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
As soon as the land of any country has all become private property, the
landlords, like all other men, love to reap where they never sowed, and
demand a rent even for its natural produce. The wood of the forest, the
grass of the field, and all the natural fruits of the earth, which, when
land was in common, cost the labourer only the trouble of gathering
them, come, even to him, to have an additional price fixed upon them. He
must then pay for the licence to gather them, and must give up to the
landlord a portion of what his labour either collects or produces. This
portion, or, what comes to the same thing, the price of this portion,
constitutes the rent of land, and in the price of the greater part of
commodities, makes a third component part.
The real value of all the different component parts of price, it must be
observed, is measured by the quantity of labour which they can, each of
them, purchase or command. Labour measures the value, not only of that
part of price which resolves itself into labour, but of that which
resolves itself into rent, and of that which resolves itself into
profit.
In every society, the price of every commodity finally resolves itself
into some one or other, or all of those three parts; and in every
improved society, all the three enter, more or less, as component parts,
into the price of the far greater part of commodities.
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 three 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.
Public-domain text, read in full here on John Shaqi.
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