1.
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
2.
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
3.
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
4.
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
5.
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
6.
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
7.
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
8.
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
9.
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
10.
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
11.
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
12.
The market is understocked with commodities, not with labour, with work done, not with work to be done
13.
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
14.
The market is here overstocked both with commodities and with labour
15.
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
16.
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
17.
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
18.
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
19.
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
20.
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
21.
There me many commodities, therefore, which, in consequence of these improvements, come to be produced by so much less labour than be
22.
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
23.
The profits of stock vary with the price of the commodities in which it is employed
24.
All commodities are more or less liable to variations of price, but
25.
In all commodities which are produced by human
26.
variations in the market price of such commodities, therefore, can arise only from some
27.
produce the same quantity of commodities
28.
The price of such commodities, therefore, varies not only with the variations of demand, but
29.
Rent, it is to be observed, therefore, enters into the composition of the price of commodities in a different way from wages and profit
30.
Though they introduce some rival commodities into the old market, they open many new markets to its produce
31.
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
32.
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
33.
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
34.
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
35.
But this cheapness was not the effect of the high value of silver, but of the low value of those commodities
36.
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
37.
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
38.
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
39.
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
40.
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
41.
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
42.
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
43.
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
44.
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
45.
will purchase or command a greater quantity of labour and commodities in India
46.
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
47.
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
48.
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
49.
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
50.
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
51.
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
52.
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
53.
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
54.
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
55.
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
56.
Since this is the case, it has been observed, with regard to every particular commodity, taken separately, it must be so with regard to all the commodities which compose the whole annual produce of the land and labour of
57.
The increase of paper money, it has been said, by augmenting the quantity, and consequently diminishing the value, of the whole currency, necessarily augments the money price of commodities
58.
Though the expense of the prodigal should be altogether in home made, and no part of it in foreign commodities, its effect upon the productive funds of the society would still be the same
59.
Were two men of equal fortune to spend their revenue, the one chiefly in the one way, the other in the other, the magnificence of the person whose expense had been chiefly in durable commodities, would be continually increasing, every day's expense contributing something to support and heighten the effect of that of the following day ; that of the other, on the contrary, would be no greater at the end of the period than at the beginning
60.
The expense, too, which is laid out in durable commodities, is favourable not only to accumulation, but to frugality
61.
The expense, besides, that is laid out in durable commodities, gives maintenance, commonly, to a greater number of people than that which is employed in the most profuse hospitality
62.
When a man of fortune spends his revenue chiefly in hospitality, he shares the greater part of it with his friends and companions; but when he employs it in purchasing such durable commodities, he often spends the whole upon his own person, and gives nothing to any body without an equivalent
63.
All that I mean is, that the one sort of expense, as it always occasions some accumulation of valuable commodities, as it is more favourable to private frugality, and, consequently, to the increase of the public capital, and as it maintains productive rather than unproductive hands, conduces more than the other to the growth of public opulence
64.
An increase in the quantity of silver, while that of the commodities circulated by means of it remained the same, could have no other effect than to diminish the value of that metal
65.
Any increase in the quantity of commodities annually circulated within the country, while that of the money which circulated them remained the same, would, on the contrary, produce many other important effects, besides that of raising the value of the money
66.
When it sends out from the residence of the merchant a certain value of commodities, it generally brings hack in return at least an equal value of other commodities
67.
In some places it is so at this day; nor will money at present purchase a greater quantity of commodities there than in other places
68.
In consequence of its being the measure of value, we estimate that of all other commodities by the quantity of money which they will exchange for
69.
commodities, which the freedom of trade, without any such attention, never fails to supply in the proper quantity
70.
They are to be bought for a certain price, like all other commodities; and as they are the price of all other commodities, so all other commodities are the price of those metals
71.
We trust, with perfect security, that the freedom of trade, without any attention of government, will always supply us with the wine which we have occasion for; and we may trust, with equal security, that it will always supply us with all the gold and silver which we can afford to purchase or to employ, either in circulating our commodities or in other uses
72.
But no commodities regulate themselves more easily or more exactly, according to this effectual demand, than gold and silver ; because, on account of the small bulk and great value of those metals, no commodities can be more easily transported from one place to another ; from the places where they are cheap, to those where they are dear ; from the places where they exceed, to those where they fall short of this effectual demand
73.
It is partly owing to the easy transportation of gold and silver, from the places where they abound to those where they are wanted, that the price of those metals does not fluctuate continually, like that of the greater part of other commodities, which are hindered by their bulk from shifting their situation, when the market happens to be either over or under-stocked with them
74.
But to make any sudden change in the price of gold and silver, so as to raise or lower at once, sensibly and remarkably, the money price of all other commodities, requires such a revolution in commerce as that occasioned by the discovery of America
75.
Consumable commodities, it is said, are soon destroyed; whereas gold and silver are of a more durable nature, and were it not for this continual exportation, might be accumulated for ages together, to the incredible augmentation of the real wealth of the country
76.
