Mastersofallsorts，therefore，frequentlymakebetterbargainswiththeirservantsindearthanincheapyears，andfindthemmorehumbleanddependentintheformerthaninthelatter。Theynaturally，therefore，commendtheformerasmorefavourabletoindustry。Landlordsandfarmers，besides，twoofthelargestclassesofmasters，haveanotherreasonforbeingpleasedwithdearyears。Therentsoftheoneandtheprofitsoftheotherdependverymuchuponthepriceofprovisions。Nothingcanbemoreabsurd，however，thantoimaginethatmeningeneralshouldworklesswhentheyworkforthemselves，thanwhentheyworkforotherpeople。Apoorindependentworkmanwillgenerallybemoreindustriousthanevenajourneymanwhoworksbythepiece。Theoneenjoysthewholeproduceofhisownindustry;theothersharesitwithhismaster。Theone，inhisseparateindependentstate，islessliabletothetemptationsofbadcompany，whichinlargemanufactoriessofrequentlyruinthemoralsoftheother。Thesuperiorityoftheindependentworkmanoverthoseservantswhoarehiredbythemonthorbytheyear，andwhosewagesandmaintenancearethesamewhethertheydomuchordolittle，islikelytobestillgreater。Cheapyearstendtoincreasetheproportionofindependentworkmentojourneymenandservantsofallkinds，anddearyearstodiminishit。
AFrenchauthorofgreatknowledgeandingenuity，Mr。
Messance，receiverofthetailliesintheelectionofSt。
Etienne，endeavourstoshowthatthepoordomoreworkincheapthanindearyears，bycomparingthequantityandvalueofthegoodsmadeuponthosedifferentoccasionsinthreedifferentmanufactures;oneofcoarsewoollenscarriedonatElbeuf;oneoflinen，andanotherofsilk，bothwhichextendthroughthewholegeneralityofRouen。Itappearsfromhisaccount，whichiscopiedfromtheregistersofthepublicoffices，thatthequantityandvalueofthegoodsmadeinallthosethreemanufactureshasgenerallybeengreaterincheapthanindearyears;andthatithasalwaysbeengreatestinthecheapest，andleastinthedearestyears。Allthethreeseemtobestationarymanufactures，orwhich，thoughtheirproducemayvarysomewhatfromyeartoyear，areuponthewholeneithergoingbackwardsnorforwards。
ThemanufactureoflineninScotland，andthatofcoarsewoollensintheWestRidingofYorkshire，aregrowingmanufactures，ofwhichtheproduceisgenerally，thoughwithsomevariations，increasingbothinquantityandvalue。Uponexamining，however，theaccountswhichhavebeenpublishedoftheirannualproduce，Ihavenotbeenabletoobservethatitsvariationshavehadanysensibleconnectionwiththedearnessorcheapnessoftheseasons。In1740，ayearofgreatscarcity，bothmanufactures，indeed，appeartohavedeclinedveryconsiderably。
Butin1756，anotheryearofgreatscarcity，theScotchmanufacturemademorethanordinaryadvances。TheYorkshiremanufacture，indeed，declined，anditsproducedidnotrisetowhatithadbeenin1755till1766，aftertherepealoftheAmericanStampAct。Inthatandthefollowingyearitgreatlyexceededwhatithadeverbeenbefore，andithascontinuedtoadvanceeversince。
Theproduceofallgreatmanufacturesfordistantsalemustnecessarilydepend，notsomuchuponthedearnessorcheapnessoftheseasonsinthecountrieswheretheyarecarriedonasuponthecircumstanceswhichaffectthedemandinthecountrieswheretheyareconsumed;uponpeaceorwar，upontheprosperityordeclensionofotherrivalmanufactures，anduponthegoodorbadhumouroftheirprincipalcustomers。Agreatpartoftheextraordinarywork，besides，whichisprobablydoneincheapyears，neverentersthepublicregistersofmanufactures。Themenservantswholeavetheirmastersbecomeindependentlabourers。
Thewomenreturntotheirparents，andcommonlyspininordertomakeclothesforthemselvesandtheirfamilies。Eventheindependentworkmendonotalwaysworkforpublicsale，butareemployedbysomeoftheirneighboursinmanufacturesforfamilyuse。Theproduceoftheirlabour，therefore，frequentlymakesnofigureinthosepublicregistersofwhichtherecordsaresometimespublishedwithsomuchparade，andfromwhichourmerchantsandmanufacturerswouldoftenvainlypretendtoannouncetheprosperityordeclensionofthegreatestempires。
