Abroad—wheeledwaggon,attendedbytwomen,anddrawnbyeighthorses,inaboutsixweeks’timecarriesandbringsbackbetweenLondonandEdinburghnearfourtonweightofgoods。Inaboutthesametimeashipnavigatedbysixoreightmen,andsailingbetweentheportsofLondonandLeith,frequentlycarriesandbringsbacktwohundredtonweightofgoods。Sixoreightmen,therefore,bythehelpofwater—carriage,cancarryandbringbackinthesametimethesamequantityofgoodsbetweenLondonandEdinburgh,asfiftybroad—wheeledwaggons,attendedbyahundredmen,anddrawnbyfourhundredhorses。Upontwohundredtonsofgoods,therefore,carriedbythecheapestland—carriagefromLondontoEdinburgh,theremustbechargedthemaintenanceofahundredmenforthreeweeks,andboththemaintenance,and,whatisnearlyequaltothemaintenance,thewearandtearoffourhundredhorsesaswellasoffiftygreatwaggons。Whereas,uponthesamequantityofgoodscarriedbywater,thereistobechargedonlythemaintenanceofsixoreightmen,andthewearandtearofashipoftwohundredtonsburden,togetherwiththevalueofthesuperiorrisk,orthedifferenceoftheinsurancebetweenlandandwater—carriage。Weretherenoothercommunicationbetweenthosetwoplaces,therefore,butbyland—carriage,asnogoodscouldbetransportedfromtheonetotheother,exceptsuchwhosepricewasveryconsiderableinproportiontotheirweight,theycouldcarryonbutasmallpartofthatcommercewhichatpresentsubsistsbetweenthem,andconsequentlycouldgivebutasmallpartofthatencouragementwhichtheyatpresentmutuallyaffordtoeachother’sindustry。
Therecouldbelittleornocommerceofanykindbetweenthedistantpartsoftheworld。Whatgoodscouldbeartheexpenseofland—carriagebetweenLondonandCalcutta?Oriftherewereanysopreciousastobeabletosupportthisexpense,withwhatsafetycouldtheybetransportedthroughtheterritoriesofsomanybarbarousnations?Thosetwocities,however,atpresentcarryonaveryconsiderablecommercewitheachother,andbymutuallyaffordingamarket,giveagooddealofencouragementtoeachother’sindustry。
Sincesuch,therefore,aretheadvantagesofwater—carriage,itisnaturalthatthefirstimprovementsofartandindustryshouldbemadewherethisconveniencyopensthewholeworldforamarkettotheproduceofeverysortoflabour,andthattheyshouldalwaysbemuchlaterinextendingthemselvesintotheinlandpartsofthecountry。Theinlandpartsofthecountrycanforalongtimehavenoothermarketforthegreaterpartoftheirgoods,butthecountrywhichliesroundaboutthem,andseparatesthemfromthesea—coast,andthegreatnavigablerivers。Theextentoftheirmarket,therefore,mustforalongtimebeinproportiontotherichesandpopulousnessofthatcountry,andconsequentlytheirimprovementmustalwaysbeposteriortotheimprovementofthatcountry。InourNorthAmericancoloniestheplantationshaveconstantlyfollowedeitherthesea—coastorthebanksofthenavigablerivers,andhavescarceanywhereextendedthemselvestoanyconsiderabledistancefromboth。
Thenationsthat,accordingtothebestauthenticatedhistory,appeartohavebeenfirstcivilised,werethosethatdweltroundthecoastoftheMediterraneanSea。Thatsea,byfarthegreatestinletthatisknownintheworld,havingnotides,norconsequentlyanywavesexceptsuchasarecausedbythewindonly,was,bythesmoothnessofitssurface,aswellasbythemultitudeofitsislands,andtheproximityofitsneighbouringshores,extremelyfavourabletotheinfantnavigationoftheworld;when,fromtheirignoranceofthecompass,menwereafraidtoquittheviewofthecoast,andfromtheimperfectionoftheartofshipbuilding,toabandonthemselvestotheboisterouswavesoftheocean。TopassbeyondthepillarsofHercules,thatis,tosailoutoftheStraitsofGibraltar,was,intheancientworld,longconsideredasamostwonderfulanddangerousexploitofnavigation。ItwaslatebeforeeventhePhoeniciansandCarthaginians,themostskilfulnavigatorsandship—buildersofthoseoldtimes,attemptedit,andtheywereforalongtimetheonlynationsthatdidattemptit。