Nothing, therefore, it is pretended, can be more disadvantageous to any country, than the trade which consists in the exchange of such lasting for such perishable commodities
77.
It should as readily occur, that the quantity of gold and silver is, in every country, limited by the use which there is for those metals ; that their use consists in circulating commodities, as coin, and in affording a species of household furniture, as plate; that the quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it; increase that value, and immediately a part of it will be sent abroad to purchase, wherever it is to be had, the additional quantity of coin requisite for circulating them : that the quantity of plate is regulated by the number and wealth of those private families who choose to indulge themselves in that sort of magnificence; increase the number and wealth of such families, and a part of this increased wealth will most probably be employed in purchasing, wherever it is to be found, an additional quantity of plate ; that to attempt to increase the wealth of any country, either by introducing or by detaining in it an
78.
Increase the use of them, increase the consumable commodities which are to be circulated, managed, and prepared by means of them, and you will infallibly increase the quantity ; but if you attempt by extraordinary means to increase the quantity, you will as infallibly diminish the use, and even the quantity too, which in those metals can never be greater than what the use requires
79.
The enormous expense of the late war, therefore, must have been chiefly defrayed, not by the exportation of gold and silver, but by that of British commodities of some kind or other
80.
When the government, or those who acted under them, contracted with a merchant for a remittance to some foreign country, he would naturally endeavour to pay his foreign correspondent, upon whom he granted a bill, by sending abroad rather commodities than gold and silver
81.
If the commodities of Great Britain were not in demand in that country, he would endeavour to send them to some other country in which he could purchase a bill upon that country
82.
The transportation of commodities, when properly suited to the market, is always attended with a considerable profit; whereas that of gold and silver is scarce ever attended with any
83.
When those metals are sent abroad in order to purchase foreign commodities, the merchant's profit arises, not from the purchase, but from the sale of the returns
84.
He naturally, therefore, exerts his invention to find out a way of paying his foreign debts, rather by the exportation of commodities, than by that of gold and silver
85.
The national coin receives its movement and direction from the commodities circulated within the precincts of each particular country ; the money in the mercantile republic, from those circulated between different countries
86.
But whatever part of this money of the mercantile republic Great Britain may have annually employed in this manner, it must have been annually purchased, either with British commodities, or with something else that had been purchased with them ; which still brings us back to commodities, to the annual produce of the land and labour of the country, as the ultimate resources which enabled us to carry on the war
87.
The commodities most proper for being transported to distatnt countries, in order to purchase there either the pay and provisions of an army, or some part of the money of the mercantile republic to be employed in purchasing them, seem to be the finer and more improved manufactures; such as contain a great value in a small bulk, and can therefore be exported to a great distance at little expense
88.
With the same annual expense of labour and commodities, Europe can annually purchase about three times the quantity of plate which it could have purchased at that time
89.
By opening a new and inexhaustible market to all the commodities of Europe, it gave occasion to new divisions of labour and improvements of art, which in the narrow circle of the ancient commerce could never have taken place, for want of a market to take off the greater part of their produce
90.
The commodities of Europe were almost all new to America, and many of those of America were new to Europe
91.
By the annual exportation of silver to the East Indies, plate is probably somrwhat dearer in Europe than it otherwise might have been ; and coined silver probably purchases a larger quantity both of labour and commodities
92.
The trade to the East Indies, by opening a market to the commodities of Europe, or, what comes nearly to the same thing, to the gold and silver which is purchased with those commodities, must necessarily tend to increase the annual production of European commodities, and consequently the real wealth and revenue of Europe
93.
The value of its annual produce is certainly more or less diminished, when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce
94.
commodities, or, what is the same thing, with a part only of the price of the commodities, which the industry employed by an equal capital would have produced at home, had it been left to follow its natural course
95.
The natural advantages which one country has over another, in producing particular commodities, are sometimes so great, that it is acknowledged by all the world to be in vain to struggle with them
96.
Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and Burgundy in Scotland ? But if there would be a manifest absurdity in turning towards any employment thirty times more of the capital and industry of the country than would be necessary to purchase from foreign countries an equal quantity of the commodities wanted, there must be an absurdity, though not altogether so glaring, yet exactly of the same kind, in turning towards any such employment a thirtieth, or even a three hundredth part more of either
97.
This second limitation of the freedom of trade, according to some people, should, upon most occasions, be extended much farther than to the precise foreign commodities which could come into competition with those which had been taxed at home
98.
In order to put domestic upon the same footing with foreign industry, therefore, it becomes necessary, they think, to lay some duty upon every foreign commodity, equal to this enhancement of the price of the home commodities with which it can come into competition
99.
necessarily raise the price of labour, and consequently that of all other commodities, I shall consider hereafter, when I come to treat of taxes
100.
Supposing, however, in the mean time, that they have this effect, and they have it undoubtedly, this general enhancement of the price of all commodities, in consequence of that labour, is a case which differs in the two following respects from that of a particular commodity, of which the price was enhanced by a particular tax immediately imposed upon it
