# Extract Economic Entities

You are an analytical economist specializing in classical economic theory.
Your task is to extract distinct economic entities from a chapter of
Adam Smith's *The Wealth of Nations*.

## Source Chapter

---
id: book-1-chapter-11
title: "OF THE RENT OF LAND."
book: "1"
chapter: 11
artifact_type: content
---

CHAPTER XI.
OF THE RENT OF LAND.



      Rent, considered as the price paid for the use of land, is naturally the
      highest which the tenant can afford to pay in the actual circumstances of
      the land. In adjusting the terms of the lease, the landlord endeavours to
      leave him no greater share of the produce than what is sufficient to keep
      up the stock from which he furnishes the seed, pays the labour, and
      purchases and maintains the cattle and other instruments of husbandry,
      together with the ordinary profits of farming stock in the neighbourhood.
      This is evidently the smallest share with which the tenant can content
      himself, without being a loser, and the landlord seldom means to leave him
      any more. Whatever part of the produce, or, what is the same thing,
      whatever part of its price, is over and above this share, he naturally
      endeavours to reserve to himself as the rent of his land, which is
      evidently the highest the tenant can afford to pay in the actual
      circumstances of the land. Sometimes, indeed, the liberality, more
      frequently the ignorance, of the landlord, makes him accept of somewhat
      less than this portion; and sometimes, too, though more rarely, the
      ignorance of the tenant makes him undertake to pay somewhat more, or to
      content himself with somewhat less, than the ordinary profits of farming
      stock in the neighbourhood. This portion, however, may still be considered
      as the natural rent of land, or the rent at which it is naturally meant
      that land should, for the most part, be let.

      The rent of land, it may be thought, is frequently no more than a
      reasonable profit or interest for the stock laid out by the landlord upon
      its improvement. This, no doubt, may be partly the case upon some
      occasions; for it can scarce ever be more than partly the case. The
      landlord demands a rent even for unimproved land, and the supposed
      interest or profit upon the expense of improvement is generally an
      addition to this original rent. Those improvements, besides, are not
      always made by the stock of the landlord, but sometimes by that of the
      tenant. When the lease comes to be renewed, however, the landlord commonly
      demands the same augmentation of rent as if they had been all made by his
      own.

      He sometimes demands rent for what is altogether incapable of human
      improvements. Kelp is a species of sea-weed, which, when burnt, yields an
      alkaline salt, useful for making glass, soap, and for several other
      purposes. It grows in several parts of Great Britain, particularly in
      Scotland, upon such rocks only as lie within the high-water mark, which
      are twice every day covered with the sea, and of which the produce,
      therefore, was never augmented by human industry. The landlord, however,
      whose estate is bounded by a kelp shore of this kind, demands a rent for
      it as much as for his corn-fields.

      The sea in the neighbourhood of the islands of Shetland is more than
      commonly abundant in fish, which makes a great part of the subsistence of
      their inhabitants. But, in order to profit by the produce of the water,
      they must have a habitation upon the neighbouring land. The rent of the
      landlord is in proportion, not to what the farmer can make by the land,
      but to what he can make both by the land and the water. It is partly paid
      in sea-fish; and one of the very few instances in which rent makes a part
      of the price of that commodity, is to be found in that country.

      The rent of land, therefore, considered as the price paid for the use of
      the land, is naturally a monopoly price. It is not at all proportioned to
      what the landlord may have laid out upon the improvement of the land, or
      to what he can afford to take, but to what the farmer can afford to give.

      Such parts only of the produce of land can commonly be brought to market,
      of which the ordinary price is sufficient to replace the stock which must
      be employed in bringing them thither, together with its ordinary profits.
      If the ordinary price is more than this, the surplus part of it will
      naturally go to the rent of the land. If it is not more, though the
      commodity may be brought to market, it can afford no rent to the landlord.
      Whether the price is, or is not more, depends upon the demand.

      There are some parts of the produce of land, for which the demand must
      always be such as to afford a greater price than what is sufficient to
      bring them to market; and there are others for which it either may or may
      not be such as to afford this greater price. The former must always afford
      a rent to the landlord. The latter sometimes may and sometimes may not,
      according to different circumstances.

      Rent, it is to be observed, therefore, enters into the composition of the
      price of commodities in a different way from wages and profit. High or low
      wages and profit are the causes of high or low price; high or low rent is
      the effect of it. It is because high or low wages and profit must be paid,
      in order to bring a particular commodity to market, that its price is high
      or low. But it is because its price is high or low, a great deal more, or
      very little more, or no more, than what is sufficient to pay those wages
      and profit, that it affords a high rent, or a low rent, or no rent at all.

      The particular consideration, first, of those parts of the produce of land
      which always afford some rent; secondly, of those which sometimes may and
      sometimes may not afford rent; and, thirdly, of the variations which, in
      the different periods of improvement, naturally take place in the relative
      value of those two different sorts of rude produce, when compared both
      with one another and with manufactured commodities, will divide this
      chapter into three parts.




      PART I.—Of the Produce of Land which always affords Rent.

      As men, like all other animals, naturally multiply in proportion to the
      means of their subsistence, food is always more or less in demand. It can
      always purchase or command a greater or smaller quantity of labour, and
      somebody can always be found who is willing to do something in order to
      obtain it. The quantity of labour, indeed, which it can purchase, is not
      always equal to what it could maintain, if managed in the most economical
      manner, on account of the high wages which are sometimes given to labour;
      but it can always purchase such a quantity of labour as it can maintain,
      according to the rate at which that sort of labour is commonly maintained
      in the neighbourhood.

      But land, in almost any situation, produces a greater quantity of food
      than what is sufficient to maintain all the labour necessary for bringing
      it to market, in the most liberal way in which that labour is ever
      maintained. The surplus, too, is always more than sufficient to replace
      the stock which employed that labour, together with its profits.
      Something, therefore, always remains for a rent to the landlord.

      The most desert moors in Norway and Scotland produce some sort of pasture
      for cattle, of which the milk and the increase are always more than
      sufficient, not only to maintain all the labour necessary for tending
      them, and to pay the ordinary profit to the farmer or the owner of the
      herd or flock, but to afford some small rent to the landlord. The rent
      increases in proportion to the goodness of the pasture. The same extent of
      ground not only maintains a greater number of cattle, but as they are
      brought within a smaller compass, less labour becomes requisite to tend
      them, and to collect their produce. The landlord gains both ways; by the
      increase of the produce, and by the diminution of the labour which must be
      maintained out of it.

      The rent of land not only varies with its fertility, whatever be its
      produce, but with its situation, whatever be its fertility. Land in the
      neighbourhood of a town gives a greater rent than land equally fertile in
      a distant part of the country. Though it may cost no more labour to
      cultivate the one than the other, it must always cost more to bring the
      produce of the distant land to market. A greater quantity of labour,
      therefore, must be maintained out of it; and the surplus, from which are
      drawn both the profit of the farmer and the rent of the landlord, must be
      diminished. But in remote parts of the country, the rate of profit, as has
      already been shewn, is generally higher than in the neighbourhood of a
      large town. A smaller proportion of this diminished surplus, therefore,
      must belong to the landlord.

      Good roads, canals, and navigable rivers, by diminishing the expense of
      carriage, put the remote parts of the country more nearly upon a level
      with those in the neighbourhood of the town. They are upon that account
      the greatest of all improvements. They encourage the cultivation of the
      remote, which must always be the most extensive circle of the country.
      They are advantageous to the town by breaking down the monopoly of the
      country in its neighbourhood. They are advantageous even to that part of
      the country. Though they introduce some rival commodities into the old
      market, they open many new markets to its produce. Monopoly, besides, is a
      great enemy to good management, which can never be universally
      established, but in consequence of that free and universal competition
      which forces every body to have recourse to it for the sake of self
      defence. It is not more than fifty years ago, that some of the counties in
      the neighbourhood of London petitioned the parliament against the
      extension of the turnpike roads into the remoter counties. Those remoter
      counties, they pretended, from the cheapness of labour, would be able to
      sell their grass and corn cheaper in the London market than themselves,
      and would thereby reduce their rents, and ruin their cultivation. Their
      rents, however, have risen, and their cultivation has been improved since
      that time.

      A corn field of moderate fertility produces a much greater quantity of
      food for man, than the best pasture of equal extent. Though its
      cultivation requires much more labour, yet the surplus which remains after
      replacing the seed and maintaining all that labour, is likewise much
      greater. If a pound of butcher’s meat, therefore, was never supposed to be
      worth more than a pound of bread, this greater surplus would everywhere be
      of greater value and constitute a greater fund, both for the profit of the
      farmer and the rent of the landlord. It seems to have done so universally
      in the rude beginnings of agriculture.

      But the relative values of those two different species of food, bread and
      butcher’s meat, are very different in the different periods of
      agriculture. In its rude beginnings, the unimproved wilds, which then
      occupy the far greater part of the country, are all abandoned to cattle.
      There is more butcher’s meat than bread; and bread, therefore, is the food
      for which there is the greatest competition, and which consequently brings
      the greatest price. At Buenos Ayres, we are told by Ulloa, four reals,
      one-and-twenty pence halfpenny sterling, was, forty or fifty years ago,
      the ordinary price of an ox, chosen from a herd of two or three hundred.
      He says nothing of the price of bread, probably because he found nothing
      remarkable about it. An ox there, he says, costs little more than the
      labour of catching him. But corn can nowhere be raised without a great
      deal of labour; and in a country which lies upon the river Plate, at that
      time the direct road from Europe to the silver mines of Potosi, the
      money-price of labour could be very cheap. It is otherwise when
      cultivation is extended over the greater part of the country. There is
      then more bread than butcher’s meat. The competition changes its
      direction, and the price of butcher’s meat becomes greater than the price
      of bread.

      By the extension, besides, of cultivation, the unimproved wilds become
      insufficient to supply the demand for butcher’s meat. A great part of the
      cultivated lands must be employed in rearing and fattening cattle; of
      which the price, therefore, must be sufficient to pay, not only the labour
      necessary for tending them, but the rent which the landlord, and the
      profit which the farmer, could have drawn from such land employed in
      tillage. The cattle bred upon the most uncultivated moors, when brought to
      the same market, are, in proportion to their weight or goodness, sold at
      the same price as those which are reared upon the most improved land. The
      proprietors of those moors profit by it, and raise the rent of their land
      in proportion to the price of their cattle. It is not more than a century
      ago, that in many parts of the Highlands of Scotland, butcher’s meat was
      as cheap or cheaper than even bread made of oatmeal. The Union opened the
      market of England to the Highland cattle. Their ordinary price, at
      present, is about three times greater than at the beginning of the
      century, and the rents of many Highland estates have been tripled and
      quadrupled in the same time. In almost every part of Great Britain, a
      pound of the best butcher’s meat is, in the present times, generally worth
      more than two pounds of the best white bread; and in plentiful years it is
      sometimes worth three or four pounds.

      It is thus that, in the progress of improvement, the rent and profit of
      unimproved pasture come to be regulated in some measure by the rent and
      profit of what is improved, and these again by the rent and profit of
      corn. Corn is an annual crop; butcher’s meat, a crop which requires four
      or five years to grow. As an acre of land, therefore, will produce a much
      smaller quantity of the one species of food than of the other, the
      inferiority of the quantity must be compensated by the superiority of the
      price. If it was more than compensated, more corn-land would be turned
      into pasture; and if it was not compensated, part of what was in pasture
      would be brought back into corn.

      This equality, however, between the rent and profit of grass and those of
      corn; of the land of which the immediate produce is food for cattle, and
      of that of which the immediate produce is food for men, must be understood
      to take place only through the greater part of the improved lands of a
      great country. In some particular local situations it is quite otherwise,
      and the rent and profit of grass are much superior to what can be made by
      corn.

      Thus, in the neighbourhood of a great town, the demand for milk, and for
      forage to horses, frequently contribute, together with the high price of
      butcher’s meat, to raise the value of grass above what may be called its
      natural proportion to that of corn. This local advantage, it is evident,
      cannot be communicated to the lands at a distance.

      Particular circumstances have sometimes rendered some countries so
      populous, that the whole territory, like the lands in the neighbourhood of
      a great town, has not been sufficient to produce both the grass and the
      corn necessary for the subsistence of their inhabitants. Their lands,
      therefore, have been principally employed in the production of grass, the
      more bulky commodity, and which cannot be so easily brought from a great
      distance; and corn, the food of the great body of the people, has been
      chiefly imported from foreign countries. Holland is at present in this
      situation; and a considerable part of ancient Italy seems to have been so
      during the prosperity of the Romans. To feed well, old Cato said, as we
      are told by Cicero, was the first and most profitable thing in the
      management of a private estate; to feed tolerably well, the second; and to
      feed ill, the third. To plough, he ranked only in the fourth place of
      profit and advantage. Tillage, indeed, in that part of ancient Italy which
      lay in the neighbour hood of Rome, must have been very much discouraged by
      the distributions of corn which were frequently made to the people, either
      gratuitously, or at a very low price. This corn was brought from the
      conquered provinces, of which several, instead of taxes, were obliged to
      furnish a tenth part of their produce at a stated price, about sixpence
      a-peck, to the republic. The low price at which this corn was distributed
      to the people, must necessarily have sunk the price of what could be
      brought to the Roman market from Latium, or the ancient territory of Rome,
      and must have discouraged its cultivation in that country.

      In an open country, too, of which the principal produce is corn, a
      well-inclosed piece of grass will frequently rent higher than any corn
      field in its neighbourhood. It is convenient for the maintenance of the
      cattle employed in the cultivation of the corn; and its high rent is, in
      this case, not so properly paid from the value of its own produce, as from
      that of the corn lands which are cultivated by means of it. It is likely
      to fall, if ever the neighbouring lands are completely inclosed. The
      present high rent of inclosed land in Scotland seems owing to the scarcity
      of inclosure, and will probably last no longer than that scarcity. The
      advantage of inclosure is greater for pasture than for corn. It saves the
      labour of guarding the cattle, which feed better, too, when they are not
      liable to be disturbed by their keeper or his dog.

      But where there is no local advantage of this kind, the rent and profit of
      corn, or whatever else is the common vegetable food of the people, must
      naturally regulate upon the land which is fit for producing it, the rent
      and profit of pasture.

      The use of the artificial grasses, of turnips, carrots, cabbages, and the
      other expedients which have been fallen upon to make an equal quantity of
      land feed a greater number of cattle than when in natural grass, should
      somewhat reduce, it might be expected, the superiority which, in an
      improved country, the price of butcher’s meat naturally has over that of
      bread. It seems accordingly to have done so; and there is some reason for
      believing that, at least in the London market, the price of butcher’s
      meat, in proportion to the price of bread, is a good deal lower in the
      present times than it was in the beginning of the last century.

      In the Appendix to the life of Prince Henry, Doctor Birch has given us an
      account of the prices of butcher’s meat as commonly paid by that prince.
      It is there said, that the four quarters of an ox, weighing six hundred
      pounds, usually cost him nine pounds ten shillings, or thereabouts; that
      is thirty-one shillings and eight-pence per hundred pounds weight. Prince
      Henry died on the 6th of November 1612, in the nineteenth year of his age.

      In March 1764, there was a parliamentary inquiry into the causes of the
      high price of provisions at that time. It was then, among other proof to
      the same purpose, given in evidence by a Virginia merchant, that in March
      1763, he had victualled his ships for twentyfour or twenty-five shillings
      the hundred weight of beef, which he considered as the ordinary price;
      whereas, in that dear year, he had paid twenty-seven shillings for the
      same weight and sort. This high price in 1764 is, however, four shillings
      and eight-pence cheaper than the ordinary price paid by Prince Henry; and
      it is the best beef only, it must be observed, which is fit to be salted
      for those distant voyages.

      The price paid by Prince Henry amounts to 3d. ⅘ths per pound weight of
      the whole carcase, coarse and choice pieces taken together; and at that
      rate the choice pieces could not have been sold by retail for less than
      4½d. or 5d. the pound.

      In the parliamentary inquiry in 1764, the witnesses stated the price of
      the choice pieces of the best beef to be to the consumer 4d. and 4½d. the
      pound; and the coarse pieces in general to be from seven farthings to 2½d.
      and 2¾d.; and this, they said, was in general one halfpenny dearer than
      the same sort of pieces had usually been sold in the month of March. But
      even this high price is still a good deal cheaper than what we can well
      suppose the ordinary retail price to have been in the time of Prince
      Henry.

      During the first twelve years of the last century, the average price of
      the best wheat at the Windsor market was £ 1:18:3½d. the quarter of nine
      Winchester bushels.

      But in the twelve years preceding 1764 including that year, the average
      price of the same measure of the best wheat at the same market was £
      2:1:9½d.

      In the first twelve years of the last century, therefore, wheat appears to
      have been a good deal cheaper, and butcher’s meat a good deal dearer, than
      in the twelve years preceding 1764, including that year.

      In all great countries, the greater part of the cultivated lands are
      employed in producing either food for men or food for cattle. The rent and
      profit of these regulate the rent and profit of all other cultivated land.
      If any particular produce afforded less, the land would soon be turned
      into corn or pasture; and if any afforded more, some part of the lands in
      corn or pasture would soon be turned to that produce.

      Those productions, indeed, which require either a greater original expense
      of improvement, or a greater annual expense of cultivation in order to fit
      the land for them, appear commonly to afford, the one a greater rent, the
      other a greater profit, than corn or pasture. This superiority, however,
      will seldom be found to amount to more than a reasonable interest or
      compensation for this superior expense.

      In a hop garden, a fruit garden, a kitchen garden, both the rent of the
      landlord, and the profit of the farmer, are generally greater than in
      acorn or grass field. But to bring the ground into this condition requires
      more expense. Hence a greater rent becomes due to the landlord. It
      requires, too, a more attentive and skilful management. Hence a greater
      profit becomes due to the farmer. The crop, too, at least in the hop and
      fruit garden, is more precarious. Its price, therefore, besides
      compensating all occasional losses, must afford something like the profit
      of insurance. The circumstances of gardeners, generally mean, and always
      moderate, may satisfy us that their great ingenuity is not commonly
      over-recompensed. Their delightful art is practised by so many rich people
      for amusement, that little advantage is to be made by those who practise
      it for profit; because the persons who should naturally be their best
      customers, supply themselves with all their most precious productions.

      The advantage which the landlord derives from such improvements, seems at
      no time to have been greater than what was sufficient to compensate the
      original expense of making them. In the ancient husbandry, after the
      vineyard, a well-watered kitchen garden seems to have been the part of the
      farm which was supposed to yield the most valuable produce. But
      Democritus, who wrote upon husbandry about two thousand years ago, and who
      was regarded by the ancients as one of the fathers of the art, thought
      they did not act wisely who inclosed a kitchen garden. The profit, he
      said, would not compensate the expense of a stone-wall: and bricks (he
      meant, I suppose, bricks baked in the sun) mouldered with the rain and the
      winter-storm, and required continual repairs. Columella, who reports this
      judgment of Democritus, does not controvert it, but proposes a very frugal
      method of inclosing with a hedge of brambles and briars, which he says he
      had found by experience to be both a lasting and an impenetrable fence;
      but which, it seems, was not commonly known in the time of Democritus.
      Palladius adopts the opinion of Columella, which had before been
      recommended by Varro. In the judgment of those ancient improvers, the
      produce of a kitchen garden had, it seems, been little more than
      sufficient to pay the extraordinary culture and the expense of watering;
      for in countries so near the sun, it was thought proper, in those times as
      in the present, to have the command of a stream of water, which could be
      conducted to every bed in the garden. Through the greater part of Europe,
      a kitchen garden is not at present supposed to deserve a better inclosure
      than that recommended by Columella. In Great Britain, and some other
      northern countries, the finer fruits cannot be brought to perfection but
      by the assistance of a wall. Their price, therefore, in such countries,
      must be sufficient to pay the expense of building and maintaining what
      they cannot be had without. The fruit-wall frequently surrounds the
      kitchen garden, which thus enjoys the benefit of an inclosure which its
      own produce could seldom pay for.

      That the vineyard, when properly planted and brought to perfection, was
      the most valuable part of the farm, seems to have been an undoubted maxim
      in the ancient agriculture, as it is in the modern, through all the wine
      countries. But whether it was advantageous to plant a new vineyard, was a
      matter of dispute among the ancient Italian husbandmen, as we learn from
      Columella. He decides, like a true lover of all curious cultivation, in
      favour of the vineyard; and endeavours to shew, by a comparison of the
      profit and expense, that it was a most advantageous improvement. Such
      comparisons, however, between the profit and expense of new projects are
      commonly very fallacious; and in nothing more so than in agriculture. Had
      the gain actually made by such plantations been commonly as great as he
      imagined it might have been, there could have been no dispute about it.
      The same point is frequently at this day a matter of controversy in the
      wine countries. Their writers on agriculture, indeed, the lovers and
      promoters of high cultivation, seem generally disposed to decide with
      Columella in favour of the vineyard. In France, the anxiety of the
      proprietors of the old vineyards to prevent the planting of any new ones,
      seems to favour their opinion, and to indicate a consciousness in those
      who must have the experience, that this species of cultivation is at
      present in that country more profitable than any other. It seems, at the
      same time, however, to indicate another opinion, that this superior profit
      can last no longer than the laws which at present restrain the free
      cultivation of the vine. In 1731, they obtained an order of council,
      prohibiting both the planting of new vineyards, and the renewal of these
      old ones, of which the cultivation had been interrupted for two years,
      without a particular permission from the king, to be granted only in
      consequence of an information from the intendant of the province,
      certifying that he had examined the land, and that it was incapable of any
      other culture. The pretence of this order was the scarcity of corn and
      pasture, and the superabundance of wine. But had this superabundance been
      real, it would, without any order of council, have effectually prevented
      the plantation of new vineyards, by reducing the profits of this species
      of cultivation below their natural proportion to those of corn and
      pasture. With regard to the supposed scarcity of corn occasioned by the
      multiplication of vineyards, corn is nowhere in France more carefully
      cultivated than in the wine provinces, where the land is fit for producing
      it: as in Burgundy, Guienne, and the Upper Languedoc. The numerous hands
      employed in the one species of cultivation necessarily encourage the
      other, by affording a ready market for its produce. To diminish the number
      of those who are capable of paying it, is surely a most unpromising
      expedient for encouraging the cultivation of corn. It is like the policy
      which would promote agriculture, by discouraging manufactures.

      The rent and profit of those productions, therefore, which require either
      a greater original expense of improvement in order to fit the land for
      them, or a greater annual expense of cultivation, though often much
      superior to those of corn and pasture, yet when they do no more than
      compensate such extraordinary expense, are in reality regulated by the
      rent and profit of those common crops.

      It sometimes happens, indeed, that the quantity of land which can be
      fitted for some particular produce, is too small to supply the effectual
      demand. The whole produce can be disposed of to those who are willing to
      give somewhat more than what is sufficient to pay the whole rent, wages,
      and profit, necessary for raising and bringing it to market, according to
      their natural rates, or according to the rates at which they are paid in
      the greater part of other cultivated land. The surplus part of the price
      which remains after defraying the whole expense of improvement and
      cultivation, may commonly, in this case, and in this case only, bear no
      regular proportion to the like surplus in corn or pasture, but may exceed
      it in almost any degree; and the greater part of this excess naturally
      goes to the rent of the landlord.

      The usual and natural proportion, for example, between the rent and profit
      of wine, and those of corn and pasture, must be understood to take place
      only with regard to those vineyards which produce nothing but good common
      wine, such as can be raised almost anywhere, upon any light, gravelly, or
      sandy soil, and which has nothing to recommend it but its strength and
      wholesomeness. It is with such vineyards only, that the common land of the
      country can be brought into competition; for with those of a peculiar
      quality it is evident that it cannot.

      The vine is more affected by the difference of soils than any other
      fruit-tree. From some it derives a flavour which no culture or management
      can equal, it is supposed, upon any other. This flavour, real or
      imaginary, is sometimes peculiar to the produce of a few vineyards;
      sometimes it extends through the greater part of a small district, and
      sometimes through a considerable part of a large province. The whole
      quantity of such wines that is brought to market falls short of the
      effectual demand, or the demand of those who would be willing to pay the
      whole rent, profit, and wages, necessary for preparing and bringing them
      thither, according to the ordinary rate, or according to the rate at which
      they are paid in common vineyards. The whole quantity, therefore, can be
      disposed of to those who are willing to pay more, which necessarily raises
      their price above that of common wine. The difference is greater or less,
      according as the fashionableness and scarcity of the wine render the
      competition of the buyers more or less eager. Whatever it be, the greater
      part of it goes to the rent of the landlord. For though such vineyards are
      in general more carefully cultivated than most others, the high price of
      the wine seems to be, not so much the effect, as the cause of this careful
      cultivation. In so valuable a produce, the loss occasioned by negligence
      is so great, as to force even the most careless to attention. A small part
      of this high price, therefore, is sufficient to pay the wages of the
      extraordinary labour bestowed upon their cultivation, and the profits of
      the extraordinary stock which puts that labour into motion.

      The sugar colonies possessed by the European nations in the West Indies
      may be compared to those precious vineyards. Their whole produce falls
      short of the effectual demand of Europe, and can be disposed of to those
      who are willing to give more than what is sufficient to pay the whole
      rent, profit, and wages, necessary for preparing and bringing it to
      market, according to the rate at which they are commonly paid by any other
      produce. In Cochin China, the finest white sugar generally sells for three
      piastres the quintal, about thirteen shillings and sixpence of our money,
      as we are told by Mr Poivre {Voyages d’un Philosophe.}, a very careful
      observer of the agriculture of that country. What is there called the
      quintal, weighs from a hundred and fifty to two hundred Paris pounds, or a
      hundred and seventy-five Paris pounds at a medium, which reduces the price
      of the hundred weight English to about eight shillings sterling; not a
      fourth part of what is commonly paid for the brown or muscovada sugars
      imported from our colonies, and not a sixth part of what is paid for the
      finest white sugar. The greater part of the cultivated lands in Cochin
      China are employed in producing corn and rice, the food of the great body
      of the people. The respective prices of corn, rice, and sugar, are there
      probably in the natural proportion, or in that which naturally takes place
      in the different crops of the greater part of cultivated land, and which
      recompenses the landlord and farmer, as nearly as can be computed,
      according to what is usually the original expense of improvement, and the
      annual expense of cultivation. But in our sugar colonies, the price of
      sugar bears no such proportion to that of the produce of a rice or corn
      field either in Europe or America. It is commonly said that a sugar
      planter expects that the rum and the molasses should defray the whole
      expense of his cultivation, and that his sugar should be all clear profit.
      If this be true, for I pretend not to affirm it, it is as if a corn farmer
      expected to defray the expense of his cultivation with the chaff and the
      straw, and that the grain should be all clear profit. We see frequently
      societies of merchants in London, and other trading towns, purchase waste
      lands in our sugar colonies, which they expect to improve and cultivate
      with profit, by means of factors and agents, notwithstanding the great
      distance and the uncertain returns, from the defective administration of
      justice in those countries. Nobody will attempt to improve and cultivate
      in the same manner the most fertile lands of Scotland, Ireland, or the
      corn provinces of North America, though, from the more exact
      administration of justice in these countries, more regular returns might
      be expected.

