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BOO K the two-hundred-and-fortieth part of a pound.
The shilling too seems originally to have been the denomination of a weight. When wheat is at twelve shillings the quarter, says an antient statute of Henry III. then wastel bread of a farthing Mall weigh eleven shillings and four pence. The proportion, however, between the fhilling and either the penny on the one hand, or the pound on the other, seems not to have been so constant ánd uniform as that between the penny and the pound. During the first race of the kings of France, the French fou or fhilling appears upon different occasions to have contained five, twelve, twenty, and forty pennies. Among the antient Saxons a shilling appears at one time to have contained only five pennies, and it is not improbable that it may have been as variable among them as among their neighbours, the antient Franks. From the time of Charlemagne among the French, and from that of William the Conqueror among the English, the proportion between the pound, the shilling, and the penny, seems to have been uniformly the same as at present, though the value of each has been very different. For in every country of the world, I believe, the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins. The Roman As, in the latter ages of the Republic, was reduced to the twenty-fourth part of its original value, and, instead of weighing a pound, came to weigh only
half an ounce. The English pound and penny c HA P. contain at present about a third only; the Scots pound and penny about a thirty-fixth ; and the French pound and penny about a fixty-sixth part of their original value. By means of thofe operations the princes and fovereign states which performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a smaller quantity of filver than would otherwise have been requisite. It was indeed in appearance only; for their creditors were really defrauded of a part of what was due to them. All other debtors in the state were allowed the fame privilege, and might pay with the fame nominal fum of the new and debafed coin whatever they had borrowed in the old. Such operations, therefore, have always proved favourable to the debtor, and ruinous to the creditor, and have sometimes produced a greater and more universal revolution in the fortunes of private persons, than could have been occasioned by a very great public calamity.
It is in this manner that money has become in all civilized nations the universal instrument of commerce, by the intervention of which goods of all kinds are bought and fold, or exchanged for one another.
What are the rules which men naturally observe in exchanging them either for money or. for one another, I shall now proceed to examine. These rules determine what may be called the relative or exchangeable value of goods.
BOOK The word VALUE, it is to be observed, has I.
two different meanings, and sometimes expresses the utility of some particular object, and fometimes the power of purchasing other goods which the poffeffion of that object conveys. The one may be called “value in use;" the other, “ value a in exchange.” The things which have the greatest value in use have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water : but it will purchase scarce any thing ; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.
In order to investigate the principles which regulate the exchangeable value of commoa dities, I shall endeavour to shew,
First, what is the real measure of this exchangeable value; or, wherein consists the real price of all commodities.
Secondly, what are the different parts of which this real price is composed or made up.
And, lastly, what are the different circumstances which sometimes raise fome or all of these different parts of price above, and some. times fink them below their natural or ordinary rate; or, what are the causes which fometimes hinder the market price, that is, the actual price of commodities, from coinciding exactly with what may be called their natural price.
I shall endeavour to explain, as fully and C HA P. distinctly as I can, those three subjects in the three following chapters, for which I must very earnestly entreat both the patience and attention of the reader : his patience in order to examine a detail which may perhaps in some places appear unnecessarily tedious; and his attention in order to understand what may, perhaps, after the fullest explication which I am capable of giving of it, appear still in some degree obscure. I am always willing to run fome hazard of being tedious in order to be sure that I am perspicuous; and after taking the utmost pains that I can to be perspicuous, some obscurity may still appear to remain upon a subject in its own nature extremely abstracted,
CHAP. V. of the real and nominal Price of Commoditics, or
of their Price in Labour, and their Price in Money,
the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man's own labour can supply him. The far greater part of them he muft derive from the labour of other
BOOK people, and he must be rich or poor according
to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.
The real price of every thing; what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impofe upon other people. What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by filver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.