   8                               3   2   2
  1361      0   2   0                               0   4   8
  1363      0  15   0                               1  15   0
  1369      1   0   0
            1   4   0         1   2   0             2   9   4
  1379      0   4   0                               0   9   4
  1387      0   2   0                               0   4   8
  1390      0  13   4
            0  14   0         0  14   5             1  13   7
            0  16   0
  1401      0  16   0                               1  17   6
  1407      0   4   4¾
            0   3   4         0   3  10             0   8  10
  1416      0  16   0                               1  12   0
                                         Total     15   9   4
                                         Average    1   5   9½

  1423      0   8   0                                       0
  1425      0   4   0                                       0
  1434      1   6   8                                       4
  1435      0   5   4                                       8
  1439      1   0   0
            1   6   8         1   3   4             2   6   8
  1440      1   4   0                               2   8   0
  1444      0   4   4         0   4   2             0   4   8
            0   4   0
  1445      0   4   6                               0   9   0
  1447      0   8   0                               0  16   0
  1448      0   6   8                               0  13   4
  1449      0   5   0                               0  10   0
  1451      0   8   0                               0  16   0
                                         Total     12  15   4
                                         Average    1   1   3¹/³

  1453      0   5   4                               0  10   8
  1455      0   1   2                               0   2   4
  1457      0   7   8                               1  15   4
  1459      0   5   0                               0  10   0
  1460      0   8   0                               0  16   0
  1463      0   2   0         0   1  10             0   3   8
            0   1   8
  1464      0   6   8                               0  10   0
  1486      1   4   0                               1  17   0
  1491      0  14   8                               1   2   0
  1494      0   4   0                               0   6   0
  1495      0   3   4                               0   5   0
  1497      1   0   0                               1  11   0
                                         Total      8   9   0
                                         Average    0  14   1

  1499      0   4   0                               0   6   0
  1504      0   5   8                               0   8   6
  1521      1   0   0                               1  10   0
  1551      0   8   0                               0   8   0
  1553      0   8   0                               0   8   0
  1554      0   8   0                               0   8   0
  1555      0   8   0                               0   8   0
  1556      0   8   0                               0   8   0
  1557      0   8   0
            0   4   0         0  17   8½            0  17   8½
            0   5   0
            2  13   4
  1558      0   8   0                               0   8   0
  1559      0   8   0                               0   8   0
  1560      0   8   0                               0   8   0
                                         Total      6   0   2½
                                         Average    0  10   0½

  1561      0   8   0                               0   8   0
  1562      0   8   0                               0   8   0
  1574      2  16   0
            1   4   0         2   0   0             2   0   0
  1587      3   4   0                               3   4   0
  1594      2  16   0                               2  16   0
  1595      2  13   0                               2  13   0
  1596      4   0   0                               4   0   0
  1597      5   4   0
            4   0   0         4  12   0             4  12   0
  1598      2  16   8                               2  16   8
  1599      1  19   2                               1  19   8
  1600      1  17   8                               1  17   8
  1601      1  14  10                               1  14  10
                                         Total     28   9   4
                                         Average    2   7   5½


PRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED
WHEAT AT WINDSOR MARKET, ON LADY DAY AND MICHAELMAS, FROM 1595 TO 1764
BOTH INCLUSIVE; THE PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE
HIGHEST PRICES OF THESE TWO MARKET DAYS.

            £   s   d
  1595      2   0   0
  1596      2   8   0
  1597      3   9   6
  1598      2  16   8
  1599      1  19   2
  1600      1  17   8
  1601      1  14  10
  1602      1   9   4
  1603      1  15   4
  1604      1  10   8
  1605      1  15  10
  1606      1  13   0
  1607      1  16   8
  1608      2  16   8
  1609      2  10   0
  1610      1  15  10
  1611      1  18   8
  1612      2   2   4
  1613      2   8   8
  1614      2   1   8½
  1615      1  18   8
  1616      2   0   4
  1617      2   8   8
  1618      2   6   8
  1619      1  15   4
  1620      1  10   4
        26)54   0   6½
    Average 2   1   6¾

