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

always a speculation from which the projector promises himself

extraordinary profits. These profits sometimes are very great, and sometimes, more

frequently, perhaps, they are quite otherwise ; but, in general, they bear no regular proportion

to those of other old trades in the neighbourhood. If the project succeeds, they are commonly

at first very high. When the trade or practice becomes thoroughly established and well known,

the competition reduces them to the level of other trades.

 

Secondly, this equality in the whole of the advantages and disadvantages of the different

employments of labour and stock, can take place only in the ordinary, or what may be called

the natural state of those employments.

 

The demand for almost every different species of labour is sometimes greater, and sometimes

less than usual. In the one case, the advantages of the employment rise above, in the other

they fall below the common level. The demand for country labour is greater at hay-time and

harvest than during the greater part of the year ; and wages rise with the demand. In time of

war, when forty or fifty thousand sailors are forced from the merchant service into that of the

king, the demand for sailors to merchant ships necessarily rises with their scarcity ; and their

wages, upon such occasions, commonly rise from a guinea and seven-and-twenty shillings to

forty shilling’s and three pounds a-month. In a decaying manufacture, on the contrary, many

workmen, rather than quit their own trade, are contented with smaller wages than would

otherwise be suitable to the nature of their employment.

 

The profits of stock vary with the price of the commodities in which it is employed. As the

price of any commodity rises above the ordinary or average rate, the profits of at least some

part of the stock that is employed in bringing it to market, rise above their proper level, and as

it falls they sink below it. All commodities are more or less liable to variations of price, but

some are much more so than others. In all commodities which are produced by human

industry, the quantity of industry annually employed is necessarily regulated by the annual

demand, in such a manner that the average annual produce may, as nearly as possible, be

equal to the average annual consumption. In some employments, it has already been observed,

the same quantity of industry will always produce the same, or very nearly the same quantity

of commodities. In the linen or woollen manufactures, for example, the same number of hands

will annually work up very nearly the same quantity of linen and woollen cloth. The

variations in the market price of such commodities, therefore, can arise only from some

accidental variation in the demand. A public mourning raises the price of black cloth. But as

the demand for most sorts of plain linen and woollen cloth is pretty uniform. so is likewise the

price. But there are other employments in which the same quantity of industry will not always

produce the same quantity of commodities. The same quantity of industry, for example, will,

in different years, produce very different quantities of corn, wine, hops, sugar tobacco, etc.

The price of such commodities, therefore, varies not only with the variations of demand, but

with the much greater and more frequent variations of quantity, and is consequently extremely

fluctuating; but the profit of some of the dealers must necessarily fluctuate with the price of

the commodities. The operations of the speculative merchant are principally employed about

such commodities. He endeavours to buy them up when he foresees that their price is likely to

rise, and to sell them when it is likely to fall.

 

Thirdly, this equality in the whole of the advantages and disadvantages of the different

employments of labour and stock, can take place only in such as are the sole or principal

employments of those who occupy them.

 

When a person derives his subsistence from one employment, which does not occupy the

greater part of his time, in the intervals of his leisure he is often willing to work at another for

less wages than would otherwise suit the nature of the employment.

 

There still subsists, in many parts of Scotland, a set of people called cottars or cottagers,

though they were more frequent some years ago than they are now. They are a sort of

out-servants of the landlords and farmers. The usual reward which they receive from their

master is a house, a small garden for pot-herbs, as much grass as will feed a cow, and,

perhaps, an acre or two of bad arable land. When their master has occasion for their labour, he

gives them, besides, two pecks of oatmeal a-week, worth about sixteen pence sterling. During

a great part of the year, he has little or no occasion for their labour, and the cultivation of their

own little possession is not sufficient to occupy the time which is left at their own disposal.

When such occupiers were more numerous than they are at present, they are said to have been

willing to give their spare time for a very small recompence to any body, and to have wrought

for less wages than other labourers. In ancient times, they seem to have been common all

over Europe. In countries ill cultivated, and worse inhabited, the greater part of landlords and

farmers could not otherwise provide themselves with the extraordinary number of hands

which country labour requires at certain seasons. The daily or weekly recompence which such

labourers occasionally received from their masters, was evidently not the whole price of their

labour. Their small tenement made a considerable part of it. This daily or weekly recompence,

however, seems to have been considered as the whole of it, by many writers who have

collected the prices of labour and provisions in ancient times, and who have taken pleasure in

representing both as wonderfully low.