      In Virginia and Maryland, the cultivation of tobacco is preferred, as most
      profitable, to that of corn. Tobacco might be cultivated with advantage
      through the greater part of Europe; but, in almost every part of Europe,
      it has become a principal subject of taxation; and to collect a tax from
      every different farm in the country where this plant might happen to be
      cultivated, would be more difficult, it has been supposed, than to levy
      one upon its importation at the custom-house. The cultivation of tobacco
      has, upon this account, been most absurdly prohibited through the greater
      part of Europe, which necessarily gives a sort of monopoly to the
      countries where it is allowed; and as Virginia and Maryland produce the
      greatest quantity of it, they share largely, though with some competitors,
      in the advantage of this monopoly. The cultivation of tobacco, however,
      seems not to be so advantageous as that of sugar. I have never even heard
      of any tobacco plantation that was improved and cultivated by the capital
      of merchants who resided in Great Britain; and our tobacco colonies send
      us home no such wealthy planters as we see frequently arrive from our
      sugar islands. Though, from the preference given in those colonies to the
      cultivation of tobacco above that of corn, it would appear that the
      effectual demand of Europe for tobacco is not completely supplied, it
      probably is more nearly so than that for sugar; and though the present
      price of tobacco is probably more than sufficient to pay the whole rent,
      wages, and profit, necessary for preparing and bringing it to market,
      according to the rate at which they are commonly paid in corn land, it
      must not be so much more as the present price of sugar. Our tobacco
      planters, accordingly, have shewn the same fear of the superabundance of
      tobacco, which the proprietors of the old vineyards in France have of the
      superabundance of wine. By act of assembly, they have restrained its
      cultivation to six thousand plants, supposed to yield a thousand weight of
      tobacco, for every negro between sixteen and sixty years of age. Such a
      negro, over and above this quantity of tobacco, can manage, they reckon,
      four acres of Indian corn. To prevent the market from being overstocked,
      too, they have sometimes, in plentiful years, we are told by Dr Douglas
      {Douglas’s Summary, vol. ii. p. 379, 373.} (I suspect he has been ill
      informed), burnt a certain quantity of tobacco for every negro, in the
      same manner as the Dutch are said to do of spices. If such violent methods
      are necessary to keep up the present price of tobacco, the superior
      advantage of its culture over that of corn, if it still has any, will not
      probably be of long continuance.

      It is in this manner that the rent of the cultivated land, of which the
      produce is human food, regulates the rent of the greater part of other
      cultivated land. No particular produce can long afford less, because the
      land would immediately be turned to another use; and if any particular
      produce commonly affords more, it is because the quantity of land which
      can be fitted for it is too small to supply the effectual demand.

      In Europe, corn is the principal produce of land, which serves immediately
      for human food. Except in particular situations, therefore, the rent of
      corn land regulates in Europe that of all other cultivated land. Britain
      need envy neither the vineyards of France, nor the olive plantations of
      Italy. Except in particular situations, the value of these is regulated by
      that of corn, in which the fertility of Britain is not much inferior to
      that of either of those two countries.

      If, in any country, the common and favourite vegetable food of the people
      should be drawn from a plant of which the most common land, with the same,
      or nearly the same culture, produced a much greater quantity than the most
      fertile does of corn; the rent of the landlord, or the surplus quantity of
      food which would remain to him, after paying the labour, and replacing the
      stock of the farmer, together with its ordinary profits, would necessarily
      be much greater. Whatever was the rate at which labour was commonly
      maintained in that country, this greater surplus could always maintain a
      greater quantity of it, and, consequently, enable the landlord to purchase
      or command a greater quantity of it. The real value of his rent, his real
      power and authority, his command of the necessaries and conveniencies of
      life with which the labour of other people could supply him, would
      necessarily be much greater.

      A rice field produces a much greater quantity of food than the most
      fertile corn field. Two crops in the year, from thirty to sixty bushels
      each, are said to be the ordinary produce of an acre. Though its
      cultivation, therefore, requires more labour, a much greater surplus
      remains after maintaining all that labour. In those rice countries,
      therefore, where rice is the common and favourite vegetable food of the
      people, and where the cultivators are chiefly maintained with it, a
      greater share of this greater surplus should belong to the landlord than
      in corn countries. In Carolina, where the planters, as in other British
      colonies, are generally both farmers and landlords, and where rent,
      consequently, is confounded with profit, the cultivation of rice is found
      to be more profitable than that of corn, though their fields produce only
      one crop in the year, and though, from the prevalence of the customs of
      Europe, rice is not there the common and favourite vegetable food of the
      people.

      A good rice field is a bog at all seasons, and at one season a bog covered
      with water. It is unfit either for corn, or pasture, or vineyard, or,
      indeed, for any other vegetable produce that is very useful to men; and
      the lands which are fit for those purposes are not fit for rice. Even in
      the rice countries, therefore, the rent of rice lands cannot regulate the
      rent of the other cultivated land which can never be turned to that
      produce.

      The food produced by a field of potatoes is not inferior in quantity to
      that produced by a field of rice, and much superior to what is produced by
      a field of wheat. Twelve thousand weight of potatoes from an acre of land
      is not a greater produce than two thousand weight of wheat. The food or
      solid nourishment, indeed, which can be drawn from each of those two
      plants, is not altogether in proportion to their weight, on account of the
      watery nature of potatoes. Allowing, however, half the weight of this root
      to go to water, a very large allowance, such an acre of potatoes will
      still produce six thousand weight of solid nourishment, three times the
      quantity produced by the acre of wheat. An acre of potatoes is cultivated
      with less expense than an acre of wheat; the fallow, which generally
      precedes the sowing of wheat, more than compensating the hoeing and other
      extraordinary culture which is always given to potatoes. Should this root
      ever become in any part of Europe, like rice in some rice countries, the
      common and favourite vegetable food of the people, so as to occupy the
      same proportion of the lands in tillage, which wheat and other sorts of
      grain for human food do at present, the same quantity of cultivated land
      would maintain a much greater number of people; and the labourers being
      generally fed with potatoes, a greater surplus would remain after
      replacing all the stock, and maintaining all the labour employed in
      cultivation. A greater share of this surplus, too, would belong to the
      landlord. Population would increase, and rents would rise much beyond what
      they are at present.

      The land which is fit for potatoes, is fit for almost every other useful
      vegetable. If they occupied the same proportion of cultivated land which
      corn does at present, they would regulate, in the same manner, the rent of
      the greater part of other cultivated land.

      In some parts of Lancashire, it is pretended, I have been told, that bread
      of oatmeal is a heartier food for labouring people than wheaten bread, and
      I have frequently heard the same doctrine held in Scotland. I am, however,
      somewhat doubtful of the truth of it. The common people in Scotland, who
      are fed with oatmeal, are in general neither so strong nor so handsome as
      the same rank of people in England, who are fed with wheaten bread. They
      neither work so well, nor look so well; and as there is not the same
      difference between the people of fashion in the two countries, experience
      would seem to shew, that the food of the common people in Scotland is not
      so suitable to the human constitution as that of their neighbours of the
      same rank in England. But it seems to be otherwise with potatoes. The
      chairmen, porters, and coal-heavers in London, and those unfortunate women
      who live by prostitution, the strongest men and the most beautiful women
      perhaps in the British dominions, are said to be, the greater part of
      them, from the lowest rank of people in Ireland, who are generally fed
      with this root. No food can afford a more decisive proof of its nourishing
      quality, or of its being peculiarly suitable to the health of the human
      constitution.

      It is difficult to preserve potatoes through the year, and impossible to
      store them like corn, for two or three years together. The fear of not
      being able to sell them before they rot, discourages their cultivation,
      and is, perhaps, the chief obstacle to their ever becoming in any great
      country, like bread, the principal vegetable food of all the different
      ranks of the people.




      PART II.—Of the Produce of Land, which sometimes does, and sometimes
      does not, afford Rent.

      Human food seems to be the only produce of land, which always and
      necessarily affords some rent to the landlord. Other sorts of produce
      sometimes may, and sometimes may not, according to different
      circumstances.

      After food, clothing and lodging are the two great wants of mankind.

      Land, in its original rude state, can afford the materials of clothing and
      lodging to a much greater number of people than it can feed. In its
      improved state, it can sometimes feed a greater number of people than it
      can supply with those materials; at least in the way in which they require
      them, and are willing to pay for them. In the one state, therefore, there
      is always a superabundance of these materials, which are frequently, upon
      that account, of little or no value. In the other, there is often a
      scarcity, which necessarily augments their value. In the one state, a
      great part of them is thrown away as useless and the price of what is used
      is considered as equal only to the labour and expense of fitting it for
      use, and can, therefore, afford no rent to the landlord. In the other,
      they are all made use of, and there is frequently a demand for more than
      can be had. Somebody is always willing to give more for every part of
      them, than what is sufficient to pay the expense of bringing them to
      market. Their price, therefore, can always afford some rent to the
      landlord.

      The skins of the larger animals were the original materials of clothing.
      Among nations of hunters and shepherds, therefore, whose food consists
      chiefly in the flesh of those animals, everyman, by providing himself with
      food, provides himself with the materials of more clothing than he can
      wear. If there was no foreign commerce, the greater part of them would be
      thrown away as things of no value. This was probably the case among the
      hunting nations of North America, before their country was discovered by
      the Europeans, with whom they now exchange their surplus peltry, for
      blankets, fire-arms, and brandy, which gives it some value. In the present
      commercial state of the known world, the most barbarous nations, I
      believe, among whom land property is established, have some foreign
      commerce of this kind, and find among their wealthier neighbours such a
      demand for all the materials of clothing, which their land produces, and
      which can neither be wrought up nor consumed at home, as raises their
      price above what it costs to send them to those wealthier neighbours. It
      affords, therefore, some rent to the landlord. When the greater part of
      the Highland cattle were consumed on their own hills, the exportation of
      their hides made the most considerable article of the commerce of that
      country, and what they were exchanged for afforded some addition to the
      rent of the Highland estates. The wool of England, which in old times,
      could neither be consumed nor wrought up at home, found a market in the
      then wealthier and more industrious country of Flanders, and its price
      afforded something to the rent of the land which produced it. In countries
      not better cultivated than England was then, or than the Highlands of
      Scotland are now, and which had no foreign commerce, the materials of
      clothing would evidently be so superabundant, that a great part of them
      would be thrown away as useless, and no part could afford any rent to the
      landlord.

      The materials of lodging cannot always be transported to so great a
      distance as those of clothing, and do not so readily become an object of
      foreign commerce. When they are superabundant in the country which
      produces them, it frequently happens, even in the present commercial state
      of the world, that they are of no value to the landlord. A good stone
      quarry in the neighbourhood of London would afford a considerable rent. In
      many parts of Scotland and Wales it affords none. Barren timber for
      building is of great value in a populous and well-cultivated country, and
      the land which produces it affords a considerable rent. But in many parts
      of North America, the landlord would be much obliged to any body who would
      carry away the greater part of his large trees. In some parts of the
      Highlands of Scotland, the bark is the only part of the wood which, for
      want of roads and water-carriage, can be sent to market; the timber is
      left to rot upon the ground. When the materials of lodging are so
      superabundant, the part made use of is worth only the labour and expense
      of fitting it for that use. It affords no rent to the landlord, who
      generally grants the use of it to whoever takes the trouble of asking it.
      The demand of wealthier nations, however, sometimes enables him to get a
      rent for it. The paving of the streets of London has enabled the owners of
      some barren rocks on the coast of Scotland to draw a rent from what never
      afforded any before. The woods of Norway, and of the coasts of the Baltic,
      find a market in many parts of Great Britain, which they could not find at
      home, and thereby afford some rent to their proprietors.

      Countries are populous, not in proportion to the number of people whom
      their produce can clothe and lodge, but in proportion to that of those
      whom it can feed. When food is provided, it is easy to find the necessary
      clothing and lodging. But though these are at hand, it may often be
      difficult to find food. In some parts of the British dominions, what is
      called a house may be built by one day’s labour of one man. The simplest
      species of clothing, the skins of animals, require somewhat more labour to
      dress and prepare them for use. They do not, however, require a great
      deal. Among savage or barbarous nations, a hundredth, or little more than
      a hundredth part of the labour of the whole year, will be sufficient to
      provide them with such clothing and lodging as satisfy the greater part of
      the people. All the other ninety-nine parts are frequently no more than
      enough to provide them with food.

      But when, by the improvement and cultivation of land, the labour of one
      family can provide food for two, the labour of half the society becomes
      sufficient to provide food for the whole. The other half, therefore, or at
      least the greater part of them, can be employed in providing other things,
      or in satisfying the other wants and fancies of mankind. Clothing and
      lodging, household furniture, and what is called equipage, are the
      principal objects of the greater part of those wants and fancies. The rich
      man consumes no more food than his poor neighbour. In quality it may be
      very different, and to select and prepare it may require more labour and
      art; but in quantity it is very nearly the same. But compare the spacious
      palace and great wardrobe of the one, with the hovel and the few rags of
      the other, and you will be sensible that the difference between their
      clothing, lodging, and household furniture, is almost as great in quantity
      as it is in quality. The desire of food is limited in every man by the
      narrow capacity of the human stomach; but the desire of the conveniencies
      and ornaments of building, dress, equipage, and household furniture, seems
      to have no limit or certain boundary. Those, therefore, who have the
      command of more food than they themselves can consume, are always willing
      to exchange the surplus, or, what is the same thing, the price of it, for
      gratifications of this other kind. What is over and above satisfying the
      limited desire, is given for the amusement of those desires which cannot
      be satisfied, but seem to be altogether endless. The poor, in order to
      obtain food, exert themselves to gratify those fancies of the rich; and to
      obtain it more certainly, they vie with one another in the cheapness and
      perfection of their work. The number of workmen increases with the
      increasing quantity of food, or with the growing improvement and
      cultivation of the lands; and as the nature of their business admits of
      the utmost subdivisions of labour, the quantity of materials which they
      can work up, increases in a much greater proportion than their numbers.
      Hence arises a demand for every sort of material which human invention can
      employ, either usefully or ornamentally, in building, dress, equipage, or
      household furniture; for the fossils and minerals contained in the bowels
      of the earth, the precious metals, and the precious stones.

      Food is, in this manner, not only the original source of rent, but every
      other part of the produce of land which afterwards affords rent, derives
      that part of its value from the improvement of the powers of labour in
      producing food, by means of the improvement and cultivation of land.

      Those other parts of the produce of land, however, which afterwards afford
      rent, do not afford it always. Even in improved and cultivated countries,
      the demand for them is not always such as to afford a greater price than
      what is sufficient to pay the labour, and replace, together with its
      ordinary profits, the stock which must be employed in bringing them to
      market. Whether it is or is not such, depends upon different
      circumstances.

      Whether a coal mine, for example, can afford any rent, depends partly upon
      its fertility, and partly upon its situation.

      A mine of any kind may be said to be either fertile or barren, according
      as the quantity of mineral which can be brought from it by a certain
      quantity of labour, is greater or less than what can be brought by an
      equal quantity from the greater part of other mines of the same kind.

      Some coal mines, advantageously situated, cannot be wrought on account of
      their barrenness. The produce does not pay the expense. They can afford
      neither profit nor rent.

      There are some, of which the produce is barely sufficient to pay the
      labour, and replace, together with its ordinary profits, the stock
      employed in working them. They afford some profit to the undertaker of the
      work, but no rent to the landlord. They can be wrought advantageously by
      nobody but the landlord, who, being himself the undertaker of the work,
      gets the ordinary profit of the capital which he employs in it. Many coal
      mines in Scotland are wrought in this manner, and can be wrought in no
      other. The landlord will allow nobody else to work them without paying
      some rent, and nobody can afford to pay any.

      Other coal mines in the same country, sufficiently fertile, cannot be
      wrought on account of their situation. A quantity of mineral, sufficient
      to defray the expense of working, could be brought from the mine by the
      ordinary, or even less than the ordinary quantity of labour: but in an
      inland country, thinly inhabited, and without either good roads or
      water-carriage, this quantity could not be sold.

      Coals are a less agreeable fuel than wood: they are said too to be less
      wholesome. The expense of coals, therefore, at the place where they are
      consumed, must generally be somewhat less than that of wood.

      The price of wood, again, varies with the state of agriculture, nearly in
      the same manner, and exactly for the same reason, as the price of cattle.
      In its rude beginnings, the greater part of every country is covered with
      wood, which is then a mere incumbrance, of no value to the landlord, who
      would gladly give it to any body for the cutting. As agriculture advances,
      the woods are partly cleared by the progress of tillage, and partly go to
      decay in consequence of the increased number of cattle. These, though they
      do not increase in the same proportion as corn, which is altogether the
      acquisition of human industry, yet multiply under the care and protection
      of men, who store up in the season of plenty what may maintain them in
      that of scarcity; who, through the whole year, furnish them with a greater
      quantity of food than uncultivated nature provides for them; and who, by
      destroying and extirpating their enemies, secure them in the free
      enjoyment of all that she provides. Numerous herds of cattle, when allowed
      to wander through the woods, though they do not destroy the old trees,
      hinder any young ones from coming up; so that, in the course of a century
      or two, the whole forest goes to ruin. The scarcity of wood then raises
      its price. It affords a good rent; and the landlord sometimes finds that
      he can scarce employ his best lands more advantageously than in growing
      barren timber, of which the greatness of the profit often compensates the
      lateness of the returns. This seems, in the present times, to be nearly
      the state of things in several parts of Great Britain, where the profit of
      planting is found to be equal to that of either corn or pasture. The
      advantage which the landlord derives from planting can nowhere exceed, at
      least for any considerable time, the rent which these could afford him;
      and in an inland country, which is highly cultivated, it will frequently
      not fall much short of this rent. Upon the sea-coast of a well-improved
      country, indeed, if coals can conveniently be had for fuel, it may
      sometimes be cheaper to bring barren timber for building from less
      cultivated foreign countries than to raise it at home. In the new town of
      Edinburgh, built within these few years, there is not, perhaps, a single
      stick of Scotch timber.

      Whatever may be the price of wood, if that of coals is such that the
      expense of a coal fire is nearly equal to that of a wood one we may be
      assured, that at that place, and in these circumstances, the price of
      coals is as high as it can be. It seems to be so in some of the inland
      parts of England, particularly in Oxfordshire, where it is usual, even in
      the fires of the common people, to mix coals and wood together, and where
      the difference in the expense of those two sorts of fuel cannot,
      therefore, be very great. Coals, in the coal countries, are everywhere
      much below this highest price. If they were not, they could not bear the
      expense of a distant carriage, either by land or by water. A small
      quantity only could be sold; and the coal masters and the coal proprietors
      find it more for their interest to sell a great quantity at a price
      somewhat above the lowest, than a small quantity at the highest. The most
      fertile coal mine, too, regulates the price of coals at all the other
      mines in its neighbourhood. Both the proprietor and the undertaker of the
      work find, the one that he can get a greater rent, the other that he can
      get a greater profit, by somewhat underselling all their neighbours. Their
      neighbours are soon obliged to sell at the same price, though they cannot
      so well afford it, and though it always diminishes, and sometimes takes
      away altogether, both their rent and their profit. Some works are
      abandoned altogether; others can afford no rent, and can be wrought only
      by the proprietor.

      The lowest price at which coals can be sold for any considerable time, is,
      like that of all other commodities, the price which is barely sufficient
      to replace, together with its ordinary profits, the stock which must be
      employed in bringing them to market. At a coal mine for which the landlord
      can get no rent, but, which he must either work himself or let it alone
      altogether, the price of coals must generally be nearly about this price.

      Rent, even where coals afford one, has generally a smaller share in their
      price than in that of most other parts of the rude produce of land. The
      rent of an estate above ground, commonly amounts to what is supposed to be
      a third of the gross produce; and it is generally a rent certain and
      independent of the occasional variations in the crop. In coal mines, a
      fifth of the gross produce is a very great rent, a tenth the common rent;
      and it is seldom a rent certain, but depends upon the occasional
      variations in the produce. These are so great, that in a country where
      thirty years purchase is considered as a moderate price for the property
      of a landed estate, ten years purchase is regarded as a good price for
      that of a coal mine.

      The value of a coal mine to the proprietor, frequently depends as much
      upon its situation as upon its fertility. That of a metallic mine depends
      more upon its fertility, and less upon its situation. The coarse, and
      still more the precious metals, when separated from the ore, are so
      valuable, that they can generally bear the expense of a very long land,
      and of the most distant sea carriage. Their market is not confined to the
      countries in the neighbourhood of the mine, but extends to the whole
      world. The copper of Japan makes an article of commerce in Europe; the
      iron of Spain in that of Chili and Peru. The silver of Peru finds its way,
      not only to Europe, but from Europe to China.

      The price of coals in Westmoreland or Shropshire can have little effect on
      their price at Newcastle; and their price in the Lionnois can have none at
      all. The productions of such distant coal mines can never be brought into
      competition with one another. But the productions of the most distant
      metallic mines frequently may, and in fact commonly are.

      The price, therefore, of the coarse, and still more that of the precious
      metals, at the most fertile mines in the world, must necessarily more or
      less affect their price at every other in it. The price of copper in Japan
      must have some influence upon its price at the copper mines in Europe. The
      price of silver in Peru, or the quantity either of labour or of other
      goods which it will purchase there, must have some influence on its price,
      not only at the silver mines of Europe, but at those of China. After the
      discovery of the mines of Peru, the silver mines of Europe were, the
      greater part of them, abandoned. The value of silver was so much reduced,
      that their produce could no longer pay the expense of working them, or
      replace, with a profit, the food, clothes, lodging, and other necessaries
      which were consumed in that operation. This was the case, too, with the
      mines of Cuba and St. Domingo, and even with the ancient mines of Peru,
      after the discovery of those of Potosi. The price of every metal, at every
      mine, therefore, being regulated in some measure by its price at the most
      fertile mine in the world that is actually wrought, it can, at the greater
      part of mines, do very little more than pay the expense of working, and
      can seldom afford a very high rent to the landlord. Rent accordingly,
      seems at the greater part of mines to have but a small share in the price
      of the coarse, and a still smaller in that of the precious metals. Labour
      and profit make up the greater part of both.

      A sixth part of the gross produce may be reckoned the average rent of the
      tin mines of Cornwall, the most fertile that are known in the world, as we
      are told by the Rev. Mr Borlace, vice-warden of the stannaries. Some, he
      says, afford more, and some do not afford so much. A sixth part of the
      gross produce is the rent, too, of several very fertile lead mines in
      Scotland.

      In the silver mines of Peru, we are told by Frezier and Ulloa, the
      proprietor frequently exacts no other acknowledgment from the undertaker
      of the mine, but that he will grind the ore at his mill, paying him the
      ordinary multure or price of grinding. Till 1736, indeed, the tax of the
      king of Spain amounted to one fifth of the standard silver, which till
      then might be considered as the real rent of the greater part of the
      silver mines of Peru, the richest which have been known in the world. If
      there had been no tax, this fifth would naturally have belonged to the
      landlord, and many mines might have been wrought which could not then be
      wrought, because they could not afford this tax. The tax of the duke of
      Cornwall upon tin is supposed to amount to more than five per cent. or one
      twentieth part of the value; and whatever may be his proportion, it would
      naturally, too, belong to the proprietor of the mine, if tin was duty
      free. But if you add one twentieth to one sixth, you will find that the
      whole average rent of the tin mines of Cornwall, was to the whole average
      rent of the silver mines of Peru, as thirteen to twelve. But the silver
      mines of Peru are not now able to pay even this low rent; and the tax upon
      silver was, in 1736, reduced from one fifth to one tenth. Even this tax
      upon silver, too, gives more temptation to smuggling than the tax of one
      twentieth upon tin; and smuggling must be much easier in the precious than
      in the bulky commodity. The tax of the king of Spain, accordingly, is said
      to be very ill paid, and that of the duke of Cornwall very well. Rent,
      therefore, it is probable, makes a greater part of the price of tin at the
      most fertile tin mines than it does of silver at the most fertile silver
      mines in the world. After replacing the stock employed in working those
      different mines, together with its ordinary profits, the residue which
      remains to the proprietor is greater, it seems, in the coarse, than in the
      precious metal.

      Neither are the profits of the undertakers of silver mines commonly very
      great in Peru. The same most respectable and well-informed authors
      acquaint us, that when any person undertakes to work a new mine in Peru,
      he is universally looked upon as a man destined to bankruptcy and ruin,
      and is upon that account shunned and avoided by every body. Mining, it
      seems, is considered there in the same light as here, as a lottery, in
      which the prizes do not compensate the blanks, though the greatness of
      some tempts many adventurers to throw away their fortunes in such
      unprosperous projects.

