An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

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will find that their annual gains bear but a very small proportion to their annual expense, even

though you rate the former as high, and the latter as low, as can well be done. The lottery of

the law, therefore, is very far from being a perfectly fair lottery ; and that as well as many

other liberal and honourable professions, is, in point of pecuniary gain, evidently

under-recompensed.

 

Those professions keep their level, however, with other occupations ; and,

notwithstanding these discouragements, all the most generous and liberal spirits are eager to

crowd into them. Two different causes contribute to recommend them. First, the desire of the

reputation which attends upon superior excellence in any of them ; and, secondly, the natural

confidence which every man has, more or less, not only in his own abilities, but in his own

good fortune.

 

To excel in any profession, in which but few arrive at mediocrity, it is the most decisive mark

of what is called genius, or superior talents. The public admiration which attends upon such

distinguished abilities makes always a part of their reward; a greater or smaller, in proportion

as it is higher or lower in degree. It makes a considerable part of that reward in the profession

of physic ; a still greater, perhaps, in that of law; in poetry and philosophy it makes almost the

whole.

 

There are some very agreeable and beautiful talents, of which the possession commands a

certain sort of admiration, but of which the exercise, for the sake of gain, is considered,

whether from reason or prejudice, as a sort of public prostitution. The pecuniary recompence,

therefore, of those who exercise them in this manner, must be sufficient, not only to pay for

the time, labour, and expense of acquiring the talents, but for the discredit which attends the

employment of them as the means of subsistence. The exorbitant rewards of players,

opera-singers, opera-dancers, etc. are founded upon those two principles ; the rarity and

beauty of the talents, and the discredit of employing them in this manner. It seems absurd at

first sight, that we should despise their persons, and yet reward their talents with the most

profuse liberality. While we do the one, however, we must of necessity do the other, Should

the public opinion or prejudice ever alter with regard to such occupations, their pecuniary

recompence would quickly diminish. More people would apply to them, and the competition

would quickly reduce the price of their labour. Such talents, though far from being common,

are by no means so rare as imagined. Many people possess them in great perfection, who

disdain to make this use of them; and many more are capable of acquiring them, if any thing

could be made honourably by them.

 

The over-weening conceit which the greater part of men have of their own abilities, is an

ancient evil remarked by the philosophers and moralists of all ages. Their absurd presumption

in their own good fortune has been less taken notice of. It is, however, if possible, still more

universal. There is no man living, who, when in tolerable health and spirits, has not some

share of it. The chance of gain is by every man more or less overvalued, and the chance of

loss is by most men undervalued, and by scarce any man, who is in tolerable health and

spirits, valued more than it is worth.

 

That the chance of gain is naturally overvalued, we may learn from the universal success of

lotteries. The world neither ever saw, nor ever will see, a perfectly fair lottery, or one in which

the whole gain compensated the whole loss; because the undertaker could make nothing by it.

In the state lotteries, the tickets are really not worth the price which is paid by the original

subscribers, and yet commonly sell in the market for twenty, thirty, and sometimes forty per

cent. advance. The vain hopes of gaining some of the great prizes is the sole cause of this

demand. The soberest people scarce look upon it as a folly to pay a small sum for the chance

of gaining ten or twenty thousand pounds, though they know that even that small sum is

perhaps twenty or thirty per cent. more than the chance is worth. In a lottery in which no prize

exceeded twenty pounds, though in other respects it approached much nearer to a perfectly

fair one than the common state lotteries, there would not be the same demand for tickets. In

order to have a better chance for some of the great prizes, some people purchase several

tickets ; and others, small shares in a still greater number. There is not, however, a more

certain proposition in mathematics, than that the more tickets you adventure upon, the more

likely you are to be a loser. Adventure upon all the tickets in the lottery, and you lose for

certain ; and the greater the number of your tickets, the nearer you approach to this certainty.

