An inquiry into the nature and causes of the wealth of

24

The Wealth of Nations

ship-builders of those old times, attempted it; and they were, for a

long time, the only nations that did attempt it.

Of all the countries on the coast of the Mediterranean sea, Egypt

seems to have been the first in which either agriculture or manu-

factures were cultivated and improved to any considerable degree.

Upper Egypt extends itself nowhere above a few miles from the

Nile; and in Lower Egypt, that great river breaks itself into many

different canals, which, with the assistance of a little art, seem to

have afforded a communication by water-carriage, not only be-

tween all the great towns, but between all the considerable vil-

lages, and even to many farm-houses in the country, nearly in the

same manner as the Rhine and the Maese do in Holland at present.

The extent and easiness of this inland navigation was probably

one of the principal causes of the early improvement of Egypt.

The improvements in agriculture and manufactures seem like-

wise to have been of very great antiquity in the provinces of Ben-

gal, in the East Indies, and in some of the eastern provinces of

China, though the great extent of this antiquity is not authenti-

cated by any histories of whose authority we, in this part of the

world, are well assured. In Bengal, the Ganges, and several other

great rivers, form a great number of navigable canals, in the same

manner as the Nile does in Egypt. In the eastern provinces of

China, too, several great rivers form, by their different branches, a

multitude of canals, and, by communicating with one another, af-

ford an inland navigation much more extensive than that either of

the Nile or the Ganges, or, perhaps, than both of them put together.

It is remarkable, that neither the ancient Egyptians, nor the Indians,

nor the Chinese, encouraged foreign commerce, but seem all to

have derived their great opulence from this inland navigation.

All the inland parts of Africa, and all that part of Asia which lies

any considerable way north of the Euxine and Caspian seas, the

ancient Scythia, the modern Tartary and Siberia, seem, in all ages

of the world, to have been in the same barbarous and uncivilized

state in which we find them at present. The sea of Tartary is the

frozen ocean, which admits of no navigation; and though some of

the greatest rivers in the world run through that country, they are

at too great a distance from one another to carry commerce and

communication through the greater part of it. There are in Africa

none of those great inlets, such as the Baltic and Adriatic seas in

Europe, the Mediterranean and Euxine seas in both Europe and

Asia, and the gulfs of Arabia, Persia, India, Bengal, and Siam, in

Asia, to carry maritime commerce into the interior parts of that

great continent; and the great rivers of Africa are at too great a

distance from one another to give occasion to any considerable

inland navigation. The commerce, besides, which any nation can

carry on by means of a river which does not break itself into any

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25

Adam Smith

great number of branches or canals, and which runs into another

territory before it reaches the sea, can never be very considerable,

because it is always in the power of the nations who possess that

other territory to obstruct the communication between the upper

country and the sea. The navigation of the Danube is of very little

use to the different states of Bavaria, Austria, and Hungary, in

comparison of what it would be, if any of them possessed the

whole of its course, till it falls into the Black sea.

CHAPTER IV

CHAPTER IV

CHAPTER IV

CHAPTER IV

CHAPTER IV

OF 

OF 

OF 

OF 

OF THE ORIGIN AND USE OF MONE

THE ORIGIN AND USE OF MONE

THE ORIGIN AND USE OF MONE

THE ORIGIN AND USE OF MONE

THE ORIGIN AND USE OF MONEY

Y

Y

Y

Y

W

HEN

 

THE

 

DIVISION

 

OF

 

LABOUR

 has been once thoroughly estab-

lished, it is but a very small part of a man’s wants which the pro-

duce of his own labour can supply. He supplies the far greater part

of them by exchanging that surplus part of the produce of his own

labour, which is over and above his own consumption, for such

parts of the produce of other men’s labour as he has occasion for.

Every man thus lives by exchanging, or becomes, in some mea-

sure, a merchant, and the society itself grows to be what is prop-

erly a commercial society.

But when the division of labour first began to take place, this

power of exchanging must frequently have been very much clogged

and embarrassed in its operations. One man, we shall suppose,

has more of a certain commodity than he himself has occasion for,

while another has less. The former, consequently, would be glad

to dispose of; and the latter to purchase, a part of this superfluity.

But if this latter should chance to have nothing that the former

stands in need of, no exchange can be made between them. The

butcher has more meat in his shop than he himself can consume,

and the brewer and the baker would each of them be willing to

---

26

The Wealth of Nations

purchase a part of it. But they have nothing to offer in exchange,

except the different productions of their respective trades, and the

butcher is already provided with all the bread and beer which he

has immediate occasion for. No exchange can, in this case, be made

between them. He cannot be their merchant, nor they his cus-

tomers; and they are all of them thus mutually less serviceable to

one another. In order to avoid the inconveniency of such situa-

tions, every prudent man in every period of society, after the first

establishment of the division of labour, must naturally have en-

deavoured to manage his affairs in such a manner, as to have at all

times by him, besides the peculiar produce of his own industry, a

certain quantity of some one commodity or other, such as he imag-

ined few people would be likely to refuse in exchange for the pro-

duce of their industry. Many different commodities, it is prob-

able, were successively both thought of and employed for this

purpose. In the rude ages of society, cattle are said to have been

the common instrument of commerce; and, though they must

have been a most inconvenient one, yet, in old times, we find

things were frequently valued according to the number of cattle

which had been given in exchange for them. The armour of

Diomede, says Homer, cost only nine oxen; but that of Glaucus

cost a hundred oxen. Salt is said to be the common instrument of

commerce and exchanges in Abyssinia; a species of shells in some

parts of the coast of India; dried cod at Newfoundland; tobacco in

Virginia; sugar in some of our West India colonies; hides or dressed

leather in some other countries; and there is at this day a village In

Scotland, where it is not uncommon, I am told, for a workman to

carry nails instead of money to the baker’s shop or the ale-house.

In all countries, however, men seem at last to have been deter-

mined by irresistible reasons to give the preference, for this em-

ployment, to metals above every other commodity. Metals can

not only be kept with as little loss as any other commodity, scarce

any thing being less perishable than they are, but they can like-

wise, without any loss, be divided into any number of parts, as by

fusion those parts can easily be re-united again; a quality which

no other equally durable commodities possess, and which, more

than any other quality, renders them fit to be the instruments of

commerce and circulation. The man who wanted to buy salt, for

example, and had nothing but cattle to give in exchange for it,

must have been obliged to buy salt to the value of a whole ox, or a

whole sheep, at a time. He could seldom buy less than this, be-

cause what he was to give for it could seldom be divided without

loss; and if he had a mind to buy more, he must, for the same

reasons, have been obliged to buy double or triple the quantity,

the value, to wit, of two or three oxen, or of two or three sheep. If,

on the contrary, instead of sheep or oxen, he had metals to give in

---