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

so early as the beginning of the sixteenth

century, nor, so far as I know, in any other part of Europe north of the

Alps. They had been introduced into Italy some time before.

 

The consideration of these circumstances may, perhaps, in some measure,

explain to us why the real price both of the coarse and of the fine

manufacture was so much higher in those ancient than it is in the present

times. It cost a greater quantity of labour to bring the goods to market.

When they were brought thither, therefore, they must have purchased, or

exchanged for the price of, a greater quantity.

 

The coarse manufacture probably was, in those ancient times, carried on in

England in the same manner as it always has been in countries where arts and

manufactures are in their infancy. It was probably a household manufacture,

in which every different part of the work was occasionally performed by all

the different members of almost every private family, but so as to be their

work only when they had nothing else to do, and not to be the principal

business from which any of them derived the greater part of their

subsistence. The work which is performed in this manner, it has already been

observed, comes always much cheaper to market than that which is the

principal or sole fund of the workman’s subsistence. The fine manufacture,

on the other hand, was not, in those times, carried on in England, but in

the rich and commercial country of Flanders; and it was probably conducted

then, in the same manner as now, by people who derived the whole, or the

principal part of their subsistence from it. It was, besides, a foreign

manufacture, and must have paid some duty, the ancient custom of tonnage and

poundage at least, to the king. This duty, indeed, would not probably be

very great. It was not then the policy of Europe to restrain, by high

duties, the importation of foreign manufactures, but rather to encourage it,

in order that merchants might be enabled to supply, at as easy a rate as

possible, the great men with the conveniencies and luxuries which they

wanted, and which the industry of their own country could not afford them.

 

The consideration of these circumstances may, perhaps, in some measure

explain to us why, in those ancient times, the real price of the coarse

manufacture was, in proportion to that of the fine, so much lower than in

the present times.

 

Conclusion of the Chapter.

 

I shall conclude this very long chapter with observing, that every

improvement in the circumstances of the society tends, either directly or

indirectly, to raise the real rent of land to increase the real wealth of

the landlord, his power of purchasing the labour, or the produce of the

labour of other people.

 

The extension of improvement and cultivation tends to raise it directly. The

landlord’s share of the produce necessarily increases with the increase of

the produce.

 

That rise in the real price of those parts of the rude produce of land,

which is first the effect of the extended improvement and cultivation, and

afterwards the cause of their being still further extended, the rise in the

price of cattle, for example, tends, too, to raise the rent of land

directly, and in a still greater proportion. The real value of the

landlord’s share, his real command of the labour of other people, not only

rises with the real value of the produce, but the proportion of his share to

the whole produce rises with it.

 

That produce, after the rise in its real price, requires no more labour to

collect it than before. A smaller proportion of it will, therefore, be

sufficient to replace, with the ordinary profit, the stock which employs

that labour. A greater proportion of it must consequently belong to the

landlord.

 

All those improvements in the productive powers of labour, which tend

directly to reduce the rent price of manufactures, tend indirectly to raise

the real rent of land. The landlord exchanges that part of his rude produce,

which is over and above his own consumption, or, what comes to the same

thing, the price of that part of it, for manufactured produce. Whatever

reduces the real price of the latter, raises that of the former. An equal

quantity of the former becomes thereby equivalent to a greater quantity of

the latter ; and the landlord is enabled to purchase a greater quantity of

the conveniencies, ornaments, or luxuries which he has occasion for.

 

Every increase in the real wealth of the society, every increase in the

quantity of useful labour employed within it, tends indirectly to raise the

real rent of land. A certain proportion of this labour naturally goes to

the land. A greater number of men and cattle are employed in its

cultivation, the produce increases with the increase of the stock which is

thus employed in raising it, and the rent increases with the produce.

 

The contrary circumstances, the neglect of cultivation and improvement, the

fall in the real price of any part of the rude produce of land, the rise in

the real price of manufactures from the decay of manufacturing art and

industry, the declension of the real wealth of the society, all tend, on

the other hand, to lower the real rent of land, to reduce the real wealth of

the landlord, to diminish his power of purchasing either the labour, or the

produce of the labour, of other people.

