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; and this rate is regulated partly by the general circumstances of the society, its richness or poverty, and partly by the peculiar nature of each employment. There is also in every society or neighbourhood an ordinary or average rate of rent, which is regulated too by the general circumstances of the society or neighbourhood in which the land is situated, and partly by the natural or improved fertility of the land. What we may call the natural price of any commodity depends upon these natural rates of wages, profit and rent, at the place where it is produced. But its market price may be above, below, or identical with its natural price, and depends upon the proportion between the supply and the demand. _II.--Nature, Accumulation, and Employment of Stock_ When the stock which a man possesses is no more than sufficient to maintain him for a few days or weeks, he seldom thinks of deriving any revenue from it; but when he possesses enough to maintain him for months or years, he endeavours to derive a revenue from the greater part of it. The part of his stock from which he expects to derive revenue is called his capital. There are two ways in which capital may be employed so as to yield a profit to its employer. First, it may be employed in raising, manufacturing, or purchasing goods, and selling them again with a profit; this is circulating capital. Secondly, it may be employed in the improvement of land, or in the purchase of machines and instruments; and this capital, which yields a profit from objects which do not change masters, is called fixed capital. The general stock of any country or society is the same as that of all its inhabitants or members, and is therefore divided into the same three portions, each of which has a different function. The first is the portion which is reserved for immediate consumption, and so affords no revenue or profit. The second is the fixed capital, which consists of (_a_) all useful machines and instruments of trade which facilitate and abridge labour; (_b_) all profitable buildings, which procure a revenue, not only to their owner, but also to the person who rents them, such as shops, warehouses, farmhouses, factories, &c.; (_c_) the improvements of land, and all that has been laid out in clearing, draining, enclosing, manuring, and reducing it into the condition most proper for culture; and (_d_) the acquired and useful abilities of all the inhabitants or members of the society, for the acquisition of such talents, by the maintenance of the learner during his education or apprenticeship, costs a real expense, which is a capital fixed in his person.