Again, with regard to the agreeableness or disagreeableness of the business as affecting the profits of stock, when, Dr Smith says,-"The keeper of an inn or tavern, who is never master of his own house, and who is exposed to the brutality of every drunkard, exercises neither a very agreeable nor a very creditable business," and when he adds,"But there is scarce any common trade in which a small stock yields so great a profit," and thence infers that "disagreeableness and disgrace affect the profits of stock in the same manner as the wages of labour,”-does he not evidently confound the one description of revenue or gain with the other? For what is the superior gain which the innkeeper realizes upon his business but wages, or superior remuneration for his more discreditable or disagreeable labour? What is it but an instance of that very "deception arising from our not always distinguishing what ought to be considered as wages from what ought to be considered as profit,"

the subject, by dissevering those accidental and uncertain gains from the proper objects of our attention,-namely, rent, wages, and the profit of stock, legitimately so called. The ordinary and average gain in all businesses, professions, or employments, is in general little more than sufficient to maintain the persons engaged in them, according to the manner in which people of the particular condition are accustomed to live; although there are no doubt much greater variety in the modes of living among the higher classes of labourers than among the lower. The far greater part, however, of both the higher and lower, gain nothing more than a livelihood by their businesses; and it is commonly either by living more frugally than their neighbours, or by some accidental gain, that persons of this condition make any considerable accumulations. It no doubt happens sometimes that individuals are indebted for their wealth solely to their superior genius and industry, -as, for example, in the case of Arkwright, the inventor of the cotton-spinning machinery; but large fortunes suddenly acquired are much more frequently the effects of accident and good fortune; and hence, no doubt, the name, a fortune, which is given to every large or remarkable acquisition of wealth.

2

of which Dr Smith takes especial notice soon afterwards in the same chapter, in continuing his treatment of the subject ?*

The ground, therefore, it appears, is not by any means tenable which would distinguish the profit of stock from interest of money, or which would describe any thing as that profit but what is received for it by the capitalist in that character specifically, and without labour; that is, without the labour of personally applying it or superintending its application in business or production. Nor can any line be drawn between profit of stock and wages which shall be more defensible or preferable to another, but that which divides them at the point where interest commences.

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And if this be granted, it must at once appear evident, that neither the agreeableness nor disagreeableness, nor the risk or security with which any business is attended, can have any influence on the profits of stock. For what is it to him who lends his capital how disagreeable or hazardous soever the business in which it is employed may be, provided he has sufficient security for its repayment? Let him who engages in such business look to that, and take care to have himself properly rewarded and indemnified both for the risk and hardship whatever it may be. He should certainly receive a higher premium to compensate the greater risk, and higher wages or remuneration for his more irksome or disagreeable labour in the more hazardous and disagreeable businesses; but why the ungalled capitalist should receive higher interest is by no means apparent. Nor is the nature of the case in the slightest degree different with regard to the person who superintends the employment of a capital of his own in such disagreeable and hazardous employment. He should have his risk and labour suitably compensated in

* See the passage quoted at large before, page 265, et seq.

the proper shape of wages and insurance against loss; but when this is accomplished, he cannot expect to receive more in his capacity of capitalist than he would do in the least disagreeable and least hazardous business.

Dr Smith has himself observed, that, "in point of agreeableness or disagreeableness, there is little or no difference in the far greater part of the different employments of stock, but a great deal in those of labour; and the ordinary profit of stock, though it rises with the risk, does not always seem to rise in proportion to it. It should follow from all this, that, in the same society or neighbourhood, the average and ordinary rates of profit in the different employments of stock should be more nearly upon a level than the pecuniary wages of the different sorts of labour. They are so accordingly."

紅燒

But the same author elsewhere says, "The profits of stock, it may perhaps be thought, are only a different name for the wages of a particular sort of labour, the labour of inspection and direction. They are, however, altogether different, are regulated by quite different principles, and bear no proportion to the quantity, the hardship, or the ingenuity of this supposed labour of inspection and direction. They are regulated altogether by the value of the stock employed, and are greater or smaller in proportion to the extent of this stock."+

Now this is true to a tittle of interest, but of interest only; of course it is true of profit of stock as identified with interest.

• Wealth of Nations, book i. chap. 10.
+ Ibid. book i. chap. 6.

SECTION II.

OF THE CIRCUMSTANCES WHICH REGULATE AND DETERMINE THE ORDINARY AND AVERAGE, OR NATURAL, RATE OF PROFIT AT ANY PARTICULAR TIME AND PLACE.

THROUGHOUT the whole of our foregoing disquisitions in this work, it may have been observed, that invariably, whereever I have had occasion to speak of the profit of stock, I have always added the words, or interest.

This precaution I thought it proper to adopt, that I' might not lead the reader into any mistake as to the exact nature of that particular species of revenue which is properly designated by the former term, before I came to the place where I was more fully to explain the reasons why I held it to be identical with that which is designated by the latter. Now, however, having done this, and shown, as I trust I have done, to the satisfaction of every one, that profit of stock is identical with interest of money, it will be unnecessary as well as inconvenient to continue the practice we have adopted and followed hitherto, in regard to this matter, any longer; and I shall therefore, in the present section, and henceforward, content myself with using the terms profit and interest singly, and either of them indifferently, declaring once for all, as I now do, that I use them upon all occasions (wherever I speak of the profit of stock technically,) uniformly and invariably in the same

sense.

Having established this point, then, (I mean the identity of profit of stock with interest,) and having before shown*

that the rate of profit must always be nearly equal in all the different employments of capital at the same time, and in the same place or neighbourhood, we come now to inquire into the circumstances which regulate that rate generally, or which cause it to be higher or lower at one period of time, or at one particular place or neighbourhood, than another.

Mr Hume, and after him Dr Smith, have long ago solved this question, and have shown, in the most unambiguous and satisfactory manner, that the rate of profit depends altogether on the abundance or scarcity of capital, at

It is strictly correct to speak of the rate of profit, because it is always reckoned or estimated by the proportion, or ratio, which it bears to the stock or capital from which it arises; but it is questionable whether it be equally allowable to speak of the rate of wages or rent. Rent indeed may be reckoned by the proportion which it bears to the value of the subject it arises from expressed in money, and considered in this way may be correctly spoken of as a rate; but wages never can be considered as proportionally related to any given sum or value expressed in money,-not even in regard to the whole produce of land, labour, and capital; because they must always be viewed in reference to the natural or necessary wants of an individual or family. They must always be reckoned by the quantity and quality of necessaries, conveniences, and luxuries which they consist of, or which they can purchase or procure, and must be accounted high or low, not from the proportion which they bear to any given quantity (be it the whole or a part) of wealth existing, but as compared with the natural and necessary desires and wants of individuals and families of the hu

man race.

Although, however, it may not be so perfectly correct to apply this word rate to either rent or wages as to profit, I shall not go the length to depart from a practice and phraseology which have been so generally used and followed by former writers, and which is sanctioned by the practice and example of Dr Smith, but shall content myself with offering the present explanation, which may, I hope, be sufficient to guard us from falling into any misconception or error in consequence of our giving in to this practice.