 

That the chance of loss is frequently undervalued, and scarce ever valued more than it is

worth, we may learn from the very moderate profit of insurers. In order to make insurance,

either from fire or sea-risk, a trade at all, the common premium must be sufficient to

compensate the common losses, to pay the expense of management, and to afford such a profit

as might have been drawn from an equal capital employed in any common trade. The person

who pays no more than this, evidently pays no more than the real value of the risk, or the

lowest price at which he can reasonably expect to insure it. But though many people have

made a little money by insurance, very few have made a great fortune; and, from this

consideration alone, it seems evident enough that the ordinary balance of profit and loss is not

more advantageous in this than in other common trades, by which so many people make

fortunes. Moderate, however, as the premium of insurance commonly is, many people despise

the risk too much to care to pay it. Taking the whole kingdom at an average, nineteen houses

in twenty, or rather, perhaps, ninety-nine in a hundred, are not insured from fire. Sea-risk is

more alarming to the greater part of people ; and the proportion of ships insured to those not

insured is much greater. Many sail, however, at all seasons, and even in time of war,

without any insurance. This may sometimes, perhaps, be done without any imprudence. When

a great company, or even a great merchant, has twenty or thirty ships at sea, they may, as it

were, insure one another. The premium saved up on them all may more than compensate such

losses as they are likely to meet with in the common course of chances. The neglect of

insurance upon shipping, however, in the same manner as upon houses, is, in most cases, the

effect of no such nice calculation, but of mere thoughtless rashness, and presumptuous

contempt of the risk.

 

The contempt of risk, and the presumptuous hope of success, are in no period of life more

active than at the age at which young people choose their professions. How little the fear of

misfortune is then capable of balancing the hope of good luck, appears still more evidently in

the readiness of the common people to enlist as soldiers, or to go to sea, than in the eagerness

of those of better fashion to enter into what are called the liberal professions.

 

What a common soldier may lose is obvious enough. Without regarding the danger, however,

young volunteers never enlist so readily as at the beginning of a new war ; and though they

have scarce any chance of preferment, they figure to themselves, in their youthful fancies, a

thousand occasions of acquiring honour and distinction which never occur. These romantic

hopes make the whole price of their blood. Their pay is less than that of common labourers,

and, in actual service, their fatigues are much greater.

 

The lottery of the sea is not altogether so disadvantageous as that of the army. The son of a

creditable labourer or artificer may frequently go to sea with his father’s consent ; but if he

enlists as a soldier, it is always without it. Other people see some chance of his making

something by the one trade; nobody but himself sees any of his making any thing by the other.

The great admiral is less the object of public admiration than the great general ; and the

highest success in the sea service promises a less brilliant fortune and reputation than equal

success in the land. The same difference runs through all the inferior degrees of preferment in

both. By the rules of precedency, a captain in the navy ranks with a colonel in the army ; but

he does not rank with him in the common estimation. As the great prizes in the lottery are

less, the smaller ones must be more numerous. Common sailors, therefore, more frequently

get some fortune and preferment than common soldiers ; and the hope of those prizes is what

principally recommends the trade. Though their skill and dexterity are much superior to that

of almost any artificers; and though their whole life is one continual scene of hardship and

danger ; yet for all this dexterity and skill, for all those hardships and dangers, while they

remain in the condition of common sailors, they receive scarce any other recompence but the

pleasure of exercising the one and of surmounting the other. Their wages are not greater

than those of common labourers at the port which regulates the rate of seamen’s wages. As

they are continually going from port to port, the monthly pay of those who sail from all the

different ports of Great Britain, is more nearly upon a level than that of any other workmen in

those different places ; and the rate of the port to and from which the greatest number sail, that

is, the port of London, regulates that of all the rest. At London, the wages of the greater part of

the different classes of workmen are about double those of the same classes at Edinburgh. But

the sailors who sail from the port of London, seldom earn above three or four shillings a

month more than those who sail from the port of Leith, and the difference is frequently not so

great. In time of peace, and in the merchant-service, the London price is from a guinea to

about seven-and-twenty shillings the calendar month. A common labourer in London, at the

rate of nine or ten shillings a week, may earn in the calendar month from forty to

five-and-forty shillings. The sailor, indeed, over and above his pay, is supplied with

provisions. Their value, however, may not perhaps always exceed the difference between his

pay and that of the common labourer ; and though it sometimes should, the excess will not be

clear gain to the sailor, because he cannot share it with his wife and family, whom he must

maintain out of his wages at home.

 

The dangers and hair-breadth escapes of a life of adventures, instead of disheartening young

people, seem frequently to recommend a trade to them. A tender mother, among the inferior

ranks of people, is often afraid to send her son to school at a sea-port town, lest the sight of

the ships, and the conversation and adventures of the sailors, should entice him to go to sea.

The distant prospect of hazards, from which we can hope to extricate ourselves by courage

and address, is not disagreeable to us, and does not raise the wages of labour in any

employment. It is otherwise with those in which courage and address can be of no avail. In

trades which are