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
In the price of corn, for example, one part pays the rent of the landlord,
another pays the wages or maintenance of the labourers and labouring
cattle employed in producing it, and the third pays the profit of the
farmer. These three parts seem either immediately or ultimately to make up
the whole price of corn. A fourth part, it may perhaps be thought is
necessary for replacing the stock of the farmer, or for compensating the
wear and tear of his labouring cattle, and other instruments of husbandry.
But it must be considered, that the price of any instrument of husbandry,
such as a labouring horse, is itself made up of the same time parts; the
rent of the land upon which he is reared, the labour of tending and
rearing him, and the profits of the farmer, who advances both the rent of
this land, and the wages of this labour. Though the price of the corn,
therefore, may pay the price as well as the maintenance of the horse, the
whole price still resolves itself, either immediately or ultimately, into
the same three parts of rent, labour, and profit.
In the price of flour or meal, we must add to the price of the corn, the
profits of the miller, and the wages of his servants; in the price of
bread, the profits of the baker, and the wages of his servants; and in the
price of both, the labour of transporting the corn from the house of the
farmer to that of the miller, and from that of the miller to that of the
baker, together with the profits of those who advance the wages of that
labour.
The price of flax resolves itself into the same three parts as that of
corn. In the price of linen we must add to this price the wages of the
flax-dresser, of the spinner, of the weaver, of the bleacher, etc.
together with the profits of their respective employers.
As any particular commodity comes to be more manufactured, that part of
the price which resolves itself into wages and profit, comes to be greater
in proportion to that which resolves itself into rent. In the progress of
the manufacture, not only the number of profits increase, but every
subsequent profit is greater than the foregoing; because the capital from
which it is derived must always be greater. The capital which employs the
weavers, for example, must be greater than that which employs the
spinners; because it not only replaces that capital with its profits, but
pays, besides, the wages of the weavers: and the profits must always bear
some proportion to the capital.
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