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
It is not easy, it has already been observed, to ascertain what are the
average wages of labour, even in a particular place, and at a particular
time. We can, even in this case, seldom determine more than what are the
most usual wages. But even this can seldom be done with regard to the
profits of stock. Profit is so very fluctuating, that the person who
carries on a particular trade, cannot always tell you himself what is the
average of his annual profit. It is affected, not only by every variation
of price in the commodities which he deals in, but by the good or bad
fortune both of his rivals and of his customers, and by a thousand other
accidents, to which goods, when carried either by sea or by land, or even
when stored in a warehouse, are liable. It varies, therefore, not only
from year to year, but from day to day, and almost from hour to hour. To
ascertain what is the average profit of all the different trades carried
on in a great kingdom, must be much more difficult; and to judge of what
it may have been formerly, or in remote periods of time, with any degree
of precision, must be altogether impossible.
But though it may be impossible to determine, with any degree of
precision, what are or were the average profits of stock, either in the
present or in ancient times, some notion may be formed of them from the
interest of money. It may be laid down as a maxim, that wherever a great
deal can be made by the use of money, a great deal will commonly be given
for the use of it; and that, wherever little can be made by it, less will
commonly he given for it. Accordingly, therefore, as the usual market rate
of interest varies in any country, we may be assured that the ordinary
profits of stock must vary with it, must sink as it sinks, and rise as it
rises. The progress of interest, therefore, may lead us to form some
notion of the progress of profit.
Public-domain text, read in full here on John Shaqi.
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