Thoughthevariationsinthepriceoflabournotonlydonotalwayscorrespondwiththoseinthepriceofprovisions，butarefrequentlyquiteopposite，wemustnot，uponthisaccount，imaginethatthepriceofprovisionshasnoinfluenceuponthatoflabour。Themoneypriceoflabourisnecessarilyregulatedbytwocircumstances;thedemandforlabour，andthepriceofthenecessariesandconveniencesoflife。Thedemandforlabour，accordingasithappenstobeincreasing，stationary，ordeclining，ortorequireanincreasing，stationary，ordecliningpopulation，determinesthequantityofthenecessariesandconvenienciesoflifewhichmustbegiventothelabourer;andthemoneypriceoflabourisdeterminedbywhatisrequisiteforpurchasingthisquantity。Thoughthemoneypriceoflabour，therefore，issometimeshighwherethepriceofprovisionsislow，itwouldbestillhigher，thedemandcontinuingthesame，ifthepriceofprovisionswashigh。
Itisbecausethedemandforlabourincreasesinyearsofsuddenandextraordinaryplenty，anddiminishesinthoseofsuddenandextraordinaryscarcity，thatthemoneypriceoflaboursometimesrisesintheoneandsinksintheother。
Inayearofsuddenandextraordinaryplenty，therearefundsinthehandsofmanyoftheemployersofindustrysufficienttomaintainandemployagreaternumberofindustriouspeoplethanhadbeenemployedtheyearbefore;andthisextraordinarynumbercannotalwaysbehad。Thosemasters，therefore，whowantmoreworkmenbidagainstoneanother，inordertogetthem，whichsometimesraisesboththerealandthemoneypriceoftheirlabour。
Thecontraryofthishappensinayearofsuddenandextraordinaryscarcity。Thefundsdestinedforemployingindustryarelessthantheyhadbeentheyearbefore。Aconsiderablenumberofpeoplearethrownoutofemployment，whobidagainstoneanother，inordertogetit，whichsometimeslowersboththerealandthemoneypriceoflabour。In1740，ayearofextraordinaryscarcity，manypeoplewerewillingtoworkforbaresubsistence。Inthesucceedingyearsofplenty，itwasmoredifficulttogetlabourersandservants。
Thescarcityofadearyear，bydiminishingthedemandforlabour，tendstoloweritsprice，asthehighpriceofprovisionstendstoraiseit。Theplentyofacheapyear，onthecontrary，byincreasingthedemand，tendstoraisethepriceoflabour，asthecheapnessofprovisionstendstolowerit。Intheordinaryvariationsofthepriceofprovisionsthosetwooppositecausesseemtocounterbalanceoneanother，whichisprobablyinpartthereasonwhythewagesoflabourareeverywheresomuchmoresteadyandpermanentthanthepriceofprovisions。
Theincreaseinthewagesoflabournecessarilyincreasesthepriceofmanycommodities，byincreasingthatpartofitwhichresolvesitselfintowages，andsofartendstodiminishtheirconsumptionbothathomeandabroad。Thesamecause，however，whichraisesthewagesoflabour，theincreaseofstock，tendstoincreaseitsproductivepowers，andtomakeasmallerquantityoflabourproduceagreaterquantityofwork。Theownerofthestockwhichemploysagreatnumberoflabourers，necessarilyendeavours，forhisownadvantage，tomakesuchaproperdivisionanddistributionofemploymentthattheymaybeenabledtoproducethegreatestquantityofworkpossible。Forthesamereason，heendeavourstosupplythemwiththebestmachinerywhicheitherheortheycanthinkof。Whattakesplaceamongthelabourersinaparticularworkhousetakesplace，forthesamereason，amongthoseofagreatsociety。Thegreatertheirnumber，themoretheynaturallydividethemselvesintodifferentclassesandsubdivisionsofemployment。Moreheadsareoccupiedininventingthemostpropermachineryforexecutingtheworkofeach，anditis，therefore，morelikelytobeinvented。
Therearemanycommodities，therefore，which，inconsequenceoftheseimprovements，cometobeproducedbysomuchlesslabourthanbeforethattheincreaseofitspriceismorethancompensatedbythediminutionofitsquantity。
CHAPTERIX
OftheProfitsofStockTHEriseandfallintheprofitsofstockdependuponthesamecauseswiththeriseandfallinthewagesoflabour，theincreasingordecliningstateofthewealthofthesociety;butthosecausesaffecttheoneandtheotherverydifferently。
Theincreaseofstock，whichraiseswages，tendstolowerprofit。Whenthestocksofmanyrichmerchantsareturnedintothesametrade，theirmutualcompetitionnaturallytendstoloweritsprofit;andwhenthereisalikeincreaseofstockinallthedifferenttradescarriedoninthesamesociety，thesamecompetitionmustproducethesameeffectinthemall。
