We must however acknowledge, with Adam Smith, that this perpetually fluctuating value of things tends to being fixed, since it always gives the producers the equivalent of what their production has cost. Else productions that do not obtain this equivalent, this just return, would no longer be reproduced, or they would be reproduced only in a proportion calculated to re-establish the equilibrium of their exchangeable value. Thus a natural proportion is, as it were, established between the different productions of man's labour; none has a lasting and permanent preponderance over the other, but up to what it has cost. Beyond this all are measured, not by their real, but by their relative value; not by their cost price, but by what they are worth. So that it is the exchangeable value which ultimately gives to every producer the equivalent of what his commodity cost to produce, and consequently secures the producers against loss.

But does not this exchangeable value afford to some producers profits superior to those which it gives to others; and are commercial exchanges to be continued, and circulation to be maintained in its activity, in that case?

In spite of the tendency of exchangeable value to insure to every producer the equivalent of what his production has cost, it yet cannot be denied that, when exchangeable value has reached this point, it is liable to vary and to grant to some producers advantages which it denies to others. Suppose a farmer expends, either in wages, interest of capital, or rent, one hundred pounds sterling, to grow fifty quarters of corn; whilst a manufacturer of woollen cloth expends only

seventy-five pounds to manufacture one hundred yards. of cloth, the exchangeable value of which is one hundred pounds; it is obvious that the farmer, if he obtain only one hundred pounds for his fifty quarters of corn, is less benefited by a fourth, or five-andtwenty pounds, than the manufacturer; and that, as long as their respective situation is the same, the wealth of the manufacturer is progressive, and that of the farmer stationary.

Adam Smith observes, that the superiority of certain labours and employments of capital over other labours and employments of capital cannot be of long duration, because those which are least favoured go over to the most favoured ones, and by their competition re-establish, if not a perfect equality, at least a certain proportion between the profits of all labours and employments of capital.

This is, no doubt, the case when the exchangeable value does no longer afford to a labour or employment of capital, the equivalent of what its production has cost; because, in that instance, the smallness of the equivalent informs the producer of his loss: but it is difficult to conceive how this can happen, when the equivalent covers all the expences of the producer, when nothing informs him that what he has obtained as an equivalent has not cost so much to produce as his production. I am even convinced that it never happens in common life, and that, among all labourers and employers of capital, there are not two classes, or perhaps not two individuals, capable of discovering which labours and which employments of capital yield

the best returns. Every'one is attached to the labour or employment of capital to which he has given the preference; and when he begins to perceive that it is not as profitable as others in which he might have embarked, it is generally too late to quit his pursuit and to go over to that which he ought to have preferred.

To inquire into the most advantageous employment of capital appears, after all, not desirable; the private wealth of certain classes and individuals resulting from the advantages which exchangeable value gives them, affords an incitement to general emulation, activity, and industry, and to aim at effecting a proportionate equality in the benefits of all labours and all employments of capital, would perhaps be attended with pernicious consequences.

The case is different when the advantages which exchangeable value gives to certain productions are derived from bad laws or the partiality of governments, and due to monopolies, privileges, and bounties. Discouraged by the privations to which they are doomed, and sometimes by the sacrifices to which they are forced, the labouring classes are then pining, they attach less importance to the increase of their capitals, and both their industry and wealth decline apace.

Except this highly important case, which is little attended to, I think national wealth has nothing to apprehend from, and cannot be injured by, the inequality of profits resulting from the various exchangeable value of the produce of labour which is circulated at home.

But is the inequality of profits in the exchange of home for foreign produce equally harmless?

Suppose a nation excels another in industry, in the accumulation of capitals, and in sciences and arts, and both nations interchange the produce of their labour; will not the productions of the industrious, enlightened, and wealthy country, have a more considerable exchangeable value, than those of the country inferior in knowledge, industry, and wealth? As her productions are really better, more acceptable, and cheaper, will they not be preferred? And if the circulation of the foreign commodities meet with no obstacles, will not labour diminish in one country, and augment in the other; or, at least, will not one nation appropriate to itself the most lucrative labour, and steadily advance on the road to wealth, whilst the other, being confined to the least profitable labour, pines in continual and intolerable misery:

Among the distinguished writers who hold this opinion, David Hume and Cantillon, in particular, think that rich nations are far from having the advantage in their dealings with poor nations, and that the latter generally get rich in the end at the expence of the former.

"The advantages of a rich trading country," says David Hume," are compensated in some measure by the low price of labour in every nation which has not an extensive commerce. Manufactures gradually shift their places, leaving those countries and provinces which they have already enriched, and flying to others, whither they are allured by the cheapness of provisions

Τ

and labour, till they have enriched these also, and are again banished by the same causes.” *

But the observation is more specious than founded. A country can grow rich only when industry is favoured by nature, and ably seconded by government : in proportion as prosperity increases, the wages of the labouring classes are raised. But let it not be supposed that increased wages are necessarily productive of higher prices.

When the labourer is well paid, he labours more and better; the high price of his labour is profitably compensated by an enlarged and improved produce. The fact is established by every traveller who has compared the produce of labour in countries where labour is badly or well paid.

The cheapness of capitals, on the other hand, sinks the price of the productions of the rich country, because it affords the means of setting up machines which shorten and facilitate labour, of selecting the best raw materials, and of granting long credits; all which are advantages so superior to low wages of labour, that they insure to the nations that enjoy these advantages, an absolute preponderance over those that have them not.

Lord Lauderdale says precisely the same. The noble Earl thinks, that David Hume "did not sufficiently attend to the unlimited resources that are to be found in the ingenuity of man in inventing means of supplanting labour by capital; for any possible augmentation of wages that increased opulence can occa

* Essays by David Hume, Edin. 1804, vol. i. of Money, p. 300.