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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 3:17:10 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 tile price of their labour.
Their usual pretences are, sometimes the high price of provisions,
sometimes the great profit which their masters make by their work. But
whether their combinations be offensive or defensive, they are always
abundantly heard of. In order to bring the point to a speedy decision,
they have always recourse to the loudest clamour, and sometimes to the
most shocking violence and outrage. They are desperate, and act with
the folly and extravagance of desperate men, who must either starve,
or frighten their masters into an immediate compliance with their
demands. The masters, upon these occasions, are just as clamorous upon
the other side, and never cease to call aloud for the assistance of
the civil magistrate, and the rigorous execution of those laws which
have been enacted with so much severity against the combination of
servants, labourers, and journeymen. The workmen, accordingly, very
seldom derive any advantage from the violence of those tumultuous
combinations, which, partly from the interposition of the civil
magistrate, partly from the superior steadiness of the masters, partly
from the necessity which the greater part of the workmen are under of
submitting for the sake of present subsistence, generally end in
nothing but the punishment or ruin of the ringleaders.

But though, in disputes with their workmen, masters must generally
have the advantage, there is, however, a certain rate, below which it
seems impossible to reduce, for any considerable time, the ordinary
wages even of the lowest species of labour.

A man must always live by his work, and his wages must at least be
sufficient to maintain him. They must even upon most occasions be
somewhat more, otherwise it would be impossible for him to bring up a
family, and the race of such workmen could not last beyond the first
generation. Mr Cantillon seems, upon this account, to suppose that the
lowest species of common labourers must everywhere earn at least
double their own maintenance, in order that, one with another, they
may be enabled to bring up two children; the labour of the wife, on
account of her necessary attendance on the children, being supposed no
more than sufficient to provide for herself: But one half the children
born, it is computed, die before the age of manhood. The poorest
labourers, therefore, according to this account, must, one with
another, attempt to rear at least four children, in order that two
may have an equal chance of living to that age. But the necessary
maintenance of four children, it is supposed, may be nearly equal to
that of one man. The labour of an able-bodied slave, the same author
adds, is computed to be worth double his maintenance; and that of the
meanest labourer, he thinks, cannot be worth less than that of an
able-bodied slave. Thus far at least seems certain, that, in order to
bring up a family, the labour of the husband and wife together must,
even in the lowest species of common labour, be able to earn something
more than what is precisely necessary for their own maintenance; but
in what proportion, whether in that above-mentioned, or many other, I
shall not take upon me to determine.

There are certain circumstances, however, which sometimes give the
labourers an advantage, and enable them to raise their wages
considerably above this rate, evidently the lowest which is consistent
with common humanity.

When in any country the demand for those who live by wages, labourers,
journeymen, servants of every kind, is continually increasing; when
every year furnishes employment for a greater number than had been
employed the year before, the workmen have no occasion to combine in
order to raise their wages. The scarcity of hands occasions a
competition among masters, who bid against one another in order to get
workmen, and thus voluntarily break through the natural combination of
masters not to raise wages. The demand for those who live by wages, it
is evident, cannot increase but in proportion to the increase of the
funds which are destined to the payment of wages. These funds are of
two kinds, first, the revenue which is over and above what is
necessary for the maintenance; and, secondly, the stock which is over
and above what is necessary for the employment of their masters.

When the landlord, annuitant, or monied man, has a greater revenue
than what he judges sufficient to maintain his own family, he employs
either the whole or a part of the surplus in maintaining one or more
menial servants. Increase this surplus, and he will naturally increase
the number of those servants.

When an independent workman, such as a weaver or shoemaker, has got
more stock than what is sufficient to purchase the materials of his
own work, and to maintain himself till he can dispose of it, he
naturally employs one or more journeymen with the surplus, in order to
make a profit by their work. Increase this surplus, and he will
naturally increase the number of his journeymen.