Itisnoteasy，ithasalreadybeenobserved，toascertainwhataretheaveragewagesoflaboureveninaparticularplace，andataparticulartime。Wecan，eveninthiscase，seldomdeterminemorethanwhatarethemostusualwages。Buteventhiscanseldombedonewithregardtotheprofitsofstock。Profitissoveryfluctuatingthatthepersonwhocarriesonaparticulartradecannotalwaystellyouhimselfwhatistheaverageofhisannualprofit。Itisaffectednotonlybyeveryvariationofpriceinthecommoditieswhichhedealsin，butbythegoodorbadfortunebothofhisrivalsandofhiscustomers，andbyathousandotheraccidentstowhichgoodswhencarriedeitherbyseaorbyland，orevenwhenstoredinawarehouse，areliable。
Itvaries，therefore，notonlyfromyeartoyear，butfromdaytoday，andalmostfromhourtohour。Toascertainwhatistheaverageprofitofallthedifferenttradescarriedoninagreatkingdommustbemuchmoredifficult;andtojudgeofwhatitmayhavebeenformerly，orinremoteperiodsoftime，withanydegreeofprecision，mustbealtogetherimpossible。
Butthoughitmaybeimpossibletodetermine，withanydegreeofprecision，whatareorweretheaverageprofitsofstock，eitherinthepresentorinancienttimes，somenotionmaybeformedofthemfromtheinterestofmoney。Itmaybelaiddownasamaxim，thatwhereveragreatdealcanbemadebytheuseofmoney，agreatdealwillcommonlybegivenfortheuseofit;andthatwhereverlittlecanbemadebyit，lesswillcommonlybegivenforit。According，therefore，astheusualmarketrateofinterestvariesinanycountry，wemaybeassuredthattheordinaryprofitsofstockmustvarywithit，mustsinkasitsinks，andriseasitrises。Theprogressofinterest，therefore，mayleadustoformsomenotionoftheprogressofprofit。
Bythe37thofHenryVIIIallinterestabovetenpercentwasdeclaredunlawful。More，itseems，hadsometimesbeentakenbeforethat。InthereignofEdwardVIreligiouszealprohibitedallinterest。Thisprohibition，however，likeallothersofthesamekind，issaidtohaveproducednoeffect，andprobablyratherincreasedthandiminishedtheevilofusury。ThestatuteofHenryVIIIwasrevivedbythe13thofElizabeth，c。8，andtenpercentcontinuedtobethelegalrateofinteresttillthe21stofJamesI，whenitwasrestrictedtoeightpercent。ItwasreducedtosixpercentsoonaftertheRestoration，andbythe12thofQueenAnnetofivepercent。Allthesedifferentstatutoryregulationsseemtohavebeenmadewithgreatpropriety。Theyseemtohavefollowedandnottohavegonebeforethemarketrateofinterest，ortherateatwhichpeopleofgoodcreditusuallyborrowed。SincethetimeofQueenAnne，fivepercentseemstohavebeenratherabovethanbelowthemarketrate。
Beforethelatewar，thegovernmentborrowedatthreepercent;
andpeopleofgoodcreditinthecapital，andinmanyotherpartsofthekingdom，atthreeandahalf，four，andfourandahalfpercent。
SincethetimeofHenryVIIIthewealthandrevenueofthecountryhavebeencontinuallyadvancing，and，inthecourseoftheirprogress，theirpaceseemsrathertohavebeengraduallyacceleratedthanretarded。Theyseemnotonlytohavebeengoingon，buttohavebeengoingonfasterandfaster。Thewagesoflabourhavebeencontinuallyincreasingduringthesameperiod，andinthegreaterpartofthedifferentbranchesoftradeandmanufacturestheprofitsofstockhavebeendiminishing。
Itgenerallyrequiresagreaterstocktocarryonanysortoftradeinagreattownthaninacountryvillage。Thegreatstocksemployedineverybranchoftrade，andthenumberofrichcompetitors，generallyreducetherateofprofitintheformerbelowwhatitisinthelatterButthewagesoflabouraregenerallyhigherinagreattownthaninacountryvillage。Inathrivingtownthepeoplewhohavegreatstockstoemployfrequentlycannotgetthenumberofworkmentheywant，andthereforebidagainstoneanotherinordertogetasmanyastheycan，whichraisesthewagesoflabour，andlowerstheprofitsofstock。Intheremotepartsofthecountrythereisfrequentlynotstocksufficienttoemployallthepeople，whothereforebidagainstoneanotherinordertogetemployment，whichlowersthewagesoflabourandraisestheprofitsofstock。