OfallthecountriesonthecoastoftheMediterraneanSea,Egyptseemstohavebeenthefirstinwhicheitheragricultureormanufactureswerecultivatedandimprovedtoanyconsiderabledegree。UpperEgyptextendsitselfnowhereaboveafewmilesfromtheNile,andinLowerEgyptthatgreatriverbreaksitselfintomanydifferentcanals,which,withtheassistanceofalittleart,seemtohaveaffordedacommunicationbywater—carriage,notonlybetweenallthegreattowns,butbetweenalltheconsiderablevillages,andeventomanyfarmhousesinthecountry;nearlyinthesamemannerastheRhineandtheMaasdoinHollandatpresent。TheextentandeasinessofthisinlandnavigationwasprobablyoneoftheprincipalcausesoftheearlyimprovementofEgypt。
TheimprovementsinagricultureandmanufacturesseemlikewisetohavebeenofverygreatantiquityintheprovincesofBengal,intheEastIndies,andinsomeoftheeasternprovincesofChina;thoughthegreatextentofthisantiquityisnotauthenticatedbyanyhistoriesofwhoseauthoritywe,inthispartoftheworld,arewellassured。InBengaltheGangesandseveralothergreatriversformagreatnumberofnavigablecanalsinthesamemannerastheNiledoesinEgypt。IntheEasternprovincesofChinatoo,severalgreatriversform,bytheirdifferentbranches,amultitudeofcanals,andbycommunicatingwithoneanotheraffordaninlandnavigationmuchmoreextensivethanthateitheroftheNileortheGanges,orperhapsthanbothofthemputtogether。ItisremarkablethatneithertheancientEgyptians,northeIndians,northeChinese,encouragedforeigncommerce,butseemalltohavederivedtheirgreatopulencefromthisinlandnavigation。
AlltheinlandpartsofAfrica,andallthatpartofAsiawhichliesanyconsiderablewaynorthoftheEuxineandCaspianseas,theancientScythia,themodernTartaryandSiberia,seeminallagesoftheworldtohavebeeninthesamebarbarousanduncivilisedstateinwhichwefindthematpresent。TheSeaofTartaryisthefrozenoceanwhichadmitsofnonavigation,andthoughsomeofthegreatestriversintheworldrunthroughthatcountry,theyareattoogreatadistancefromoneanothertocarrycommerceandcommunicationthroughthegreaterpartofit。
ThereareinAfricanoneofthosegreatinlets,suchastheBalticandAdriaticseasinEurope,theMediterraneanandEuxineseasinbothEuropeandAsia,andthegulfsofArabia,Persia,India,Bengal,andSiam,inAsia,tocarrymaritimecommerceintotheinteriorpartsofthatgreatcontinent:andthegreatriversofAfricaareattoogreatadistancefromoneanothertogiveoccasiontoanyconsiderableinlandnavigation。Thecommercebesideswhichanynationcancarryonbymeansofariverwhichdoesnotbreakitselfintoanygreatnumberofbranchesorcanals,andwhichrunsintoanotherterritorybeforeitreachesthesea,canneverbeveryconsiderable;becauseitisalwaysinthepowerofthenationswhopossessthatotherterritorytoobstructthecommunicationbetweentheuppercountryandthesea。
ThenavigationoftheDanubeisofverylittleusetothedifferentstatesofBavaria,AustriaandHungary,incomparisonofwhatitwouldbeifanyofthempossessedthewholeofitscoursetillitfallsintotheBlackSea。
CHAPTERIV
OftheOriginandUseofMoneyWHENthedivisionoflabourhasbeenoncethoroughlyestablished,itisbutaverysmallpartofaman’swantswhichtheproduceofhisownlabourcansupply。Hesuppliesthefargreaterpartofthembyexchangingthatsurpluspartoftheproduceofhisownlabour,whichisoverandabovehisownconsumption,forsuchpartsoftheproduceofothermen’slabourashehasoccasionfor。Everymanthuslivesbyexchanging,orbecomesinsomemeasureamerchant,andthesocietyitselfgrowstobewhatisproperlyacommercialsociety。
Butwhenthedivisionoflabourfirstbegantotakeplace,thispowerofexchangingmustfrequentlyhavebeenverymuchcloggedandembarrassedinitsoperations。Oneman,weshallsuppose,hasmoreofacertaincommoditythanhehimselfhasoccasionfor,whileanotherhasless。Theformerconsequentlywouldbegladtodisposeof,andthelattertopurchase,apartofthissuperfluity。Butifthislattershouldchancetohavenothingthattheformerstandsinneedof,noexchangecanbemadebetweenthem。Thebutcherhasmoremeatinhisshopthanhehimselfcanconsume,andthebrewerandthebakerwouldeachofthembewillingtopurchaseapartofit。Buttheyhavenothingtoofferinexchange,exceptthedifferentproductionsoftheirrespectivetrades,andthebutcherisalreadyprovidedwithallthebreadandbeerwhichhehasimmediateoccasionfor。Noexchangecan,inthiscase,bemadebetweenthem。Hecannotbetheirmerchant,northeyhiscustomers;andtheyareallofthemthusmutuallylessserviceabletooneanother。Inordertoavoidtheinconveniencyofsuchsituations,everyprudentmanineveryperiodofsociety,afterthefirstestablishmentofthedivisionoflabour,mustnaturallyhaveendeavouredtomanagehisaffairsinsuchamannerastohaveatalltimesbyhim,besidesthepeculiarproduceofhisownindustry,acertainquantityofsomeonecommodityorother,suchasheimaginedfewpeoplewouldbelikelytorefuseinexchangefortheproduceoftheirindustry。
