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
That that increase in the quantity of the precious metals, which arises
in any country from the increase of wealth, has no tendency to diminish
their value, I have endeavoured to shew already. Gold and silver
naturally resort to a rich country, for the same reason that all sorts
of luxuries and curiosities resort to it; not because they are cheaper
there than in poorer countries, but because they are dearer, or because
a better price is given for them. It is the superiority of price which
attracts them; and as soon as that superiority ceases, they necessarily
cease to go thither.
If you except corn, and such other vegetables as are raised altogether
by human industry, that all other sorts of rude produce, cattle,
poultry, game of all kinds, the useful fossils and minerals of the
earth, &c. naturally grow dearer, as the society advances in wealth and
improvement, I have endeavoured to shew already. Though such
commodities, therefore, come to exchange for a greater quantity of
silver than before, it will not from thence follow that silver has
become really cheaper, or will purchase less labour than before; but
that such commodities have become really dearer, or will purchase more
labour than before. It is not their nominal price only, but their real
price, which rises in the progress of improvement. The rise of their
nominal price is the effect, not of any degradation of the value of
silver, but of the rise in their real price.
_Different Effects of the Progress of Improvement upon three different
sorts of rude Produce._
These different sorts of rude produce may be divided into three classes.
The first comprehends those which it is scarce in the power of human
industry to multiply at all. The second, those which it can multiply in
proportion to the demand. The third, those in which the efficacy of
industry is either limited or uncertain. In the progress of wealth and
improvement, the rent price of the first may rise to any degree of
extravagance, and seems not to be limited by any certain boundary. That
of the second, though it may rise greatly, has, however, a certain
boundary, beyond which it cannot well pass for any considerable time
together. That of the third, though its natural tendency is to rise in
the progress of improvement, yet in the same degree of improvement it
may sometimes happen even to fall, some times to continue the same, and
sometimes to rise more or less, according as different accidents render
the efforts of human industry, in multiplying this sort of rude produce,
more or less successful.
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