BO O K they are sometimes confounded with one another,

at least in common language.

A gentleman who farms a part of his own eftate, after paying the expence of cultivation, should gain both the rent of the landlord and the profit of the farmer. He is apt to denominate, however, his whole gain, profit, and thus confounds rent with profit, at least in common language. The greater part of our North Ame. rican and West Indian planters are in this situation. They farm, the greater part of them, their own estates, and accordingly we feldom hear of the rent of a plantation, but frequently of its profit.

Common farmers feldom employ any overseer to direct the general operations of the farin. They generally too work a good deal with their own hands, as ploughmen, harrowers, &c. What remains of the crop after paying the rent, there. fore, should not only replace to them their stock employed in cultivation, together with its ordi. nary profits, but pay them the wages which are due to them, both as labourers and overseers. Whatever remains, however, after paying the rent and keeping up the stock, is called profit. But wages evidently make a part of it. The farmer, by saving these wages, must neceffarily gain them. Wages, therefore, are in this case confounded with profit.

An independent manufacturer, who has stock enough both to purchase materials, and to maintain himself till he can carry his work to market,


should gain both the wages of a journeyman who c HA P. works under a master, and the profit which that, VI. master makes by the sale of the journeyman's work. His whole gains, however, are commonly called profit, and wages are, in this case too, confounded with profit.

A gardener who cultivates his own garden with his own hands, unites in his own person the three different characters, of landlord, farmer, and labourer. His produce, therefore, should pay him the rent of the first, the profit of the second, and the wages of the third. The whole, however, is commonly considered as the earnings of his labour. Both rent and profit are, in this case, confounded with wages.

As in a civilized country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contri. buting largely to that of the far greater part of them, so the annual produce of its labour will always be fufficient to purchase or command a much greater quantity of labour than what was employed in railing, preparing, and bringing that produce to market. If the society were an. nually 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 fucceeding 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 industri. ous. The idle every where consume a great part of it; and according to the different proportions



BOO K in which it is annually divided between those two. 1. different orders of people, its ordinary or average

value must either annually increase, or diminish, or continue the same from one year to another.


Of the Natural and Market Price of Commodities.

CHAP. THERE is in every society or neighbourVII. 1 hood 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 de. clining 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, 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 CHA P. the profits of the stock employed in railing, 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 then 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 profit of the person who is to sell it again, yet if he fells it at a price which does not allow him the ordinary rate of profit 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 profit. His profit, 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 profit which he may reasonably expect from the sale of his goods. Unless they yield him this profit, 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 profit, is not always the lowest at which a dealer may sometimes fell his goods, it is the lowest at which he is likely to sell them for any considerable time; at least where there is perfect liberty, or where he may change his trade as often as he pleases.




BOOK. 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 same 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 profit, 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 faid in some sense to have a demand for a coach and fix; 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 profit, which must be paid in order to bring it thither, cannot be fupplied 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 rise more or less above the natural price, according as either the greatness of the deficiency, or the wealth and wanton luxury of the competitors, happen to animate more or less the eagerness


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