Manydifferentcommodities,itisprobable,weresuccessivelyboththoughtofandemployedforthispurpose。Intherudeagesofsociety,cattlearesaidtohavebeenthecommoninstrumentofcommerce;and,thoughtheymusthavebeenamostinconvenientone,yetinoldtimeswefindthingswerefrequentlyvaluedaccordingtothenumberofcattlewhichhadbeengiveninexchangeforthem。ThearmourofDiomede,saysHomer,costonlynineoxen;butthatofGlaucuscostanhundredoxen。SaltissaidtobethecommoninstrumentofcommerceandexchangesinAbyssinia;aspeciesofshellsinsomepartsofthecoastofIndia;driedcodatNewfoundland;tobaccoinVirginia;sugarinsomeofourWestIndiacolonies;hidesordressedleatherinsomeothercountries;andthereisatthisdayavillageinScotlandwhereitisnotuncommon,Iamtold,foraworkmantocarrynailsinsteadofmoneytothebaker’sshoporthealehouse。
Inallcountries,however,menseematlasttohavebeendeterminedbyirresistiblereasonstogivethepreference,forthisemployment,tometalsaboveeveryothercommodity。Metalscannotonlybekeptwithaslittlelossasanyothercommodity,scarceanythingbeinglessperishablethantheyare,buttheycanlikewise,withoutanyloss,bedividedintoanynumberofparts,asbyfusionthosepartscaneasilybereunitedagain;aqualitywhichnootherequallydurablecommoditiespossess,andwhichmorethananyotherqualityrendersthemfittobetheinstrumentsofcommerceandcirculation。Themanwhowantedtobuysalt,forexample,andhadnothingbutcattletogiveinexchangeforit,musthavebeenobligedtobuysalttothevalueofawholeox,orawholesheepatatime。Hecouldseldombuylessthanthis,becausewhathewastogiveforitcouldseldombedividedwithoutloss;andifhehadamindtobuymore,hemust,forthesamereasons,havebeenobligedtobuydoubleortriplethequantity,thevalue,towit,oftwoorthreeoxen,oroftwoorthreesheep。If,onthecontrary,insteadofsheeporoxen,hehadmetalstogiveinexchangeforit,hecouldeasilyproportionthequantityofthemetaltotheprecisequantityofthecommoditywhichhehadimmediateoccasionfor。
Differentmetalshavebeenmadeuseofbydifferentnationsforthispurpose。IronwasthecommoninstrumentofcommerceamongtheancientSpartans;copperamongtheancientRomans;andgoldandsilveramongallrichandcommercialnations。
Thosemetalsseemoriginallytohavebeenmadeuseofforthispurposeinrudebars,withoutanystamporcoinage。ThuswearetoldbyPliny,upontheauthorityofTimaeus,anancienthistorian,that,tillthetimeofServiusTullius,theRomanshadnocoinedmoney,butmadeuseofunstampedbarsofcopper,topurchasewhatevertheyhadoccasionfor。Thesebars,therefore,performedatthistimethefunctionofmoney。
Theuseofmetalsinthisrudestatewasattendedwithtwoveryconsiderableinconveniencies;first,withthetroubleofweighing;and,secondly,withthatofassayingthem。Inthepreciousmetals,whereasmalldifferenceinthequantitymakesagreatdifferenceinthevalue,eventhebusinessofweighing,withproperexactness,requiresatleastveryaccurateweightsandscales。Theweighingofgoldinparticularisanoperationofsomenicety。Inthecoarsermetals,indeed,whereasmallerrorwouldbeoflittleconsequence,lessaccuracywould,nodoubt,benecessary。Yetweshouldfinditexcessivelytroublesome,ifeverytimeapoormanhadoccasioneithertobuyorsellafarthing’sworthofgoods,hewasobligedtoweighthefarthing。
