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 in a civilized country there are but few commodities of which the
exchangeable value arises from labour only, rent and profit contributing
largely to that of the far greater part of them, so the annual produce
of its labour will always be sufficient to purchase or command a much
greater quantity of labour than what was employed in raising, preparing,
and bringing that produce to market. If the society were annually to
employ all the labour which it can annually purchase, as the quantity of
labour would increase greatly every year, so the produce of every
succeeding year would be of vastly greater value than that of the
foregoing. But there is no country in which the whole annual produce is
employed in maintaining the industrious. The idle everywhere consume a
great part of it; and, according to the different proportions in which
it is annually divided between these two different orders of people, its
ordinary or average value must either annually increase or diminish, or
continue the same from one year to another.
CHAP. VII.
OF THE NATURAL AND MARKET PRICE OF COMMODITIES.
There is in every society or neighbourhood an ordinary or average rate,
both of wages and profit, in every different employment of labour and
stock. This rate is naturally regulated, as I shall show hereafter,
partly by the general circumstances of the society, their riches or
poverty, their advancing, stationary, or declining condition, and partly
by the particular nature of each employment.
There is likewise in every society or neighbourhood an ordinary or
average rate of rent, which is regulated, too, as I shall shew
hereafter, partly by the general circumstances of the society or
neighbourhood in which the land is situated, and partly by the natural
improved fertility of the land.
These ordinary or average rates may be called the natural rates of
wages, profit and rent, at the time and place in which they commonly
prevail.
When the price of any commodity is neither more nor less than what is
sufficient to pay the rent of the land, the wages of the labour, and the
profits of the stock employed in raising, preparing, and bringing it to
market, according to their natural rates, the commodity is then sold for
what may be called its natural price.
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