      As the sovereign, however, derives a considerable part of his revenue from
      the produce of silver mines, the law in Peru gives every possible
      encouragement to the discovery and working of new ones. Whoever discovers
      a new mine, is entitled to measure off two hundred and forty-six feet in
      length, according to what he supposes to be the direction of the vein, and
      half as much in breadth. He becomes proprietor of this portion of the
      mine, and can work it without paving any acknowledgment to the landlord.
      The interest of the duke of Cornwall has given occasion to a regulation
      nearly of the same kind in that ancient dutchy. In waste and uninclosed
      lands, any person who discovers a tin mine may mark out its limits to a
      certain extent, which is called bounding a mine. The bounder becomes the
      real proprietor of the mine, and may either work it himself, or give it in
      lease to another, without the consent of the owner of the land, to whom,
      however, a very small acknowledgment must be paid upon working it. In both
      regulations, the sacred rights of private property are sacrificed to the
      supposed interests of public revenue.

      The same encouragement is given in Peru to the discovery and working of
      new gold mines; and in gold the king’s tax amounts only to a twentieth
      part of the standard rental. It was once a fifth, and afterwards a tenth,
      as in silver; but it was found that the work could not bear even the
      lowest of these two taxes. If it is rare, however, say the same authors,
      Frezier and Ulloa, to find a person who has made his fortune by a silver,
      it is still much rarer to find one who has done so by a gold mine. This
      twentieth part seems to be the whole rent which is paid by the greater
      part of the gold mines of Chili and Peru. Gold, too, is much more liable
      to be smuggled than even silver; not only on account of the superior value
      of the metal in proportion to its bulk, but on account of the peculiar way
      in which nature produces it. Silver is very seldom found virgin, but, like
      most other metals, is generally mineralized with some other body, from
      which it is impossible to separate it in such quantities as will pay for
      the expense, but by a very laborious and tedious operation, which cannot
      well be carried on but in work-houses erected for the purpose, and,
      therefore, exposed to the inspection of the king’s officers. Gold, on the
      contrary, is almost always found virgin. It is sometimes found in pieces
      of some bulk; and, even when mixed, in small and almost insensible
      particles, with sand, earth, and other extraneous bodies, it can be
      separated from them by a very short and simple operation, which can be
      carried on in any private house by any body who is possessed of a small
      quantity of mercury. If the king’s tax, therefore, is but ill paid upon
      silver, it is likely to be much worse paid upon gold; and rent must make a
      much smaller part of the price of gold than that of silver.

      The lowest price at which the precious metals can be sold, or the smallest
      quantity of other goods for which they can be exchanged, during any
      considerable time, is regulated by the same principles which fix the
      lowest ordinary price of all other goods. The stock which must commonly be
      employed, the food, clothes, and lodging, which must commonly be consumed
      in bringing them from the mine to the market, determine it. It must at
      least be sufficient to replace that stock, with the ordinary profits.

      Their highest price, however, seems not to be necessarily determined by
      any thing but the actual scarcity or plenty of these metals themselves. It
      is not determined by that of any other commodity, in the same manner as
      the price of coals is by that of wood, beyond which no scarcity can ever
      raise it. Increase the scarcity of gold to a certain degree, and the
      smallest bit of it may become more precious than a diamond, and exchange
      for a greater quantity of other goods.

      The demand for those metals arises partly from their utility, and partly
      from their beauty. If you except iron, they are more useful than, perhaps,
      any other metal. As they are less liable to rust and impurity, they can
      more easily be kept clean; and the utensils, either of the table or the
      kitchen, are often, upon that account, more agreeable when made of them. A
      silver boiler is more cleanly than a lead, copper, or tin one; and the
      same quality would render a gold boiler still better than a silver one.
      Their principal merit, however, arises from their beauty, which renders
      them peculiarly fit for the ornaments of dress and furniture. No paint or
      dye can give so splendid a colour as gilding. The merit of their beauty is
      greatly enhanced by their scarcity. With the greater part of rich people,
      the chief enjoyment of riches consists in the parade of riches; which, in
      their eye, is never so complete as when they appear to possess those
      decisive marks of opulence which nobody can possess but themselves. In
      their eyes, the merit of an object, which is in any degree either useful
      or beautiful, is greatly enhanced by its scarcity, or by the great labour
      which it requires to collect any considerable quantity of it; a labour
      which nobody can afford to pay but themselves. Such objects they are
      willing to purchase at a higher price than things much more beautiful and
      useful, but more common. These qualities of utility, beauty, and scarcity,
      are the original foundation of the high price of those metals, or of the
      great quantity of other goods for which they can everywhere be exchanged.
      This value was antecedent to, and independent of their being employed as
      coin, and was the quality which fitted them for that employment. That
      employment, however, by occasioning a new demand, and by diminishing the
      quantity which could be employed in any other way, may have afterwards
      contributed to keep up or increase their value.

      The demand for the precious stones arises altogether from their beauty.
      They are of no use but as ornaments; and the merit of their beauty is
      greatly enhanced by their scarcity, or by the difficulty and expense of
      getting them from the mine. Wages and profit accordingly make up, upon
      most occasions, almost the whole of the high price. Rent comes in but for
      a very small share, frequently for no share; and the most fertile mines
      only afford any considerable rent. When Tavernier, a jeweller, visited the
      diamond mines of Golconda and Visiapour, he was informed that the
      sovereign of the country, for whose benefit they were wrought, had ordered
      all of them to be shut up except those which yielded the largest and
      finest stones. The other, it seems, were to the proprietor not worth the
      working.

      As the prices, both of the precious metals and of the precious stones, is
      regulated all over the world by their price at the most fertile mine in
      it, the rent which a mine of either can afford to its proprietor is in
      proportion, not to its absolute, but to what may be called its relative
      fertility, or to its superiority over other mines of the same kind. If new
      mines were discovered, as much superior to those of Potosi, as they were
      superior to those of Europe, the value of silver might be so much degraded
      as to render even the mines of Potosi not worth the working. Before the
      discovery of the Spanish West Indies, the most fertile mines in Europe may
      have afforded as great a rent to their proprietors as the richest mines in
      Peru do at present. Though the quantity of silver was much less, it might
      have exchanged for an equal quantity of other goods, and the proprietor’s
      share might have enabled him to purchase or command an equal quantity
      either of labour or of commodities.

      The value, both of the produce and of the rent, the real revenue which
      they afforded, both to the public and to the proprietor, might have been
      the same.

      The most abundant mines, either of the precious metals, or of the precious
      stones, could add little to the wealth of the world. A produce, of which
      the value is principally derived from its scarcity, is necessarily
      degraded by its abundance. A service of plate, and the other frivolous
      ornaments of dress and furniture, could be purchased for a smaller
      quantity of commodities; and in this would consist the sole advantage
      which the world could derive from that abundance.

      It is otherwise in estates above ground. The value, both of their produce
      and of their rent, is in proportion to their absolute, and not to their
      relative fertility. The land which produces a certain quantity of food,
      clothes, and lodging, can always feed, clothe, and lodge, a certain number
      of people; and whatever may be the proportion of the landlord, it will
      always give him a proportionable command of the labour of those people,
      and of the commodities with which that labour can supply him. The value of
      the most barren land is not diminished by the neighbourhood of the most
      fertile. On the contrary, it is generally increased by it. The great
      number of people maintained by the fertile lands afford a market to many
      parts of the produce of the barren, which they could never have found
      among those whom their own produce could maintain.

      Whatever increases the fertility of land in producing food, increases not
      only the value of the lands upon which the improvement is bestowed, but
      contributes likewise to increase that of many other lands, by creating a
      new demand for their produce. That abundance of food, of which, in
      consequence of the improvement of land, many people have the disposal
      beyond what they themselves can consume, is the great cause of the demand,
      both for the precious metals and the precious stones, as well as for every
      other conveniency and ornament of dress, lodging, household furniture, and
      equipage. Food not only constitutes the principal part of the riches of
      the world, but it is the abundance of food which gives the principal part
      of their value to many other sorts of riches. The poor inhabitants of Cuba
      and St. Domingo, when they were first discovered by the Spaniards, used to
      wear little bits of gold as ornaments in their hair and other parts of
      their dress. They seemed to value them as we would do any little pebbles
      of somewhat more than ordinary beauty, and to consider them as just worth
      the picking up, but not worth the refusing to any body who asked them,
      They gave them to their new guests at the first request, without seeming
      to think that they had made them any very valuable present. They were
      astonished to observe the rage of the Spaniards to obtain them; and had no
      notion that there could anywhere be a country in which many people had the
      disposal of so great a superfluity of food; so scanty always among
      themselves, that, for a very small quantity of those glittering baubles,
      they would willingly give as much as might maintain a whole family for
      many years. Could they have been made to understand this, the passion of
      the Spaniards would not have surprised them.




      PART III.—Of the variations in the Proportion between the respective
      Values of that sort of Produce which always affords Rent, and of that
      which sometimes does, and sometimes does not, afford Rent.

      The increasing abundance of food, in consequence of the increasing
      improvement and cultivation, must necessarily increase the demand for
      every part of the produce of land which is not food, and which can be
      applied either to use or to ornament. In the whole progress of
      improvement, it might, therefore, be expected there should be only one
      variation in the comparative values of those two different sorts of
      produce. The value of that sort which sometimes does, and sometimes does
      not afford rent, should constantly rise in proportion to that which always
      affords some rent. As art and industry advance, the materials of clothing
      and lodging, the useful fossils and materials of the earth, the precious
      metals and the precious stones, should gradually come to be more and more
      in demand, should gradually exchange for a greater and a greater quantity
      of food; or, in other words, should gradually become dearer and dearer.
      This, accordingly, has been the case with most of these things upon most
      occasions, and would have been the case with all of them upon all
      occasions, if particular accidents had not, upon some occasions, increased
      the supply of some of them in a still greater proportion than the demand.

      The value of a free-stone quarry, for example, will necessarily increase
      with the increasing improvement and population of the country round about
      it, especially if it should be the only one in the neighbourhood. But the
      value of a silver mine, even though there should not be another within a
      thousand miles of it, will not necessarily increase with the improvement
      of the country in which it is situated. The market for the produce of a
      free-stone quarry can seldom extend more than a few miles round about it,
      and the demand must generally be in proportion to the improvement and
      population of that small district; but the market for the produce of a
      silver mine may extend over the whole known world. Unless the world in
      general, therefore, be advancing in improvement and population, the demand
      for silver might not be at all increased by the improvement even of a
      large country in the neighbourhood of the mine. Even though the world in
      general were improving, yet if, in the course of its improvements, new
      mines should be discovered, much more fertile than any which had been
      known before, though the demand for silver would necessarily increase, yet
      the supply might increase in so much a greater proportion, that the real
      price of that metal might gradually fall; that is, any given quantity, a
      pound weight of it, for example, might gradually purchase or command a
      smaller and a smaller quantity of labour, or exchange for a smaller and a
      smaller quantity of corn, the principal part of the subsistence of the
      labourer.

      The great market for silver is the commercial and civilized part of the
      world.

      If, by the general progress of improvement, the demand of this market
      should increase, while, at the same time, the supply did not increase in
      the same proportion, the value of silver would gradually rise in
      proportion to that of corn. Any given quantity of silver would exchange
      for a greater and a greater quantity of corn; or, in other words, the
      average money price of corn would gradually become cheaper and cheaper.

      If, on the contrary, the supply, by some accident, should increase, for
      many years together, in a greater proportion than the demand, that metal
      would gradually become cheaper and cheaper; or, in other words, the
      average money price of corn would, in spite of all improvements, gradually
      become dearer and dearer.

      But if, on the other hand, the supply of that metal should increase nearly
      in the same proportion as the demand, it would continue to purchase or
      exchange for nearly the same quantity of corn; and the average money price
      of corn would, in spite of all improvements. continue very nearly the
      same.

      These three seem to exhaust all the possible combinations of events which
      can happen in the progress of improvement; and during the course of the
      four centuries preceding the present, if we may judge by what has happened
      both in France and Great Britain, each of those three different
      combinations seems to have taken place in the European market, and nearly
      in the same order, too, in which I have here set them down.

      _Digression concerning the Variations in the value of Silver during the
      Course of the Four last Centuries._




      First Period.—In 1350, and for some time before, the average price
      of the quarter of wheat in England seems not to have been estimated lower
      than four ounces of silver, Tower weight, equal to about twenty shillings
      of our present money. From this price it seems to have fallen gradually to
      two ounces of silver, equal to about ten shillings of our present money,
      the price at which we find it estimated in the beginning of the sixteenth
      century, and at which it seems to have continued to be estimated till
      about 1570.

      In 1350, being the 25th of Edward III. was enacted what is called the
      Statute of Labourers. In the preamble, it complains much of the insolence
      of servants, who endeavoured to raise their wages upon their masters. It
      therefore ordains, that all servants and labourers should, for the future,
      be contented with the same wages and liveries (liveries in those times
      signified not only clothes, but provisions) which they had been accustomed
      to receive in the 20th year of the king, and the four preceding years;
      that, upon this account, their livery-wheat should nowhere be estimated
      higher than tenpence a-bushel, and that it should always be in the option
      of the master to deliver them either the wheat or the money. Tenpence:
      a-bushel, therefore, had, in the 25th of Edward III. been reckoned a very
      moderate price of wheat, since it required a particular statute to oblige
      servants to accept of it in exchange for their usual livery of provisions;
      and it had been reckoned a reasonable price ten years before that, or in
      the 16th year of the king, the term to which the statute refers. But in
      the 16th year of Edward III. tenpence contained about half an ounce of
      silver, Tower weight, and was nearly equal to half-a-crown of our present
      money. Four ounces of silver, Tower weight, therefore, equal to six
      shillings and eightpence of the money of those times, and to near twenty
      shillings of that of the present, must have been reckoned a moderate price
      for the quarter of eight bushels.

      This statute is surely a better evidence of what was reckoned, in those
      times, a moderate price of grain, than the prices of some particular
      years, which have generally been recorded by historians and other writers,
      on account of their extraordinary dearness or cheapness, and from which,
      therefore, it is difficult to form any judgment concerning what may have
      been the ordinary price. There are, besides, other reasons for believing
      that, in the beginning of the fourteenth century, and for some time
      before, the common price of wheat was not less than four ounces of silver
      the quarter, and that of other grain in proportion.

      In 1309, Ralph de Born, prior of St Augustine’s, Canterbury, gave a feast
      upon his installation-day, of which William Thorn has preserved, not only
      the bill of fare, but the prices of many particulars. In that feast were
      consumed, 1st, fifty-three quarters of wheat, which cost nineteen pounds,
      or seven shillings, and twopence a-quarter, equal to about one-and-twenty
      shillings and sixpence of our present money; 2dly, fifty-eight quarters of
      malt, which cost seventeen pounds ten shillings, or six shillings
      a-quarter, equal to about eighteen shillings of our present money; 3dly,
      twenty quarters of oats, which cost four pounds, or four shillings
      a-quarter, equal to about twelve shillings of our present money. The
      prices of malt and oats seem here to be higher than their ordinary
      proportion to the price of wheat.

      These prices are not recorded, on account of their extraordinary dearness
      or cheapness, but are mentioned accidentally, as the prices actually paid
      for large quantities of grain consumed at a feast, which was famous for
      its magnificence.

      In 1262, being the 51st of Henry III. was revived an ancient statute,
      called the assize of bread and ale, which, the king says in the preamble,
      had been made in the times of his progenitors, some time kings of England.
      It is probably, therefore, as old at least as the time of his grandfather,
      Henry II. and may have been as old as the Conquest. It regulates the price
      of bread according as the prices of wheat may happen to be, from one
      shilling to twenty shillings the quarter of the money of those times. But
      statutes of this kind are generally presumed to provide with equal care
      for all deviations from the middle price, for those below it, as well as
      for those above it. Ten shillings, therefore, containing six ounces of
      silver, Tower weight, and equal to about thirty shillings of our present
      money, must, upon this supposition, have been reckoned the middle price of
      the quarter of wheat when this statute was first enacted, and must have
      continued to be so in the 51st of Henry III. We cannot, therefore, be very
      wrong in supposing that the middle price was not less than one-third of
      the highest price at which this statute regulates the price of bread, or
      than six shillings and eightpence of the money of those times, containing
      four ounces of silver, Tower weight.

      From these different facts, therefore, we seem to have some reason to
      conclude that, about the middle of the fourteenth century, and for a
      considerable time before, the average or ordinary price of the quarter of
      wheat was not supposed to be less than four ounces of silver, Tower
      weight.

      From about the middle of the fourteenth to the beginning of the sixteenth
      century, what was reckoned the reasonable and moderate, that is, the
      ordinary or average price of wheat, seems to have sunk gradually to about
      one half of this price; so as at last to have fallen to about two ounces
      of silver, Tower weight, equal to about ten shillings of our present
      money. It continued to be estimated at this price till about 1570.

      In the household book of Henry, the fifth earl of Northumberland, drawn up
      in 1512 there are two different estimations of wheat. In one of them it is
      computed at six shilling and eightpence the quarter, in the other at five
      shillings and eightpence only. In 1512, six shillings and eightpence
      contained only two ounces of silver, Tower weight, and were equal to about
      ten shillings of our present money.

      From the 25th of Edward III. to the beginning of the reign of Elizabeth,
      during the space of more than two hundred years, six shillings and
      eightpence, it appears from several different statutes, had continued to
      be considered as what is called the moderate and reasonable, that is, the
      ordinary or average price of wheat. The quantity of silver, however,
      contained in that nominal sum was, during the course of this period,
      continually diminishing in consequence of some alterations which were made
      in the coin. But the increase of the value of silver had, it seems, so far
      compensated the diminution of the quantity of it contained in the same
      nominal sum, that the legislature did not think it worth while to attend
      to this circumstance.

      Thus, in 1436, it was enacted, that wheat might be exported without a
      licence when the price was so low as six shillings and eightpence: and in
      1463, it was enacted, that no wheat should be imported if the price was
      not above six shillings and eightpence the quarter: The legislature had
      imagined, that when the price was so low, there could be no inconveniency
      in exportation, but that when it rose higher, it became prudent to allow
      of importation. Six shillings and eightpence, therefore, containing about
      the same quantity of silver as thirteen shillings and fourpence of our
      present money (one-third part less than the same nominal sum contained in
      the time of Edward III), had, in those times, been considered as what is
      called the moderate and reasonable price of wheat.

      In 1554, by the 1st and 2nd of Philip and Mary, and in 1558, by the 1st of
      Elizabeth, the exportation of wheat was in the same manner prohibited,
      whenever the price of the quarter should exceed six shillings and
      eightpence, which did not then contain two penny worth more silver than
      the same nominal sum does at present. But it had soon been found, that to
      restrain the exportation of wheat till the price was so very low, was, in
      reality, to prohibit it altogether. In 1562, therefore, by the 5th of
      Elizabeth, the exportation of wheat was allowed from certain ports,
      whenever the price of the quarter should not exceed ten shillings,
      containing nearly the same quantity of silver as the like nominal sum does
      at present. This price had at this time, therefore, been considered as
      what is called the moderate and reasonable price of wheat. It agrees
      nearly with the estimation of the Northumberland book in 1512.

      That in France the average price of grain was, in the same manner, much
      lower in the end of the fifteenth and beginning of the sixteenth century,
      than in the two centuries preceding, has been observed both by Mr Dupré de
      St Maur, and by the elegant author of the Essay on the Policy of Grain.
      Its price, during the same period, had probably sunk in the same manner
      through the greater part of Europe.

      This rise in the value of silver, in proportion to that of corn, may
      either have been owing altogether to the increase of the demand for that
      metal, in consequence of increasing improvement and cultivation, the
      supply, in the mean time, continuing the same as before; or, the demand
      continuing the same as before, it may have been owing altogether to the
      gradual diminution of the supply: the greater part of the mines which were
      then known in the world being much exhausted, and, consequently, the
      expense of working them much increased; or it may have been owing partly
      to the one, and partly to the other of those two circumstances. In the end
      of the fifteenth and beginning of the sixteenth centuries, the greater
      part of Europe was approaching towards a more settled form of government
      than it had enjoyed for several ages before. The increase of security
      would naturally increase industry and improvement; and the demand for the
      precious metals, as well as for every other luxury and ornament, would
      naturally increase with the increase of riches. A greater annual produce
      would require a greater quantity of coin to circulate it; and a greater
      number of rich people would require a greater quantity of plate and other
      ornaments of silver. It is natural to suppose, too, that the greater part
      of the mines which then supplied the European market with silver might be
      a good deal exhausted, and have become more expensive in the working. They
      had been wrought, many of them, from the time of the Romans.

      It has been the opinion, however, of the greater part of those who have
      written upon the prices of commodities in ancient times, that, from the
      Conquest, perhaps from the invasion of Julius Caesar, till the discovery
      of the mines of America, the value of silver was continually diminishing.
      This opinion they seem to have been led into, partly by the observations
      which they had occasion to make upon the prices both of corn and of some
      other parts of the rude produce of land, and partly by the popular notion,
      that as the quantity of silver naturally increases in every country with
      the increase of wealth, so its value diminishes as it quantity increases.

      In their observations upon the prices of corn, three different
      circumstances seem frequently to have misled them.

      First, in ancient times, almost all rents were paid in kind; in a certain
      quantity of corn, cattle, poultry, etc. It sometimes happened, however,
      that the landlord would stipulate, that he should be at liberty to demand
      of the tenant, either the annual payment in kind or a certain sum of money
      instead of it. The price at which the payment in kind was in this manner
      exchanged for a certain sum of money, is in Scotland called the conversion
      price. As the option is always in the landlord to take either the
      substance or the price, it is necessary, for the safety of the tenant,
      that the conversion price should rather be below than above the average
      market price. In many places, accordingly, it is not much above one half
      of this price. Through the greater part of Scotland this custom still
      continues with regard to poultry, and in some places with regard to
      cattle. It might probably have continued to take place, too, with regard
      to corn, had not the institution of the public fiars put an end to it.
      These are annual valuations, according to the judgment of an assize, of
      the average price of all the different sorts of grain, and of all the
      different qualities of each, according to the actual market price in every
      different county. This institution rendered it sufficiently safe for the
      tenant, and much more convenient for the landlord, to convert, as they
      call it, the corn rent, rather at what should happen to be the price of
      the fiars of each year, than at any certain fixed price. But the writers
      who have collected the prices of corn in ancient times seem frequently to
      have mistaken what is called in Scotland the conversion price for the
      actual market price. Fleetwood acknowledges, upon one occasion, that he
      had made this mistake. As he wrote his book, however, for a particular
      purpose, he does not think proper to make this acknowledgment till after
      transcribing this conversion price fifteen times. The price is eight
      shillings the quarter of wheat. This sum in 1423, the year at which he
      begins with it, contained the same quantity of silver as sixteen shillings
      of our present money. But in 1562, the year at which he ends with it, it
      contained no more than the same nominal sum does at present.

      Secondly, they have been misled by the slovenly manner in which some
      ancient statutes of assize had been sometimes transcribed by lazy copiers,
      and sometimes, perhaps, actually composed by the legislature.

      The ancient statutes of assize seem to have begun always with determining
      what ought to be the price of bread and ale when the price of wheat and
      barley were at the lowest; and to have proceeded gradually to determine
      what it ought to be, according as the prices of those two sorts of grain
      should gradually rise above this lowest price. But the transcribers of
      those statutes seem frequently to have thought it sufficient to copy the
      regulation as far as the three or four first and lowest prices; saving in
      this manner their own labour, and judging, I suppose, that this was enough
      to show what proportion ought to be observed in all higher prices.

      Thus, in the assize of bread and ale, of the 51st of Henry III. the price
      of bread was regulated according to the different prices of wheat, from
      one shilling to twenty shillings the quarter of the money of those times.
      But in the manuscripts from which all the different editions of the
      statutes, preceding that of Mr Ruffhead, were printed, the copiers had
      never transcribed this regulation beyond the price of twelve shillings.
      Several writers, therefore, being misled by this faulty transcription,
      very naturally conclude that the middle price, or six shillings the
      quarter, equal to about eighteen shillings of our present money, was the
      ordinary or average price of wheat at that time.

      In the statute of Tumbrel and Pillory, enacted nearly about the same time,
      the price of ale is regulated according to every sixpence rise in the
      price of barley, from two shillings, to four shillings the quarter. That
      four shillings, however, was not considered as the highest price to which
      barley might frequently rise in those times, and that these prices were
      only given as an example of the proportion which ought to be observed in
      all other prices, whether higher or lower, we may infer from the last
      words of the statute: “Et sic deinceps crescetur vel diminuetur per sex
      denarios.” The expression is very slovenly, but the meaning is plain
      enough, “that the price of ale is in this manner to be increased or
      diminished according to every sixpence rise or fall in the price of
      barley.” In the composition of this statute, the legislature itself seems
      to have been as negligent as the copiers were in the transcription of the
      other.

      In an ancient manuscript of the Regiam Majestatem, an old Scotch law book,
      there is a statute of assize, in which the price of bread is regulated
      according to all the different prices of wheat, from tenpence to three
      shillings the Scotch boll, equal to about half an English quarter. Three
      shillings Scotch, at the time when this assize is supposed to have been
      enacted, were equal to about nine shillings sterling of our present money.
      Mr Ruddiman seems {See his Preface to Anderson’s Diplomata Scotiae.} to
      conclude from this, that three shillings was the highest price to which
      wheat ever rose in those times, and that tenpence, a shilling, or at most
      two shillings, were the ordinary prices. Upon consulting the manuscript,
      however, it appears evidently, that all these prices are only set down as
      examples of the proportion which ought to be observed between the
      respective prices of wheat and bread. The last words of the statute are
      “reliqua judicabis secundum praescripta, habendo respectum ad pretium
      bladi.”—“You shall judge of the remaining cases, according to what
      is above written, having respect to the price of corn.”

