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-