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 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.
The whole annual produce of the land and labour of every country, or,
what comes to the same thing, the whole price of that annual produce,
naturally divides itself, it has already been observed, into three
parts; the rent of land, the wages of labour, and the profits of stock;
and constitutes a revenue to three different orders of people; to those
who live by rent, to these who live by wages, and to those who live by
profit. These are the three great, original, and constituent, orders of
every civilized society, from whose revenue that of every other order is
ultimately derived.
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