InScotland，thoughthelegalrateofinterestisthesameasinEngland，themarketrateisratherhigher。Peopleofthebestcreditthereseldomborrowunderfivepercent。EvenprivatebankersinEdinburghgivefourpercentupontheirpromissorynotes，ofwhichpaymenteitherinwholeorinpartmaybedemandedatpleasure。PrivatebankersinLondongivenointerestforthemoneywhichisdepositedwiththem。TherearefewtradeswhichcannotbecarriedonwithasmallerstockinScotlandthaninEngland。Thecommonrateofprofit，therefore，mustbesomewhatgreater。Thewagesoflabour，ithasalreadybeenobserved，arelowerinScotlandthaninEngland。Thecountry，too，isnotonlymuchpoorer，butthestepsbywhichitadvancestoabettercondition，foritisevidentlyadvancing，seemtobemuchslowerandmoretardy。
ThelegalrateofinterestinFrancehasnot，duringthecourseofthepresentcentury，beenalwaysregulatedbythemarketrate。In1720interestwasreducedfromthetwentiethtothefiftiethpenny，orfromfivetotwopercent。In1724itwasraisedtothethirtiethpenny，orto31/3percent。In1725itwasagainraisedtothetwentiethpenny，ortofivepercent。In1766，duringtheadministrationofMr。Laverdy，itwasreducedtothetwenty—fifthpenny，ortofourpercent。TheAbbeTerrayraiseditafterwardstotheoldrateoffivepercent。Thesupposedpurposeofmanyofthoseviolentreductionsofinterestwastopreparethewayforreducingthatofthepublicdebts;apurposewhichhassometimesbeenexecuted。FranceisperhapsinthepresenttimesnotsorichacountryasEngland;andthoughthelegalrateofinteresthasinFrancefrequentlybeenlowerthaninEngland，themarketratehasgenerallybeenhigher;forthere，asinothercountries，theyhaveseveralverysafeandeasymethodsofevadingthelaw。Theprofitsoftrade，IhavebeenassuredbyBritishmerchantswhohadtradedinbothcountries，arehigherinFrancethaninEngland;anditisnodoubtuponthisaccountthatmanyBritishsubjectschooserathertoemploytheircapitalsinacountrywheretradeisindisgrace，thaninonewhereitishighlyrespected。ThewagesoflabourarelowerinFrancethaninEngland。WhenyougofromScotlandtoEngland，thedifferencewhichyoumayremarkbetweenthedressandcountenanceofthecommonpeopleintheonecountryandintheothersufficientlyindicatesthedifferenceintheircondition。ThecontrastisstillgreaterwhenyoureturnfromFrance。France，thoughnodoubtarichercountrythanScotland，seemsnottobegoingforwardsofast。Itisacommonandevenapopularopinioninthecountrythatitisgoingbackwards;anopinionwhich，apprehend，isillfoundedevenwithregardtoFrance，butwhichnobodycanpossiblyentertainwithregardtoScotland，whoseesthecountrynow，andwhosawittwentyorthirtyyearsago。
TheprovinceofHolland，ontheotherhand，inproportiontotheextentofitsterritoryandthenumberofitspeople，isarichercountrythanEngland。Thegovernmentthereborrowsattwopercent，andprivatepeopleofgoodcreditatthree。ThewagesoflabouraresaidtobehigherinHollandthaninEngland，andtheDutch，itiswellknown，tradeuponlowerprofitsthananypeopleinEurope。ThetradeofHolland，ithasbeenpretendedbysomepeople，isdecaying，anditmayperhapsbetruesomeparticularbranchesofitareso。Butthesesymptomsseemtoindicatesufficientlythatthereisnogeneraldecay。Whenprofitdiminishes，merchantsareveryapttocomplainthattradedecays;
thoughthediminutionofprofitisthenaturaleffectofitsprosperity，orofagreaterstockbeingemployedinitthanbefore。DuringthelatewartheDutchgainedthewholecarryingtradeofFrance，ofwhichtheystillretainaverylargeshare。
ThegreatpropertywhichtheypossessbothintheFrenchandEnglishfunds，aboutfortymillions，itissaid，inthelatter（inwhichIsuspect，however，thereisaconsiderableexaggeration）;thegreatsumswhichtheylendtoprivatepeopleincountrieswheretherateofinterestishigherthanintheirown，arecircumstanceswhichnodoubtdemonstratetheredundancyoftheirstock，orthatithasincreasedbeyondwhattheycanemploywithtolerableprofitintheproperbusinessoftheirowncountry:buttheydonotdemonstratethatthathasdecreased。Asthecapitalofaprivateman，thoughacquiredbyaparticulartrade，mayincreasebeyondwhathecanemployinit，andyetthattradecontinuetoincreasetoo;somaylikewisethecapitalofagreatnation。
InourNorthAmericanandWestIndiancolonies，notonlythewagesoflabour，buttheinterestofmoney，andconsequentlytheprofitsofstock，arehigherthaninEngland。Inthedifferentcoloniesboththelegalandthemarketrateofinterestrunfromsixtoeightpercent。Highwagesoflabourandhighprofitsofstock，however，arethings，perhaps，whichscarceevergotogether，exceptinthepeculiarcircumstancesofnewcolonies。A