Theoperationofassayingisstillmoredifficult,stillmoretedious,and,unlessapartofthemetalisfairlymeltedinthecrucible,withproperdissolvents,anyconclusionthatcanbedrawnfromit,isextremelyuncertain。Beforetheinstitutionofcoinedmoney,however,unlesstheywentthroughthistediousanddifficultoperation,peoplemustalwayshavebeenliabletothegrossestfraudsandimpositions,andinsteadofapoundweightofpuresilver,orpurecopper,mightreceiveinexchangefortheirgoodsanadulteratedcompositionofthecoarsestandcheapestmaterials,whichhad,however,intheiroutwardappearance,beenmadetoresemblethosemetals。Topreventsuchabuses,tofacilitateexchanges,andtherebytoencourageallsortsofindustryandcommerce,ithasbeenfoundnecessary,inallcountriesthathavemadeanyconsiderableadvancestowardsimprovement,toaffixapublicstampuponcertainquantitiesofsuchparticularmetalsaswereinthosecountriescommonlymadeuseoftopurchasegoods。Hencetheoriginofcoinedmoney,andofthosepublicofficescalledmints;institutionsexactlyofthesamenaturewiththoseoftheaulnagersandstamp—mastersofwoolenandlinencloth。Allofthemareequallymeanttoascertain,bymeansofapublicstamp,thequantityanduniformgoodnessofthosedifferentcommoditieswhenbroughttomarket。
Thefirstpublicstampsofthiskindthatwereaffixedtothecurrentmetals,seeminmanycasestohavebeenintendedtoascertain,whatitwasbothmostdifficultandmostimportanttoascertain,thegoodnessorfinenessofthemetal,andtohaveresembledthesterlingmarkwhichisatpresentaffixedtoplateandbarsofsilver,ortheSpanishmarkwhichissometimesaffixedtoingotsofgold,andwhichbeingstruckonlyupononesideofthepiece,andnotcoveringthewholesurface,ascertainsthefineness,butnottheweightofthemetal。AbrahamweighstoEphronthefourhundredshekelsofsilverwhichhehadagreedtopayforthefieldofMachpelah。Theyaresaid,however,tobethecurrentmoneyofthemerchant,andyetarereceivedbyweightandnotbytale,inthesamemannerasingotsofgoldandbarsofsilverareatpresent。TherevenuesoftheancientSaxonkingsofEnglandaresaidtohavebeenpaid,notinmoneybutinkind,thatis,invictualsandprovisionsofallsorts。WilliamtheConquerorintroducedthecustomofpayingtheminmoney。Thismoney,however,was,foralongtime,receivedattheexchequer,byweightandnotbytale。
Theinconveniencyanddifficultyofweighingthosemetalswithexactnessgaveoccasiontotheinstitutionofcoins,ofwhichthestamp,coveringentirelybothsidesofthepieceandsometimestheedgestoo,wassupposedtoascertainnotonlythefineness,buttheweightofthemetal。Suchcoins,therefore,werereceivedbytaleasatpresent,withoutthetroubleofweighing。
Thedenominationsofthosecoinsseemoriginallytohaveexpressedtheweightorquantityofmetalcontainedinthem。InthetimeofServiusTullius,whofirstcoinedmoneyatRome,theRomanasorpondocontainedaRomanpoundofgoodcopper。ItwasdividedinthesamemannerasourTroyespound,intotwelveounces,eachofwhichcontainedarealounceofgoodcopper。TheEnglishpoundsterling,inthetimeofEdwardI,containedapound,Towerweight,ofsilver,ofaknownfineness。TheTowerpoundseemstohavebeensomethingmorethantheRomanpound,andsomethinglessthantheTroyespound。ThislastwasnotintroducedintothemintofEnglandtillthe18thofHenryVIII。
TheFrenchlivrecontainedinthetimeofCharlemagneapound,Troyesweight,ofsilverofaknownfineness。ThefairofTroyesinChampaignwasatthattimefrequentedbyallthenationsofEurope,andtheweightsandmeasuresofsofamousamarketweregenerallyknownandesteemed。TheScotsmoneypoundcontained,fromthetimeofAlexandertheFirsttothatofRobertBruce,apoundofsilverofthesameweightandfinenesswiththeEnglishpoundsterling。English,French,andScotspennies,too,containedallofthemoriginallyarealpennyweightofsilver,thetwentiethpartofanounce,andthetwo—hundred—and—fortiethpartofapound。Theshillingtooseemsoriginallytohavebeenthedenominationofaweight。Whenwheatisattwelveshillingsthequarter,saysanancientstatuteofHenryIII,thenwastelbreadofafarthingshallweighelevenshillingsandfourpence。
Theproportion,however,betweentheshillingandeitherthepennyontheonehand,orthepoundontheother,seemsnottohavebeensoconstantanduniformasthatbetweenthepennyandthepound。DuringthefirstraceofthekingsofFrance,theFrenchsouorshillingappearsupondifferentoccasionstohavecontainedfive,twelve,twenty,andfortypennies。AmongtheancientSaxonsashillingappearsatonetimetohavecontainedonlyfivepennies,anditisnotimprobablethatitmayhavebeenasvariableamongthemasamongtheirneighbours,theancientFranks。FromthetimeofCharlemagneamongtheFrench,andfromthatofWilliamtheConqueroramongtheEnglish,theproportionbetweenthepound,theshilling,andthepenny,seemstohavebeenuniformlythesameasatpresent,thoughthevalueofeachhasbeenverydifferent。Forineverycountryoftheworld,I