 

The whole annual produce of the land and labour of every country, or, what

comes to the same thing, the whole price of that annual produce, naturally

divides itself, it has already been observed, into three parts; the rent of

land, the wages of labour, and the profits of stock ; and constitutes a

revenue to three different orders of people; to those who live by rent, to

those who live by wages, and to those who live by profit. These are the

three great, original, and constituent, orders of every civilized society,

from whose revenue that of every other order is ultimately derived.

 

The interest of the first of those three great orders, it appears from what

has been just now said, is strictly and inseparably connected with the

general interest of the society. Whatever either promotes or obstructs the

one, necessarily promotes or obstructs the other. When the public

deliberates concerning any regulation of commerce or police, the proprietors

of land never can mislead it, with a view to promote the interest of their

own particular order ; at least, if they have any tolerable knowledge of

that interest. They are, indeed, too often defective in this tolerable

knowledge. They are the only one of the three orders whose revenue costs

them neither labour nor care, but comes to them, as it were, of its own

accord, and independent of any plan or project of their own. That indolence

which is the natural effect of the ease and security of their situation,

renders them too often, not only ignorant, but incapable of that application

of mind, which is necessary in order to foresee and understand the

consequence of any public regulation.

 

The interest of the second order, that of those who live by wages, is as

strictly connected with the interest of the society as that of the first.

The wages of the labourer, it has already been shewn, are never so high as

when the demand for labour is continually rising, or when the quantity

employed is every year increasing considerably. When this real wealth of the

society becomes stationary, his wages are soon reduced to what is barely

enough to enable him to bring up a family, or to continue the race of

labourers. When the society declines, they fall even below this. The order

of proprietors may perhaps gain more by the prosperity of the society than

that of labourers; but there is no order that suffers so cruelly from its

decline. But though the interest of the labourer is strictly connected with

that of the society, he is incapable either of comprehending that interest,

or of understanding its connexion with his own. His condition leaves him no

time to receive the necessary information, and his education and habits are

commonly such as to render him unfit to judge, even though he was fully

informed. In the public deliberations, therefore, his voice is little heard,

and less regarded; except upon particular occasions, when his clamour is

animated, set on, and supported by his employers, not for his, but their own

particular purposes.

 

His employers constitute the third order, that of those who live by profit.

It is the stock that is employed for the sake of profit, which puts into

motion the greater part of the useful labour of every society. The plans and

projects of the employers of stock regulate and direct all the most

important operation of labour, and profit is the end proposed by all those

plans and projects. But the rate of profit does not, like rent and wages,

rise with the prosperity, and fall with the declension of the society. On

the contrary, it is naturally low in rich, and high in poor countries, and

it is always highest in the countries which are going fastest to ruin. The

interest of this third order, therefore, has not the same connexion with the

general interest of the society, as that of the other two. Merchants and

master manufacturers are, in this order, the two classes of people who

commonly employ the largest capitals, and who by their wealth draw to

themselves the greatest share of the public consideration. As during their

whole lives they are engaged in plans and projects, they have frequently

more acuteness of understanding than the greater part of country gentlemen.

As their thoughts, however, are commonly exercised rather about the interest

of their own particular branch of business. than about that of the society,

their judgment, even when given with the greatest candour (which it has not

been upon every occasion), is much more to be depended upon with regard to

the former of those two objects, than with regard to the latter. Their

superiority over the country gentleman is, not so much in their knowledge of

the public interest, as in their having a better knowledge of their own

interest than he has of his. It is by this superior knowledge of their own

interest that they have frequently imposed upon his generosity, and

persuaded him to give up both his own interest and that of the public, from

a very simple but honest conviction, that their interest, and not his, was

the interest of the public. The interest of the dealers, however, in any

particular branch of trade or manufactures, is always in some respects

different from, and even opposite to, that of the public. To widen the

market, and to narrow the competition, is always the interest of the

dealers. To widen the market may frequently be agreeable enough to the

interest of the public ; but to narrow the competition must always be

against it, and can only serve to enable the dealers, by raising their

profits above what they naturally would be, to levy, for their own benefit,

an absurd tax upon the rest of their fellow-citizens. The proposal of any

new law or regulation of commerce which comes from this order, ought always

to be listened to with great precaution, and ought never to be adopted till

after having been long and carefully examined, not only with the most

scrupulous, but with the most suspicious attention. It comes from an order

of men, whose interest is never exactly the same with that of the public,

who have generally an interest to deceive and even to oppress the public,

and who