newcolonymustalwaysforsometimebemoreunderstockedinproportiontotheextentofitsterritory，andmoreunderpeopledinproportiontotheextentofitsstock，thanthegreaterpartofothercountries。Theyhavemorelandthantheyhavestocktocultivate。Whattheyhave，therefore，isappliedtothecultivationonlyofwhatismostfertileandmostfavourablysituated，thelandneartheseashore，andalongthebanksofnavigablerivers。Suchland，too，isfrequentlypurchasedatapricebelowthevalueevenofitsnaturalproduce。Stockemployedinthepurchaseandimprovementofsuchlandsmustyieldaverylargeprofit，andconsequentlyaffordtopayaverylargeinterest。Itsrapidaccumulationinsoprofitableanemploymentenablestheplantertoincreasethenumberofhishandsfasterthanhecanfindtheminanewsettlement。Thosewhomhecanfind，therefore，areveryliberallyrewarded。Asthecolonyincreases，theprofitsofstockgraduallydiminish。Whenthemostfertileandbestsituatedlandshavebeenalloccupied，lessprofitcanbemadebythecultivationofwhatisinferiorbothinsoilandsituation，andlessinterestcanbeaffordedforthestockwhichissoemployed。Inthegreaterpartofourcolonies，accordingly，boththelegalandthemarketrateofinteresthavebeenconsiderablyreducedduringthecourseofthepresentcentury。Asriches，improvement，andpopulationhaveincreased，interesthasdeclined。Thewagesoflabourdonotsinkwiththeprofitsofstock。Thedemandforlabourincreaseswiththeincreaseofstockwhateverbeitsprofits;andafterthesearediminished，stockmaynotonlycontinuetoincrease，buttoincreasemuchfasterthanbefore。Itiswithindustriousnationswhoareadvancingintheacquisitionofrichesaswithindustriousindividuals。Agreatstock，thoughwithsmallprofits，generallyincreasesfasterthanasmallstockwithgreatprofits。Money，saystheproverb，makesmoney。Whenyouhavegotalittle，itisofteneasytogetmore。Thegreatdifficultyistogetthatlittle。Theconnectionbetweentheincreaseofstockandthatofindustry，orofthedemandforusefullabour，haspartlybeenexplainedalready，butwillbeexplainedmorefullyhereafterintreatingoftheaccumulationofstock。
Theacquisitionofnewterritory，orofnewbranchesoftrade，maysometimesraisetheprofitsofstock，andwiththemtheinterestofmoney，eveninacountrywhichisfastadvancingintheacquisitionofriches。Thestockofthecountrynotbeingsufficientforthewholeaccessionofbusiness，whichsuchacquisitionspresenttothedifferentpeopleamongwhomitisdivided，isappliedtothoseparticularbranchesonlywhichaffordthegreatestprofit。Partofwhathadbeforebeenemployedinothertradesisnecessarilywithdrawnfromthem，andturnedintosomeofthenewandmoreprofitableones。Inallthoseoldtrades，therefore，thecompetitioncomestobelessthanbefore。
Themarketcomestobelessfullysuppliedwithmanydifferentsortsofgoods。Theirpricenecessarilyrisesmoreorless，andyieldsagreaterprofittothosewhodealinthem，whocan，therefore，affordtoborrowatahigherinterest。Forsometimeaftertheconclusionofthelatewar，notonlyprivatepeopleofthebestcredit，butsomeofthegreatestcompaniesinLondon，commonlyborrowedatfivepercent，whobeforethathadnotbeenusedtopaymorethanfour，andfourandahalfpercent。Thegreataccessionbothofterritoryandtrade，byouracquisitionsinNorthAmericaandtheWestIndies，willsufficientlyaccountforthis，withoutsupposinganydiminutioninthecapitalstockofthesociety。Sogreatanaccessionofnewbusinesstobecarriedonbytheoldstockmustnecessarilyhavediminishedthequantityemployedinagreatnumberofparticularbranches，inwhichthecompetitionbeingless，theprofitsmusthavebeengreater。IshallhereafterhaveoccasiontomentionthereasonswhichdisposemetobelievethatthecapitalstockofGreatBritainwasnotdiminishedevenbytheenormousexpenseofthelatewar。