believe,theavariceandinjusticeofprincesandsovereignstates,abusingtheconfidenceoftheirsubjects,havebydegreesdiminishedtherealquantityofmetal,whichhadbeenoriginallycontainedintheircoins。TheRomanas,inthelatteragesoftheRepublic,wasreducedtothetwenty—fourthpartofitsoriginalvalue,and,insteadofweighingapound,cametoweighonlyhalfanounce。TheEnglishpoundandpennycontainatpresentaboutathirdonly;theScotspoundandpennyaboutathirty—sixth;andtheFrenchpoundandpennyaboutasixty—sixthpartoftheiroriginalvalue。Bymeansofthoseoperationstheprincesandsovereignstateswhichperformedthemwereenabled,inappearance,topaytheirdebtsandtofulfiltheirengagementswithasmallerquantityofsilverthanwouldotherwisehavebeenrequisite。Itwasindeedinappearanceonly;fortheircreditorswerereallydefraudedofapartofwhatwasduetothem。Allotherdebtorsinthestatewereallowedthesameprivilege,andmightpaywiththesamenominalsumofthenewanddebasedcoinwhatevertheyhadborrowedintheold。Suchoperations,therefore,havealwaysprovedfavourabletothedebtor,andruinoustothecreditor,andhavesometimesproducedagreaterandmoreuniversalrevolutioninthefortunesofprivatepersons,thancouldhavebeenoccasionedbyaverygreatpubliccalamity。
Itisinthismannerthatmoneyhasbecomeinallcivilisednationstheuniversalinstrumentofcommerce,bytheinterventionofwhichgoodsofallkindsareboughtandsold,orexchangedforoneanother。
Whataretheruleswhichmennaturallyobserveinexchangingthemeitherformoneyorforoneanother,Ishallnowproceedtoexamine。Theserulesdeterminewhatmaybecalledtherelativeorexchangeablevalueofgoods。
Thewordvalue,itistobeobserved,hastwodifferentmeanings,andsometimesexpressestheutilityofsomeparticularobject,andsometimesthepowerofpurchasingothergoodswhichthepossessionofthatobjectconveys。Theonemaybecalled\"valueinuse\";theother,\"valueinexchange。\"Thethingswhichhavethegreatestvalueinusehavefrequentlylittleornovalueinexchange;and,onthecontrary,thosewhichhavethegreatestvalueinexchangehavefrequentlylittleornovalueinuse。
Nothingismoreusefulthanwater:butitwillpurchasescarceanything;scarceanythingcanbehadinexchangeforit。A
diamond,onthecontrary,hasscarceanyvalueinuse;butaverygreatquantityofothergoodsmayfrequentlybehadinexchangeforit。
Inordertoinvestigatetheprincipleswhichregulatetheexchangeablevalueofcommodities,Ishallendeavourtoshow:
First,whatistherealmeasureofthisexchangeablevalue;
or,whereinconsiststherealpriceofallcommodities。
Secondly,whatarethedifferentpartsofwhichthisrealpriceiscomposedormadeup。
And,lastly,whatarethedifferentcircumstanceswhichsometimesraisesomeorallofthesedifferentpartsofpriceabove,andsometimessinkthembelowtheirnaturalorordinaryrate;or,whatarethecauseswhichsometimeshinderthemarketprice,thatis,theactualpriceofcommodities,fromcoincidingexactlywithwhatmaybecalledtheirnaturalprice。
Ishallendeavourtoexplain,asfullyanddistinctlyasI
can,thosethreesubjectsinthethreefollowingchapters,forwhichImustveryearnestlyentreatboththepatienceandattentionofthereader:hispatienceinordertoexamineadetailwhichmayperhapsinsomeplacesappearunnecessarilytedious;andhisattentioninordertounderstandwhatmay,perhaps,afterthefullestexplicationwhichIamcapableofgivingofit,appearstillinsomedegreeobscure。IamalwayswillingtorunsomehazardofbeingtediousinordertobesurethatIamperspicuous;andaftertakingtheutmostpainsthatI
cantobeperspicuous,someobscuritymaystillappeartoremainuponasubjectinitsownnatureextremelyabstracted。
CHAPTERV