The demand for those who live by wages, therefore, necessarily
increases with the increase of the revenue and stock of every country,
and cannot possibly increase without it. The increase of revenue and
stock is the increase of national wealth. The demand for those who
live by wages, therefore, naturally increases with the increase of
national wealth, and cannot possibly increase without it.

It is not the actual greatness of national wealth, but its continual
increase, which occasions a rise in the wages of labour. It is not,
accordingly, in the richest countries, but in the most thriving, or in
those which are growing rich the fastest, that the wages of labour are
highest. England is certainly, in the present times, a much richer
country than any part of North America. The wages of labour, however,
are much higher in North America than in any part of England. In the
province of New York, common labourers earned in 1773, before the
commencement of the late disturbances, three shillings and sixpence
currency, equal to two shillings sterling, a-day; ship-carpenters, ten
shillings and sixpence currency, with a pint of rum, worth sixpence
sterling, equal in all to six shillings and sixpence sterling;
house-carpenters and bricklayers, eight shillings currency, equal to
four shillings and sixpence sterling; journeymen tailors, five
shillings currency, equal to about two shillings and tenpence
sterling. These prices are all above the London price; and wages are
said to be as high in the other colonies as in New York. The price of
provisions is everywhere in North America much lower than in England.
A dearth has never been known there. In the worst seasons they have
always had a sufficiency for themselves, though less for exportation.
If the money price of labour, therefore, be higher than it is anywhere
in the mother-country, its real price, the real command of the
necessaries and conveniencies of life which it conveys to the
labourer, must be higher in a still greater proportion.

But though North America is not yet so rich as England, it is much
more thriving, and advancing with much greater rapidity to the further
acquisition of riches. The most decisive mark of the prosperity of any
country is the increase of the number of its inhabitants. In Great
Britain, and most other European countries, they are not supposed to
double in less than five hundred years. In the British colonies in
North America, it has been found that they double in twenty or
five-and-twenty years. Nor in the present times is this increase
principally owing to the continual importation of new inhabitants, but
to the great multiplication of the species. Those who live to old age,
it is said, frequently see there from fifty to a hundred, and
sometimes many more, descendants from their own body. Labour is there
so well rewarded, that a numerous family of children, instead of being
a burden, is a source of opulence and prosperity to the parents. The
labour of each child, before it can leave their house, is computed to
be worth a hundred pounds clear gain to them. A young widow with four
or five young children, who, among the middling or inferior ranks of
people in Europe, would have so little chance for a second husband, is
there frequently courted as a sort of fortune. The value of children
is the greatest of all encouragements to marriage. We cannot,
therefore, wonder that the people in North America should generally
marry very young. Notwithstanding the great increase occasioned by
such early marriages, there is a continual complaint of the scarcity
of hands in North America. The demand for labourers, the funds
destined for maintaining them increase, it seems, still faster than
they can find labourers to employ.

