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
That rise in the real price of those parts of the rude produce of land,
which is first the effect of the extended improvement and cultivation, and
afterwards the cause of their being still further extended, the rise in
the price of cattle, for example, tends, too, to raise the rent of land
directly, and in a still greater proportion. The real value of the
landlord’s share, his real command of the labour of other people, not only
rises with the real value of the produce, but the proportion of his share
to the whole produce rises with it.
That produce, after the rise in its real price, requires no more labour to
collect it than before. A smaller proportion of it will, therefore, be
sufficient to replace, with the ordinary profit, the stock which employs
that labour. A greater proportion of it must consequently belong to the
landlord.
All those improvements in the productive powers of labour, which tend
directly to reduce the rent price of manufactures, tend indirectly to
raise the real rent of land. The landlord exchanges that part of his rude
produce, which is over and above his own consumption, or, what comes to
the same thing, the price of that part of it, for manufactured produce.
Whatever reduces the real price of the latter, raises that of the former.
An equal quantity of the former becomes thereby equivalent to a greater
quantity of the latter; and the landlord is enabled to purchase a greater
quantity of the conveniencies, ornaments, or luxuries which he has
occasion for.
Every increase in the real wealth of the society, every increase in the
quantity of useful labour employed within it, tends indirectly to raise
the real rent of land. A certain proportion of this labour naturally goes
to the land. A greater number of men and cattle are employed in its
cultivation, the produce increases with the increase of the stock which is
thus employed in raising it, and the rent increases with the produce.
The contrary circumstances, the neglect of cultivation and improvement,
the fall in the real price of any part of the rude produce of land, the
rise in the real price of manufactures from the decay of manufacturing art
and industry, the declension of the real wealth of the society, all tend,
on the other hand, to lower the real rent of land, to reduce the real
wealth of the landlord, to diminish his power of purchasing either the
labour, or the produce of the labour, of other people.
Public-domain text, read in full here on John Shaqi.
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