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or the price of free competition, on the contrary, C HA P. is the lowest which can be taken, not upon every occafion indeed, but for any confiderable 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, ftatutes of apprenticeship, and all those laws which restrain, in particular employments, the compe. tition to a smaller number than might otherwise go into them, have the same tendency, though in a less degree. They are a fort 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 police which give occasion to them.
The market price of any particular commodity, though it may continue long above, can feldom 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 so much labour, or so much stock, from being employed
BO O K 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 cafe where there was perfeet liberty.
The same statutes of apprenticeship and other corporation laws indeed, which, when a' manu. facture 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 fuch regulations, however, is not near so durable in finking 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 fome 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 fuit itself to the effeetual demand. The police must be as violent as that of Indoftan or antient 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 facrilege if he changed it for another), which can in any particular employment, and for feveral generations together, sink either the wages of
labour or the profits of stock below their natural c H A P. rate.
This is all that I thiņk 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 show 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 coma monly 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
BOO K 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 fociety; by its ad. vancing, stationary, or declining condition ; but to remain the fame 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 show 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.
C HA P.
"HE produce of labour constitutes the natural VIII.
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 improve
ments in its productive powers, to which the CH A P. 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 fuppofe, 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 origi, nally; 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 pur