OftheRealandNominalPriceofCommodities,ortheirPriceinLabour,andtheirPriceinMoneyEVERYmanisrichorpooraccordingtothedegreeinwhichhecanaffordtoenjoythenecessaries,conveniences,andamusementsofhumanlife。Butafterthedivisionoflabourhasoncethoroughlytakenplace,itisbutaverysmallpartofthesewithwhichaman’sownlabourcansupplyhim。Thefargreaterpartofthemhemustderivefromthelabourofotherpeople,andhemustberichorpooraccordingtothequantityofthatlabourwhichhecancommand,orwhichhecanaffordtopurchase。Thevalueofanycommodity,therefore,tothepersonwhopossessesit,andwhomeansnottouseorconsumeithimself,buttoexchangeitforothercommodities,isequaltothequantityoflabourwhichitenableshimtopurchaseorcommand。Labour,therefore,istherealmeasureoftheexchangeablevalueofallcommodities。
Therealpriceofeverything,whateverythingreallycoststothemanwhowantstoacquireit,isthetoilandtroubleofacquiringit。Whateverythingisreallyworthtothemanwhohasacquiredit,andwhowantstodisposeofitorexchangeitforsomethingelse,isthetoilandtroublewhichitcansavetohimself,andwhichitcanimposeuponotherpeople。Whatisboughtwithmoneyorwithgoodsispurchasedbylabourasmuchaswhatweacquirebythetoilofourownbody。Thatmoneyorthosegoodsindeedsaveusthistoil。Theycontainthevalueofacertainquantityoflabourwhichweexchangeforwhatissupposedatthetimetocontainthevalueofanequalquantity。Labourwasthefirstprice,theoriginalpurchase—moneythatwaspaidforallthings。Itwasnotbygoldorbysilver,butbylabour,thatallthewealthoftheworldwasoriginallypurchased;anditsvalue,tothosewhopossessit,andwhowanttoexchangeitforsomenewproductions,ispreciselyequaltothequantityoflabourwhichitcanenablethemtopurchaseorcommand。
Wealth,asMr。Hobbessays,ispower。Butthepersonwhoeitheracquires,orsucceedstoagreatfortune,doesnotnecessarilyacquireorsucceedtoanypoliticalpower,eithercivilormilitary。Hisfortunemay,perhaps,affordhimthemeansofacquiringboth,butthemerepossessionofthatfortunedoesnotnecessarilyconveytohimeither。Thepowerwhichthatpossessionimmediatelyanddirectlyconveystohim,isthepowerofpurchasing;acertaincommandoverallthelabour,oroveralltheproduceoflabour,whichistheninthemarket。Hisfortuneisgreaterorless,preciselyinproportiontotheextentofthispower;ortothequantityeitherofothermen’slabour,or,whatisthesamething,oftheproduceofothermen’slabour,whichitenableshimtopurchaseorcommand。Theexchangeablevalueofeverythingmustalwaysbepreciselyequaltotheextentofthispowerwhichitconveystoitsowner。
Butthoughlabourbetherealmeasureoftheexchangeablevalueofallcommodities,itisnotthatbywhichtheirvalueiscommonlyestimated。Itisofdifficulttoascertaintheproportionbetweentwodifferentquantitiesoflabour。Thetimespentintwodifferentsortsofworkwillnotalwaysalonedeterminethisproportion。Thedifferentdegreesofhardshipendured,andofingenuityexercised,mustlikewisebetakenintoaccount。Theremaybemorelabourinanhour’shardworkthanintwohours’easybusiness;orinanhour’sapplicationtoatradewhichitcosttenyears’labourtolearn,thaninamonth’sindustryatanordinaryandobviousemployment。Butitisnoteasytofindanyaccuratemeasureeitherofhardshiporingenuity。Inexchanging,indeed,thedifferentproductionsofdifferentsortsoflabourforoneanother,someallowanceiscommonlymadeforboth。Itisadjusted,however,notbyanyaccuratemeasure,butbythehigglingandbargainingofthemarket,accordingtothatsortofroughequalitywhich,thoughnotexact,issufficientforcarryingonthebusinessofcommonlife。
Everycommodity,besides,ismorefrequentlyexchangedfor,andtherebycomparedwith,othercommoditiesthanwithlabour。Itismorenatural,therefore,toestimateitsexchangeablevaluebythequantityofsomeothercommoditythanbythatofthelabourwhichitcanpurchase。Thegreaterpartofpeople,too,understandbetterwhatismeantbyaquantityofaparticularcommoditythanbyaquantityoflabour。Theoneisaplainpalpableobject;theotheranabstractnotion,which,thoughitcanbemadesufficientlyintelligible,isnotaltogethersonaturalandobvious。