Though the wealth of a country should be very great, yet if it has
been long stationary, we must not expect to find the wages of labour
very high in it. The funds destined for the payment of wages, the
revenue and stock of its inhabitants, may be of the greatest extent;
but if they have continued for several centuries of the same, or very
nearly of the same extent, the number of labourers employed every year
could easily supply, and even more than supply, the number wanted the
following year. There could seldom be any scarcity of hands, nor could
the masters be obliged to bid against one another in order to get
them. The hands, on the contrary, would, in this case, naturally
multiply beyond their employment. There would be a constant scarcity
of employment, and the labourers would be obliged to bid against one
another in order to get it. If in such a country the wages off labour
had ever been more than sufficient to maintain the labourer, and to
enable him to bring up a family, the competition of the labourers and
the interest of the masters would soon reduce them to the lowest rate
which is consistent with common humanity. China has been long one of
the richest, that is, one of the most fertile, best cultivated, most
industrious, and most populous, countries in the world. It seems,
however, to have been long stationary. Marco Polo, who visited it more
than five hundred years ago, describes its cultivation, industry, and
populousness, almost in the same terms in which they are described by
travellers in the present times. It had, perhaps, even long before his
time, acquired that full complement of riches which the nature of its
laws and institutions permits it to acquire. The accounts of all
travellers, inconsistent in many other respects, agree in the low
wages of labour, and in the difficulty which a labourer finds in
bringing up a family in China. If by digging the ground a whole day he
can get what will purchase a small quantity of rice in the evening, he
is contented. The condition of artificers is, if possible, still
worse. Instead of waiting indolently in their work-houses for the
calls of their customers, as in Europe, they are continually running
about the streets with the tools of their respective trades, offering
their services, and, as it were, begging employment. The poverty of
the lower ranks of people in China far surpasses that of the most
beggarly nations in Europe. In the neighbourhood of Canton, many
hundred, it is commonly said, many thousand families have no
habitation on the land, but live constantly in little fishing-boats
upon the rivers and canals. The subsistence which they find there is
so scanty, that they are eager to fish up the nastiest garbage thrown
overboard from any European ship. Any carrion, the carcase of a dead
dog or cat, for example, though half putrid and stinking, is as
welcome to them as the most wholesome food to the people of other
countries. Marriage is encouraged in China, not by the profitableness
of children, but by the liberty of destroying them. In all great
towns, several are every night exposed in the street, or drowned like
puppies in the water. The performance of this horrid office is even
said to be the avowed business by which some people earn their
subsistence.

China, however, though it may, perhaps, stand still, does not seem to
go backwards. Its towns are nowhere deserted by their inhabitants. The
lands which had once been cultivated, are nowhere neglected. The same,
or very nearly the same, annual labour, must, therefore, continue to
be performed, and the funds destined for maintaining it must not,
consequently, be sensibly diminished. The lowest class of labourers,
therefore, notwithstanding their scanty subsistence, must some way or
another make shift to continue their race so far as to keep up their
usual numbers.

But it would be otherwise in a country where the funds destined for
the maintenance of labour were sensibly decaying. Every year the
demand for servants and labourers would, in all the different classes
of employments, be less than it had been the year before. Many who had
been bred in the superior classes, not being able to find employment
in their own business, would be glad to seek it in the lowest. The
lowest class being not only overstocked with its own workmen, but with
the overflowings of all the other classes, the competition for
employment would be so great in it, as to reduce the wages of labour
to the most miserable and scanty subsistence of the labourer. Many
would not be able to find employment even upon these hard terms, but
would either starve, or be driven to seek a subsistence, either by
begging, or by the perpetration perhaps, of the greatest enormities.
Want, famine, and mortality, would immediately prevail in that class,
and from thence extend themselves to all the superior classes, till
the number of inhabitants in the country was reduced to what could
easily be maintained by the revenue and stock which remained in it,
and which had escaped either the tyranny or calamity which had
destroyed the rest. This, perhaps, is nearly the present state of
Bengal, and of some other of the English settlements in the East
Indies. In a fertile country, which had before been much depopulated,
where subsistence, consequently, should not be very difficult, and
where, notwithstanding, three or four hundred thousand people die of
hunger in one year, we maybe assured that the funds destined for the
maintenance of the labouring poor are fast decaying. The difference
between the genius of the British constitution, which protects and
governs North America, and that of the mercantile company which
oppresses and domineers in the East Indies, cannot, perhaps, be better
illustrated than by the different state of those countries.

The liberal reward of labour, therefore, as it is the necessary
effect, so it is the natural symptom of increasing national wealth.
The scanty maintenance of the labouring poor, on the other hand, is
the natural symptom that things are at a stand, and their starving
condition, that they are going fast backwards.

In Great Britain, the wages of labour seem, in the present times, to
be evidently more than what is precisely necessary to enable the
labourer to bring up a family. In order to satisfy ourselves upon this
point, it will not be necessary to enter into any tedious or doubtful
calculation of what may be the lowest sum upon winch it is possible to
do this. There are many plain symptoms, that the wages of labour are
nowhere in this country regulated by this lowest rate, which is
consistent with common humanity.

