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BOOK to their natural rates. Such commodities may I. continue for whole centuries together to be fold at

this high price; and that part of it which refolves itself into the rent of land is in this case the part which is generally paid above its natural rate. The rent of the land which affords fuch fingular and esteemed productions, like the rent of fome vineyards in France of a peculiarly happy foil and fituation, bears no regular proportion to the rent of other equally fertile and equally well-cultivated land in its neighbourhood. The wages of the labour and the profits of the stock employed in bringing fuch 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.

SUCH enhancements of the market price are evidently the effect of natural causes which may hinder the effectual demand from ever being fully fupplied, and which may continue, therefore, to operate for ever.

A MONOPOLY granted either to an individual or to a trading company has the fame effect as a fecret in trade or manufactures. The monopolifts, by keeping the market conftantly understocked, by never fully fupplying the effectual demand, fell their commodities much above the natural price, and raise their emoluments, whether they confift in wages or profit, greatly above their natural rate.

THE price of monopoly is upon every occafion the highest which can be got. The natural price,

or

VII.

or the price of free competition, on the contrary, CHAP. is the lowest which can be taken, not upon every occafion indeed, but for any confiderable time together. The one is upon every occafion the highest which can be squeezed out of the buyers, or which, it is fuppofed, they will confent to give The other is the lowest which the fellers can commonly afford to take, and at the fame time continue their business.

THE exclufive privileges of corporations, ftatutes of apprenticeship, and all those laws which reftrain, in particular employments, the competition to a smaller number than might otherwise go into them, have the fame tendency, though in a lefs degree. They are a fort of enlarged monopolies, and may frequently, for ages together, and in whole claffes 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 fomewhat above their natural rate.

SUCH enhancements of the market price may last as long as the regulations of police which give occafion 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 perfons whofe intereft it affected would immediately feel the lofs, and would immediately withdraw either fo much land, or fo much labour, or fo much ftock, from being employed about

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94

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THE NATURE AND CAUSES OF

BOOK about it, that the quantity brought to market would foon be no more than fufficient to fupply the effectual demand. Its market price, therefore, would foon rife to the natural price. This at leaft would be the cafe where there was perfect liberty.

THE fame ftatutes of apprenticeship and other corporation laws indeed, which, when a manufacture is in profperity, enable the workman to raife his wages a good deal above their natural rate, fometimes oblige him, when it decays, to let them down a good deal below it. As in the one cafe they exclude many people from his employment, fo in the other they exclude him from many employments. The effect of fuch regulations, however, is not near fo 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 laft no longer than the lives of fome of the workmen who were bred to the bufinefs in the time of its profperity. When they are gone, the number of those who are afterwards educated to the trade will naturally fuit itself to the effectual 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 fuppofed to commit, the most horrid facrilege if he changed it for another), which can in any particular employment, and for several generations together, fink either the wages of

labour

labour or the profits of stock below their natural CHA P.

rate.

THIS is all that I think neceffary to be obferved at present concerning the deviations, whether occafional 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 fociety this rate varies according to their circumstances, according to their riches or poverty, their advancing, ftationary, or declining condition. I fhall, in the four following chapters, endeavour to explain, as fully and diftinctly as I can, the causes of those different variations.

FIRST, I fhall endeavour to explain what are the circumstances which naturally determine the rate of wages, and in what manner thofe circumstances are affected by the riches or poverty, by the advancing, ftationary, or declining state of the fociety.

SECONDLY, I fhall endeavour to fhow what are the circumstances which naturally determine the rate of profit, and in what manner too thofe circumstances are affected by the like variations in the ftate of the fociety.

THOUGH pecuniary wages and profit are very different in the different employments of labour and stock; yet a certain proportion feems commonly 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

appear

VII.

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BOOK

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appear hereafter, depends partly upon the nature of the different employments, and partly upon the different laws and policy of the fociety in which they are carried on. But though in many respects dependent upon the laws and policy, this proportion feems to be little affected by the riches or poverty of that fociety; by its advancing, ftationary, or declining condition; but to remain the fame or very nearly the fame in all those different states. I fhall, in the third place, endeavour to explain all the different circumstances which regulate this proportion.

In the fourth and last place, I fhall endeavour to show what are the circumftances which regulate the rent of land, and which either raise or lower the real price of all the different fubftances which it produces.

TH

CHAP. VIII.

Of the Wages of Labour.

HE produce of labour conftitutes the natural recompence or wages of labour.

In that original ftate of things, which precedes both the appropriation of land and the accumulation of ftock, the whole produce of labour belongs to the labourer. He has neither landlord nor mafter to fhare with him.

HAD this ftate continued, the wages of labour would have augmented with all those improve

ments

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