Butwhenbarterceases,andmoneyhasbecomethecommoninstrumentofcommerce,everyparticularcommodityismorefrequentlyexchangedformoneythanforanyothercommodity。Thebutcherseldomcarrieshisbeeforhismuttontothebaker,orthebrewer,inordertoexchangethemforbreadorforbeer;buthecarriesthemtothemarket,whereheexchangesthemformoney,andafterwardsexchangesthatmoneyforbreadandforbeer。Thequantityofmoneywhichhegetsforthemregulates,too,thequantityofbreadandbeerwhichhecanafterwardspurchase。Itismorenaturalandobvioustohim,therefore,toestimatetheirvaluebythequantityofmoney,thecommodityforwhichheimmediatelyexchangesthem,thanbythatofbreadandbeer,thecommoditiesforwhichhecanexchangethemonlybytheinterventionofanothercommodity;andrathertosaythathisbutcher’smeatisworththreepenceorfourpenceapound,thanthatitisworththreeorfourpoundsofbread,orthreeorfourquartsofsmallbeer。Henceitcomestopassthattheexchangeablevalueofeverycommodityismorefrequentlyestimatedbythequantityofmoney,thanbythequantityeitheroflabourorofanyothercommoditywhichcanbehadinexchangeforit。
Goldandsilver,however,likeeveryothercommodity,varyintheirvalue,aresometimescheaperandsometimesdearer,sometimesofeasierandsometimesofmoredifficultpurchase。Thequantityoflabourwhichanyparticularquantityofthemcanpurchaseorcommand,orthequantityofothergoodswhichitwillexchangefor,dependsalwaysuponthefertilityorbarrennessofthemineswhichhappentobeknownaboutthetimewhensuchexchangesaremade。ThediscoveryoftheabundantminesofAmericareduced,inthesixteenthcentury,thevalueofgoldandsilverinEuropetoaboutathirdofwhatithadbeenbefore。Asitcostslesslabourtobringthosemetalsfromtheminetothemarket,sowhentheywerebroughtthithertheycouldpurchaseorcommandlesslabour;andthisrevolutionintheirvalue,thoughperhapsthegreatest,isbynomeanstheonlyoneofwhichhistorygivessomeaccount。Butasameasureofquantity,suchasthenaturalfoot,fathom,orhandful,whichiscontinuallyvaryinginitsownquantity,canneverbeanaccuratemeasureofthequantityofotherthings;soacommoditywhichisitselfcontinuallyvaryinginitsownvalue,canneverbeanaccuratemeasureofthevalueofothercommodities。Equalquantitiesoflabour,atalltimesandplaces,maybesaidtobeofequalvaluetothelabourer。Inhisordinarystateofhealth,strengthandspirits;intheordinarydegreeofhisskillanddexterity,hemustalwayslaydownthesameportionofhisease,hisliberty,andhishappiness。Thepricewhichhepaysmustalwaysbethesame,whatevermaybethequantityofgoodswhichhereceivesinreturnforit。Ofthese,indeed,itmaysometimespurchaseagreaterandsometimesasmallerquantity;butitistheirvaluewhichvaries,notthatofthelabourwhichpurchasesthem。Atalltimesandplacesthatisdearwhichitisdifficulttocomeat,orwhichitcostsmuchlabourtoacquire;andthatcheapwhichistobehadeasily,orwithverylittlelabour。Labouralone,therefore,nevervaryinginitsownvalue,isalonetheultimateandrealstandardbywhichthevalueofallcommoditiescanatalltimesandplacesbeestimatedandcompared。Itistheirrealprice;moneyistheirnominalpriceonly。
Butthoughequalquantitiesoflabourarealwaysofequalvaluetothelabourer,yettothepersonwhoemployshimtheyappearsometimestobeofgreaterandsometimesofsmallervalue。
Hepurchasesthemsometimeswithagreaterandsometimeswithasmallerquantityofgoods,andtohimthepriceoflabourseemstovarylikethatofallotherthings。Itappearstohimdearintheonecase,andcheapintheother。Inreality,however,itisthegoodswhicharecheapintheonecase,anddearintheother。
Inthispopularsense,therefore,labour,likecommodities,maybesaidtohavearealandanominalprice。Itsrealpricemaybesaidtoconsistinthequantityofthenecessariesandconveniencesoflifewhicharegivenforit;itsnominalprice,inthequantityofmoney。Thelabourerisrichorpoor,iswellorillrewarded,inproportiontothereal,nottothenominalpriceofhislabour。
Thedistinctionbetweentherealandthenominalpriceofcommoditiesandlabourisnotamatterofmerespeculation,butmaysometimesbeofconsiderableuseinpractice。Thesamerealpriceisalwaysofthesamevalue;butonaccountofthevariationsinthevalueofgoldandsilver,thesamenominalpriceissometimesofverydifferentvalues。Whenalandedestate,therefore,issoldwithareservationofaperpetualrent,ifitisintendedthatthisrentshouldalwaysbeofthesamevalue,itisofimportancetothefamilyinwhosefavouritisreservedthatitshouldnotconsistinaparticularsumofmoney。Itsvaluewouldinthiscasebeliabletovariationsoftwodifferentkinds;first,tothosewhicharisefromthedifferentquantitiesofgoldandsilverwhicharecontainedatdifferenttimesincoinofthesamedenomination;and,secondly,tothosewhicharisefromthedifferentvaluesofequalquantitiesofgoldandsilveratdifferenttimes。