      Thirdly, they seem to have been misled too, by the very low price at which
      wheat was sometimes sold in very ancient times; and to have imagined, that
      as its lowest price was then much lower than in later times its ordinary
      price must likewise have been much lower. They might have found, however,
      that in those ancient times its highest price was fully as much above, as
      its lowest price was below any thing that had ever been known in later
      times. Thus, in 1270, Fleetwood gives us two prices of the quarter of
      wheat. The one is four pounds sixteen shillings of the money of those
      times, equal to fourteen pounds eight shillings of that of the present;
      the other is six pounds eight shillings, equal to nineteen pounds four
      shillings of our present money. No price can be found in the end of the
      fifteenth, or beginning of the sixteenth century, which approaches to the
      extravagance of these. The price of corn, though at all times liable to
      variation varies most in those turbulent and disorderly societies, in
      which the interruption of all commerce and communication hinders the
      plenty of one part of the country from relieving the scarcity of another.
      In the disorderly state of England under the Plantagenets, who governed it
      from about the middle of the twelfth till towards the end of the fifteenth
      century, one district might be in plenty, while another, at no great
      distance, by having its crop destroyed, either by some accident of the
      seasons, or by the incursion of some neighbouring baron, might be
      suffering all the horrors of a famine; and yet if the lands of some
      hostile lord were interposed between them, the one might not be able to
      give the least assistance to the other. Under the vigorous administration
      of the Tudors, who governed England during the latter part of the
      fifteenth, and through the whole of the sixteenth century, no baron was
      powerful enough to dare to disturb the public security.

      The reader will find at the end of this chapter all the prices of wheat
      which have been collected by Fleetwood, from 1202 to 1597, both inclusive,
      reduced to the money of the present times, and digested, according to the
      order of time, into seven divisions of twelve years each. At the end of
      each division, too, he will find the average price of the twelve years of
      which it consists. In that long period of time, Fleetwood has been able to
      collect the prices of no more than eighty years; so that four years are
      wanting to make out the last twelve years. I have added, therefore, from
      the accounts of Eton college, the prices of 1598, 1599, 1600, and 1601. It
      is the only addition which I have made. The reader will see, that from the
      beginning of the thirteenth till after the middle of the sixteenth
      century, the average price of each twelve years grows gradually lower and
      lower; and that towards the end of the sixteenth century it begins to rise
      again. The prices, indeed, which Fleetwood has been able to collect, seem
      to have been those chiefly which were remarkable for extraordinary
      dearness or cheapness; and I do not pretend that any very certain
      conclusion can be drawn from them. So far, however, as they prove any
      thing at all, they confirm the account which I have been endeavouring to
      give. Fleetwood himself, however, seems, with most other writers, to have
      believed, that, during all this period, the value of silver, in
      consequence of its increasing abundance, was continually diminishing. The
      prices of corn, which he himself has collected, certainly do not agree
      with this opinion. They agree perfectly with that of Mr Dupré de St Maur,
      and with that which I have been endeavouring to explain. Bishop Fleetwood
      and Mr Dupré de St Maur are the two authors who seem to have collected,
      with the greatest diligence and fidelity, the prices of things in ancient
      times. It is somewhat curious that, though their opinions are so very
      different, their facts, so far as they relate to the price of corn at
      least, should coincide so very exactly.

      It is not, however, so much from the low price of corn, as from that of
      some other parts of the rude produce of land, that the most judicious
      writers have inferred the great value of silver in those very ancient
      times. Corn, it has been said, being a sort of manufacture, was, in those
      rude ages, much dearer in proportion than the greater part of other
      commodities; it is meant, I suppose, than the greater part of
      unmanufactured commodities, such as cattle, poultry, game of all kinds,
      etc. That in those times of poverty and barbarism these were
      proportionably much cheaper than corn, is undoubtedly true. But this
      cheapness was not the effect of the high value of silver, but of the low
      value of those commodities. It was not because silver would in such times
      purchase or represent a greater quantity of labour, but because such
      commodities would purchase or represent a much smaller quantity than in
      times of more opulence and improvement. Silver must certainly be cheaper
      in Spanish America than in Europe; in the country where it is produced,
      than in the country to which it is brought, at the expense of a long
      carriage both by land and by sea, of a freight, and an insurance.
      One-and-twenty pence halfpenny sterling, however, we are told by Ulloa,
      was, not many years ago, at Buenos Ayres, the price of an ox chosen from a
      herd of three or four hundred. Sixteen shillings sterling, we are told by
      Mr Byron, was the price of a good horse in the capital of Chili. In a
      country naturally fertile, but of which the far greater part is altogether
      uncultivated, cattle, poultry, game of all kinds, etc. as they can be
      acquired with a very small quantity of labour, so they will purchase or
      command but a very small quantity. The low money price for which they may
      be sold, is no proof that the real value of silver is there very high, but
      that the real value of those commodities is very low.

      Labour, it must always be remembered, and not any particular commodity, or
      set of commodities, is the real measure of the value both of silver and of
      all other commodities.

      But in countries almost waste, or but thinly inhabited, cattle, poultry,
      game of all kinds, etc. as they are the spontaneous productions of Nature,
      so she frequently produces them in much greater quantities than the
      consumption of the inhabitants requires. In such a state of things, the
      supply commonly exceeds the demand. In different states of society, in
      different states of improvement, therefore, such commodities will
      represent, or be equivalent, to very different quantities of labour.

      In every state of society, in every stage of improvement, corn is the
      production of human industry. But the average produce of every sort of
      industry is always suited, more or less exactly, to the average
      consumption; the average supply to the average demand. In every different
      stage of improvement, besides, the raising of equal quantities of corn in
      the same soil and climate, will, at an average, require nearly equal
      quantities of labour; or, what comes to the same thing, the price of
      nearly equal quantities; the continual increase of the productive powers
      of labour, in an improved state of cultivation, being more or less
      counterbalanced by the continual increasing price of cattle, the principal
      instruments of agriculture. Upon all these accounts, therefore, we may
      rest assured, that equal quantities of corn will, in every state of
      society, in every stage of improvement, more nearly represent, or be
      equivalent to, equal quantities of labour, than equal quantities of any
      other part of the rude produce of land. Corn, accordingly, it has already
      been observed, is, in all the different stages of wealth and improvement,
      a more accurate measure of value than any other commodity or set of
      commodities. In all those different stages, therefore, we can judge better
      of the real value of silver, by comparing it with corn, than by comparing
      it with any other commodity or set of commodities.

      Corn, besides, or whatever else is the common and favourite vegetable food
      of the people, constitutes, in every civilized country, the principal part
      of the subsistence of the labourer. In consequence of the extension of
      agriculture, the land of every country produces a much greater quantity of
      vegetable than of animal food, and the labourer everywhere lives chiefly
      upon the wholesome food that is cheapest and most abundant. Butcher’s
      meat, except in the most thriving countries, or where labour is most
      highly rewarded, makes but an insignificant part of his subsistence;
      poultry makes a still smaller part of it, and game no part of it. In
      France, and even in Scotland, where labour is somewhat better rewarded
      than in France, the labouring poor seldom eat butcher’s meat, except upon
      holidays, and other extraordinary occasions. The money price of labour,
      therefore, depends much more upon the average money price of corn, the
      subsistence of the labourer, than upon that of butcher’s meat, or of any
      other part of the rude produce of land. The real value of gold and silver,
      therefore, the real quantity of labour which they can purchase or command,
      depends much more upon the quantity of corn which they can purchase or
      command, than upon that of butcher’s meat, or any other part of the rude
      produce of land.

      Such slight observations, however, upon the prices either of corn or of
      other commodities, would not probably have misled so many intelligent
      authors, had they not been influenced at the same time by the popular
      notion, that as the quantity of silver naturally increases in every
      country with the increase of wealth, so its value diminishes as its
      quantity increases. This notion, however, seems to be altogether
      groundless.

      The quantity of the precious metals may increase in any country from two
      different causes; either, first, from the increased abundance of the mines
      which supply it; or, secondly, from the increased wealth of the people,
      from the increased produce of their annual labour. The first of these
      causes is no doubt necessarily connected with the diminution of the value
      of the precious metals; but the second is not.

      When more abundant mines are discovered, a greater quantity of the
      precious metals is brought to market; and the quantity of the necessaries
      and conveniencies of life for which they must be exchanged being the same
      as before, equal quantities of the metals must be exchanged for smaller
      quantities of commodities. So far, therefore, as the increase of the
      quantity of the precious metals in any country arises from the increased
      abundance of the mines, it is necessarily connected with some diminution
      of their value.

      When, on the contrary, the wealth of any country increases, when the
      annual produce of its labour becomes gradually greater and greater, a
      greater quantity of coin becomes necessary in order to circulate a greater
      quantity of commodities: and the people, as they can afford it, as they
      have more commodities to give for it, will naturally purchase a greater
      and a greater quantity of plate. The quantity of their coin will increase
      from necessity; the quantity of their plate from vanity and ostentation,
      or from the same reason that the quantity of fine statues, pictures, and
      of every other luxury and curiosity, is likely to increase among them. But
      as statuaries and painters are not likely to be worse rewarded in times of
      wealth and prosperity, than in times of poverty and depression, so gold
      and silver are not likely to be worse paid for.

      The price of gold and silver, when the accidental discovery of more
      abundant mines does not keep it down, as it naturally rises with the
      wealth of every country, so, whatever be the state of the mines, it is at
      all times naturally higher in a rich than in a poor country. Gold and
      silver, like all other commodities, naturally seek the market where the
      best price is given for them, and the best price is commonly given for
      every thing in the country which can best afford it. Labour, it must be
      remembered, is the ultimate price which is paid for every thing; and in
      countries where labour is equally well rewarded, the money price of labour
      will be in proportion to that of the subsistence of the labourer. But gold
      and silver will naturally exchange for a greater quantity of subsistence
      in a rich than in a poor country; in a country which abounds with
      subsistence, than in one which is but indifferently supplied with it. If
      the two countries are at a great distance, the difference may be very
      great; because, though the metals naturally fly from the worse to the
      better market, yet it may be difficult to transport them in such
      quantities as to bring their price nearly to a level in both. If the
      countries are near, the difference will be smaller, and may sometimes be
      scarce perceptible; because in this case the transportation will be easy.
      China is a much richer country than any part of Europe, and the difference
      between the price of subsistence in China and in Europe is very great.
      Rice in China is much cheaper than wheat is any where in Europe. England
      is a much richer country than Scotland, but the difference between the
      money price of corn in those two countries is much smaller, and is but
      just perceptible. In proportion to the quantity or measure, Scotch corn
      generally appears to be a good deal cheaper than English; but, in
      proportion to its quality, it is certainly somewhat dearer. Scotland
      receives almost every year very large supplies from England, and every
      commodity must commonly be somewhat dearer in the country to which it is
      brought than in that from which it comes. English corn, therefore, must be
      dearer in Scotland than in England; and yet in proportion to its quality,
      or to the quantity and goodness of the flour or meal which can be made
      from it, it cannot commonly be sold higher there than the Scotch corn
      which comes to market in competition with it.

      The difference between the money price of labour in China and in Europe,
      is still greater than that between the money price of subsistence; because
      the real recompence of labour is higher in Europe than in China, the
      greater part of Europe being in an improving state, while China seems to
      be standing still. The money price of labour is lower in Scotland than in
      England, because the real recompence of labour is much lower: Scotland,
      though advancing to greater wealth, advances much more slowly than
      England. The frequency of emigration from Scotland, and the rarity of it
      from England, sufficiently prove that the demand for labour is very
      different in the two countries. The proportion between the real recompence
      of labour in different countries, it must be remembered, is naturally
      regulated, not by their actual wealth or poverty, but by their advancing,
      stationary, or declining condition.

      Gold and silver, as they are naturally of the greatest value among the
      richest, so they are naturally of the least value among the poorest
      nations. Among savages, the poorest of all nations, they are scarce of any
      value.

      In great towns, corn is always dearer than in remote parts of the country.
      This, however, is the effect, not of the real cheapness of silver, but of
      the real dearness of corn. It does not cost less labour to bring silver to
      the great town than to the remote parts of the country; but it costs a
      great deal more to bring corn.

      In some very rich and commercial countries, such as Holland and the
      territory of Genoa, corn is dear for the same reason that it is dear in
      great towns. They do not produce enough to maintain their inhabitants.
      They are rich in the industry and skill of their artificers and
      manufacturers, in every sort of machinery which can facilitate and abridge
      labour; in shipping, and in all the other instruments and means of
      carriage and commerce: but they are poor in corn, which, as it must be
      brought to them from distant countries, must, by an addition to its price,
      pay for the carriage from those countries. It does not cost less labour to
      bring silver to Amsterdam than to Dantzic; but it costs a great deal more
      to bring corn. The real cost of silver must be nearly the same in both
      places; but that of corn must be very different. Diminish the real
      opulence either of Holland or of the territory of Genoa, while the number
      of their inhabitants remains the same; diminish their power of supplying
      themselves from distant countries; and the price of corn, instead of
      sinking with that diminution in the quantity of their silver, which must
      necessarily accompany this declension, either as its cause or as its
      effect, will rise to the price of a famine. When we are in want of
      necessaries, we must part with all superfluities, of which the value, as
      it rises in times of opulence and prosperity, so it sinks in times of
      poverty and distress. It is otherwise with necessaries. Their real price,
      the quantity of labour which they can purchase or command, rises in times
      of poverty and distress, and sinks in times of opulence and prosperity,
      which are always times of great abundance; for they could not otherwise be
      times of opulence and prosperity. Corn is a necessary, silver is only a
      superfluity.

      Whatever, therefore, may have been the increase in the quantity of the
      precious metals, which, during the period between the middle of the
      fourteenth and that of the sixteenth century, arose from the increase of
      wealth and improvement, it could have no tendency to diminish their value,
      either in Great Britain, or in my other part of Europe. If those who have
      collected the prices of things in ancient times, therefore, had, during
      this period, no reason to infer the diminution of the value of silver from
      any observations which they had made upon the prices either of corn, or of
      other commodities, they had still less reason to infer it from any
      supposed increase of wealth and improvement.

      Second Period.—But how various soever may have been the opinions of
      the learned concerning the progress of the value of silver during the
      first period, they are unanimous concerning it during the second.

      From about 1570 to about 1640, during a period of about seventy years, the
      variation in the proportion between the value of silver and that of corn
      held a quite opposite course. Silver sunk in its real value, or would
      exchange for a smaller quantity of labour than before; and corn rose in
      its nominal price, and, instead of being commonly sold for about two
      ounces of silver the quarter, or about ten shillings of our present money,
      came to be sold for six and eight ounces of silver the quarter, or about
      thirty and forty shillings of our present money.

      The discovery of the abundant mines of America seems to have been the sole
      cause of this diminution in the value of silver, in proportion to that of
      corn. It is accounted for, accordingly, in the same manner by every body;
      and there never has been any dispute, either about the fact, or about the
      cause of it. The greater part of Europe was, during this period, advancing
      in industry and improvement, and the demand for silver must consequently
      have been increasing; but the increase of the supply had, it seems, so far
      exceeded that of the demand, that the value of that metal sunk
      considerably. The discovery of the mines of America, it is to be observed,
      does not seem to have had any very sensible effect upon the prices of
      things in England till after 1570; though even the mines of Potosi had
      been discovered more than twenty years before.

      From 1595 to 1620, both inclusive, the average price of the quarter of
      nine bushels of the best wheat, at Windsor market, appears, from the
      accounts of Eton college, to have been £ 2:1:6 ⁹⁄₁₃. From which sum,
      neglecting the fraction, and deducting a ninth, or 4s. 7 ⅓d., the price
      of the quarter of eight bushels comes out to have been £ 1:16:10 ⅔. And
      from this sum, neglecting likewise the fraction, and deducting a ninth, or
      4s. 1 ⅑d., for the difference between the price of the best wheat and
      that of the middle wheat, the price of the middle wheat comes out to have
      been about £ 1:12:8 ⁸⁄₉, or about six ounces and one-third of an ounce of
      silver.

      From 1621 to 1636, both inclusive, the average price of the same measure
      of the best wheat, at the same market, appears, from the same accounts, to
      have been £ 2:10s.; from which, making the like deductions as in the
      foregoing case, the average price of the quarter of eight bushels of
      middle wheat comes out to have been £ 1:19:6, or about seven ounces and
      two-thirds of an ounce of silver.

      Third Period.—Between 1630 and 1640, or about 1636, the effect of
      the discovery of the mines of America, in reducing the value of silver,
      appears to have been completed, and the value of that metal seems never to
      have sunk lower in proportion to that of corn than it was about that time.
      It seems to have risen somewhat in the course of the present century, and
      it had probably begun to do so, even some time before the end of the last.

      From 1637 to 1700, both inclusive, being the sixty-four last years of the
      last century the average price of the quarter of nine bushels of the best
      wheat, at Windsor market, appears, from the same accounts, to have been £
      2:11:0 ⅓, which is only 1s. 0 ⅓d. dearer than it had been during the
      sixteen years before. But, in the course of these sixty-four years, there
      happened two events, which must have produced a much greater scarcity of
      corn than what the course of the seasons would otherwise have occasioned,
      and which, therefore, without supposing any further reduction in the
      value of silver, will much more than account for this very small
      enhancement of price.

      The first of these events was the civil war, which, by discouraging
      tillage and interrupting commerce, must have raised the price of corn much
      above what the course of the seasons would otherwise have occasioned. It
      must have had this effect, more or less, at all the different markets in
      the kingdom, but particularly at those in the neighbourhood of London,
      which require to be supplied from the greatest distance. In 1648,
      accordingly, the price of the best wheat, at Windsor market, appears, from
      the same accounts, to have been £ 4:5s., and, in 1649, to have been £ 4,
      the quarter of nine bushels. The excess of those two years above £ 2:10s.
      (the average price of the sixteen years preceding 1637) is £ 3:5s., which,
      divided among the sixty four last years of the last century, will alone
      very nearly account for that small enhancement of price which seems to
      have taken place in them. These, however, though the highest, are by no
      means the only high prices which seem to have been occasioned by the civil
      wars.

      The second event was the bounty upon the exportation of corn, granted in
      1688. The bounty, it has been thought by many people, by encouraging
      tillage, may, in a long course of years, have occasioned a greater
      abundance, and, consequently, a greater cheapness of corn in the home
      market, than what would otherwise have taken place there. How far the
      bounty could produce this effect at any time I shall examine hereafter: I
      shall only observe at present, that between 1688 and 1700, it had not time
      to produce any such effect. During this short period, its only effect must
      have been, by encouraging the exportation of the surplus produce of every
      year, and thereby hindering the abundance of one year from compensating
      the scarcity of another, to raise the price in the home market. The
      scarcity which prevailed in England, from 1693 to 1699, both inclusive,
      though no doubt principally owing to the badness of the seasons, and,
      therefore, extending through a considerable part of Europe, must have been
      somewhat enhanced by the bounty. In 1699, accordingly, the further
      exportation of corn was prohibited for nine months.

      There was a third event which occurred in the course of the same period,
      and which, though it could not occasion any scarcity of corn, nor,
      perhaps, any augmentation in the real quantity of silver which was usually
      paid for it, must necessarily have occasioned some augmentation in the
      nominal sum. This event was the great debasement of the silver coin, by
      clipping and wearing. This evil had begun in the reign of Charles II. and
      had gone on continually increasing till 1695; at which time, as we may
      learn from Mr Lowndes, the current silver coin was, at an average, near
      five-and-twenty per cent. below its standard value. But the nominal sum
      which constitutes the market price of every commodity is necessarily
      regulated, not so much by the quantity of silver, which, according to the
      standard, ought to be contained in it, as by that which, it is found by
      experience, actually is contained in it. This nominal sum, therefore, is
      necessarily higher when the coin is much debased by clipping and wearing,
      than when near to its standard value.

      In the course of the present century, the silver coin has not at any time
      been more below its standard weight than it is at present. But though very
      much defaced, its value has been kept up by that of the gold coin, for
      which it is exchanged. For though, before the late recoinage, the gold
      coin was a good deal defaced too, it was less so than the silver. In 1695,
      on the contrary, the value of the silver coin was not kept up by the gold
      coin; a guinea then commonly exchanging for thirty shillings of the worn
      and clipt silver. Before the late recoinage of the gold, the price of
      silver bullion was seldom higher than five shillings and sevenpence an
      ounce, which is but fivepence above the mint price. But in 1695, the
      common price of silver bullion was six shillings and fivepence an ounce,
      {Lowndes’s Essay on the Silver Coin, 68.} which is fifteen pence above the
      mint price. Even before the late recoinage of the gold, therefore, the
      coin, gold and silver together, when compared with silver bullion, was not
      supposed to be more than eight per cent. below its standard value, In
      1695, on the contrary, it had been supposed to be near five-and-twenty per
      cent. below that value. But in the beginning of the present century, that
      is, immediately after the great recoinage in King William’s time, the
      greater part of the current silver coin must have been still nearer to its
      standard weight than it is at present. In the course of the present
      century, too, there has been no great public calamity, such as a civil
      war, which could either discourage tillage, or interrupt the interior
      commerce of the country. And though the bounty which has taken place
      through the greater part of this century, must always raise the price of
      corn somewhat higher than it otherwise would be in the actual state of
      tillage; yet, as in the course of this century, the bounty has had full
      time to produce all the good effects commonly imputed to it to encourage
      tillage, and thereby to increase the quantity of corn in the home market,
      it may, upon the principles of a system which I shall explain and examine
      hereafter, be supposed to have done something to lower the price of that
      commodity the one way, as well as to raise it the other. It is by many
      people supposed to have done more. In the sixty-four years of the present
      century, accordingly, the average price of the quarter of nine bushels of
      the best wheat, at Windsor market, appears, by the accounts of Eton
      college, to have been £ 2:0:6 ¹⁰⁄₃₂, which is about ten shillings and
      sixpence, or more than five-and-twenty percent. cheaper than it had been
      during the sixty-four last years of the last century; and about nine
      shillings and sixpence cheaper than it had been during the sixteen years
      preceding 1636, when the discovery of the abundant mines of America may be
      supposed to have produced its full effect; and about one shilling cheaper
      than it had been in the twenty-six years preceding 1620, before that
      discovery can well be supposed to have produced its full effect. According
      to this account, the average price of middle wheat, during these
      sixty-four first years of the present century, comes out to have been
      about thirty-two shillings the quarter of eight bushels.

      The value of silver, therefore, seems to have risen somewhat in proportion
      to that of corn during the course of the present century, and it had
      probably begun to do so even some time before the end of the last.

      In 1687, the price of the quarter of nine bushels of the best wheat, at
      Windsor market, was £ 1:5:2, the lowest price at which it had ever been
      from 1595.

      In 1688, Mr Gregory King, a man famous for his knowledge in matters of
      this kind, estimated the average price of wheat, in years of moderate
      plenty, to be to the grower 3s. 6d. the bushel, or eight-and-twenty
      shillings the quarter. The grower’s price I understand to be the same with
      what is sometimes called the contract price, or the price at which a
      farmer contracts for a certain number of years to deliver a certain
      quantity of corn to a dealer. As a contract of this kind saves the farmer
      the expense and trouble of marketing, the contract price is generally
      lower than what is supposed to be the average market price. Mr King had
      judged eight-and-twenty shillings the quarter to be at that time the
      ordinary contract price in years of moderate plenty. Before the scarcity
      occasioned by the late extraordinary course of bad seasons, it was, I have
      been assured, the ordinary contract price in all common years.

      In 1688 was granted the parliamentary bounty upon the exportation of corn.
      The country gentlemen, who then composed a still greater proportion of the
      legislature than they do at present, had felt that the money price of corn
      was falling. The bounty was an expedient to raise it artificially to the
      high price at which it had frequently been sold in the times of Charles I.
      and II. It was to take place, therefore, till wheat was so high as
      fortyeight shillings the quarter; that is, twenty shillings, or 5-7ths
      dearer than Mr King had, in that very year, estimated the grower’s price
      to be in times of moderate plenty. If his calculations deserve any part of
      the reputation which they have obtained very universally, eight-and-forty
      shillings the quarter was a price which, without some such expedient as
      the bounty, could not at that time be expected, except in years of
      extraordinary scarcity. But the government of King William was not then
      fully settled. It was in no condition to refuse anything to the country
      gentlemen, from whom it was, at that very time, soliciting the first
      establishment of the annual land-tax.

      The value of silver, therefore, in proportion to that of corn, had
      probably risen somewhat before the end of the last century; and it seems
      to have continued to do so during the course of the greater part of the
      present, though the necessary operation of the bounty must have hindered
      that rise from being so sensible as it otherwise would have been in the
      actual state of tillage.

      In plentiful years, the bounty, by occasioning an extraordinary
      exportation, necessarily raises the price of corn above what it otherwise
      would be in those years. To encourage tillage, by keeping up the price of
      corn, even in the most plentiful years, was the avowed end of the
      institution.

      In years of great scarcity, indeed, the bounty has generally been
      suspended. It must, however, have had some effect upon the prices of many
      of those years. By the extraordinary exportation which it occasions in
      years of plenty, it must frequently hinder the plenty of one year from
      compensating the scarcity of another.

      Both in years of plenty and in years of scarcity, therefore, the bounty
      raises the price of corn above what it naturally would be in the actual
      state of tillage. If during the sixty-four first years of the present
      century, therefore, the average price has been lower than during the
      sixty-four last years of the last century, it must, in the same state of
      tillage, have been much more so, had it not been for this operation of the
      bounty.

      But, without the bounty, it may be said the state of tillage would not
      have been the same. What may have been the effects of this institution
      upon the agriculture of the country, I shall endeavour to explain
      hereafter, when I come to treat particularly of bounties. I shall only
      observe at present, that this rise in the value of silver, in proportion
      to that of corn, has not been peculiar to England. It has been observed to
      have taken place in France during the same period, and nearly in the same
      proportion, too, by three very faithful, diligent, and laborious
      collectors of the prices of corn, Mr Dupré de St Maur, Mr Messance, and
      the author of the Essay on the Police of Grain. But in France, till 1764,
      the exportation of grain was by law prohibited; and it is somewhat
      difficult to suppose, that nearly the same diminution of price which took
      place in one country, notwithstanding this prohibition, should, in
      another, be owing to the extraordinary encouragement given to exportation.

      It would be more proper, perhaps, to consider this variation in the
      average money price of corn as the effect rather of some gradual rise in
      the real value of silver in the European market, than of any fall in the
      real average value of corn. Corn, it has already been observed, is, at
      distant periods of time, a more accurate measure of value than either
      silver or, perhaps, any other commodity. When, after the discovery of the
      abundant mines of America, corn rose to three and four times its former
      money price, this change was universally ascribed, not to any rise in the
      real value of corn, but to a fall in the real value of silver. If, during
      the sixty-four first years of the present century, therefore, the average
      money price of corn has fallen somewhat below what it had been during the
      greater part of the last century, we should, in the same manner, impute
      this change, not to any fall in the real value of corn, but to some rise
      in the real value of silver in the European market.