Thediminutionofthecapitalstockofthesociety，orofthefundsdestinedforthemaintenanceofindustry，however，asitlowersthewagesoflabour，soitraisestheprofitsofstock，andconsequentlytheinterestofmoney。Bythewagesoflabourbeinglowered，theownersofwhatstockremainsinthesocietycanbringtheirgoodsatlessexpensetomarketthanbefore，andlessstockbeingemployedinsupplyingthemarketthanbefore，theycansellthemdearer。Theirgoodscostthemless，andtheygetmoreforthem。Theirprofits，therefore，beingaugmentedatbothends，canwellaffordalargeinterest。ThegreatfortunessosuddenlyandsoeasilyacquiredinBengalandtheotherBritishsettlementsintheEastIndiesmaysatisfyusthat，asthewagesoflabourareverylow，sotheprofitsofstockareveryhighinthoseruinedcountries。Theinterestofmoneyisproportionablyso。InBengal，moneyisfrequentlylenttothefarmersatforty，fifty，andsixtypercentandthesucceedingcropismortgagedforthepayment。Astheprofitswhichcanaffordsuchaninterestmusteatupalmostthewholerentofthelandlord，sosuchenormoususurymustinitsturneatupthegreaterpartofthoseprofits。BeforethefalloftheRomanrepublic，ausuryofthesamekindseemstohavebeencommonintheprovinces，undertheruinousadministrationoftheirproconsuls。ThevirtuousBrutuslentmoneyinCyprusateight—and—fortypercentaswelearnfromthelettersofCicero。
Inacountrywhichhadacquiredthatfullcomplementofricheswhichthenatureofitssoilandclimate，anditssituationwithrespecttoothercountries，allowedittoacquire;
whichcould，therefore，advancenofurther，andwhichwasnotgoingbackwards，boththewagesoflabourandtheprofitsofstockwouldprobablybeverylow。Inacountryfullypeopledinproportiontowhateitheritsterritorycouldmaintainoritsstockemploy，thecompetitionforemploymentwouldnecessarilybesogreatastoreducethewagesoflabourtowhatwasbarelysufficienttokeepupthenumberoflabourers，and，thecountrybeingalreadyfullypeopled，thatnumbercouldneverbeaugmented。Inacountryfullystockedinproportiontoallthebusinessithadtotransact，asgreataquantityofstockwouldbeemployedineveryparticularbranchasthenatureandextentofthetradewouldadmit。Thecompetition，therefore，wouldeverywherebeasgreat，andconsequentlytheordinaryprofitaslowaspossible。
Butperhapsnocountryhaseveryetarrivedatthisdegreeofopulence。Chinaseemstohavebeenlongstationary，andhadprobablylongagoacquiredthatfullcomplementofricheswhichisconsistentwiththenatureofitslawsandinstitutions。Butthiscomplementmaybemuchinferiortowhat，withotherlawsandinstitutions，thenatureofitssoil，climate，andsituationmightadmitof。Acountrywhichneglectsordespisesforeigncommerce，andwhichadmitsthevesselsofforeignnationsintooneortwoofitsportsonly，cannottransactthesamequantityofbusinesswhichitmightdowithdifferentlawsandinstitutions。Inacountrytoo，where，thoughtherichortheownersoflargecapitalsenjoyagooddealofsecurity，thepoorortheownersofsmallcapitalsenjoyscarceany，butareliable，underthepretenceofjustice，tobepillagedandplunderedatanytimebytheinferiormandarins，thequantityofstockemployedinallthedifferentbranchesofbusinesstransactedwithinitcanneverbeequaltowhatthenatureandextentofthatbusinessmightadmit。Ineverydifferentbranch，theoppressionofthepoormustestablishthemonopolyoftherich，who，byengrossingthewholetradetothemselves，willbeabletomakeverylargeprofits。TwelvepercentaccordinglyissaidtobethecommoninterestofmoneyinChina，andtheordinaryprofitsofstockmustbesufficienttoaffordthislargeinterest。
Adefectinthelawmaysometimesraisetherateofinterestconsiderablyabovewhattheconditionofthecountry，astowealthorpoverty，wouldrequire。Whenthelawdoesnotenforcetheperformanceofcontracts，itputsallborrowersnearlyuponthesamefootingwithbankruptsorpeopleofdoubtfulcreditinbetterregulatedcountries。Theuncertaintyofrecoveringhismoneymakesthelenderexactthesameusuriousinterestwhichisusuallyrequiredfrombankrupts。AmongthebarbarousnationswhooverranthewesternprovincesoftheRomanempire，theperformanceofcontractswasleftformanyagestothefaithofthecontractingparties。Thecourtsofjusticeoftheirkingsseldomintermeddledinit。Thehighrateofinterestwhichtookplaceinthoseancienttimesmayperhapsbepartlyaccountedforfromthiscause。
Whenthelawprohibitsinterestaltogether，itdoesnotpreventit。Manypeoplemustborrow，andnobodywilllendwithoutsuchaconsiderationfortheuseoftheirmoneyasissuitablenotonlytowhatcanbemadebytheuseofit，buttothedifficultyanddangerofevadingthelaw。ThehighrateofinterestamongallMahometannationsisaccountedforbyMr。
