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or the price of free competition, on the contrary, CHA P. 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 higheft which can be fqueezed 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 thofe laws which restrain, in particular employments, the competition to a smaller number than might otherwife 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 ftock employed about them fomewhat above their natural rate.

Such enhancements of the market price may laft 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 stock, from being employed about


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 least 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 raifing 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 feveral generations together, fink either the wages of labour

labour or the profits of stock below their natural C H A P.



This is all that I think neceffary to be observed at prefent 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 circumftances, according to their riches or poverty, their advancing, stationary, or declining condition. I fhall, in the four following chapters, endeavour to explain, as fully and diftinctly as I can, the caufes of thofe different variations.

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

Secondly, I fhall endeavour to show what are the circumstances which naturally determine the rate of profit, and in what manner too thofe circumftances are affected by the like variations in the state 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


BOOK appear hereafter, depends partly upon the nature I. 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 refpects 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 thofe different ftates. I fhall, in the third place, endeavour to explain all the different circumftances which regulate this proportion.

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



Of the Wages of Labour.


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

In that original state 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 in its productive powers, to which the CHA P. divifion of labour gives occafion. All things would gradually have become cheaper. They would have been produced by a smaller quantity of labour; and as the commodities produced by equal quantities of labour would naturally in this ftate of things be exchanged for one another, they would have been purchafed likewife with the produce of a fmaller quantity.

But though all things would have become cheaper in reality, in appearance many things might have become dearer than before, or have been exchanged for a greater quantity of other goods. Let us fuppofe, for example, that in the greater part of employments the productive powers of labour had been improved to tenfold, or that a day's labour could produce ten times the quantity of work which it had done originally; but that in a particular employment they had been improved only to double, or that a day's labour could produce only twice the quantity of work which it had done before. In exchanging the produce of a day's labour in the greater part of employments, for that of a day's labour in this particular one, ten times the original quantity of work in them would purchase only twice the original quantity in it. Any particular quantity in it, therefore, a pound weight, for example, would appear to be five times dearer than before. In reality, however, it would be twice as cheap. Though it required five times the quantity of other goods to pur




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