      The high price of corn during these ten or twelve years past, indeed, has
      occasioned a suspicion that the real value of silver still continues to
      fall in the European market. This high price of corn, however, seems
      evidently to have been the effect of the extraordinary unfavourableness of
      the seasons, and ought, therefore, to be regarded, not as a permanent, but
      as a transitory and occasional event. The seasons, for these ten or twelve
      years past, have been unfavourable through the greater part of Europe; and
      the disorders of Poland have very much increased the scarcity in all those
      countries, which, in dear years, used to be supplied from that market. So
      long a course of bad seasons, though not a very common event, is by no
      means a singular one; and whoever has inquired much into the history of
      the prices of corn in former times, will be at no loss to recollect
      several other examples of the same kind. Ten years of extraordinary
      scarcity, besides, are not more wonderful than ten years of extraordinary
      plenty. The low price of corn, from 1741 to 1750, both inclusive, may very
      well be set in opposition to its high price during these last eight or ten
      years. From 1741 to 1750, the average price of the quarter of nine bushels
      of the best wheat, at Windsor market, it appears from the accounts of Eton
      college, was only £ 1:13:9 ⅘, which is nearly 6s.3d. below the average
      price of the sixty-four first years of the present century. The average
      price of the quarter of eight bushels of middle wheat comes out, according
      to this account, to have been, during these ten years, only £ 1:6:8.

      Between 1741 and 1750, however, the bounty must have hindered the price of
      corn from falling so low in the home market as it naturally would have
      done. During these ten years, the quantity of all sorts of grain exported,
      it appears from the custom-house books, amounted to no less than 8,029,156
      quarters, one bushel. The bounty paid for this amounted to £
      1,514,962:17:4 ½. In 1749, accordingly, Mr Pelham, at that time prime
      minister, observed to the house of commons, that, for the three years
      preceding, a very extraordinary sum had been paid as bounty for the
      exportation of corn. He had good reason to make this observation, and in
      the following year he might have had still better. In that single year,
      the bounty paid amounted to no less than £ 324,176:10:6. {See Tracts on
      the Corn Trade, Tract 3,} It is unnecessary to observe how much this
      forced exportation must have raised the price of corn above what it
      otherwise would have been in the home market.

      At the end of the accounts annexed to this chapter the reader will find
      the particular account of those ten years separated from the rest. He will
      find there, too, the particular account of the preceding ten years, of
      which the average is likewise below, though not so much below, the general
      average of the sixty-four first years of the century. The year 1740,
      however, was a year of extraordinary scarcity. These twenty years
      preceding 1750 may very well be set in opposition to the twenty preceding
      1770. As the former were a good deal below the general average of the
      century, notwithstanding the intervention of one or two dear years; so the
      latter have been a good deal above it, notwithstanding the intervention of
      one or two cheap ones, of 1759, for example. If the former have not been
      as much below the general average as the latter have been above it, we
      ought probably to impute it to the bounty. The change has evidently been
      too sudden to be ascribed to any change in the value of silver, which is
      always slow and gradual. The suddenness of the effect can be accounted for
      only by a cause which can operate suddenly, the accidental variations of
      the seasons.

      The money price of labour in Great Britain has, indeed, risen during the
      course of the present century. This, however, seems to be the effect, not
      so much of any diminution in the value of silver in the European market,
      as of an increase in the demand for labour in Great Britain, arising from
      the great, and almost universal prosperity of the country. In France, a
      country not altogether so prosperous, the money price of labour has, since
      the middle of the last century, been observed to sink gradually with the
      average money price of corn. Both in the last century and in the present,
      the day wages of common labour are there said to have been pretty
      uniformly about the twentieth part of the average price of the septier of
      wheat; a measure which contains a little more than four Winchester
      bushels. In Great Britain, the real recompence of labour, it has already
      been shewn, the real quantities of the necessaries and conveniencies of
      life which are given to the labourer, has increased considerably during
      the course of the present century. The rise in its money price seems to
      have been the effect, not of any diminution of the value of silver in the
      general market of Europe, but of a rise in the real price of labour, in
      the particular market of Great Britain, owing to the peculiarly happy
      circumstances of the country.

      For some time after the first discovery of America, silver would continue
      to sell at its former, or not much below its former price. The profits of
      mining would for some time be very great, and much above their natural
      rate. Those who imported that metal into Europe, however, would soon find
      that the whole annual importation could not be disposed of at this high
      price. Silver would gradually exchange for a smaller and a smaller
      quantity of goods. Its price would sink gradually lower and lower, till it
      fell to its natural price; or to what was just sufficient to pay,
      according to their natural rates, the wages of the labour, the profits of
      the stock, and the rent of the land, which must be paid in order to bring
      it from the mine to the market. In the greater part of the silver mines of
      Peru, the tax of the king of Spain, amounting to a tenth of the gross
      produce, eats up, it has already been observed, the whole rent of the
      land. This tax was originally a half; it soon afterwards fell to a third,
      then to a fifth, and at last to a tenth, at which late it still continues.
      In the greater part of the silver mines of Peru, this, it seems, is all
      that remains, after replacing the stock of the undertaker of the work,
      together with its ordinary profits; and it seems to be universally
      acknowledged that these profits, which were once very high, are now as low
      as they can well be, consistently with carrying on the works.

      The tax of the king of Spain was reduced to a fifth of the registered
      silver in 1504 {Solorzano, vol, ii.}, one-and-forty years before 1545, the
      date of the discovery of the mines of Potosi. In the course of ninety
      years, or before 1636, these mines, the most fertile in all America, had
      time sufficient to produce their full effect, or to reduce the value of
      silver in the European market as low as it could well fall, while it
      continued to pay this tax to the king of Spain. Ninety years is time
      sufficient to reduce any commodity, of which there is no monopoly, to its
      natural price, or to the lowest price at which, while it pays a particular
      tax, it can continue to be sold for any considerable time together.

      The price of silver in the European market might, perhaps, have fallen
      still lower, and it might have become necessary either to reduce the tax
      upon it, not only to one-tenth, as in 1736, but to one twentieth, in the
      same manner as that upon gold, or to give up working the greater part of
      the American mines which are now wrought. The gradual increase of the
      demand for silver, or the gradual enlargement of the market for the
      produce of the silver mines of America, is probably the cause which has
      prevented this from happening, and which has not only kept up the value of
      silver in the European market, but has perhaps even raised it somewhat
      higher than it was about the middle of the last century.

      Since the first discovery of America, the market for the produce of its
      silver mines has been growing gradually more and more extensive.

      First, the market of Europe has become gradually more and more extensive.
      Since the discovery of America, the greater part of Europe has been much
      improved. England, Holland, France, and Germany; even Sweden, Denmark, and
      Russia, have all advanced considerably, both in agriculture and in
      manufactures. Italy seems not to have gone backwards. The fall of Italy
      preceded the conquest of Peru. Since that time it seems rather to have
      recovered a little. Spain and Portugal, indeed, are supposed to have gone
      backwards. Portugal, however, is but a very small part of Europe, and the
      declension of Spain is not, perhaps, so great as is commonly imagined. In
      the beginning of the sixteenth century, Spain was a very poor country,
      even in comparison with France, which has been so much improved since that
      time. It was the well known remark of the emperor Charles V. who had
      travelled so frequently through both countries, that every thing abounded
      in France, but that every thing was wanting in Spain. The increasing
      produce of the agriculture and manufactures of Europe must necessarily
      have required a gradual increase in the quantity of silver coin to
      circulate it; and the increasing number of wealthy individuals must have
      required the like increase in the quantity of their plate and other
      ornaments of silver.

      Secondly, America is itself a new market, for the produce of its own
      silver mines; and as its advances in agriculture, industry, and
      population, are much more rapid than those of the most thriving countries
      in Europe, its demand must increase much more rapidly. The English
      colonies are altogether a new market, which, partly for coin, and partly
      for plate, requires a continual augmenting supply of silver through a
      great continent where there never was any demand before. The greater part,
      too, of the Spanish and Portuguese colonies, are altogether new markets.
      New Granada, the Yucatan, Paraguay, and the Brazils, were, before
      discovered by the Europeans, inhabited by savage nations, who had neither
      arts nor agriculture. A considerable degree of both has now been
      introduced into all of them. Even Mexico and Peru, though they cannot be
      considered as altogether new markets, are certainly much more extensive
      ones than they ever were before. After all the wonderful tales which have
      been published concerning the splendid state of those countries in ancient
      times, whoever reads, with any degree of sober judgment, the history of
      their first discovery and conquest, will evidently discern that, in arts,
      agriculture, and commerce, their inhabitants were much more ignorant than
      the Tartars of the Ukraine are at present. Even the Peruvians, the more
      civilized nation of the two, though they made use of gold and silver as
      ornaments, had no coined money of any kind. Their whole commerce was
      carried on by barter, and there was accordingly scarce any division of
      labour among them. Those who cultivated the ground, were obliged to build
      their own houses, to make their own household furniture, their own
      clothes, shoes, and instruments of agriculture. The few artificers among
      them are said to have been all maintained by the sovereign, the nobles,
      and the priests, and were probably their servants or slaves. All the
      ancient arts of Mexico and Peru have never furnished one single
      manufacture to Europe. The Spanish armies, though they scarce ever
      exceeded five hundred men, and frequently did not amount to half that
      number, found almost everywhere great difficulty in procuring subsistence.
      The famines which they are said to have occasioned almost wherever they
      went, in countries, too, which at the same time are represented as very
      populous and well cultivated, sufficiently demonstrate that the story of
      this populousness and high cultivation is in a great measure fabulous. The
      Spanish colonies are under a government in many respects less favourable
      to agriculture, improvement, and population, than that of the English
      colonies. They seem, however, to be advancing in all those much more
      rapidly than any country in Europe. In a fertile soil and happy climate,
      the great abundance and cheapness of land, a circumstance common to all
      new colonies, is, it seems, so great an advantage, as to compensate many
      defects in civil government. Frezier, who visited Peru in 1713, represents
      Lima as containing between twenty-five and twenty-eight thousand
      inhabitants. Ulloa, who resided in the same country between 1740 and 1746,
      represents it as containing more than fifty thousand. The difference in
      their accounts of the populousness of several other principal towns of
      Chili and Peru is nearly the same; and as there seems to be no reason to
      doubt of the good information of either, it marks an increase which is
      scarce inferior to that of the English colonies. America, therefore, is a
      new market for the produce of its own silver mines, of which the demand
      must increase much more rapidly than that of the most thriving country in
      Europe.

      Thirdly, the East Indies is another market for the produce of the silver
      mines of America, and a market which, from the time of the first discovery
      of those mines, has been continually taking off a greater and a greater
      quantity of silver. Since that time, the direct trade between America and
      the East Indies, which is carried on by means of the Acapulco ships, has
      been continually augmenting, and the indirect intercourse by the way of
      Europe has been augmenting in a still greater proportion. During the
      sixteenth century, the Portuguese were the only European nation who
      carried on any regular trade to the East Indies. In the last years of that
      century, the Dutch began to encroach upon this monopoly, and in a few
      years expelled them from their principal settlements in India. During the
      greater part of the last century, those two nations divided the most
      considerable part of the East India trade between them; the trade of the
      Dutch continually augmenting in a still greater proportion than that of
      the Portuguese declined. The English and French carried on some trade with
      India in the last century, but it has been greatly augmented in the course
      of the present. The East India trade of the Swedes and Danes began in the
      course of the present century. Even the Muscovites now trade regularly
      with China, by a sort of caravans which go over land through Siberia and
      Tartary to Pekin. The East India trade of all these nations, if we except
      that of the French, which the last war had well nigh annihilated, has been
      almost continually augmenting. The increasing consumptions of East India
      goods in Europe is, it seems, so great, as to afford a gradual increase of
      employment to them all. Tea, for example, was a drug very little used in
      Europe, before the middle of the last century. At present, the value of
      the tea annually imported by the English East India company, for the use
      of their own countrymen, amounts to more than a million and a half a year;
      and even this is not enough; a great deal more being constantly smuggled
      into the country from the ports of Holland, from Gottenburgh in Sweden,
      and from the coast of France, too, as long as the French East India
      company was in prosperity. The consumption of the porcelain of China, of
      the spiceries of the Moluccas, of the piece goods of Bengal, and of
      innumerable other articles, has increased very nearly in a like
      proportion. The tonnage, accordingly, of all the European shipping
      employed in the East India trade, at any one time during the last century,
      was not, perhaps, much greater than that of the English East India company
      before the late reduction of their shipping.

      But in the East Indies, particularly in China and Indostan, the value of
      the precious metals, when the Europeans first began to trade to those
      countries, was much higher than in Europe; and it still continues to be
      so. In rice countries, which generally yield two, sometimes three crops in
      the year, each of them more plentiful than any common crop of corn, the
      abundance of food must be much greater than in any corn country of equal
      extent. Such countries are accordingly much more populous. In them, too,
      the rich, having a greater superabundance of food to dispose of beyond
      what they themselves can consume, have the means of purchasing a much
      greater quantity of the labour of other people. The retinue of a grandee
      in China or Indostan accordingly is, by all accounts, much more numerous
      and splendid than that of the richest subjects in Europe. The same
      superabundance of food, of which they have the disposal, enables them to
      give a greater quantity of it for all those singular and rare productions
      which nature furnishes but in very small quantities; such as the precious
      metals and the precious stones, the great objects of the competition of
      the rich. Though the mines, therefore, which supplied the Indian market,
      had been as abundant as those which supplied the European, such
      commodities would naturally exchange for a greater quantity of food in
      India than in Europe. But the mines which supplied the Indian market with
      the precious metals seem to have been a good deal less abundant, and those
      which supplied it with the precious stones a good deal more so, than the
      mines which supplied the European. The precious metals, therefore, would
      naturally exchange in India for a somewhat greater quantity of the
      precious stones, and for a much greater quantity of food than in Europe.
      The money price of diamonds, the greatest of all superfluities, would be
      somewhat lower, and that of food, the first of all necessaries, a great
      deal lower in the one country than in the other. But the real price of
      labour, the real quantity of the necessaries of life which is given to the
      labourer, it has already been observed, is lower both in China and
      Indostan, the two great markets of India, than it is through the greater
      part of Europe. The wages of the labourer will there purchase a smaller
      quantity of food: and as the money price of food is much lower in India
      than in Europe, the money price of labour is there lower upon a double
      account; upon account both of the small quantity of food which it will
      purchase, and of the low price of that food. But in countries of equal art
      and industry, the money price of the greater part of manufactures will be
      in proportion to the money price of labour; and in manufacturing art and
      industry, China and Indostan, though inferior, seem not to be much
      inferior to any part of Europe. The money price of the greater part of
      manufactures, therefore, will naturally be much lower in those great
      empires than it is anywhere in Europe. Through the greater part of Europe,
      too, the expense of land-carriage increases very much both the real and
      nominal price of most manufactures. It costs more labour, and therefore
      more money, to bring first the materials, and afterwards the complete
      manufacture to market. In China and Indostan, the extent and variety of
      inland navigations save the greater part of this labour, and consequently
      of this money, and thereby reduce still lower both the real and the
      nominal price of the greater part of their manufactures. Upon all these
      accounts, the precious metals are a commodity which it always has been,
      and still continues to be, extremely advantageous to carry from Europe to
      India. There is scarce any commodity which brings a better price there; or
      which, in proportion to the quantity of labour and commodities which it
      costs in Europe, will purchase or command a greater quantity of labour and
      commodities in India. It is more advantageous, too, to carry silver
      thither than gold; because in China, and the greater part of the other
      markets of India, the proportion between fine silver and fine gold is but
      as ten, or at most as twelve to one; whereas in Europe it is as fourteen
      or fifteen to one. In China, and the greater part of the other markets of
      India, ten, or at most twelve ounces of silver, will purchase an ounce of
      gold; in Europe, it requires from fourteen to fifteen ounces. In the
      cargoes, therefore, of the greater part of European ships which sail to
      India, silver has generally been one of the most valuable articles. It is
      the most valuable article in the Acapulco ships which sail to Manilla. The
      silver of the new continent seems, in this manner, to be one of the
      principal commodities by which the commerce between the two extremities of
      the old one is carried on; and it is by means of it, in a great measure,
      that those distant parts of the world are connected with one another.

      In order to supply so very widely extended a market, the quantity of
      silver annually brought from the mines must not only be sufficient to
      support that continued increase, both of coin and of plate, which is
      required in all thriving countries; but to repair that continual waste and
      consumption of silver which takes place in all countries where that metal
      is used.

      The continual consumption of the precious metals in coin by wearing, and
      in plate both by wearing and cleaning, is very sensible; and in
      commodities of which the use is so very widely extended, would alone
      require a very great annual supply. The consumption of those metals in
      some particular manufactures, though it may not perhaps be greater upon
      the whole than this gradual consumption, is, however, much more sensible,
      as it is much more rapid. In the manufactures of Birmingham alone, the
      quantity of gold and silver annually employed in gilding and plating, and
      thereby disqualified from ever afterwards appearing in the shape of those
      metals, is said to amount to more than fifty thousand pounds sterling. We
      may from thence form some notion how great must be the annual consumption
      in all the different parts of the world, either in manufactures of the
      same kind with those of Birmingham, or in laces, embroideries, gold and
      silver stuffs, the gilding of books, furniture, etc. A considerable
      quantity, too, must be annually lost in transporting those metals from one
      place to another both by sea and by land. In the greater part of the
      governments of Asia, besides, the almost universal custom of concealing
      treasures in the bowels of the earth, of which the knowledge frequently
      dies with the person who makes the concealment, must occasion the loss of
      a still greater quantity.

      The quantity of gold and silver imported at both Cadiz and Lisbon
      (including not only what comes under register, but what may be supposed to
      be smuggled) amounts, according to the best accounts, to about six
      millions sterling a-year.

      According to Mr Meggens {Postscript to the Universal Merchant p. 15 and
      16. This postscript was not printed till 1756, three years after the
      publication of the book, which has never had a second edition. The
      postscript is, therefore, to be found in few copies; it corrects several
      errors in the book.}, the annual importation of the precious metals into
      Spain, at an average of six years, viz. from 1748 to 1753, both inclusive,
      and into Portugal, at an average of seven years, viz. from 1747 to 1753,
      both inclusive, amounted in silver to 1,101,107 pounds weight, and in gold
      to 49,940 pounds weight. The silver, at sixty two shillings the pound
      troy, amounts to £ 3,413,431:10s. sterling. The gold, at forty-four
      guineas and a half the pound troy, amounts to £ 2,333,446:14s. sterling.
      Both together amount to £ 5,746,878:4s. sterling. The account of what was
      imported under register, he assures us, is exact. He gives us the detail
      of the particular places from which the gold and silver were brought, and
      of the particular quantity of each metal, which, according to the
      register, each of them afforded. He makes an allowance, too, for the
      quantity of each metal which, he supposes, may have been smuggled. The
      great experience of this judicious merchant renders his opinion of
      considerable weight.

      According to the eloquent, and sometimes well-informed, author of the
      Philosophical and Political History of the Establishment of the Europeans
      in the two Indies, the annual importation of registered gold and silver
      into Spain, at an average of eleven years, viz. from 1754 to 1764, both
      inclusive, amounted to 13,984,185 ⅗ piastres of ten reals. On account of
      what may have been smuggled, however, the whole annual importation, he
      supposes, may have amounted to seventeen millions of piastres, which, at
      4s. 6d. the piastre, is equal to £ 3,825,000 sterling. He gives the
      detail, too, of the particular places from which the gold and silver were
      brought, and of the particular quantities of each metal, which according
      to the register, each of them afforded. He informs us, too, that if we
      were to judge of the quantity of gold annually imported from the Brazils
      to Lisbon, by the amount of the tax paid to the king of Portugal, which it
      seems, is one-fifth of the standard metal, we might value it at eighteen
      millions of cruzadoes, or forty-five millions of French livres, equal to
      about twenty millions sterling. On account of what may have been smuggled,
      however, we may safely, he says, add to this sum an eighth more, or £
      250,000 sterling, so that the whole will amount to £ 2,250,000 sterling.
      According to this account, therefore, the whole annual importation of the
      precious metals into both Spain and Portugal, mounts to about £ 6,075,000
      sterling.

      Several other very well authenticated, though manuscript accounts, I have
      been assured, agree in making this whole annual importation amount, at an
      average, to about six millions sterling; sometimes a little more,
      sometimes a little less.

      The annual importation of the precious metals into Cadiz and Lisbon,
      indeed, is not equal to the whole annual produce of the mines of America.
      Some part is sent annually by the Acapulco ships to Manilla; some part is
      employed in a contraband trade, which the Spanish colonies carry on with
      those of other European nations; and some part, no doubt, remains in the
      country. The mines of America, besides, are by no means the only gold and
      silver mines in the world. They, are, however, by far the most abundant.
      The produce of all the other mines which are known is insignificant, it is
      acknowledged, in comparison with theirs; and the far greater part of
      their produce, it is likewise acknowledged, is annually imported into
      Cadiz and Lisbon. But the consumption of Birmingham alone, at the rate of
      fifty thousand pounds a-year, is equal to the hundred-and-twentieth part
      of this annual importation, at the rate of six millions a-year. The whole
      annual consumption of gold and silver, therefore, in all the different
      countries of the world where those metals are used, may, perhaps, be
      nearly equal to the whole annual produce. The remainder may be no more
      than sufficient to supply the increasing demand of all thriving countries.
      It may even have fallen so far short of this demand, as somewhat to raise
      the price of those metals in the European market.

      The quantity of brass and iron annually brought from the mine to the
      market, is out of all proportion greater than that of gold and silver. We
      do not, however, upon this account, imagine that those coarse metals are
      likely to multiply beyond the demand, or to become gradually cheaper and
      cheaper. Why should we imagine that the precious metals are likely to do
      so? The coarse metals, indeed, though harder, are put to much harder uses,
      and, as they are of less value, less care is employed in their
      preservation. The precious metals, however, are not necessarily immortal
      any more than they, but are liable, too, to be lost, wasted, and consumed,
      in a great variety of ways.

      The price of all metals, though liable to slow and gradual variations,
      varies less from year to year than that of almost any other part of the
      rude produce of land: and the price of the precious metals is even less
      liable to sudden variations than that of the coarse ones. The durableness
      of metals is the foundation of this extraordinary steadiness of price. The
      corn which was brought to market last year will be all, or almost all,
      consumed, long before the end of this year. But some part of the iron
      which was brought from the mine two or three hundred years ago, may be
      still in use, and, perhaps, some part of the gold which was brought from
      it two or three thousand years ago. The different masses of corn, which,
      in different years, must supply the consumption of the world, will always
      be nearly in proportion to the respective produce of those different
      years. But the proportion between the different masses of iron which may
      be in use in two different years, will be very little affected by any
      accidental difference in the produce of the iron mines of those two years;
      and the proportion between the masses of gold will be still less affected
      by any such difference in the produce of the gold mines. Though the
      produce of the greater part of metallic mines, therefore, varies, perhaps,
      still more from year to year than that of the greater part of corn fields,
      those variations have not the same effect upon the price of the one
      species of commodities as upon that of the other.

      _Variations in the Proportion between the respective Values of Gold and
      Silver._




      Before the discovery of the mines of America, the value of fine gold to
      fine silver was regulated in the different mines of Europe, between the
      proportions of one to ten and one to twelve; that is, an ounce of fine
      gold was supposed to be worth from ten to twelve ounces of fine silver.
      About the middle of the last century, it came to be regulated, between the
      proportions of one to fourteen and one to fifteen; that is, an ounce of
      fine gold came to be supposed worth between fourteen and fifteen ounces of
      fine silver. Gold rose in its nominal value, or in the quantity of silver
      which was given for it. Both metals sunk in their real value, or in the
      quantity of labour which they could purchase; but silver sunk more than
      gold. Though both the gold and silver mines of America exceeded in
      fertility all those which had ever been known before, the fertility of the
      silver mines had, it seems, been proportionally still greater than that of
      the gold ones.

      The great quantities of silver carried annually from Europe to India,
      have, in some of the English settlements, gradually reduced the value of
      that metal in proportion to gold. In the mint of Calcutta, an ounce of
      fine gold is supposed to be worth fifteen ounces of fine silver, in the
      same manner as in Europe. It is in the mint, perhaps, rated too high for
      the value which it bears in the market of Bengal. In China, the proportion
      of gold to silver still continues as one to ten, or one to twelve. In
      Japan, it is said to be as one to eight.

      The proportion between the quantities of gold and silver annually imported
      into Europe, according to Mr Meggens’ account, is as one to twenty-two
      nearly; that is, for one ounce of gold there are imported a little more
      than twenty-two ounces of silver. The great quantity of silver sent
      annually to the East Indies reduces, he supposes, the quantities of those
      metals which remain in Europe to the proportion of one to fourteen or
      fifteen, the proportion of their values. The proportion between their
      values, he seems to think, must necessarily be the same as that between
      their quantities, and would therefore be as one to twenty-two, were it not
      for this greater exportation of silver.

      But the ordinary proportion between the respective values of two
      commodities is not necessarily the same as that between the quantities of
      them which are commonly in the market. The price of an ox, reckoned at ten
      guineas, is about three score times the price of a lamb, reckoned at 3s.
      6d. It would be absurd, however, to infer from thence, that there are
      commonly in the market three score lambs for one ox; and it would be just
      as absurd to infer, because an ounce of gold will commonly purchase from
      fourteen or fifteen ounces of silver, that there are commonly in the
      market only fourteen or fifteen ounces of silver for one ounce of gold.