Montesquieu，notfromtheirpoverty，butpartlyfromthis，andpartlyfromthedifficultyofrecoveringthemoney。
Thelowestordinaryrateofprofitmustalwaysbesomethingmorethanwhatissufficienttocompensatetheoccasionallossestowhicheveryemploymentofstockisexposed。Itisthissurplusonlywhichisneatorclearprofit。Whatiscalledgrossprofitcomprehendsfrequently，notonlythissurplus，butwhatisretainedforcompensatingsuchextraordinarylosses。Theinterestwhichtheborrowercanaffordtopayisinproportiontotheclearprofitonly。
Thelowestordinaryrateofinterestmust，inthesamemanner，besomethingmorethansufficienttocompensatetheoccasionallossestowhichlending，evenwithtolerableprudence，isexposed。Wereitnotmore，charityorfriendshipcouldbetheonlymotiveforlending。
Inacountrywhichhadacquireditsfullcomplementofriches，whereineveryparticularbranchofbusinesstherewasthegreatestquantityofstockthatcouldbeemployedinit，astheordinaryrateofclearprofitwouldbeverysmall，sotheusualmarketrateofinterestwhichcouldbeaffordedoutofitwouldbesolowastorenderitimpossibleforanybuttheverywealthiestpeopletoliveupontheinterestoftheirmoney。Allpeopleofsmallormiddlingfortuneswouldbeobligedtosuperintendthemselvestheemploymentoftheirownstocks。Itwouldbenecessarythatalmosteverymanshouldbeamanofbusiness，orengageinsomesortoftrade。TheprovinceofHollandseemstobeapproachingneartothisstate。Itisthereunfashionablenottobeamanofbusiness。Necessitymakesitusualforalmosteverymantobeso，andcustomeverywhereregulatesfashion。Asitisridiculousnottodress，soisit，insomemeasure，nottobeemployed，likeotherpeople。Asamanofacivilprofessionseemsawkwardinacamporagarrison，andiseveninsomedangerofbeingdespisedthere，sodoesanidlemanamongmenofbusiness。
Thehighestordinaryrateofprofitmaybesuchas，inthepriceofthegreaterpartofcommodities，eatsupthewholeofwhatshouldgototherentoftheland，andleavesonlywhatissufficienttopaythelabourofpreparingandbringingthemtomarket，accordingtothelowestrateatwhichlabourcananywherebepaid，thebaresubsistenceofthelabourer。Theworkmanmustalwayshavebeenfedinsomewayorotherwhilehewasaboutthework;butthelandlordmaynotalwayshavebeenpaid。TheprofitsofthetradewhichtheservantsoftheEastIndiaCompanycarryoninBengalmaynotperhapsbeveryfarfromthisrate。
Theproportionwhichtheusualmarketrateofinterestoughttobeartotheordinaryrateofclearprofit，necessarilyvariesasprofitrisesorfalls。DoubleinterestisinGreatBritainreckonedwhatthemerchantscallagood，moderate，reasonableprofit;termswhichIapprehendmeannomorethanacommonandusualprofit。Inacountrywheretheordinaryrateofclearprofitiseightortenpercent，itmaybereasonablethatonehalfofitshouldgotointerest，whereverbusinessiscarriedonwithborrowedmoney。Thestockisattheriskoftheborrower，who，asitwere，insuresittothelender;andfourorfivepercentmay，inthegreaterpartoftrades，bebothasufficientprofitupontheriskofthisinsurance，andasufficientrecompenseforthetroubleofemployingthestock。Buttheproportionbetweeninterestandclearprofitmightnotbethesameincountrieswheretheordinaryrateofprofitwaseitheragooddeallower，oragooddealhigher。Ifitwereagooddeallower，onehalfofitperhapscouldnotbeaffordedforinterest;
andmoremightbeaffordedifitwereagooddealhigher。
Incountrieswhicharefastadvancingtoriches，thelowrateofprofitmay，inthepriceofmanycommodities，compensatethehighwagesoflabour，andenablethosecountriestosellascheapastheirlessthrivingneighbours，amongwhomthewagesoflabourmaybelower。
