An inquiry into the nature and causes of the wealth of

58

The Wealth of Nations

Secondly, I shall endeavour to shew what are the circumstances

which naturally determine the rate of profit; and in what manner,

too, those circumstances are affected by the like variations in the

state of the society.

Though pecuniary wages and profit are very different in the

different employments of labour and stock; yet a certain propor-

tion seems commonly to take place between both the pecuniary

wages in all the different employments of labour, and the pecuni-

ary profits in all the different employments of stock. This propor-

tion, it will appear hereafter, depends partly upon the nature of

the different employments, and partly upon the different laws and

policy of the society in which they are carried on. But though in

many respects dependent upon the laws and policy, this propor-

tion seems to be little affected by the riches or poverty of that

society, by its advancing, stationary, or declining condition, but to

remain the same, or very nearly the same, in all those different

states. I shall, in the third place, endeavour to explain all the dif-

ferent circumstances which regulate this proportion.

In the fourth and last place, I shall endeavour to shew what are

the circumstances which regulate the rent of land, and which ei-

ther raise or lower the real price of all the different substances

which it produces.

CHAPTER 

CHAPTER 

CHAPTER 

CHAPTER 

CHAPTER VIII

VIII

VIII

VIII

VIII

OF 

OF 

OF 

OF 

OF THE 

THE 

THE 

THE 

THE W

W

W

W

WA

A

A

A

AGES OF L

GES OF L

GES OF L

GES OF L

GES OF LABOUR

ABOUR

ABOUR

ABOUR

ABOUR

T

HE

 

PRODUCE

 

OF

 

LABOUR

 constitutes the natural recompence or

wages of labour

In that original state of things which precedes both the appro-

priation of land and the accumulation of stock, the whole pro-

duce of labour belongs to the labourer. He has neither landlord

nor master to share with him.

Had this state continued, the wages of labour would have aug-

mented with all those improvements in its productive powers, to

which the division of labour gives occasion. All things would gradu-

ally have become cheaper. They would have been produced by a

smaller quantity of labour; and as the commodities produced by

equal quantities of labour would naturally in this state of things

be exchanged for one another, they would have been purchased

likewise with the produce of a smaller quantity.

But though all things would have become cheaper in reality, in

appearance many things might have become dearer, than before,

or have been exchanged for a greater quantity of other goods. Let

us suppose, for example, that in the greater part of employments

the productive powers of labour had been improved to tenfold, or

---

59

Adam Smith

that a day’s labour could produce ten times the quantity of work

which it had done originally; but that in a particular employment

they had been improved only to double, or that a day’s labour

could produce only twice the quantity of work which it had done

before. In exchanging the produce of a day’s labour in the greater

part of employments for that of a day’s labour in this particular

one, ten times the original quantity of work in them would pur-

chase only twice the original quantity in it. Any particular quan-

tity in it, therefore, a pound weight, for example, would appear to

be five times dearer than before. In reality, however, it would be

twice as cheap. Though it required five times the quantity of other

goods to purchase it, it would require only half the quantity of

labour either to purchase or to produce it. The acquisition, there-

fore, would be twice as easy as before.

But this original state of things, in which the labourer enjoyed

the whole produce of his own labour, could not last beyond the

first introduction of the appropriation of land and the accumula-

tion of stock. It was at an end, therefore, long before the most

considerable improvements were made in the productive powers

of labour; and it would be to no purpose to trace further what

might have been its effects upon the recompence or wages of labour.

As soon as land becomes private property, the landlord demands

a share of almost all the produce which the labourer can either

raise or collect from it. His rent makes the first deduction from

the produce of the labour which is employed upon land.

It seldom happens that the person who tills the ground has where-

withal to maintain himself till he reaps the harvest. His mainte-

nance is generally advanced to him from the stock of a master, the

farmer who employs him, and who would have no interest to

employ him, unless he was to share in the produce of his labour,

or unless his stock was to be replaced to him with a profit. This

profit makes a second deduction from the produce of the labour

which is employed upon land.

The produce of almost all other labour is liable to the like de-

duction of profit. In all arts and manufactures, the greater part of

the workmen stand in need of a master, to advance them the ma-

terials of their work, and their wages and maintenance, till it be

completed. He shares in the produce of their labour, or in the

value which it adds to the materials upon which it is bestowed;

and in this share consists his profit.

It sometimes happens, indeed, that a single independent work-

man has stock sufficient both to purchase the materials of his work,

and to maintain himself till it be completed. He is both master

and workman, and enjoys the whole produce of his own labour,

or the whole value which it adds to the materials upon which it is

bestowed. It includes what are usually two distinct revenues, be-

---