Smith puts forward a queer idea—and he stood to it in the _Wealth of Nations_—that what gives occasion to the division of labour is not a perception of the advantage to be gained thereby, but a direct propensity in human nature for one man to barter with another. This love of barter is one of those natural instincts which distinguish us from animals. The division of labour and the material wealth of society are greatly perfected by improvements of communication which extend markets; for division of labour must always be proportioned to extent of commerce. “If ten people only want a certain commodity, the manufacture of it will never be so divided as if a thousand wanted it.” But where communications are bad the cost of transit hinders the distribution of goods. If roads are “deep” or infested with robbers, the progress of commerce is stopped. “Since the mending of roads in England forty or fifty years ago, its opulence has increased extremely.” Water carriage also effectively promotes public opulence; for five or six men will convey three hundred tons by water more quickly than a hundred men with a hundred wagons and six hundred horses can take the same weight by land.[16] A distinction is drawn between the natural and market price of commodities. A man has the natural price of his labour when he has enough to maintain him during its continuance, to defray the cost of his education, and to compensate the risk of failure or of premature death. When a man can get this natural price he will have sufficient encouragement and will produce in proportion to the demand. The market is regulated by the momentary demand for a thing, by its abundance or scarcity. When a thing is very scarce the price depends upon the fortune of the bidders. “As in an auction, if two persons have an equal fondness for a book, he whose fortune is the largest will carry it.” The conclusion drawn from these and other arguments is that whatever “police” (_i.e._ policy) tends to raise the market price above the natural, tends also to diminish public opulence. The cheaper the conveniences of life, the greater is the purchasing power of the poor and the happier will a society be. Any policy which raises and keeps the market price of goods above their natural price, and so raises the national, as it were, above the international price, diminishes the nation’s opulence. This impoverishing policy took various forms, which admitted of a triple classification:— 1. Taxes on industry and necessities. 2. Monopolies. 3. Exclusive privileges of corporations, and combinations, like those of bakers and brewers, which kept the price of bread and beer above the natural level.