Princesandsovereignstateshavefrequentlyfanciedthattheyhadatemporaryinteresttodiminishthequantityofpuremetalcontainedintheircoins;buttheyseldomhavefanciedthattheyhadanytoaugmentit。Thequantityofmetalcontainedinthecoins,Ibelieveofallnations,has,accordingly,beenalmostcontinuallydiminishing,andhardlyeveraugmenting。Suchvariations,therefore,tendalmostalwaystodiminishthevalueofamoneyrent。
ThediscoveryoftheminesofAmericadiminishedthevalueofgoldandsilverinEurope。Thisdiminution,itiscommonlysupposed,thoughIapprehendwithoutanycertainproof,isstillgoingongradually,andislikelytocontinuetodosoforalongtime。Uponthissupposition,therefore,suchvariationsaremorelikelytodiminishthantoaugmentthevalueofamoneyrent,eventhoughitshouldbestipulatedtobepaid,notinsuchaquantityofcoinedmoneyofsuchadenomination(insomanypoundssterling,forexample),butinsomanyounceseitherofpuresilver,orofsilverofacertainstandard。
Therentswhichhavebeenreservedincornhavepreservedtheirvaluemuchbetterthanthosewhichhavebeenreservedinmoney,evenwherethedenominationofthecoinhasnotbeenaltered。Bythe18thofElizabethitwasenactedthatathirdoftherentofallcollegeleasesshouldbereservedincorn,tobepaid,eitherinkind,oraccordingtothecurrentpricesatthenearestpublicmarket。Themoneyarisingfromthiscornrent,thoughoriginallybutathirdofthewhole,isinthepresenttimes,accordingtoDr。Blackstone,commonlyneardoubleofwhatarisesfromtheothertwo—thirds。Theoldmoneyrentsofcollegesmust,accordingtothisaccount,havesunkalmosttoafourthpartoftheirancientvalue;orareworthlittlemorethanafourthpartofthecornwhichtheywereformerlyworth。ButsincethereignofPhilipandMarythedenominationoftheEnglishcoinhasundergonelittleornoalteration,andthesamenumberofpounds,shillingsandpencehavecontainedverynearlythesamequantityofpuresilver。Thisdegradation,therefore,inthevalueofthemoneyrentsofcolleges,hasarisenaltogetherfromthedegradationinthevalueofsilver。
Whenthedegradationinthevalueofsilveriscombinedwiththediminutionofthequantityofitcontainedinthecoinofthesamedenomination,thelossisfrequentlystillgreater。InScotland,wherethedenominationofthecoinhasundergonemuchgreateralterationsthaniteverdidinEngland,andinFrance,whereithasundergonestillgreaterthaniteverdidinScotland,someancientrents,originallyofconsiderablevalue,haveinthismannerbeenreducedalmosttonothing。
Equalquantitiesoflabourwillatdistanttimesbepurchasedmorenearlywithequalquantitiesofcorn,thesubsistenceofthelabourer,thanwithequalquantitiesofgoldandsilver,orperhapsofanyothercommodity。Equalquantitiesofcorn,therefore,will,atdistanttimes,bemorenearlyofthesamerealvalue,orenablethepossessortopurchaseorcommandmorenearlythesamequantityofthelabourofotherpeople。Theywilldothis,Isay,morenearlythanequalquantitiesofalmostanyothercommodity;forevenequalquantitiesofcornwillnotdoitexactly。Thesubsistenceofthelabourer,ortherealpriceoflabour,asIshallendeavourtoshowhereafter,isverydifferentupondifferentoccasions;moreliberalinasocietyadvancingtoopulencethaninonethatisstandingstill;andinonethatisstandingstillthaninonethatisgoingbackwards。
Everyothercommodity,however,willatanyparticulartimepurchaseagreaterorsmallerquantityoflabourinproportiontothequantityofsubsistencewhichitcanpurchaseatthattime。A
rentthereforereservedincornisliableonlytothevariationsinthequantityoflabourwhichacertainquantityofcorncanpurchase。Butarentreservedinanyothercommodityisliablenotonlytothevariationsinthequantityoflabourwhichanyparticularquantityofcorncanpurchase,buttothevariationsinthequantityofcornwhichcanbepurchasedbyanyparticularquantityofthatcommodity。