of improvements; at present it is enough to remark, that the supposition that they are in all cases capable of neutralizing the influence of increasing sterility, is inconsistent with the best established principles, and contradicted by the experience of every nation.

Although, however, the mere comparison of corn and silver be incapable of communicating any information with respect to the variations that have taken place in the value of either or both of them, still it is, on several accounts, desirable to know the proportion which the one has borne to the other. According to Say, or rather to Garnier,2 the hectolitre of wheat exchanged, at an average, in antiquity, for 289 grains of pure silver; and for

245 grains, under Charlemagne,

under Charles VII. of France, towards 1450,

in 1514-(America was discovered in 1492,)

219

333

There is, however, reason to think that Garnier has undervalued the price of wheat in antiquity. The learned M. Létronne has endeavoured to show, that the price of the hectolitre of wheat in Greece, in the age of Socrates, should not be reckoned at less than 468 grains of pure silver; and that its price at Rome, in the reign of Augustus, was about 550 grains. The statements of Létronne seem to be fully established; and if so, it will follow that the

1 "Cours d'Economie Politique," vol. iii. p. 24. "Richesse des Nations," vol. v. p. 152-184.

3 Considérations Générales sur l'Evaluation des Monnoies Grecques et Romaines," p. 113-124.

value of silver, as compared with corn, instead of having, as M. Say supposes, fallen to a sixth part of its value in antiquity, has not fallen to quite a fourth part of its value in Greece, about 400 years before the Christian era, and to about a third part only of its value in Rome, at its

commencement.

We are, also, inclined to think that the difference between the values of corn, as compared with silver, in 1789 and 1820, in the foregoing statement, is a good deal overrated. The latter, indeed, was hardly a fair term to be taken for a comparison; for agriculture had not then fully recovered from the disturbance occasioned by the previous war, commerce had not resumed its old channels, and the paper money issued during the contest had not been wholly withdrawn from circulation. But at present, (1848,) and for some years past, the value of corn, as compared with silver, has not differed materially, in most European markets, from its value in 1789: certainly it is not more than from 10 to 12 per cent higher.

The influence caused by the discovery of the American mines over prices in Europe, appears to have ceased by the middle of the seventeenth century; and we doubt whether the value of money, compared with the mass of commodities usually brought to market, has fallen in the interval. It is commonly, indeed, supposed that £100 or £1000 was worth as much in the reigns of William III., Anne, and George I., as £200 or £2000 at present. There is really, however, no such difference in the value of money at these epochs. Corn is not materially higher at this moment than it was a hundred or a hundred and fifty years ago; and though the prices of butchers' meat, beer, leather, and a few other articles have risen in the interval, that rise has been nearly if not wholly countervailed by the extraordinary fall that has taken place in the price of almost all sorts of manufactured goods, colonial products, &c. We admit, indeed, that £100 or £1000 will not go nearly so far in housekeeping at present as it would have done in the first

half of last century. That, however, is not a consequence of the enhanced cost of commodities, but of the vastly improved and more expensive mode of living; the better quality of houses, the superiority of their furniture and other accommodations, the better tables that are now kept, the improved and more costly education of children, the greater number and cost of servants, &c. Those who should now live as our forefathers did in the reigns of Anne and the first George, would, we apprehend, find that £100 would go about as far as it did then.

The wages of household servants have risen most materially during the last century and a half; but it is questionable whether the services of agricultural labourers, artisans, &c., cost more now than in 1700 or 1750. These parties receive, it is true, a far higher rate of wages, if estimated by the day; but when compared with the services rendered, or the work done, it is doubtful whether their wages have increased. We are well satisfied that, speaking generally, the Scotch labourers of the present day execute in a given time from three to four times the work that was executed by their predecessors previously to the peace of Paris in 1763; and during the same period a great, though not an equal, increase has also taken place in the labour performed in England.

CHAPTER II.

Cost of Production the grand regulating Principle of Exchangeable Value and Price-Influence of Variations in the Demand for and Supply of Commodities over Prices - Influence of MonopoliesAverage Price coincident with Cost of Production.

We endeavoured, in the foregoing chapter, to elucidate the leading and fundamental principles with respect to value, by investigating the circumstances which determine the value of commodities, when their supply is adjusted according to the effective demand. In the present chapter we shall endeavour to appreciate the influence of variations in the demand and supply of commodities on their value and price, whatever may be the source of these variations.

To render what has to be stated on these subjects, and those that will be discussed in the following chapter, perfectly intelligible, we shall anticipate so far on what will hereafter be more fully proved, as to assume that the wages earned by the labourers engaged in the different branches of industry are, all things considered, nearly equal, or differ only by an amount so small, that it may be neglected without occasioning any material error; and that the profits realised by those who undertake different businesses are in the same predicament. It is obvious, indeed, that such must be the case: if, on the one hand, the profits or wages of those who undertake or employ themselves in difficult, hazardous, dirty, unhealthy, or disagreeable businesses, were materially to exceed what was necessary to afford them a reasonable compensation for the greater skill required, or the peculiar inconveniences to which they are exposed, they would be in a better situation than others; and there would, consequently, be an influx of capital and labourers into those businesses, until the natural equilibrium that, at an

average, always subsists amongst the different branches of industry had been restored: and if, on the other hand, the inconveniences attending any particular business be not sufficiently compensated, some of those who carry it on will gradually withdraw from it, till, by the diminution of the supply, the price of the article is raised, so as to yield the necessary indemnification. The law of competition, or the attention paid by every individual to his own interest, will not allow this principle to be infringed upon for any considerable period; and, speaking generally, will insure the near equality, all things taken into account, of wages and profits in different occupations.

The cost, or real value, of commodities-denominated by Smith and Garnier natural or necessary price-is, as already seen, identical with the quantity of labour required to produce them and bring them to market. Now, it is quite obvious that this cost is the permanent and ultimate regulator of the exchangeable value or price of all commodities not subjected to monopolies, or of which the supply may be indefinitely increased with the increase of demand. That the market price of such commodities and their cost do not always coincide, is certain; but they cannot, for any considerable period, be far separated, and have a constant tendency to equality. If, owing to any single circumstance or combination of circumstances, a commodity be brought to market and exchanged for a greater amount, either of other commodities or of money, than is required to defray the cost of its production, including the common and average rate of nett profit at the time, its producers will obviously be placed in a relatively advantageous situation; and there will, in consequence, be an influx of capital into that particular department, until competition has sunk the value or price of the article to the level that will yield only the customary rate of profit on the capital employed in its production. And, on the other hand, were a commodity brought to market which did not exchange for so great an amount of other commodities, or of money, as was required