An Inquiry into the Nature and Causes of the Wealth of NationsSmith, Adam
History
An Inquiry into the Nature and Causes of the Wealth of Nations
Smith, Adam
Economics
The difference between the apparent profit of the retail and that of the
wholesale trade, is much less in the capital than in small towns and
country villages. Where ten thousand pounds can be employed in the grocery
trade, the wages of the grocer’s labour must be a very trifling addition
to the real profits of so great a stock. The apparent profits of the
wealthy retailer, therefore, are there more nearly upon a level with those
of the wholesale merchant. It is upon this account that goods sold by
retail are generally as cheap, and frequently much cheaper, in the capital
than in small towns and country villages. Grocery goods, for example, are
generally much cheaper; bread and butchers’ meat frequently as cheap. It
costs no more to bring grocery goods to the great town than to the country
village; but it costs a great deal more to bring corn and cattle, as the
greater part of them must be brought from a much greater distance. The
prime cost of grocery goods, therefore, being the same in both places,
they are cheapest where the least profit is charged upon them. The prime
cost of bread and butchers’ meat is greater in the great town than in the
country village; and though the profit is less, therefore they are not
always cheaper there, but often equally cheap. In such articles as bread
and butchers’ meat, the same cause which diminishes apparent profit,
increases prime cost. The extent of the market, by giving employment to
greater stocks, diminishes apparent profit; but by requiring supplies from
a greater distance, it increases prime cost. This diminution of the one
and increase of the other, seem, in most cases, nearly to counterbalance
one another; which is probably the reason that, though the prices of corn
and cattle are commonly very different in different parts of the kingdom,
those of bread and butchers’ meat are generally very nearly the same
through the greater part of it.
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