An Inquiry Into the Nature and Causes of the Wealth of NationsSmith, Adam
General
An Inquiry Into the Nature and Causes of the Wealth of Nations
Smith, Adam
Economics
He sometimes demands rent for what is altogether incapable of human
improvements. Kelp is a species of sea-weed, which, when burnt, yields
an alkaline salt, useful for making glass, soup, and for several other
purposes. It grows in several parts of Great Britain, particularly in
Scotland, upon such rocks only as lie within the high-water mark, which
are twice every day covered with the sea, and of which the produce,
therefore, was never augmented by human industry. The landlord, however,
whose estate is bounded by a kelp shore of this kind, demands a rent for
it as much as for his corn-fields.
The sea in the neighbourhood of the islands of Shetland is more than
commonly abundant in fish, which makes a great part of the subsistence
of their inhabitants. But, in order to profit by the produce of the
water, they must have a habitation upon the neighbouring land. The rent
of the landlord is in proportion, not to what the farmer can make by the
land, but to what he can make both by the land and the water. It is
partly paid in sea-fish; and one of the very few instances in which rent
makes a part of the price of that commodity, is to be found in that
country.
The rent of land, therefore, considered as the price paid for the use of
the land, is naturally a monopoly price. It is not at all proportioned
to what the landlord may have laid out upon the improvement of the land,
or to what he can afford to take, but to what the farmer can afford to
give.
Such parts only of the produce of land can commonly be brought to
market, of which the ordinary price is sufficient to replace the stock
which must be employed in bringing them thither, together with its
ordinary profits. If the ordinary price is more than this, the surplus
part of it will naturally go to the rent of the land. If it is not more,
though the commodity may be brought to market, it can afford no rent to
the landlord. Whether the price is, or is not more, depends upon the
demand.
There are some parts of the produce of land, for which the demand must
always be such as to afford a greater price than what is sufficient to
bring them to market, and there are others for which it either may or
may not be such as to afford this greater price. The former must always
afford a rent to the landlord. The latter sometimes may and sometimes
may not, according to different circumstances.
Rent, it is to be observed, therefore, enters into the composition of
the price of commodities in a different way from wages and profit. High
or low wages and profit are the causes of high or low price; high or low
rent is the effect of it. It is because high or low wages and profit
must be paid, in order to bring a particular commodity to market, that
its price is high or low. But it is because its price is high or low, a
great deal more, or very little more, or no more, than what is
sufficient to pay those wages and profit, that it affords a high rent,
or a low rent, or no rent at all.
Public-domain text, read in full here on John Shaqi.
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