      The quantity of silver commonly in the market, it is probable, is much
      greater in proportion to that of gold, than the value of a certain
      quantity of gold is to that of an equal quantity of silver. The whole
      quantity of a cheap commodity brought to market is commonly not only
      greater, but of greater value, than the whole quantity of a dear one. The
      whole quantity of bread annually brought to market, is not only greater,
      but of greater value, than the whole quantity of butcher’s meat; the whole
      quantity of butcher’s meat, than the whole quantity of poultry; and the
      whole quantity of poultry, than the whole quantity of wild fowl. There are
      so many more purchasers for the cheap than for the dear commodity, that,
      not only a greater quantity of it, but a greater value can commonly be
      disposed of. The whole quantity, therefore, of the cheap commodity, must
      commonly be greater in proportion to the whole quantity of the dear one,
      than the value of a certain quantity of the dear one, is to the value of
      an equal quantity of the cheap one. When we compare the precious metals
      with one another, silver is a cheap, and gold a dear commodity. We ought
      naturally to expect, therefore, that there should always be in the market,
      not only a greater quantity, but a greater value of silver than of gold.
      Let any man, who has a little of both, compare his own silver with his
      gold plate, and he will probably find, that not only the quantity, but the
      value of the former, greatly exceeds that of the latter. Many people,
      besides, have a good deal of silver who have no gold plate, which, even
      with those who have it, is generally confined to watch-cases, snuff-boxes,
      and such like trinkets, of which the whole amount is seldom of great
      value. In the British coin, indeed, the value of the gold preponderates
      greatly, but it is not so in that of all countries. In the coin of some
      countries, the value of the two metals is nearly equal. In the Scotch
      coin, before the union with England, the gold preponderated very little,
      though it did somewhat {See Ruddiman’s Preface to Anderson’s Diplomata,
      etc. Scotiae.}, as it appears by the accounts of the mint. In the coin of
      many countries the silver preponderates. In France, the largest sums are
      commonly paid in that metal, and it is there difficult to get more gold
      than what is necessary to carry about in your pocket. The superior value,
      however, of the silver plate above that of the gold, which takes place in
      all countries, will much more than compensate the preponderancy of the
      gold coin above the silver, which takes place only in some countries.

      Though, in one sense of the word, silver always has been, and probably
      always will be, much cheaper than gold; yet, in another sense, gold may
      perhaps, in the present state of the Spanish market, be said to be
      somewhat cheaper than silver. A commodity may be said to be dear or cheap
      not only according to the absolute greatness or smallness of its usual
      price, but according as that price is more or less above the lowest for
      which it is possible to bring it to market for any considerable time
      together. This lowest price is that which barely replaces, with a moderate
      profit, the stock which must be employed in bringing the commodity
      thither. It is the price which affords nothing to the landlord, of which
      rent makes not any component part, but which resolves itself altogether
      into wages and profit. But, in the present state of the Spanish market,
      gold is certainly somewhat nearer to this lowest price than silver. The
      tax of the king of Spain upon gold is only one-twentieth part of the
      standard metal, or five per cent.; whereas his tax upon silver amounts to
      one-tenth part of it, or to ten per cent. In these taxes, too, it has
      already been observed, consists the whole rent of the greater part of the
      gold and silver mines of Spanish America; and that upon gold is still
      worse paid than that upon silver. The profits of the undertakers of gold
      mines, too, as they more rarely make a fortune, must, in general, be still
      more moderate than those of the undertakers of silver mines. The price of
      Spanish gold, therefore, as it affords both less rent and less profit,
      must, in the Spanish market, be somewhat nearer to the lowest price for
      which it is possible to bring it thither, than the price of Spanish
      silver. When all expenses are computed, the whole quantity of the one
      metal, it would seem, cannot, in the Spanish market, be disposed of so
      advantageously as the whole quantity of the other. The tax, indeed, of the
      king of Portugal upon the gold of the Brazils, is the same with the
      ancient tax of the king of Spain upon the silver of Mexico and Peru; or
      one-fifth part of the standard metal. It may therefore be uncertain,
      whether, to the general market of Europe, the whole mass of American gold
      comes at a price nearer to the lowest for which it is possible to bring it
      thither, than the whole mass of American silver.

      The price of diamonds and other precious stones may, perhaps, be still
      nearer to the lowest price at which it is possible to bring them to
      market, than even the price of gold.

      Though it is not very probable that any part of a tax, which is not only
      imposed upon one of the most proper subjects of taxation, a mere luxury
      and superfluity, but which affords so very important a revenue as the tax
      upon silver, will ever be given up as long as it is possible to pay it;
      yet the same impossibility of paying it, which, in 1736. made it necessary
      to reduce it from one-fifth to one-tenth, may in time make it necessary to
      reduce it still further; in the same manner as it made it necessary to
      reduce the tax upon gold to one-twentieth. That the silver mines of
      Spanish America, like all other mines, become gradually more expensive in
      the working, on account of the greater depths at which it is necessary to
      carry on the works, and of the greater expense of drawing out the water,
      and of supplying them with fresh air at those depths, is acknowledged by
      everybody who has inquired into the state of those mines.

      These causes, which are equivalent to a growing scarcity of silver (for a
      commodity may be said to grow scarcer when it becomes more difficult and
      expensive to collect a certain quantity of it), must, in time, produce one
      or other of the three following events: The increase of the expense must
      either, first, be compensated altogether by a proportionable increase in
      the price of the metal; or, secondly, it must be compensated altogether by
      a proportionable diminution of the tax upon silver; or, thirdly, it must
      be compensated partly by the one and partly by the other of those two
      expedients. This third event is very possible. As gold rose in its price
      in proportion to silver, notwithstanding a great diminution of the tax
      upon gold, so silver might rise in its price in proportion to labour and
      commodities, notwithstanding an equal diminution of the tax upon silver.

      Such successive reductions of the tax, however, though they may not
      prevent altogether, must certainly retard, more or less, the rise of the
      value of silver in the European market. In consequence of such reductions,
      many mines may be wrought which could not be wrought before, because they
      could not afford to pay the old tax; and the quantity of silver annually
      brought to market, must always be somewhat greater, and, therefore, the
      value of any given quantity somewhat less, than it otherwise would have
      been. In consequence of the reduction in 1736, the value of silver in the
      European market, though it may not at this day be lower than before that
      reduction, is, probably, at least ten per cent. lower than it would have
      been, had the court of Spain continued to exact the old tax. That,
      notwithstanding this reduction, the value of silver has, during the course
      of the present century, begun to rise somewhat in the European market, the
      facts and arguments which have been alleged above, dispose me to believe,
      or more properly to suspect and conjecture; for the best opinion which I
      can form upon this subject, scarce, perhaps, deserves the name of belief.
      The rise, indeed, supposing there has been any, has hitherto been so very
      small, that after all that has been said, it may, perhaps, appear to many
      people uncertain, not only whether this event has actually taken place,
      but whether the contrary may not have taken place, or whether the value of
      silver may not still continue to fall in the European market.

      It must be observed, however, that whatever may be the supposed annual
      importation of gold and silver, there must be a certain period at which
      the annual consumption of those metals will be equal to that annual
      importation. Their consumption must increase as their mass increases, or
      rather in a much greater proportion. As their mass increases, their value
      diminishes. They are more used, and less cared for, and their consumption
      consequently increases in a greater proportion than their mass. After a
      certain period, therefore, the annual consumption of those metals must, in
      this manner, become equal to their annual importation, provided that
      importation is not continually increasing; which, in the present times, is
      not supposed to be the case.

      If, when the annual consumption has become equal to the annual
      importation, the annual importation should gradually diminish, the annual
      consumption may, for some time, exceed the annual importation. The mass of
      those metals may gradually and insensibly diminish, and their value
      gradually and insensibly rise, till the annual importation becoming again
      stationary, the annual consumption will gradually and insensibly
      accommodate itself to what that annual importation can maintain.


      _Grounds of the suspicion that the Value of Silver still continues to
      decrease._


      The increase of the wealth of Europe, and the popular notion, that as the
      quantity of the precious metals naturally increases with the increase of
      wealth, so their value diminishes as their quantity increases, may,
      perhaps, dispose many people to believe that their value still continues
      to fall in the European market; and the still gradually increasing price
      of many parts of the rude produce of land may confirm them still farther
      in this opinion.

      That that increase in the quantity of the precious metals, which arises in
      any country from the increase of wealth, has no tendency to diminish their
      value, I have endeavoured to shew already. Gold and silver naturally
      resort to a rich country, for the same reason that all sorts of luxuries
      and curiosities resort to it; not because they are cheaper there than in
      poorer countries, but because they are dearer, or because a better price
      is given for them. It is the superiority of price which attracts them; and
      as soon as that superiority ceases, they necessarily cease to go thither.

      If you except corn, and such other vegetables as are raised altogether by
      human industry, that all other sorts of rude produce, cattle, poultry,
      game of all kinds, the useful fossils and minerals of the earth, etc.
      naturally grow dearer, as the society advances in wealth and improvement,
      I have endeavoured to shew already. Though such commodities, therefore,
      come to exchange for a greater quantity of silver than before, it will not
      from thence follow that silver has become really cheaper, or will purchase
      less labour than before; but that such commodities have become really
      dearer, or will purchase more labour than before. It is not their nominal
      price only, but their real price, which rises in the progress of
      improvement. The rise of their nominal price is the effect, not of any
      degradation of the value of silver, but of the rise in their real price.


      _Different Effects of the Progress of Improvement upon three different
      sorts of rude Produce._


      These different sorts of rude produce may be divided into three classes.
      The first comprehends those which it is scarce in the power of human
      industry to multiply at all. The second, those which it can multiply in
      proportion to the demand. The third, those in which the efficacy of
      industry is either limited or uncertain. In the progress of wealth and
      improvement, the real price of the first may rise to any degree of
      extravagance, and seems not to be limited by any certain boundary. That of
      the second, though it may rise greatly, has, however, a certain boundary,
      beyond which it cannot well pass for any considerable time together. That
      of the third, though its natural tendency is to rise in the progress of
      improvement, yet in the same degree of improvement it may sometimes happen
      even to fall, sometimes to continue the same, and sometimes to rise more
      or less, according as different accidents render the efforts of human
      industry, in multiplying this sort of rude produce, more or less
      successful.

      First Sort.—The first sort of rude produce, of which the price rises
      in the progress of improvement, is that which it is scarce in the power of
      human industry to multiply at all. It consists in those things which
      nature produces only in certain quantities, and which being of a very
      perishable nature, it is impossible to accumulate together the produce of
      many different seasons. Such are the greater part of rare and singular
      birds and fishes, many different sorts of game, almost all wild-fowl, all
      birds of passage in particular, as well as many other things. When wealth,
      and the luxury which accompanies it, increase, the demand for these is
      likely to increase with them, and no effort of human industry may be able
      to increase the supply much beyond what it was before this increase of the
      demand. The quantity of such commodities, therefore, remaining the same,
      or nearly the same, while the competition to purchase them is continually
      increasing, their price may rise to any degree of extravagance, and seems
      not to be limited by any certain boundary. If woodcocks should become so
      fashionable as to sell for twenty guineas a-piece, no effort of human
      industry could increase the number of those brought to market, much beyond
      what it is at present. The high price paid by the Romans, in the time of
      their greatest grandeur, for rare birds and fishes, may in this manner
      easily be accounted for. These prices were not the effects of the low
      value of silver in those times, but of the high value of such rarities and
      curiosities as human industry could not multiply at pleasure. The real
      value of silver was higher at Rome, for sometime before, and after the
      fall of the republic, than it is through the greater part of Europe at
      present. Three sestertii equal to about sixpence sterling, was the price
      which the republic paid for the modius or peck of the tithe wheat of
      Sicily. This price, however, was probably below the average market price,
      the obligation to deliver their wheat at this rate being considered as a
      tax upon the Sicilian farmers. When the Romans, therefore, had occasion to
      order more corn than the tithe of wheat amounted to, they were bound by
      capitulation to pay for the surplus at the rate of four sestertii, or
      eightpence sterling the peck; and this had probably been reckoned the
      moderate and reasonable, that is, the ordinary or average contract price
      of those times; it is equal to about one-and-twenty shillings the quarter.
      Eight-and-twenty shillings the quarter was, before the late years of
      scarcity, the ordinary contract price of English wheat, which in quality
      is inferior to the Sicilian, and generally sells for a lower price in the
      European market. The value of silver, therefore, in those ancient times,
      must have been to its value in the present, as three to four inversely;
      that is, three ounces of silver would then have purchased the same
      quantity of labour and commodities which four ounces will do at present.
      When we read in Pliny, therefore, that Seius {Lib. X, c. 29.} bought a
      white nightingale, as a present for the empress Agrippina, at the price of
      six thousand sestertii, equal to about fifty pounds of our present money;
      and that Asinius Celer {Lib. IX, c. 17.} purchased a surmullet at the
      price of eight thousand sestertii, equal to about sixty-six pounds
      thirteen shillings and fourpence of our present money; the extravagance of
      those prices, how much soever it may surprise us, is apt, notwithstanding,
      to appear to us about one third less than it really was. Their real price,
      the quantity of labour and subsistence which was given away for them, was
      about one-third more than their nominal price is apt to express to us in
      the present times. Seius gave for the nightingale the command of a
      quantity of labour and subsistence, equal to what £ 66:13: 4d. would
      purchase in the present times; and Asinius Celer gave for a surmullet the
      command of a quantity equal to what £ 88:17: 9d. would purchase. What
      occasioned the extravagance of those high prices was, not so much the
      abundance of silver, as the abundance of labour and subsistence, of which
      those Romans had the disposal, beyond what was necessary for their own
      use. The quantity of silver, of which they had the disposal, was a good
      deal less than what the command of the same quantity of labour and
      subsistence would have procured to them in the present times.

      Second sort.—The second sort of rude produce, of which the price
      rises in the progress of improvement, is that which human industry can
      multiply in proportion to the demand. It consists in those useful plants
      and animals, which, in uncultivated countries, nature produces with such
      profuse abundance, that they are of little or no value, and which, as
      cultivation advances, are therefore forced to give place to some more
      profitable produce. During a long period in the progress of improvement,
      the quantity of these is continually diminishing, while, at the same time,
      the demand for them is continually increasing. Their real value,
      therefore, the real quantity of labour which they will purchase or
      command, gradually rises, till at last it gets so high as to render them
      as profitable a produce as any thing else which human industry can raise
      upon the most fertile and best cultivated land. When it has got so high,
      it cannot well go higher. If it did, more land and more industry would
      soon be employed to increase their quantity.

      When the price of cattle, for example, rises so high, that it is as
      profitable to cultivate land in order to raise food for them as in order
      to raise food for man, it cannot well go higher. If it did, more corn land
      would soon be turned into pasture. The extension of tillage, by
      diminishing the quantity of wild pasture, diminishes the quantity of
      butcher’s meat, which the country naturally produces without labour or
      cultivation; and, by increasing the number of those who have either corn,
      or, what comes to the same thing, the price of corn, to give in exchange
      for it, increases the demand. The price of butcher’s meat, therefore, and,
      consequently, of cattle, must gradually rise, till it gets so high, that
      it becomes as profitable to employ the most fertile and best cultivated
      lands in raising food for them as in raising corn. But it must always be
      late in the progress of improvement before tillage can be so far extended
      as to raise the price of cattle to this height; and, till it has got to
      this height, if the country is advancing at all, their price must be
      continually rising. There are, perhaps, some parts of Europe in which the
      price of cattle has not yet got to this height. It had not got to this
      height in any part of Scotland before the Union. Had the Scotch cattle
      been always confined to the market of Scotland, in a country in which the
      quantity of land, which can be applied to no other purpose but the feeding
      of cattle, is so great in proportion to what can be applied to other
      purposes, it is scarce possible, perhaps, that their price could ever have
      risen so high as to render it profitable to cultivate land for the sake of
      feeding them. In England, the price of cattle, it has already been
      observed, seems, in the neighbourhood of London, to have got to this
      height about the beginning of the last century; but it was much later,
      probably, before it got through the greater part of the remoter counties,
      in some of which, perhaps, it may scarce yet have got to it. Of all the
      different substances, however, which compose this second sort of rude
      produce, cattle is, perhaps, that of which the price, in the progress of
      improvement, rises first to this height.

      Till the price of cattle, indeed, has got to this height, it seems scarce
      possible that the greater part, even of those lands which are capable of
      the highest cultivation, can be completely cultivated. In all farms too
      distant from any town to carry manure from it, that is, in the far greater
      part of those of every extensive country, the quantity of well cultivated
      land must be in proportion to the quantity of manure which the farm itself
      produces; and this, again, must be in proportion to the stock of cattle
      which are maintained upon it. The land is manured, either by pasturing the
      cattle upon it, or by feeding them in the stable, and from thence carrying
      out their dung to it. But unless the price of the cattle be sufficient to
      pay both the rent and profit of cultivated land, the farmer cannot afford
      to pasture them upon it; and he can still less afford to feed them in the
      stable. It is with the produce of improved and cultivated land only that
      cattle can be fed in the stable; because, to collect the scanty and
      scattered produce of waste and unimproved lands, would require too much
      labour, and be too expensive. If the price of the cattle, therefore, is
      not sufficient to pay for the produce of improved and cultivated land,
      when they are allowed to pasture it, that price will be still less
      sufficient to pay for that produce, when it must be collected with a good
      deal of additional labour, and brought into the stable to them. In these
      circumstances, therefore, no more cattle can with profit be fed in the
      stable than what are necessary for tillage. But these can never afford
      manure enough for keeping constantly in good condition all the lands which
      they are capable of cultivating. What they afford, being insufficient for
      the whole farm, will naturally be reserved for the lands to which it can
      be most advantageously or conveniently applied; the most fertile, or
      those, perhaps, in the neighbourhood of the farm-yard. These, therefore,
      will be kept constantly in good condition, and fit for tillage. The rest
      will, the greater part of them, be allowed to lie waste, producing scarce
      any thing but some miserable pasture, just sufficient to keep alive a few
      straggling, half-starved cattle; the farm, though much overstocked in
      proportion to what would be necessary for its complete cultivation, being
      very frequently overstocked in proportion to its actual produce. A portion
      of this waste land, however, after having been pastured in this wretched
      manner for six or seven years together, may be ploughed up, when it will
      yield, perhaps, a poor crop or two of bad oats, or of some other coarse
      grain; and then, being entirely exhausted, it must be rested and pastured
      again as before, and another portion ploughed up, to be in the same manner
      exhausted and rested again in its turn. Such, accordingly, was the general
      system of management all over the low country of Scotland before the
      Union. The lands which were kept constantly well manured and in good
      condition seldom exceeded a third or fourth part of the whole farm, and
      sometimes did not amount to a fifth or a sixth part of it. The rest were
      never manured, but a certain portion of them was in its turn,
      notwithstanding, regularly cultivated and exhausted. Under this system of
      management, it is evident, even that part of the lands of Scotland which
      is capable of good cultivation, could produce but little in comparison of
      what it may be capable of producing. But how disadvantageous soever this
      system may appear, yet, before the Union, the low price of cattle seems to
      have rendered it almost unavoidable. If, notwithstanding a great rise in
      the price, it still continues to prevail through a considerable part of
      the country, it is owing in many places, no doubt, to ignorance and
      attachment to old customs, but, in most places, to the unavoidable
      obstructions which the natural course of things opposes to the immediate
      or speedy establishment of a better system: first, to the poverty of the
      tenants, to their not having yet had time to acquire a stock of cattle
      sufficient to cultivate their lands more completely, the same rise of
      price, which would render it advantageous for them to maintain a greater
      stock, rendering it more difficult for them to acquire it; and, secondly,
      to their not having yet had time to put their lands in condition to
      maintain this greater stock properly, supposing they were capable of
      acquiring it. The increase of stock and the improvement of land are two
      events which must go hand in hand, and of which the one can nowhere much
      outrun the other. Without some increase of stock, there can be scarce any
      improvement of land, but there can be no considerable increase of stock,
      but in consequence of a considerable improvement of land; because
      otherwise the land could not maintain it. These natural obstructions to
      the establishment of a better system, cannot be removed but by a long
      course of frugality and industry; and half a century or a century more,
      perhaps, must pass away before the old system, which is wearing out
      gradually, can be completely abolished through all the different parts of
      the country. Of all the commercial advantages, however, which Scotland has
      derived from the Union with England, this rise in the price of cattle is,
      perhaps, the greatest. It has not only raised the value of all highland
      estates, but it has, perhaps, been the principal cause of the improvement
      of the low country.

      In all new colonies, the great quantity of waste land, which can for many
      years be applied to no other purpose but the feeding of cattle, soon
      renders them extremely abundant; and in every thing great cheapness is the
      necessary consequence of great abundance. Though all the cattle of the
      European colonies in America were originally carried from Europe, they
      soon multiplied so much there, and became of so little value, that even
      horses were allowed to run wild in the woods, without any owner thinking
      it worth while to claim them. It must be a long time after the first
      establishment of such colonies, before it can become profitable to feed
      cattle upon the produce of cultivated land. The same causes, therefore,
      the want of manure, and the disproportion between the stock employed in
      cultivation and the land which it is destined to cultivate, are likely to
      introduce there a system of husbandry, not unlike that which still
      continues to take place in so many parts of Scotland. Mr Kalm, the Swedish
      traveller, when he gives an account of the husbandry of some of the
      English colonies in North America, as he found it in 1749, observes,
      accordingly, that he can with difficulty discover there the character of
      the English nation, so well skilled in all the different branches of
      agriculture. They make scarce any manure for their corn fields, he says;
      but when one piece of ground has been exhausted by continual cropping,
      they clear and cultivate another piece of fresh land; and when that is
      exhausted, proceed to a third. Their cattle are allowed to wander through
      the woods and other uncultivated grounds, where they are half-starved;
      having long ago extirpated almost all the annual grasses, by cropping them
      too early in the spring, before they had time to form their flowers, or to
      shed their seeds. {Kalm’s Travels, vol 1, pp. 343, 344.} The annual
      grasses were, it seems, the best natural grasses in that part of North
      America; and when the Europeans first settled there, they used to grow
      very thick, and to rise three or four feet high. A piece of ground which,
      when he wrote, could not maintain one cow, would in former times, he was
      assured, have maintained four, each of which would have given four times
      the quantity of milk which that one was capable of giving. The poorness of
      the pasture had, in his opinion, occasioned the degradation of their
      cattle, which degenerated sensibly from one generation to another. They
      were probably not unlike that stunted breed which was common all over
      Scotland thirty or forty years ago, and which is now so much mended
      through the greater part of the low country, not so much by a change of
      the breed, though that expedient has been employed in some places, as by a
      more plentiful method of feeding them.

      Though it is late, therefore, in the progress of improvement, before
      cattle can bring such a price as to render it profitable to cultivate land
      for the sake of feeding them; yet of all the different parts which compose
      this second sort of rude produce, they are perhaps the first which bring
      this price; because, till they bring it, it seems impossible that
      improvement can be brought near even to that degree of perfection to which
      it has arrived in many parts of Europe.

      As cattle are among the first, so perhaps venison is among the last parts
      of this sort of rude produce which bring this price. The price of venison
      in Great Britain, how extravagant soever it may appear, is not near
      sufficient to compensate the expense of a deer park, as is well known to
      all those who have had any experience in the feeding of deer. If it was
      otherwise, the feeding of deer would soon become an article of common
      farming, in the same manner as the feeding of those small birds, called
      turdi, was among the ancient Romans. Varro and Columella assure us, that
      it was a most profitable article. The fattening of ortolans, birds of
      passage which arrive lean in the country, is said to be so in some parts
      of France. If venison continues in fashion, and the wealth and luxury of
      Great Britain increase as they have done for some time past, its price may
      very probably rise still higher than it is at present.

      Between that period in the progress of improvement, which brings to its
      height the price of so necessary an article as cattle, and that which
      brings to it the price of such a superfluity as venison, there is a very
      long interval, in the course of which many other sorts of rude produce
      gradually arrive at their highest price, some sooner and some later,
      according to different circumstances.

      Thus, in every farm, the offals of the barn and stable will maintain a
      certain number of poultry. These, as they are fed with what would
      otherwise be lost, are a mere save-all; and as they cost the farmer scarce
      any thing, so he can afford to sell them for very little. Almost all that
      he gets is pure gain, and their price can scarce be so low as to
      discourage him from feeding this number. But in countries ill cultivated,
      and therefore but thinly inhabited, the poultry, which are thus raised
      without expense, are often fully sufficient to supply the whole demand. In
      this state of things, therefore, they are often as cheap as butcher’s
      meat, or any other sort of animal food. But the whole quantity of poultry
      which the farm in this manner produces without expense, must always be
      much smaller than the whole quantity of butcher’s meat which is reared
      upon it; and in times of wealth and luxury, what is rare, with only nearly
      equal merit, is always preferred to what is common. As wealth and luxury
      increase, therefore, in consequence of improvement and cultivation, the
      price of poultry gradually rises above that of butcher’s meat, till at
      last it gets so high, that it becomes profitable to cultivate land for the
      sake of feeding them. When it has got to this height, it cannot well go
      higher. If it did, more land would soon be turned to this purpose. In
      several provinces of France, the feeding of poultry is considered as a
      very important article in rural economy, and sufficiently profitable to
      encourage the farmer to raise a considerable quantity of Indian corn and
      buckwheat for this purpose. A middling farmer will there sometimes have
      four hundred fowls in his yard. The feeding of poultry seems scarce yet to
      be generally considered as a matter of so much importance in England. They
      are certainly, however, dearer in England than in France, as England
      receives considerable supplies from France. In the progress of
      improvements, the period at which every particular sort of animal food is
      dearest, must naturally be that which immediately precedes the general
      practice of cultivating land for the sake of raising it. For some time
      before this practice becomes general, the scarcity must necessarily raise
      the price. After it has become general, new methods of feeding are
      commonly fallen upon, which enable the farmer to raise upon the same
      quantity of ground a much greater quantity of that particular sort of
      animal food. The plenty not only obliges him to sell cheaper, but, in
      consequence of these improvements, he can afford to sell cheaper; for if
      he could not afford it, the plenty would not be of long continuance. It
      has been probably in this manner that the introduction of clover, turnips,
      carrots, cabbages, etc. has contributed to sink the common price of
      butcher’s meat in the London market, somewhat below what it was about the
      beginning of the last century.