First, in almost every part of Great Britain there is a distinction,
even in the lowest species of labour, between summer and winter wages.
Summer wages are always highest. But, on account of the extraordinary
expense of fuel, the maintenance of a family is most expensive in
winter. Wages, therefore, being highest when this expense is lowest,
it seems evident that they are not regulated by what is necessary for
this expense, but by the quantity and supposed value of the work. A
labourer, it may be said, indeed, ought to save part of his summer
wages, in order to defray his winter expense; and that, through the
whole year, they do not exceed what is necessary to maintain his
family through the whole year. A slave, however, or one absolutely
dependent on us for immediate subsistence, would not be treated in
this manner. His daily subsistence would be proportioned to his daily
necessities.

Secondly, the wages of labour do not, in Great Britain, fluctuate with
the price of provisions. These vary everywhere from year to year,
frequently from month to month. But in many places, the money price of
labour remains uniformly the same, sometimes for half a century
together. If, in these places, therefore, the labouring poor can
maintain their families in dear years, they must be at their ease in
times of moderate plenty, and in affluence in those of extraordinary
cheapness. The high price of provisions during these ten years past,
has not, in many parts of the kingdom, been accompanied with any
sensible rise in the money price of labour. It has, indeed, in some;
owing, probably, more to the increase of the demand for labour, than
to that of the price of provisions.

Thirdly, as the price of provisions varies more from year to year than
the wages of labour, so, on the other hand, the wages of labour vary
more from place to place than the price of provisions. The prices of
bread and butchers' meat are generally the same, or very nearly the
same, through the greater part of the united kingdom. These, and most
other things which are sold by retail, the way in which the labouring
poor buy all things, are generally fully as cheap, or cheaper, in
great towns than in the remoter parts of the country, for reasons
which I shall have occasion to explain hereafter. But the wages of
labour in a great town and its neighbourhood, are frequently a fourth
or a fifth part, twenty or five-and--twenty per cent. higher than at a
few miles distance. Eighteen pence a day may be reckoned the common
price of labour in London and its neighbourhood. At a few miles
distance, it falls to fourteen and fifteen pence. Tenpence may be
reckoned its price in Edinburgh and its neighbourhood. At a few miles
distance, it falls to eightpence, the usual price of common labour
through the greater part of the low country of Scotland, where it
varies a good deal less than in England. Such a difference of prices,
which, it seems, is not always sufficient to transport a man from one
parish to another, would necessarily occasion so great a
transportation of the most bulky commodities, not only from one parish
to another, but from one end of the kingdom, almost from one end of
the world to the other, as would soon reduce them more nearly to a
level. After all that has been said of the levity and inconstancy of
human nature, it appears evidently from experience, that man is, of
all sorts of luggage, the most difficult to be transported. If the
labouring poor, therefore, can maintain their families in those parts
of the kingdom where the price of labour is lowest, they must be in
affluence where it is highest.

Fourthly, the variations in the price of labour not only do not
correspond, either in place or time, with those in the price of
provisions, but they are frequently quite opposite.

Grain, the food of the common people, is dearer in Scotland than in
England, whence Scotland receives almost every year very large
supplies. But English corn must be sold dearer in Scotland, the
country to which it is brought, than in England, the country from
which it comes; and in proportion to its quality it cannot be sold
dearer in Scotland than the Scotch corn that comes to the same market
in competition with it. The quality of grain depends chiefly upon the
quantity of flour or meal which it yields at the mill; and, in this
respect, English grain is so much superior to the Scotch, that though
often dearer in appearance, or in proportion to the measure of its
bulk, it is generally cheaper in reality, or in proportion to its
quality, or even to the measure of its weight. The price of labour, on
the contrary, is dearer in England than in Scotland. If the labouring
poor, therefore, can maintain their families in the one part of the
united kingdom, they must be in affluence in the other. Oatmeal,
indeed, supplies the common people in Scotland with the greatest and
the best part of their food, which is, in general, much inferior to
that of their neighbours of the same rank in England. This difference,
however, in the mode of their subsistence, is not the cause, but the
effect, of the difference in their wages; though, by a strange
misapprehension, I have frequently heard it represented as the cause.
It is not because one man keeps a coach, while his neighbour walks
a-foot, that the one is rich, and the other poor; but because the one
is rich, he keeps a coach, and because the other is poor, he walks
a-foot.

