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should gain both the wages of a journeyman who Chap. works under a master, and the prosit which that ^ , master makes by the sale of the journeyman's work. His whole gains, however, are commonly called prosit, and wages are, in this case too, confounded with prosit.
A gardener who cultivates his own garden with his own hands, unites in his own person the three different characters, of landlord, farmers and labourer. His produce, therefore, should pay him the rent of the sirst, the prosit uof the second, and the wages of the third. The whole, however, is commonly considered as the earnings of his labour. Both rent and prosit are, in this cafe, confounded with wages.
As in a civilized country there are but few commodities of which the exchangeable value arises from labour only, rent and prosit 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 encrease 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 every where consume a great part of it; and according to the different proportions
VOL. II. c jfl
B o O K i» which it is annually divided between those two *• different orders of people, its ordinary or average 'Y 'value must either annually increase, or diminish, or continue the same from one year to another.
Of tlie Natural and Market Price of Commodities.
c H A P. r I ""HERE is in every society or neighbour, Y"' . A hood an ordinary or average rate both of wages and prosit 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 show hereafter, partly 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.
These ordinary or average rates may be called the natural rates of wages, prosit, 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 rent of the land, the wages of the labour, and the prosits of the stock employed in raising, preparing, and bringing it to market, according to their natural rates, the commodity is then fold for what may be called its natural price.
The commodity is jhen fold precisely for what it is worth, or for what it really costs the person who brings it to market; for though in common language what is called the prime cost of any commodity does not comprehend the prosit of the person who is to fell it again, yet if he fells it at a price which does not allow him the ordinary rate of prosit in his neighbourhood, he is evidently a loser by the trade; since by employing his stock in some other way he might have made that prosit. His prosit, besides, is his revenue, the proper fund of his subsistence. As, while he is preparing and bringing the goods to market, he advances to his workmen their wages, or their subsistence; so he advances to himself, in the same manner, his own subsistence, which is generally suitable to the prosit which he may reasonably expect from • the sale of his goods. Unless they yield him this prosit, therefore, they do not repay him what they may very properly be said to have really cost him.
Though the price, therefore, which leaves him this prosit, is not always the lowest at which a dealer may sometimes fell his goods, it is the lowest at which he is likely to fell them Tor any considerable time; at least where there is perfect liberty, or where he may change his trade as often as he pleases.
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The actual price at which any commodity is commonly fold is called its market price. It may either be above, or below, or exactly the fame with its natural price.
The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market,and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and prosit, which must be paid in order to bring it thither. Such people may be called the effectual demanders, and their demand the effectual demand; since it may be sufficient to effectuate the bringing of the commodity to market. It is different from the absolute demand. A very poor man may be said in some sense to have a demand for a coach and six; he might like to have it; but his demand is not an effectual demand, as the commodity can never be brought to market in order to satisfy it.
When the quantity of any commodity which is brought to market falls short of the effectual demand,all those who are willing to pay the whole value of the rent, wages, and prosit, which must be paid in order to bring it thither, cannot be supplied with the quantity which they want. Rather than want it altogether, some of them will be willing to give more. A competition will immediately begin among them, and the market price will rife more or less above the natural price, according as either the greatness of the desiciency, or the wealth and wanton luxury of the competitors, happen to animate more or less the eagerness of the competition.- Among competitors of equal C wealth and luxury the fame desiciency will generally occasion a more or less eager competition, according as the acquisition of the commodity happens to be of more or less importance to them. Hence the exorbitant price of the necessaries of life during the blockade of a town or in a famine.
When the quantity brought to market exceeds the effectual demand, it cannot be all fold to those who are willing to pay the whole value of the rent, wages and prosit, which must be paid in order to bring it thither. Some part must be fold to those who are willing to pay less, and the low price which they give for it must reduce the price of the whole. The market price will sink more or less below the natural price, according as the greatness of the excess increases more or less the competition of the sellers, or according as it happens to be more or less important to them to get immediately rid of the commodity. The fame excess in the importation of perishable, will occasion a much greater competition than in that of durable commodities; in the importation of oranges, for example, than in that of old iron.
When the quantity brought to market is just sufficient to supply the effectual demand and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the fame with the natural price. The whole quantity upon hand can be disposed of for this price, and cannot be disposed of for more. The