      The hog, that finds his food among ordure, and greedily devours many
      things rejected by every other useful animal, is, like poultry, originally
      kept as a save-all. As long as the number of such animals, which can thus
      be reared at little or no expense, is fully sufficient to supply the
      demand, this sort of butcher’s meat comes to market at a much lower price
      than any other. But when the demand rises beyond what this quantity can
      supply, when it becomes necessary to raise food on purpose for feeding and
      fattening hogs, in the same manner as for feeding and fattening other
      cattle, the price necessarily rises, and becomes proportionably either
      higher or lower than that of other butcher’s meat, according as the nature
      of the country, and the state of its agriculture, happen to render the
      feeding of hogs more or less expensive than that of other cattle. In
      France, according to Mr Buffon, the price of pork is nearly equal to that
      of beef. In most parts of Great Britain it is at present somewhat higher.

      The great rise in the price both of hogs and poultry, has, in Great
      Britain, been frequently imputed to the diminution of the number of
      cottagers and other small occupiers of land; an event which has in every
      part of Europe been the immediate forerunner of improvement and better
      cultivation, but which at the same time may have contributed to raise the
      price of those articles, both somewhat sooner and somewhat faster than it
      would otherwise have risen. As the poorest family can often maintain a cat
      or a dog without any expense, so the poorest occupiers of land can
      commonly maintain a few poultry, or a sow and a few pigs, at very little.
      The little offals of their own table, their whey, skimmed milk, and butter
      milk, supply those animals with a part of their food, and they find the
      rest in the neighbouring fields, without doing any sensible damage to any
      body. By diminishing the number of those small occupiers, therefore, the
      quantity of this sort of provisions, which is thus produced at little or
      no expense, must certainly have been a good deal diminished, and their
      price must consequently have been raised both sooner and faster than it
      would otherwise have risen. Sooner or later, however, in the progress of
      improvement, it must at any rate have risen to the utmost height to which
      it is capable of rising; or to the price which pays the labour and expense
      of cultivating the land which furnishes them with food, as well as these
      are paid upon the greater part of other cultivated land.

      The business of the dairy, like the feeding of hogs and poultry, is
      originally carried on as a save-all. The cattle necessarily kept upon the
      farm produce more milk than either the rearing of their own young, or the
      consumption of the farmer’s family requires; and they produce most at one
      particular season. But of all the productions of land, milk is perhaps the
      most perishable. In the warm season, when it is most abundant, it will
      scarce keep four-and-twenty hours. The farmer, by making it into fresh
      butter, stores a small part of it for a week; by making it into salt
      butter, for a year; and by making it into cheese, he stores a much greater
      part of it for several years. Part of all these is reserved for the use of
      his own family; the rest goes to market, in order to find the best price
      which is to be had, and which can scarce be so low is to discourage him
      from sending thither whatever is over and above the use of his own family.
      If it is very low indeed, he will be likely to manage his dairy in a very
      slovenly and dirty manner, and will scarce, perhaps, think it worth while
      to have a particular room or building on purpose for it, but will suffer
      the business to be carried on amidst the smoke, filth, and nastiness of
      his own kitchen, as was the case of almost all the farmers’ dairies in
      Scotland thirty or forty years ago, and as is the case of many of them
      still. The same causes which gradually raise the price of butcher’s meat,
      the increase of the demand, and, in consequence of the improvement of the
      country, the diminution of the quantity which can be fed at little or no
      expense, raise, in the same manner, that of the produce of the dairy, of
      which the price naturally connects with that of butcher’s meat, or with
      the expense of feeding cattle. The increase of price pays for more labour,
      care, and cleanliness. The dairy becomes more worthy of the farmer’s
      attention, and the quality of its produce gradually improves. The price at
      last gets so high, that it becomes worth while to employ some of the most
      fertile and best cultivated lands in feeding cattle merely for the purpose
      of the dairy; and when it has got to this height, it cannot well go
      higher. If it did, more land would soon be turned to this purpose. It
      seems to have got to this height through the greater part of England,
      where much good land is commonly employed in this manner. If you except
      the neighbourhood of a few considerable towns, it seems not yet to have
      got to this height anywhere in Scotland, where common farmers seldom
      employ much good land in raising food for cattle, merely for the purpose
      of the dairy. The price of the produce, though it has risen very
      considerably within these few years, is probably still too low to admit of
      it. The inferiority of the quality, indeed, compared with that of the
      produce of English dairies, is fully equal to that of the price. But this
      inferiority of quality is, perhaps, rather the effect of this lowness of
      price, than the cause of it. Though the quality was much better, the
      greater part of what is brought to market could not, I apprehend, in the
      present circumstances of the country, be disposed of at a much better
      price; and the present price, it is probable, would not pay the expense of
      the land and labour necessary for producing a much better quality. Through
      the greater part of England, notwithstanding the superiority of price, the
      dairy is not reckoned a more profitable employment of land than the
      raising of corn, or the fattening of cattle, the two great objects of
      agriculture. Through the greater part of Scotland, therefore, it cannot
      yet be even so profitable.

      The lands of no country, it is evident, can ever be completely cultivated
      and improved, till once the price of every produce, which human industry
      is obliged to raise upon them, has got so high as to pay for the expense
      of complete improvement and cultivation. In order to do this, the price of
      each particular produce must be sufficient, first, to pay the rent of good
      corn land, as it is that which regulates the rent of the greater part of
      other cultivated land; and, secondly, to pay the labour and expense of the
      farmer, as well as they are commonly paid upon good corn land; or, in
      other words, to replace with the ordinary profits the stock which he
      employs about it. This rise in the price of each particular produce; must
      evidently be previous to the improvement and cultivation of the land which
      is destined for raising it. Gain is the end of all improvement; and
      nothing could deserve that name, of which loss was to be the necessary
      consequence. But loss must be the necessary consequence of improving land
      for the sake of a produce of which the price could never bring back the
      expense. If the complete improvement and cultivation of the country be, as
      it most certainly is, the greatest of all public advantages, this rise in
      the price of all those different sorts of rude produce, instead of being
      considered as a public calamity, ought to be regarded as the necessary
      forerunner and attendant of the greatest of all public advantages.

      This rise, too, in the nominal or money price of all those different sorts
      of rude produce, has been the effect, not of any degradation in the value
      of silver, but of a rise in their real price. They have become worth, not
      only a greater quantity of silver, but a greater quantity of labour and
      subsistence than before. As it costs a greater quantity of labour and
      subsistence to bring them to market, so, when they are brought thither
      they represent, or are equivalent to a greater quantity.

      Third Sort.—The third and last sort of rude produce, of which the
      price naturally rises in the progress of improvement, is that in which the
      efficacy of human industry, in augmenting the quantity, is either limited
      or uncertain. Though the real price of this sort of rude produce,
      therefore, naturally tends to rise in the progress of improvement, yet,
      according as different accidents happen to render the efforts of human
      industry more or less successful in augmenting the quantity, it may happen
      sometimes even to fall, sometimes to continue the same, in very different
      periods of improvement, and sometimes to rise more or less in the same
      period.

      There are some sorts of rude produce which nature has rendered a kind of
      appendages to other sorts; so that the quantity of the one which any
      country can afford, is necessarily limited by that of the other. The
      quantity of wool or of raw hides, for example, which any country can
      afford, is necessarily limited by the number of great and small cattle
      that are kept in it. The state of its improvement, and the nature of its
      agriculture, again necessarily determine this number.

      The same causes which, in the progress of improvement, gradually raise the
      price of butcher’s meat, should have the same effect, it may be thought,
      upon the prices of wool and raw hides, and raise them, too, nearly in the
      same proportion. It probably would be so, if, in the rude beginnings of
      improvement, the market for the latter commodities was confined within as
      narrow bounds as that for the former. But the extent of their respective
      markets is commonly extremely different.

      The market for butcher’s meat is almost everywhere confined to the country
      which produces it. Ireland, and some part of British America, indeed,
      carry on a considerable trade in salt provisions; but they are, I believe,
      the only countries in the commercial world which do so, or which export to
      other countries any considerable part of their butcher’s meat.

      The market for wool and raw hides, on the contrary, is, in the rude
      beginnings of improvement, very seldom confined to the country which
      produces them. They can easily be transported to distant countries; wool
      without any preparation, and raw hides with very little; and as they are
      the materials of many manufactures, the industry of other countries may
      occasion a demand for them, though that of the country which produces them
      might not occasion any.

      In countries ill cultivated, and therefore but thinly inhabited, the price
      of the wool and the hide bears always a much greater proportion to that of
      the whole beast, than in countries where, improvement and population being
      further advanced, there is more demand for butcher’s meat. Mr Hume
      observes, that in the Saxon times, the fleece was estimated at two-fifths
      of the value of the whole sheep and that this was much above the
      proportion of its present estimation. In some provinces of Spain, I have
      been assured, the sheep is frequently killed merely for the sake of the
      fleece and the tallow. The carcase is often left to rot upon the ground,
      or to be devoured by beasts and birds of prey. If this sometimes happens
      even in Spain, it happens almost constantly in Chili, at Buenos Ayres, and
      in many other parts of Spanish America, where the horned cattle are almost
      constantly killed merely for the sake of the hide and the tallow. This,
      too, used to happen almost constantly in Hispaniola, while it was infested
      by the buccaneers, and before the settlement, improvement, and
      populousness of the French plantations ( which now extend round the coast
      of almost the whole western half of the island) had given some value to
      the cattle of the Spaniards, who still continue to possess, not only the
      eastern part of the coast, but the whole inland mountainous part of the
      country.

      Though, in the progress of improvement and population, the price of the
      whole beast necessarily rises, yet the price of the carcase is likely to
      be much more affected by this rise than that of the wool and the hide. The
      market for the carcase being in the rude state of society confined always
      to the country which produces it, must necessarily be extended in
      proportion to the improvement and population of that country. But the
      market for the wool and the hides, even of a barbarous country, often
      extending to the whole commercial world, it can very seldom be enlarged in
      the same proportion. The state of the whole commercial world can seldom be
      much affected by the improvement of any particular country; and the market
      for such commodities may remain the same, or very nearly the same, after
      such improvements, as before. It should, however, in the natural course of
      things, rather, upon the whole, be somewhat extended in consequence of
      them. If the manufactures, especially, of which those commodities are the
      materials, should ever come to flourish in the country, the market, though
      it might not be much enlarged, would at least be brought much nearer to
      the place of growth than before; and the price of those materials might at
      least be increased by what had usually been the expense of transporting
      them to distant countries. Though it might not rise, therefore, in the
      same proportion as that of butcher’s meat, it ought naturally to rise
      somewhat, and it ought certainly not to fall.

      In England, however, notwithstanding the flourishing state of its woollen
      manufacture, the price of English wool has fallen very considerably since
      the time of Edward III. There are many authentic records which demonstrate
      that, during the reign of that prince (towards the middle of the
      fourteenth century, or about 1339), what was reckoned the moderate and
      reasonable price of the tod, or twenty-eight pounds of English wool, was
      not less than ten shillings of the money of those times {See Smith’s
      Memoirs of Wool, vol. i c. 5, 6, 7. also vol. ii.}, containing, at the
      rate of twenty-pence the ounce, six ounces of silver, Tower weight, equal
      to about thirty shillings of our present money. In the present times,
      one-and-twenty shillings the tod may be reckoned a good price for very
      good English wool. The money price of wool, therefore, in the time of
      Edward III. was to its money price in the present times as ten to seven.
      The superiority of its real price was still greater. At the rate of six
      shillings and eightpence the quarter, ten shillings was in those ancient
      times the price of twelve bushels of wheat. At the rate of twenty-eight
      shillings the quarter, one-and-twenty shillings is in the present times
      the price of six bushels only. The proportion between the real price of
      ancient and modern times, therefore, is as twelve to six, or as two to
      one. In those ancient times, a tod of wool would have purchased twice the
      quantity of subsistence which it will purchase at present, and
      consequently twice the quantity of labour, if the real recompence of
      labour had been the same in both periods.

      This degradation, both in the real and nominal value of wool, could never
      have happened in consequence of the natural course of things. It has
      accordingly been the effect of violence and artifice. First, of the
      absolute prohibition of exporting wool from England: secondly, of the
      permission of importing it from Spain, duty free: thirdly, of the
      prohibition of exporting it from Ireland to another country but England.
      In consequence of these regulations, the market for English wool, instead
      of being somewhat extended, in consequence of the improvement of England,
      has been confined to the home market, where the wool of several other
      countries is allowed to come into competition with it, and where that of
      Ireland is forced into competition with it. As the woollen manufactures,
      too, of Ireland, are fully as much discouraged as is consistent with
      justice and fair dealing, the Irish can work up but a smaller part of
      their own wool at home, and are therefore obliged to send a greater
      proportion of it to Great Britain, the only market they are allowed.

      I have not been able to find any such authentic records concerning the
      price of raw hides in ancient times. Wool was commonly paid as a subsidy
      to the king, and its valuation in that subsidy ascertains, at least in
      some degree, what was its ordinary price. But this seems not to have been
      the case with raw hides. Fleetwood, however, from an account in 1425,
      between the prior of Burcester Oxford and one of his canons, gives us
      their price, at least as it was stated upon that particular occasion, viz.
      five ox hides at twelve shillings; five cow hides at seven shillings and
      threepence; thirtysix sheep skins of two years old at nine shillings;
      sixteen calf skins at two shillings. In 1425, twelve shillings contained
      about the same quantity of silver as four-and-twenty shillings of our
      present money. An ox hide, therefore, was in this account valued at the
      same quantity of silver as 4s. ⅘ths of our present money. Its nominal
      price was a good deal lower than at present. But at the rate of six
      shillings and eightpence the quarter, twelve shillings would in those
      times have purchased fourteen bushels and four-fifths of a bushel of
      wheat, which, at three and sixpence the bushel, would in the present times
      cost 51s. 4d. An ox hide, therefore, would in those times have purchased
      as much corn as ten shillings and threepence would purchase at present.
      Its real value was equal to ten shillings and threepence of our present
      money. In those ancient times, when the cattle were half starved during
      the greater part of the winter, we cannot suppose that they were of a very
      large size. An ox hide which weighs four stone of sixteen pounds of
      avoirdupois, is not in the present times reckoned a bad one; and in those
      ancient times would probably have been reckoned a very good one. But at
      half-a-crown the stone, which at this moment (February 1773) I understand
      to be the common price, such a hide would at present cost only ten
      shillings. Through its nominal price, therefore, is higher in the present
      than it was in those ancient times, its real price, the real quantity of
      subsistence which it will purchase or command, is rather somewhat lower.
      The price of cow hides, as stated in the above account, is nearly in the
      common proportion to that of ox hides. That of sheep skins is a good deal
      above it. They had probably been sold with the wool. That of calves skins,
      on the contrary, is greatly below it. In countries where the price of
      cattle is very low, the calves, which are not intended to be reared in
      order to keep up the stock, are generally killed very young, as was the
      case in Scotland twenty or thirty years ago. It saves the milk, which
      their price would not pay for. Their skins, therefore, are commonly good
      for little.

      The price of raw hides is a good deal lower at present than it was a few
      years ago; owing probably to the taking off the duty upon seal skins, and
      to the allowing, for a limited time, the importation of raw hides from
      Ireland, and from the plantations, duty free, which was done in 1769. Take
      the whole of the present century at an average, their real price has
      probably been somewhat higher than it was in those ancient times. The
      nature of the commodity renders it not quite so proper for being
      transported to distant markets as wool. It suffers more by keeping. A
      salted hide is reckoned inferior to a fresh one, and sells for a lower
      price. This circumstance must necessarily have some tendency to sink the
      price of raw hides produced in a country which does not manufacture them,
      but is obliged to export them, and comparatively to raise that of those
      produced in a country which does manufacture them. It must have some
      tendency to sink their price in a barbarous, and to raise it in an
      improved and manufacturing country. It must have had some tendency,
      therefore, to sink it in ancient, and to raise it in modern times. Our
      tanners, besides, have not been quite so successful as our clothiers, in
      convincing the wisdom of the nation, that the safety of the commonwealth
      depends upon the prosperity of their particular manufacture. They have
      accordingly been much less favoured. The exportation of raw hides has,
      indeed, been prohibited, and declared a nuisance; but their importation
      from foreign countries has been subjected to a duty; and though this duty
      has been taken off from those of Ireland and the plantations (for the
      limited time of five years only), yet Ireland has not been confined to the
      market of Great Britain for the sale of its surplus hides, or of those
      which are not manufactured at home. The hides of common cattle have, but
      within these few years, been put among the enumerated commodities which
      the plantations can send nowhere but to the mother country; neither has
      the commerce of Ireland been in this case oppressed hitherto, in order to
      support the manufactures of Great Britain.

      Whatever regulations tend to sink the price, either of wool or of raw
      hides, below what it naturally would be, must, in an improved and
      cultivated country, have some tendency to raise the price of butcher’s
      meat. The price both of the great and small cattle, which are fed on
      improved and cultivated land, must be sufficient to pay the rent which the
      landlord, and the profit which the farmer, has reason to expect from
      improved and cultivated land. If it is not, they will soon cease to feed
      them. Whatever part of this price, therefore, is not paid by the wool and
      the hide, must be paid by the carcase. The less there is paid for the one,
      the more must be paid for the other. In what manner this price is to be
      divided upon the different parts of the beast, is indifferent to the
      landlords and farmers, provided it is all paid to them. In an improved and
      cultivated country, therefore, their interest as landlords and farmers
      cannot be much affected by such regulations, though their interest as
      consumers may, by the rise in the price of provisions. It would be quite
      otherwise, however, in an unimproved and uncultivated country, where the
      greater part of the lands could be applied to no other purpose but the
      feeding of cattle, and where the wool and the hide made the principal part
      of the value of those cattle. Their interest as landlords and farmers
      would in this case be very deeply affected by such regulations, and their
      interest as consumers very little. The fall in the price of the wool and
      the hide would not in this case raise the price of the carcase; because
      the greater part of the lands of the country being applicable to no other
      purpose but the feeding of cattle, the same number would still continue to
      be fed. The same quantity of butcher’s meat would still come to market.
      The demand for it would be no greater than before. Its price, therefore,
      would be the same as before. The whole price of cattle would fall, and
      along with it both the rent and the profit of all those lands of which
      cattle was the principal produce, that is, of the greater part of the
      lands of the country. The perpetual prohibition of the exportation of
      wool, which is commonly, but very falsely, ascribed to Edward III., would,
      in the then circumstances of the country, have been the most destructive
      regulation which could well have been thought of. It would not only have
      reduced the actual value of the greater part of the lands in the kingdom,
      but by reducing the price of the most important species of small cattle,
      it would have retarded very much its subsequent improvement.

      The wool of Scotland fell very considerably in its price in consequence of
      the union with England, by which it was excluded from the great market of
      Europe, and confined to the narrow one of Great Britain. The value of the
      greater part of the lands in the southern counties of Scotland, which are
      chiefly a sheep country, would have been very deeply affected by this
      event, had not the rise in the price of butcher’s meat fully compensated
      the fall in the price of wool.

      As the efficacy of human industry, in increasing the quantity either of
      wool or of raw hides, is limited, so far as it depends upon the produce of
      the country where it is exerted; so it is uncertain so far as it depends
      upon the produce of other countries. It so far depends not so much upon
      the quantity which they produce, as upon that which they do not
      manufacture; and upon the restraints which they may or may not think
      proper to impose upon the exportation of this sort of rude produce. These
      circumstances, as they are altogether independent of domestic industry, so
      they necessarily render the efficacy of its efforts more or less
      uncertain. In multiplying this sort of rude produce, therefore, the
      efficacy of human industry is not only limited, but uncertain.

      In multiplying another very important sort of rude produce, the quantity
      of fish that is brought to market, it is likewise both limited and
      uncertain. It is limited by the local situation of the country, by the
      proximity or distance of its different provinces from the sea, by the
      number of its lakes and rivers, and by what may be called the fertility or
      barrenness of those seas, lakes, and rivers, as to this sort of rude
      produce. As population increases, as the annual produce of the land and
      labour of the country grows greater and greater, there come to be more
      buyers of fish; and those buyers, too, have a greater quantity and variety
      of other goods, or, what is the same thing, the price of a greater
      quantity and variety of other goods, to buy with. But it will generally be
      impossible to supply the great and extended market, without employing a
      quantity of labour greater than in proportion to what had been requisite
      for supplying the narrow and confined one. A market which, from requiring
      only one thousand, comes to require annually ten thousand ton of fish, can
      seldom be supplied, without employing more than ten times the quantity of
      labour which had before been sufficient to supply it. The fish must
      generally be sought for at a greater distance, larger vessels must be
      employed, and more expensive machinery of every kind made use of. The real
      price of this commodity, therefore, naturally rises in the progress of
      improvement. It has accordingly done so, I believe, more or less in every
      country.

      Though the success of a particular day’s fishing may be a very uncertain
      matter, yet the local situation of the country being supposed, the general
      efficacy of industry in bringing a certain quantity of fish to market,
      taking the course of a year, or of several years together, it may,
      perhaps, be thought is certain enough; and it, no doubt, is so. As it
      depends more, however, upon the local situation of the country, than upon
      the state of its wealth and industry; as upon this account it may in
      different countries be the same in very different periods of improvement,
      and very different in the same period; its connection with the state of
      improvement is uncertain; and it is of this sort of uncertainty that I am
      here speaking.

      In increasing the quantity of the different minerals and metals which are
      drawn from the bowels of the earth, that of the more precious ones
      particularly, the efficacy of human industry seems not to be limited, but
      to be altogether uncertain.

      The quantity of the precious metals which is to be found in any country,
      is not limited by any thing in its local situation, such as the fertility
      or barrenness of its own mines. Those metals frequently abound in
      countries which possess no mines. Their quantity, in every particular
      country, seems to depend upon two different circumstances; first, upon its
      power of purchasing, upon the state of its industry, upon the annual
      produce of its land and labour, in consequence of which it can afford to
      employ a greater or a smaller quantity of labour and subsistence, in
      bringing or purchasing such superfluities as gold and silver, either from
      its own mines, or from those of other countries; and, secondly, upon the
      fertility or barrenness of the mines which may happen at any particular
      time to supply the commercial world with those metals. The quantity of
      those metals in the countries most remote from the mines, must be more or
      less affected by this fertility or barrenness, on account of the easy and
      cheap transportation of those metals, of their small bulk and great value.
      Their quantity in China and Indostan must have been more or less affected
      by the abundance of the mines of America.

      So far as their quantity in any particular country depends upon the former
      of those two circumstances (the power of purchasing), their real price,
      like that of all other luxuries and superfluities, is likely to rise with
      the wealth and improvement of the country, and to fall with its poverty
      and depression. Countries which have a great quantity of labour and
      subsistence to spare, can afford to purchase any particular quantity of
      those metals at the expense of a greater quantity of labour and
      subsistence, than countries which have less to spare.

      So far as their quantity in any particular country depends upon the latter
      of those two circumstances (the fertility or barrenness of the mines which
      happen to supply the commercial world), their real price, the real
      quantity of labour and subsistence which they will purchase or exchange
      for, will, no doubt, sink more or less in proportion to the fertility, and
      rise in proportion to the barrenness of those mines.

      The fertility or barrenness of the mines, however, which may happen at any
      particular time to supply the commercial world, is a circumstance which,
      it is evident, may have no sort of connection with the state of industry
      in a particular country. It seems even to have no very necessary
      connection with that of the world in general. As arts and commerce,
      indeed, gradually spread themselves over a greater and a greater part of
      the earth, the search for new mines, being extended over a wider surface,
      may have somewhat a better chance for being successful than when confined
      within narrower bounds. The discovery of new mines, however, as the old
      ones come to be gradually exhausted, is a matter of the greatest
      uncertainty, and such as no human skill or industry can insure. All
      indications, it is acknowledged, are doubtful; and the actual discovery
      and successful working of a new mine can alone ascertain the reality of
      its value, or even of its existence. In this search there seem to be no
      certain limits, either to the possible success, or to the possible
      disappointment of human industry. In the course of a century or two, it is
      possible that new mines may be discovered, more fertile than any that have
      ever yet been known; and it is just equally possible, that the most
      fertile mine then known may be more barren than any that was wrought
      before the discovery of the mines of America. Whether the one or the other
      of those two events may happen to take place, is of very little importance
      to the real wealth and prosperity of the world, to the real value of the
      annual produce of the land and labour of mankind. Its nominal value, the
      quantity of gold and silver by which this annual produce could be
      expressed or represented, would, no doubt, be very different; but its real
      value, the real quantity of labour which it could purchase or command,
      would be precisely the same. A shilling might, in the one case, represent
      no more labour than a penny does at present; and a penny, in the other,
      might represent as much as a shilling does now. But in the one case, he
      who had a shilling in his pocket would be no richer than he who has a
      penny at present; and in the other, he who had a penny would be just as
      rich as he who has a shilling now. The cheapness and abundance of gold and
      silver plate would be the sole advantage which the world could derive from
      the one event; and the dearness and scarcity of those trifling
      superfluities, the only inconveniency it could suffer from the other.




      Conclusion of the Digression concerning the Variations in the Value of
      Silver.

