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BOOK the two-hundred-and-fortieth part of a pound.


The fhilling too feems originally to have been the denomination of a weight. When wheat is at twelve fhillings the quarter, fays an antient ftatute of Henry III. then wafiel bread of a farthing Shall weigh eleven fhillings and four pence. The proportion, however, between the fhilling and either the penny on the one hand, or the pound on the other, feems not to have been fo conftant and uniform as that between the penny and the pound. During the firft race of the kings of France, the French fou or fhilling appears upon different occafions to have contained five, twelve, twenty, and forty pennies. Among the antient Saxons a fhilling appears at one time to have contained only five pennies, and it is not improbable that it may have been as variable among them as among their neighbours, the antient Franks. From the time of Charlemagne among the French, and from that of William the Conqueror among the English, the proportion between the pound, the fhilling, and the penny, feems to have been uniformly the fame as at prefent, though the value of each has been very different. For in every country of the world, I believe, the avarice and injuftice of princes and fovereign ftates, abufing the confidence of their fubjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins. The Roman As, in the latter ages of the Republic, was reduced to the twenty-fourth part of its original value, and, inftead of weighing a pound, came to weigh only



half an ounce. The English pound and penny CHA P. contain at present about a third only; the Scots pound and penny about a thirty-fixth; and the French pound and penny about a fixty-fixth part of their original value. By means of thofe operations the princes and fovereign ftates which performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a fmaller quantity of filver than would otherwise have been requifite. It was indeed in appearance only; for their creditors were really defrauded of a part of what was due to them. All other debtors in the ftate were allowed the fame privilege, and might pay with the fame nominal fum of the new and debafed coin whatever they had borrowed in the old. Such operations, therefore, have always proved favourable to the debtor, and ruinous to the creditor, and have fometimes produced a greater and more univerfal revolution in the fortunes of private perfons, than could have been occafioned by a very great public calamity.

It is in this manner that money has become in all civilized nations the univerfal inftrument of commerce, by the intervention of which goods of all kinds are bought and fold, or exchanged for one another.

What are the rules which men naturally obferve in exchanging them either for money or for one another, I fhall now proceed to examine. Thefe rules determine what may be called the relative or exchangeable value of goods.



The word VALUE, it is to be observed, has two different meanings, and fometimes expreffes the utility of fome particular object, and fometimes the power of purchafing other goods which the poffeffion of that object conveys. The one may be called "value in ufe;" the other, "value " in exchange." The things which have the greatest value in ufe have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in ufe. Nothing is more useful than water: but it will purchase fcarce any thing; fcarce any thing can be had in exchange for it. A diamond, on the contrary, has fcarce any value in ufe; but a very great quantity of other goods may frequently be had in exchange for it.

In order to investigate the principles which regulate the exchangeable value of commo dities, I fhall endeavour to fhew,

Firft, what is the real measure of this exchangeable value; or, wherein confifts the real price of all commodities.

Secondly, what are the different parts of which this real price is compofed or made up.

And, laftly, what are the different circumftances which fometimes raise fome or all of thefe different parts of price above, and fometimes fink them below their natural or ordinary rate; or, what are the caufes which fometimes hinder the market price, that is, the actual price of commodities, from coinciding exactly with what may be called their natural price.

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I fhall endeavour to explain, as fully and CHAP. diftinctly as I can, thofe three fubjects in the three following chapters, for which I muft very earneftly entreat both the patience and attention of the reader: his patience in order to examine a detail which may perhaps in fome places appear unneceffarily tedious; and his attention in order to understand what may, perhaps, after the fullest explication which I am capable of giving of it, appear ftill in fome degree obfcure. I am always willing to run fome hazard of being tedious in order to be fure that I am perfpicuous; and after taking the utmost pains that I can to be perfpicuous, fome obfcurity may ftill appear to remain upon a fubject in its own nature extremely abftracted,


Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money.


VERY man is rich or poor according to CHA P. the degree in which he can afford to enjoy the neceffaries, conveniencies, and amufements of human life. But after the divifion of labour has once thoroughly taken place, it is but a very fmall part of these with which a man's own labour can fupply him. The far greater part of them he muft derive from the labour of other


BOOK people, and he must be rich or poor according


to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the perfon who poffeffes it, and who means not to ufe or confume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchafe or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.

The real price of every thing, what every thing really cofts to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to difpofe of it or exchange it for fomething elfe, is the toil and trouble which it can fave to himfelf, and which it can impofe upon other people. What is bought with money or with goods is purchafed by labour, as much as what we acquire by the toil of our own body. That money or thofe goods indeed fave us this toil. They contain the value of a certain quantity of labour which we exchange for what is fuppofed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by filver, but by labour, that all the wealth of the world was originally purchafed; and its value, to thofe who poffefs it, and who want to exchange it for fome new productions, is precifely equal to the quantity of labour which it can enable them to purchase or command.


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