 

The produce of such labour comes frequently cheaper to market than would otherwise be

suitable to its nature. Stockings, in many parts of Scotland, are knit much cheaper than they

can anywhere be wrought upon the loom. They are the work of servants and labourers who

derive the principal part of their subsistence from some other employment. More than a

thousand pair of Shetland stockings are annually imported into Leith, of which the price is

from fivepence to sevenpence a pair. At Lerwick, the small capital of the Shetland islands,

tenpence a-day, I have been assured, is a common price of common labour. In the same

islands, they knit worsted stockings to the value of a guinea a pair and upwards.

 

The spinning of linen yarn is carried on in Scotland nearly in the same way as the knitting of

stockings, by servants, who are chiefly hired for other purposes. They earn but a very scanty

subsistence, who endeavour to get their livelihood by either of those trades. In most parts of

Scotland, she is a good spinner who can earn twentypence a-week.

 

In opulent countries, the market is generally so extensive, that any one trade is sufficient to

employ the whole labour and stock of those who occupy it. Instances of people living by one

employment, and, at the same time, deriving some little advantage from another, occur

chiefly in pour countries. The following instance, however, of something of the same kind, is

to be found in the capital of a very rich one. There is no city in Europe, I believe, in which

house-rent is dearer than in London, and yet I know no capital in which a furnished apartment

can be hired so cheap. Lodging is not only much cheaper in London than in Paris; it is much

cheaper than in Edinburgh, of the same degree of goodness ; and, what may seem

extraordinary, the dearness of house-rent is the cause of the cheapness of lodging. The

dearness of house-rent in London arises, not only from those causes which render it dear in all

great capitals, the dearness of labour, the dearness of all the materials of building, which must

generally be brought from a great distance, and, above all, the dearness of ground-rent, every

landlord acting the part of a monopolist, and frequently exacting a higher rent for a single acre

of bad land in a town, than can be had for a hundred of the best in the country; but it arises in

part from the peculiar manners and customs of the people, which oblige every master of a

family to hire a whole house from top to bottom. A dwelling-house in England means every

thing that is contained under the same roof. In France, Scotland, and many other parts of

Europe, it frequently means no more than a single storey. A tradesman in London is obliged to

hire a whole house in that part of the town where his customers live. His shop is upon the

ground floor, and he and his family sleep in the garret ; and he endeavours to pay a part of his

house-rent by letting the two middle storeys to lodgers. He expects to maintain his family by

his trade, and not by his lodgers. Whereas at Paris and Edinburgh, people who let lodgings

have commonly no other means of subsistence ; and the price of the lodging must pay, not

only the rent of the house, but the whole expense of the family.

 

PART II. � Inequalities occasioned by the Policy of Europe.

 

Such are the inequalities in the whole of the advantages and disadvantages of the different

employments of labour and stock, which the defect of any of the three requisites above

mentioned must occasion, even where there is the most perfect liberty. But the policy of

Europe, by not leaving things at perfect liberty, occasions other inequalities of much greater

importance.

 

It does this chiefly in the three following ways. First, by restraining the competition in some

employments to a smaller number than would otherwise be disposed to enter into them ;

secondly, by increasing it in others beyond what it naturally would be; and, thirdly, by

obstructing the free circulation of labour and stock, both from employment to employment,

and from place to place.

 

First, The policy of Europe occasions a very important inequality in the whole of the

advantages and disadvantages of the different employments of labour and stock, by restraining

the competition in some employments to a smaller number than might otherwise be disposed

to enter into them.

 

The exclusive privileges of corporations are the principal means it makes use of for this

purpose.

 

The exclusive privilege of an incorporated trade necessarily restrains the competition, in the

town where it is established, to those who are free of the trade. To have served an

apprenticeship in the town, under a master properly qualified, is commonly the necessary

requisite for obtaining this freedom. The bye-laws of the corporation regulate sometimes the

number of apprentices which any master is allowed to have, and almost always the number of

years which each apprentice is obliged to serve. The intention of both regulations is to restrain

the competition to a much smaller number than might otherwise be disposed to enter into the

trade. The limitation of the number of apprentices restrains it directly. A long term of

apprenticeship restrains it more indirectly, but as effectually, by increasing the expense of

education.

 

In Sheffield, no master cutler can have more than one apprentice at a time, by a bye-law of the

corporation. In Norfolk and Norwich, no master weaver can have more than two apprentices,

under pain of forfeiting five pounds a-month to the king. No master hatter can have more than

two apprentices anywhere in England, or in the English plantations, under pain of forfeiting;

five pounds a-month, half to the king, and half to him who shall sue in any