  1621      1  10    4
  1622      2  18    8
  1623      2  12    0
  1624      2   8    0
  1625      2  12    0
  1626      2   9    4
  1627      1  16    0
  1628      1   8    0
  1629      2   2    0
  1630      2  15    8
  1631      3   8    0
  1632      2  13    4
  1633      2  18    0
  1634      2  16    0
  1635      2  16    0
  1636      2  16    8
        16)40   0    0
    Average 2  10    0

  1637      2  13    0
  1638      2  17    4
  1639      2   4   10
  1640      2   4    8
  1641      2   8    0
  1646      2   8    0
  1647      3  13    0
  1648      4   5    0
  1649      4   0    0
  1650      3  16    8
  1651      3  13    4
  1652      2   9    6
  1653      1  15    6
  1654      1   6    0
  1655      1  13    4
  1656      2   3    0
  1657      2   6    8
  1658      3   5    0
  1659      3   6    0
  1660      2  16    6
  1661      3  10    0
  1662      3  14    0
  1663      2  17    0
  1664      2   0    6
  1665      2   9    4
  1666      1  16    0
  1667      1  16    0
  1668      2   0    0
  1669      2   4    4
  1670      2   1    8
  1671      2   2    0
  1672      2   1    0
  1673      2   6    8
  1674      3   8    8
  1675      3   4    8
  1676      1  18    0
  1677      2   2    0
  1678      2  19    0
  1679      3   0    0
  1680      2   5    0
  1681      2   6    8
  1682      2   4    0
  1683      2   0    0
  1684      2   4    0
  1685      2   6    8
  1686      1  14    0
  1687      1   5    2
  1688      2   6    0
  1689      1  10    0
  1690      1  14    8
  1691      1  14    0
  1692      2   6    8
  1693      3   7    8
  1694      3   4    0
  1695      2  13    0
  1696      3  11    0
  1697      3   0    0
  1698      3   8    4
  1699      3   4    0
  1700      2   0    0
      60) 153   1    8
   Average  2  11    0¹/³

  1701      1  17    8
  1702      1   9    6
  1703      1  16    0
  1704      2   6    6
  1705      1  10    0
  1706      1   6    0
  1707      1   8    6
  1708      2   1    6
  1709      3  18    6
  1710      3  18    0
  1711      2  14    0
  1712      2   6    4
  1713      2  11    0
  1714      2  10    4
  1715      2   3    0
  1716      2   8    0
  1717      2   5    8
  1718      1  18   10
  1719      1  15    0
  1720      1  17    0
  1721      1  17    6
  1722      1  16    0
  1723      1  14    8
  1724      1  17    0
  1725      2   8    6
  1726      2   6    0
  1727      2   2    0
  1728      2  14    6
  1729      2   6   10
  1730      1  16    6
  1731      1  12   10                     1  12   10
  1732      1   6    8                     1   6    8
  1733      1   8    4                     1   8    4
  1734      1  18   10                     1  18   10
  1735      2   3    0                     2   3    0
  1736      2   0    4                     2   0    4
  1737      1  18    0                     1  18    0
  1738      1  15    6                     1  15    6
  1739      1  18    6                     1  18    6
  1740      2  10    8                     2  10    8
                                      10) 18  12    8
                                           1  17    3½

  1741      2   6    8                     2   6    8
  1742      1  14    0                     1  14    0
  1743      1   4   10                     1   4   10
  1744      1   4   10                     1   4   10
  1745      1   7    6                     1   7    6
  1746      1  19    0                     1  19    0
  1747      1  14   10                     1  14   10
  1748      1  17    0                     1  17    0
  1749      1  17    0                     1  17    0
  1750      1  12    6                     1  12    6
                                      10) 16  18    2
                                           1  13    9¾

  1751      1  18    6
  1752      2   1   10
  1753      2   4    8
  1754      1  13    8
  1755      1  14   10
  1756      2   5    3
  1757      3   0    0
  1758      2  10    0
  1759      1  19   10
  1760      1  16    6
  1761      1  10    3
  1762      1  19    0
  1763      2   0    9
  1764      2   6    9
      64) 129  13    6
   Average  2   0    6¾