During the course of the last century, taking one year with another,
grain was dearer in both parts of the united kingdom than during that
of the present. This is a matter of fact which cannot now admit of any
reasonable doubt; and the proof of it is, if possible, still more
decisive with regard to Scotland than with regard to England. It is in
Scotland supported by the evidence of the public fiars, annual
valuations made upon oath, according to the actual state of the
markets, of all the different sorts of grain in every different county
of Scotland. If such direct proof could require any collateral
evidence to confirm it, I would observe, that this has likewise been
the case in France, and probably in most other parts of Europe. With
regard to France, there is the clearest proof. But though it is
certain, that in both parts of the united kingdom grain was somewhat
dearer in the last century than in the present, it is equally certain
that labour was much cheaper. If the labouring poor, therefore, could
bring up their families then, they must be much more at their ease
now. In the last century, the most usual day-wages of common labour
through the greater part of Scotland were sixpence in summer, and
fivepence in winter. Three shillings a-week, the same price, very
nearly still continues to be paid in some parts of the Highlands and
Western islands. Through the greater part of the Low country, the most
usual wages of common labour are now eight pence a-day; tenpence,
sometimes a shilling, about Edinburgh, in the counties which border
upon England, probably on account of that neighbourhood, and in a few
other places where there has lately been a considerable rise in the
demand for labour, about Glasgow, Carron, Ayrshire, etc. In England,
the improvements of agriculture, manufactures, and commerce, began
much earlier than in Scotland. The demand for labour, and consequently
its price, must necessarily have increased with those improvements. In
the last century, accordingly, as well as in the present, the wages of
labour were higher in England than in Scotland. They have risen, too,
considerably since that time, though, on account of the greater
variety of wages paid there in different places, it is more difficult
to ascertain how much. In 1614, the pay of a foot soldier was the same
as in the present times, eightpence a-day. When it was first
established, it would naturally be regulated by the usual wages of
common labourers, the rank of people from which foot soldiers are
commonly drawn. Lord-chief-justice Hales, who wrote in the time of
Charles II. computes the necessary expense of a labourer's family,
consisting of six persons, the father and mother, two children able to
do something, and two not able, at ten shillings a-week, or twenty-six
pounds a-year. If they cannot earn this by their labour, they must
make it up, he supposes, either by begging or stealing. He appears to
have enquired very carefully into this subject {See his scheme for the
maintenance of the poor, in Burn's History of the Poor Laws.}. In
1688, Mr Gregory King, whose skill in political arithmetic is so much
extolled by Dr Davenant, computed the ordinary income of labourers and
out-servants to be fifteen pounds a-year to a family, which he
supposed to consist, one with another, of three and a half persons.
His calculation, therefore, though different in appearance,
corresponds very nearly at bottom with that of Judge Hales. Both
suppose the weekly expense of such families to be about twenty-pence
a-head. Both the pecuniary income and expense of such families have
increased considerably since that time through the greater part of the
kingdom, in some places more, and in some less, though perhaps scarce
anywhere so much as some exaggerated accounts of the present wages of
labour have lately represented them to the public. The price of
labour, it must be observed, cannot be ascertained very accurately
anywhere, different prices being often paid at the same place and for
the same sort of labour, not only according to the different abilities
of the workman, but according to the easiness or hardness of the
masters. Where wages are not regulated by law, all that we can pretend
to determine is, what are the most usual; and experience seems to shew
that law can never regulate them properly, though it has often
pretended to do so.