Inrealityhighprofitstendmuchmoretoraisethepriceofworkthanhighwages。Ifinthelinenmanufacture，forexample，thewagesofthedifferentworkingpeople，theflax—dressers，thespinners，theweavers，etc。，should，allofthem，beadvancedtwopenceaday;itwouldbenecessarytoheightenthepriceofapieceoflinenonlybyanumberoftwopencesequaltothenumberofpeoplethathadbeenemployedaboutit，multipliedbythenumberofdaysduringwhichtheyhadbeensoemployed。Thatpartofthepriceofthecommoditywhichresolveditselfintowageswould，throughallthedifferentstagesofthemanufacture，riseonlyinarithmeticalproportiontothisriseofwages。Butiftheprofitsofallthedifferentemployersofthoseworkingpeopleshouldberaisedfivepercent，thatpartofthepriceofthecommoditywhichresolveditselfintoprofitwould，throughallthedifferentstagesofthemanufacture，riseingeometricalproportiontothisriseofprofit。Theemployeroftheflaxdresserswouldinsellinghisflaxrequireanadditionalfivepercentuponthewholevalueofthematerialsandwageswhichheadvancedtohisworkmen。Theemployerofthespinnerswouldrequireanadditionalfivepercentbothupontheadvancedpriceoftheflaxanduponthewagesofthespinners。Andtheemployeroftheweaverswouldrequirealikefivepercentbothupontheadvancedpriceofthelinenyarnanduponthewagesoftheweavers。Inraisingthepriceofcommoditiestheriseofwagesoperatesinthesamemannerassimpleinterestdoesintheaccumulationofdebt。Theriseofprofitoperateslikecompoundinterest。Ourmerchantsandmaster—manufacturerscomplainmuchofthebadeffectsofhighwagesinraisingtheprice，andtherebylesseningthesaleoftheirgoodsbothathomeandabroad。Theysaynothingconcerningthebadeffectsofhighprofits。Theyaresilentwithregardtotheperniciouseffectsoftheirowngains。
Theycomplainonlyofthoseofotherpeople。
CHAPTERX
OfWagesandProfitinthedifferentEmploymentsofLabourandStockTHEwholeoftheadvantagesanddisadvantagesofthedifferentemploymentsoflabourandstockmust，inthesameneighbourhood，beeitherperfectlyequalorcontinuallytendingtoequality。Ifinthesameneighbourhood，therewasanyemploymentevidentlyeithermoreorlessadvantageousthantherest，somanypeoplewouldcrowdintoitintheonecase，andsomanywoulddesertitintheother，thatitsadvantageswouldsoonreturntothelevelofotheremployments。Thisatleastwouldbethecaseinasocietywherethingswerelefttofollowtheirnaturalcourse，wheretherewasperfectliberty，andwhereeverymanwasperfectlyfreebothtochoosewhatoccupationhethoughtproper，andtochangeitasoftenashethoughtproper。Everyman’sinterestwouldprompthimtoseektheadvantageous，andtoshunthedisadvantageousemployment。
Pecuniarywagesandprofit，indeed，areeverywhereinEuropeextremelydifferentaccordingtothedifferentemploymentsoflabourandstock。Butthisdifferencearisespartlyfromcertaincircumstancesintheemploymentsthemselves，which，eitherreally，oratleastintheimaginationsofmen，makeupforasmallpecuniarygaininsome，andcounterbalanceagreatoneinothers;andpartlyfromthepolicyofEurope，whichnowhereleavesthingsatperfectliberty。
Theparticularconsiderationofthosecircumstancesandofthatpolicywilldividethischapterintotwoparts。
PART1InequalitiesarisingfromtheNatureoftheEmploymentsthemselvesTHEfivefollowingaretheprincipalcircumstanceswhich，sofarasIhavebeenabletoobserve，makeupforasmallpecuniarygaininsomeemployments，andcounterbalanceagreatoneinothers:first，theagreeablenessordisagreeablenessoftheemploymentsthemselves;secondly，theeasinessandcheapness，orthedifficultyandexpenseoflearningthem;thirdly，theconstancyorinconstancyofemploymentinthem;fourthly，thesmallorgreattrustwhichmustbereposedinthosewhoexercisethem;and，fifthly，theprobabilityorimprobabilityofsuccessinthem。
First，thewagesoflabourvarywiththeeaseorhardship，thecleanlinessordirtiness，thehonourablenessordishonourablenessoftheemployment。Thusinmostplaces，taketheyearround，ajourneymantailorearnslessthanajourneymanweaver。Hisworkismucheasier。Ajourneymanweaverearnslessthanajourneymansmith。Hisworkisnotalwayseasier，butitismuchcleanlier。Ajourneymanblacksmith，thoughanartificer，seldomearnssomuchintwelvehoursasacollier，whoisonlyalabourer，doesineight。Hisworkisnotquitesodirty，islessdangerous，andiscarriedonindaylight，andaboveground。
Honourmakesagreatpartoftherewardofallhonourableprofessions。Inpointofpecuniarygain，allthingsconsidered，theyaregenerallyunder—recompensed，asIshallendeavourtoshowbyandby。Disgracehasthecontraryeffect。Thetradeofabutcherisabrutalandanodiousbusiness;butitisinmostplacesmoreprofitablethanthegreaterpartofcommontrades。