The real recompence of labour, the real quantity of the necessaries
and conveniencies of life which it can procure to the labourer, has,
during the course of the present century, increased perhaps in a still
greater proportion than its money price. Not only grain has become
somewhat cheaper, but many other things, from which the industrious
poor derive an agreeable and wholesome variety of food, have become a
great deal cheaper. Potatoes, for example, do not at present, through
the greater part of the kingdom, cost half the price which they used
to do thirty or forty years ago. The same thing may be said of
turnips, carrots, cabbages; things which were formerly never raised
but by the spade, but which are now commonly raised by the plough. All
sort of garden stuff, too, has become cheaper. The greater part of the
apples, and even of the onions, consumed in Great Britain, were, in
the last century, imported from Flanders. The great improvements in
the coarser manufactories of both linen and woollen cloth furnish the
labourers with cheaper and better clothing; and those in the
manufactories of the coarser metals, with cheaper and better
instruments of trade, as well as with many agreeable and convenient
pieces of household furniture. Soap, salt, candles, leather, and
fermented liquors, have, indeed, become a good deal dearer, chiefly
from the taxes which have been laid upon them. The quantity of these,
however, which the labouring poor an under any necessity of consuming,
is so very small, that the increase in their price does not compensate
the diminution in that of so many other things. The common complaint,
that luxury extends itself even to the lowest ranks of the people, and
that the labouring poor will not now be contented with the same food,
clothing, and lodging, which satisfied them in former times, may
convince us that it is not the money price of labour only, but its
real recompence, which has augmented.

Is this improvement in the circumstances of the lower ranks of the
people to be regarded as an advantage, or as an inconveniency, to the
society? The answer seems at first abundantly plain. Servants,
labourers, and workmen of different kinds, make up the far greater
part of every great political society. But what improves the
circumstances of the greater part, can never be regarded as any
inconveniency to the whole. No society can surely be flourishing and
happy, of which the far greater part of the members are poor and
miserable. It is but equity, besides, that they who feed, clothe, and
lodge the whole body of the people, should have such a share of the
produce of their own labour as to be themselves tolerably well fed,
clothed, and lodged.

Poverty, though it no doubt discourages, does not always prevent,
marriage. It seems even to be favourable to generation. A half-starved
Highland woman frequently bears more than twenty children, while a
pampered fine lady is often incapable of bearing any, and is generally
exhausted by two or three. Barrenness, so frequent among women of
fashion, is very rare among those of inferior station. Luxury, in the
fair sex, while it inflames, perhaps, the passion for enjoyment, seems
always to weaken, and frequently to destroy altogether, the powers of
generation.

But poverty, though it does not prevent the generation, is extremely
unfavourable to the rearing of children. The tender plant is produced;
but in so cold a soil, and so severe a climate, soon withers and dies.
It is not uncommon, I have been frequently told, in the Highlands of
Scotland, for a mother who has born twenty children not to have two
alive. Several officers of great experience have assured me, that, so
far from recruiting their regiment, they have never been able to
supply it with drums and fifes, from all the soldiers' children that
were born in it. A greater number of fine children, however, is seldom
seen anywhere than about a barrack of soldiers. Very few of them, it
seems, arrive at the age of thirteen or fourteen. In some places, one
half the children die before they are four years of age, in many
places before they are seven, and in almost all places before they are
nine or ten. This great mortality, however will everywhere be found
chiefly among the children of the common people, who cannot afford to
tend them with the same care as those of better station. Though their
marriages are generally more fruitful than those of people of fashion,
a smaller proportion of their children arrive at maturity. In
foundling hospitals, and among the children brought up by parish
charities, the mortality is still greater than among those of the
common people.

Every species of animals naturally multiplies in proportion to the
means of their subsistence, and no species can ever multiply be yond
it. But in civilized society, it is only among the inferior ranks of
people that the scantiness of subsistence can set limits to the
further multiplication of the human species; and it can do so in no
other way than by destroying a great part of the children which their

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