      The greater part of the writers who have collected the money price of
      things in ancient times, seem to have considered the low money price of
      corn, and of goods in general, or, in other words, the high value of gold
      and silver, as a proof, not only of the scarcity of those metals, but of
      the poverty and barbarism of the country at the time when it took place.
      This notion is connected with the system of political economy, which
      represents national wealth as consisting in the abundance and national
      poverty in the scarcity, of gold and silver; a system which I shall
      endeavour to explain and examine at great length in the fourth book of
      this Inquiry. I shall only observe at present, that the high value of the
      precious metals can be no proof of the poverty or barbarism of any
      particular country at the time when it took place. It is a proof only of
      the barrenness of the mines which happened at that time to supply the
      commercial world. A poor country, as it cannot afford to buy more, so it
      can as little afford to pay dearer for gold and silver than a rich one;
      and the value of those metals, therefore, is not likely to be higher in
      the former than in the latter. In China, a country much richer than any
      part of Europe, the value of the precious metals is much higher than in
      any part of Europe. As the wealth of Europe, indeed, has increased greatly
      since the discovery of the mines of America, so the value of gold and
      silver has gradually diminished. This diminution of their value, however,
      has not been owing to the increase of the real wealth of Europe, of the
      annual produce of its land and labour, but to the accidental discovery of
      more abundant mines than any that were known before. The increase of the
      quantity of gold and silver in Europe, and the increase of its
      manufactures and agriculture, are two events which, though they have
      happened nearly about the same time, yet have arisen from very different
      causes, and have scarce any natural connection with one another. The one
      has arisen from a mere accident, in which neither prudence nor policy
      either had or could have any share; the other, from the fall of the feudal
      system, and from the establishment of a government which afforded to
      industry the only encouragement which it requires, some tolerable security
      that it shall enjoy the fruits of its own labour. Poland, where the feudal
      system still continues to take place, is at this day as beggarly a country
      as it was before the discovery of America. The money price of corn,
      however, has risen; the real value of the precious metals has fallen in
      Poland, in the same manner as in other parts of Europe. Their quantity,
      therefore, must have increased there as in other places, and nearly in the
      same proportion to the annual produce of its land and labour. This
      increase of the quantity of those metals, however, has not, it seems,
      increased that annual produce, has neither improved the manufactures and
      agriculture of the country, nor mended the circumstances of its
      inhabitants. Spain and Portugal, the countries which possess the mines,
      are, after Poland, perhaps the two most beggarly countries in Europe. The
      value of the precious metals, however, must be lower in Spain and Portugal
      than in any other part of Europe, as they come from those countries to all
      other parts of Europe, loaded, not only with a freight and an insurance,
      but with the expense of smuggling, their exportation being either
      prohibited or subjected to a duty. In proportion to the annual produce of
      the land and labour, therefore, their quantity must be greater in those
      countries than in any other part of Europe; those countries, however, are
      poorer than the greater part of Europe. Though the feudal system has been
      abolished in Spain and Portugal, it has not been succeeded by a much
      better.

      As the low value of gold and silver, therefore, is no proof of the wealth
      and flourishing state of the country where it takes place; so neither is
      their high value, or the low money price either of goods in general, or of
      corn in particular, any proof of its poverty and barbarism.

      But though the low money price, either of goods in general, or of corn in
      particular, be no proof of the poverty or barbarism of the times, the low
      money price of some particular sorts of goods, such as cattle, poultry,
      game of all kinds, etc. in proportion to that of corn, is a most decisive
      one. It clearly demonstrates, first, their great abundance in proportion
      to that of corn, and, consequently, the great extent of the land which
      they occupied in proportion to what was occupied by corn; and, secondly,
      the low value of this land in proportion to that of corn land, and,
      consequently, the uncultivated and unimproved state of the far greater
      part of the lands of the country. It clearly demonstrates, that the stock
      and population of the country did not bear the same proportion to the
      extent of its territory, which they commonly do in civilized countries;
      and that society was at that time, and in that country, but in its
      infancy. From the high or low money price, either of goods in general, or
      of corn in particular, we can infer only, that the mines, which at that
      time happened to supply the commercial world with gold and silver, were
      fertile or barren, not that the country was rich or poor. But from the
      high or low money price of some sorts of goods in proportion to that of
      others, we can infer, with a degree of probability that approaches almost
      to certainty, that it was rich or poor, that the greater part of its lands
      were improved or unimproved, and that it was either in a more or less
      barbarous state, or in a more or less civilized one.

      Any rise in the money price of goods which proceeded altogether from the
      degradation of the value of silver, would affect all sorts of goods
      equally, and raise their price universally, a third, or a fourth, or a
      fifth part higher, according as silver happened to lose a third, or a
      fourth, or a fifth part of its former value. But the rise in the price of
      provisions, which has been the subject of so much reasoning and
      conversation, does not affect all sorts of provisions equally. Taking the
      course of the present century at an average, the price of corn, it is
      acknowledged, even by those who account for this rise by the degradation
      of the value of silver, has risen much less than that of some other sorts
      of provisions. The rise in the price of those other sorts of provisions,
      therefore, cannot be owing altogether to the degradation of the value of
      silver. Some other causes must be taken into the account; and those which
      have been above assigned, will, perhaps, without having recourse to the
      supposed degradation of the value of silver, sufficiently explain this
      rise in those particular sorts of provisions, of which the price has
      actually risen in proportion to that of corn.

      As to the price of corn itself, it has, during the sixty-four first years
      of the present century, and before the late extraordinary course of bad
      seasons, been somewhat lower than it was during the sixty-four last years
      of the preceding century. This fact is attested, not only by the accounts
      of Windsor market, but by the public fiars of all the different counties
      of Scotland, and by the accounts of several different markets in France,
      which have been collected with great diligence and fidelity by Mr
      Messance, and by Mr Dupré de St Maur. The evidence is more complete than
      could well have been expected in a matter which is naturally so very
      difficult to be ascertained.

      As to the high price of corn during these last ten or twelve years, it can
      be sufficiently accounted for from the badness of the seasons, without
      supposing any degradation in the value of silver.

      The opinion, therefore, that silver is continually sinking in its value,
      seems not to be founded upon any good observations, either upon the prices
      of corn, or upon those of other provisions.

      The same quantity of silver, it may perhaps be said, will, in the present
      times, even according to the account which has been here given, purchase a
      much smaller quantity of several sorts of provisions than it would have
      done during some part of the last century; and to ascertain whether this
      change be owing to a rise in the value of those goods, or to a fall in the
      value of silver, is only to establish a vain and useless distinction,
      which can be of no sort of service to the man who has only a certain
      quantity of silver to go to market with, or a certain fixed revenue in
      money. I certainly do not pretend that the knowledge of this distinction
      will enable him to buy cheaper. It may not, however, upon that account be
      altogether useless.

      It may be of some use to the public, by affording an easy proof of the
      prosperous condition of the country. If the rise in the price of some
      sorts of provisions be owing altogether to a fall in the value of silver,
      it is owing to a circumstance, from which nothing can be inferred but the
      fertility of the American mines. The real wealth of the country, the
      annual produce of its land and labour, may, notwithstanding this
      circumstance, be either gradually declining, as in Portugal and Poland; or
      gradually advancing, as in most other parts of Europe. But if this rise in
      the price of some sorts of provisions be owing to a rise in the real value
      of the land which produces them, to its increased fertility, or, in
      consequence of more extended improvement and good cultivation, to its
      having been rendered fit for producing corn; it is owing to a circumstance
      which indicates, in the clearest manner, the prosperous and advancing
      state of the country. The land constitutes by far the greatest, the most
      important, and the most durable part of the wealth of every extensive
      country. It may surely be of some use, or, at least, it may give some
      satisfaction to the public, to have so decisive a proof of the increasing
      value of by far the greatest, the most important, and the most durable
      part of its wealth.

      It may, too, be of some use to the public, in regulating the pecuniary
      reward of some of its inferior servants. If this rise in the price of some
      sorts of provisions be owing to a fall in the value of silver, their
      pecuniary reward, provided it was not too large before, ought certainly to
      be augmented in proportion to the extent of this fall. If it is not
      augmented, their real recompence will evidently be so much diminished. But
      if this rise of price is owing to the increased value, in consequence of
      the improved fertility of the land which produces such provisions, it
      becomes a much nicer matter to judge, either in what proportion any
      pecuniary reward ought to be augmented, or whether it ought to be
      augmented at all. The extension of improvement and cultivation, as it
      necessarily raises more or less, in proportion to the price of corn, that
      of every sort of animal food, so it as necessarily lowers that of, I
      believe, every sort of vegetable food. It raises the price of animal food;
      because a great part of the land which produces it, being rendered fit for
      producing corn, must afford to the landlord and farmer the rent and
      profit of corn land. It lowers the price of vegetable food; because, by
      increasing the fertility of the land, it increases its abundance. The
      improvements of agriculture, too, introduce many sorts of vegetable food,
      which requiring less land, and not more labour than corn, come much
      cheaper to market. Such are potatoes and maize, or what is called Indian
      corn, the two most important improvements which the agriculture of Europe,
      perhaps, which Europe itself, has received from the great extension of its
      commerce and navigation. Many sorts of vegetable food, besides, which in
      the rude state of agriculture are confined to the kitchen-garden, and
      raised only by the spade, come, in its improved state, to be introduced
      into common fields, and to be raised by the plough; such as turnips,
      carrots, cabbages, etc. If, in the progress of improvement, therefore, the
      real price of one species of food necessarily rises, that of another as
      necessarily falls; and it becomes a matter of more nicety to judge how far
      the rise in the one may be compensated by the fall in the other. When the
      real price of butcher’s meat has once got to its height (which, with
      regard to every sort, except perhaps that of hogs flesh, it seems to have
      done through a great part of England more than a century ago), any rise
      which can afterwards happen in that of any other sort of animal food,
      cannot much affect the circumstances of the inferior ranks of people. The
      circumstances of the poor, through a great part of England, cannot surely
      be so much distressed by any rise in the price of poultry, fish,
      wild-fowl, or venison, as they must be relieved by the fall in that of
      potatoes.

      In the present season of scarcity, the high price of corn no doubt
      distresses the poor. But in times of moderate plenty, when corn is at its
      ordinary or average price, the natural rise in the price of any other sort
      of rude produce cannot much affect them. They suffer more, perhaps, by the
      artificial rise which has been occasioned by taxes in the price of some
      manufactured commodities, as of salt, soap, leather, candles, malt, beer,
      ale, etc.


      _Effects of the Progress of Improvement upon the real Price of
      Manufactures._


      It is the natural effect of improvement, however, to diminish gradually
      the real price of almost all manufactures. That of the manufacturing
      workmanship diminishes, perhaps, in all of them without exception. In
      consequence of better machinery, of greater dexterity, and of a more
      proper division and distribution of work, all of which are the natural
      effects of improvement, a much smaller quantity of labour becomes
      requisite for executing any particular piece of work; and though, in
      consequence of the flourishing circumstances of the society, the real
      price of labour should rise very considerably, yet the great diminution of
      the quantity will generally much more than compensate the greatest rise
      which can happen in the price.

      There are, indeed, a few manufactures, in which the necessary rise in the
      real price of the rude materials will more than compensate all the
      advantages which improvement can introduce into the execution of the work.
      In carpenters’ and joiners’ work, and in the coarser sort of cabinet work,
      the necessary rise in the real price of barren timber, in consequence of
      the improvement of land, will more than compensate all the advantages
      which can be derived from the best machinery, the greatest dexterity, and
      the most proper division and distribution of work.

      But in all cases in which the real price of the rude material either does
      not rise at all, or does not rise very much, that of the manufactured
      commodity sinks very considerably.

      This diminution of price has, in the course of the present and preceding
      century, been most remarkable in those manufactures of which the materials
      are the coarser metals. A better movement of a watch, than about the
      middle of the last century could have been bought for twenty pounds, may
      now perhaps be had for twenty shillings. In the work of cutlers and
      locksmiths, in all the toys which are made of the coarser metals, and in
      all those goods which are commonly known by the name of Birmingham and
      Sheffield ware, there has been, during the same period, a very great
      reduction of price, though not altogether so great as in watch-work. It
      has, however, been sufficient to astonish the workmen of every other part
      of Europe, who in many cases acknowledge that they can produce no work of
      equal goodness for double or even for triple the price. There are perhaps
      no manufactures, in which the division of labour can be carried further,
      or in which the machinery employed admits of a greater variety of
      improvements, than those of which the materials are the coarser metals.

      In the clothing manufacture there has, during the same period, been no
      such sensible reduction of price. The price of superfine cloth, I have
      been assured, on the contrary, has, within these five-and-twenty or thirty
      years, risen somewhat in proportion to its quality, owing, it was said, to
      a considerable rise in the price of the material, which consists
      altogether of Spanish wool. That of the Yorkshire cloth, which is made
      altogether of English wool, is said, indeed, during the course of the
      present century, to have fallen a good deal in proportion to its quality.
      Quality, however, is so very disputable a matter, that I look upon all
      information of this kind as somewhat uncertain. In the clothing
      manufacture, the division of labour is nearly the same now as it was a
      century ago, and the machinery employed is not very different. There may,
      however, have been some small improvements in both, which may have
      occasioned some reduction of price.

      But the reduction will appear much more sensible and undeniable, if we
      compare the price of this manufacture in the present times with what it
      was in a much remoter period, towards the end of the fifteenth century,
      when the labour was probably much less subdivided, and the machinery
      employed much more imperfect, than it is at present.

      In 1487, being the 4th of Henry VII., it was enacted, that “whosoever
      shall sell by retail a broad yard of the finest scarlet grained, or of
      other grained cloth of the finest making, above sixteen shillings, shall
      forfeit forty shillings for every yard so sold.” Sixteen shillings,
      therefore, containing about the same quantity of silver as four-and-twenty
      shillings of our present money, was, at that time, reckoned not an
      unreasonable price for a yard of the finest cloth; and as this is a
      sumptuary law, such cloth, it is probable, had usually been sold somewhat
      dearer. A guinea may be reckoned the highest price in the present times.
      Even though the quality of the cloths, therefore, should be supposed
      equal, and that of the present times is most probably much superior, yet,
      even upon this supposition, the money price of the finest cloth appears to
      have been considerably reduced since the end of the fifteenth century. But
      its real price has been much more reduced. Six shillings and eightpence
      was then, and long afterwards, reckoned the average price of a quarter of
      wheat. Sixteen shillings, therefore, was the price of two quarters and
      more than three bushels of wheat. Valuing a quarter of wheat in the
      present times at eight-and-twenty shillings, the real price of a yard of
      fine cloth must, in those times, have been equal to at least three pounds
      six shillings and sixpence of our present money. The man who bought it
      must have parted with the command of a quantity of labour and subsistence
      equal to what that sum would purchase in the present times.

      The reduction in the real price of the coarse manufacture, though
      considerable, has not been so great as in that of the fine.

      In 1463, being the 3rd of Edward IV. it was enacted, that “no servant in
      husbandry nor common labourer, nor servant to any artificer inhabiting out
      of a city or burgh, shall use or wear in their clothing any cloth above
      two shillings the broad yard.” In the 3rd of Edward IV., two shillings
      contained very nearly the same quantity of silver as four of our present
      money. But the Yorkshire cloth which is now sold at four shillings the
      yard, is probably much superior to any that was then made for the wearing
      of the very poorest order of common servants. Even the money price of
      their clothing, therefore, may, in proportion to the quality, be somewhat
      cheaper in the present than it was in those ancient times. The real price
      is certainly a good deal cheaper. Tenpence was then reckoned what is
      called the moderate and reasonable price of a bushel of wheat. Two
      shillings, therefore, was the price of two bushels and near two pecks of
      wheat, which in the present times, at three shillings and sixpence the
      bushel, would be worth eight shillings and ninepence. For a yard of this
      cloth the poor servant must have parted with the power of purchasing a
      quantity of subsistence equal to what eight shillings and ninepence would
      purchase in the present times. This is a sumptuary law, too, restraining
      the luxury and extravagance of the poor. Their clothing, therefore, had
      commonly been much more expensive.

      The same order of people are, by the same law, prohibited from wearing
      hose, of which the price should exceed fourteen-pence the pair, equal to
      about eight-and-twenty pence of our present money. But fourteen-pence was
      in those times the price of a bushel and near two pecks of wheat; which in
      the present times, at three and sixpence the bushel, would cost five
      shillings and threepence. We should in the present times consider this as
      a very high price for a pair of stockings to a servant of the poorest and
      lowest order. He must however, in those times, have paid what was really
      equivalent to this price for them.

      In the time of Edward IV. the art of knitting stockings was probably not
      known in any part of Europe. Their hose were made of common cloth, which
      may have been one of the causes of their dearness. The first person that
      wore stockings in England is said to have been Queen Elizabeth. She
      received them as a present from the Spanish ambassador.

      Both in the coarse and in the fine woollen manufacture, the machinery
      employed was much more imperfect in those ancient, than it is in the
      present times. It has since received three very capital improvements,
      besides, probably, many smaller ones, of which it may be difficult to
      ascertain either the number or the importance. The three capital
      improvements are, first, the exchange of the rock and spindle for the
      spinning-wheel, which, with the same quantity of labour, will perform more
      than double the quantity of work. Secondly, the use of several very
      ingenious machines, which facilitate and abridge, in a still greater
      proportion, the winding of the worsted and woollen yarn, or the proper
      arrangement of the warp and woof before they are put into the loom; an
      operation which, previous to the invention of those machines, must have
      been extremely tedious and troublesome. Thirdly, the employment of the
      fulling-mill for thickening the cloth, instead of treading it in water.
      Neither wind nor water mills of any kind were known in England so early as
      the beginning of the sixteenth century, nor, so far as I know, in any
      other part of Europe north of the Alps. They had been introduced into
      Italy some time before.

      The consideration of these circumstances may, perhaps, in some measure,
      explain to us why the real price both of the coarse and of the fine
      manufacture was so much higher in those ancient than it is in the present
      times. It cost a greater quantity of labour to bring the goods to market.
      When they were brought thither, therefore, they must have purchased, or
      exchanged for the price of, a greater quantity.

      The coarse manufacture probably was, in those ancient times, carried on in
      England in the same manner as it always has been in countries where arts
      and manufactures are in their infancy. It was probably a household
      manufacture, in which every different part of the work was occasionally
      performed by all the different members of almost every private family, but
      so as to be their work only when they had nothing else to do, and not to
      be the principal business from which any of them derived the greater part
      of their subsistence. The work which is performed in this manner, it has
      already been observed, comes always much cheaper to market than that which
      is the principal or sole fund of the workman’s subsistence. The fine
      manufacture, on the other hand, was not, in those times, carried on in
      England, but in the rich and commercial country of Flanders; and it was
      probably conducted then, in the same manner as now, by people who derived
      the whole, or the principal part of their subsistence from it. It was,
      besides, a foreign manufacture, and must have paid some duty, the ancient
      custom of tonnage and poundage at least, to the king. This duty, indeed,
      would not probably be very great. It was not then the policy of Europe to
      restrain, by high duties, the importation of foreign manufactures, but
      rather to encourage it, in order that merchants might be enabled to
      supply, at as easy a rate as possible, the great men with the
      conveniencies and luxuries which they wanted, and which the industry of
      their own country could not afford them.

      The consideration of these circumstances may, perhaps, in some measure
      explain to us why, in those ancient times, the real price of the coarse
      manufacture was, in proportion to that of the fine, so much lower than in
      the present times.




      Conclusion of the Chapter.

      I shall conclude this very long chapter with observing, that every
      improvement in the circumstances of the society tends, either directly or
      indirectly, to raise the real rent of land to increase the real wealth of
      the landlord, his power of purchasing the labour, or the produce of the
      labour of other people.

      The extension of improvement and cultivation tends to raise it directly.
      The landlord’s share of the produce necessarily increases with the
      increase of the produce.

      That rise in the real price of those parts of the rude produce of land,
      which is first the effect of the extended improvement and cultivation, and
      afterwards the cause of their being still further extended, the rise in
      the price of cattle, for example, tends, too, to raise the rent of land
      directly, and in a still greater proportion. The real value of the
      landlord’s share, his real command of the labour of other people, not only
      rises with the real value of the produce, but the proportion of his share
      to the whole produce rises with it.

      That produce, after the rise in its real price, requires no more labour to
      collect it than before. A smaller proportion of it will, therefore, be
      sufficient to replace, with the ordinary profit, the stock which employs
      that labour. A greater proportion of it must consequently belong to the
      landlord.

      All those improvements in the productive powers of labour, which tend
      directly to reduce the rent price of manufactures, tend indirectly to
      raise the real rent of land. The landlord exchanges that part of his rude
      produce, which is over and above his own consumption, or, what comes to
      the same thing, the price of that part of it, for manufactured produce.
      Whatever reduces the real price of the latter, raises that of the former.
      An equal quantity of the former becomes thereby equivalent to a greater
      quantity of the latter; and the landlord is enabled to purchase a greater
      quantity of the conveniencies, ornaments, or luxuries which he has
      occasion for.

      Every increase in the real wealth of the society, every increase in the
      quantity of useful labour employed within it, tends indirectly to raise
      the real rent of land. A certain proportion of this labour naturally goes
      to the land. A greater number of men and cattle are employed in its
      cultivation, the produce increases with the increase of the stock which is
      thus employed in raising it, and the rent increases with the produce.

      The contrary circumstances, the neglect of cultivation and improvement,
      the fall in the real price of any part of the rude produce of land, the
      rise in the real price of manufactures from the decay of manufacturing art
      and industry, the declension of the real wealth of the society, all tend,
      on the other hand, to lower the real rent of land, to reduce the real
      wealth of the landlord, to diminish his power of purchasing either the
      labour, or the produce of the labour, of other people.

      The whole annual produce of the land and labour of every country, or, what
      comes to the same thing, the whole price of that annual produce, naturally
      divides itself, it has already been observed, into three parts; the rent
      of land, the wages of labour, and the profits of stock; and constitutes a
      revenue to three different orders of people; to those who live by rent, to
      those who live by wages, and to those who live by profit. These are the
      three great, original, and constituent, orders of every civilized society,
      from whose revenue that of every other order is ultimately derived.

      The interest of the first of those three great orders, it appears from
      what has been just now said, is strictly and inseparably connected with
      the general interest of the society. Whatever either promotes or obstructs
      the one, necessarily promotes or obstructs the other. When the public
      deliberates concerning any regulation of commerce or police, the
      proprietors of land never can mislead it, with a view to promote the
      interest of their own particular order; at least, if they have any
      tolerable knowledge of that interest. They are, indeed, too often
      defective in this tolerable knowledge. They are the only one of the three
      orders whose revenue costs them neither labour nor care, but comes to
      them, as it were, of its own accord, and independent of any plan or
      project of their own. That indolence which is the natural effect of the
      ease and security of their situation, renders them too often, not only
      ignorant, but incapable of that application of mind, which is necessary in
      order to foresee and understand the consequence of any public regulation.

      The interest of the second order, that of those who live by wages, is as
      strictly connected with the interest of the society as that of the first.
      The wages of the labourer, it has already been shewn, are never so high as
      when the demand for labour is continually rising, or when the quantity
      employed is every year increasing considerably. When this real wealth of
      the society becomes stationary, his wages are soon reduced to what is
      barely enough to enable him to bring up a family, or to continue the race
      of labourers. When the society declines, they fall even below this. The
      order of proprietors may perhaps gain more by the prosperity of the
      society than that of labourers; but there is no order that suffers so
      cruelly from its decline. But though the interest of the labourer is
      strictly connected with that of the society, he is incapable either of
      comprehending that interest, or of understanding its connexion with his
      own. His condition leaves him no time to receive the necessary
      information, and his education and habits are commonly such as to render
      him unfit to judge, even though he was fully informed. In the public
      deliberations, therefore, his voice is little heard, and less regarded;
      except upon particular occasions, when his clamour is animated, set on,
      and supported by his employers, not for his, but their own particular
      purposes.

      His employers constitute the third order, that of those who live by
      profit. It is the stock that is employed for the sake of profit, which
      puts into motion the greater part of the useful labour of every society.
      The plans and projects of the employers of stock regulate and direct all
      the most important operation of labour, and profit is the end proposed by
      all those plans and projects. But the rate of profit does not, like rent
      and wages, rise with the prosperity, and fall with the declension of the
      society. On the contrary, it is naturally low in rich, and high in poor
      countries, and it is always highest in the countries which are going
      fastest to ruin. The interest of this third order, therefore, has not the
      same connexion with the general interest of the society, as that of the
      other two. Merchants and master manufacturers are, in this order, the two
      classes of people who commonly employ the largest capitals, and who by
      their wealth draw to themselves the greatest share of the public
      consideration. As during their whole lives they are engaged in plans and
      projects, they have frequently more acuteness of understanding than the
      greater part of country gentlemen. As their thoughts, however, are
      commonly exercised rather about the interest of their own particular
      branch of business. than about that of the society, their judgment, even
      when given with the greatest candour (which it has not been upon every
      occasion), is much more to be depended upon with regard to the former of
      those two objects, than with regard to the latter. Their superiority over
      the country gentleman is, not so much in their knowledge of the public
      interest, as in their having a better knowledge of their own interest than
      he has of his. It is by this superior knowledge of their own interest that
      they have frequently imposed upon his generosity, and persuaded him to
      give up both his own interest and that of the public, from a very simple
      but honest conviction, that their interest, and not his, was the interest
      of the public. The interest of the dealers, however, in any particular
      branch of trade or manufactures, is always in some respects different
      from, and even opposite to, that of the public. To widen the market, and
      to narrow the competition, is always the interest of the dealers. To widen
      the market may frequently be agreeable enough to the interest of the
      public; but to narrow the competition must always be against it, and can
      only serve to enable the dealers, by raising their profits above what they
      naturally would be, to levy, for their own benefit, an absurd tax upon the
      rest of their fellow-citizens. The proposal of any new law or regulation
      of commerce which comes from this order, ought always to be listened to
      with great precaution, and ought never to be adopted till after having
      been long and carefully examined, not only with the most scrupulous, but
      with the most suspicious attention. It comes from an order of men, whose
      interest is never exactly the same with that of the public, who have
      generally an interest to deceive and even to oppress the public, and who
      accordingly have, upon many occasions, both deceived and oppressed it.

      # PRICES OF WHEAT


  Year    Prices/Quarter  Average of different   Average prices of
          in each year     prices in one year    each year in money
                                                    of 1776

            £   s   d         £   s   d             £   s   d
  1202      0  12   0                               1  16   0
  1205      0  12   0
            0  13   4         0  13   5             2   0   3
            0  15   0
  1223      0  12   0                               1  16   0
  1237      0   3   4                               0  10   0
  1243      0   2   0                               0   6   0
  1244      0   2   0                               0   6   0
  1246      0  16   0                               2   8   0
  1247      0  13   5                               2   0   0
  1257      1   4   0                               3  12   0
  1258      1   0   0
            0  15   0         0  17   0             2  11   0
            0  16   0
  1270      4  16   0
            6   8   0         5  12   0            16  16   0
  1286      0   2   8
            0  16   0         0   9   4             1   8   0
                                          Total    35   9   3
                                          Average   2  19   1¼

  1287      0   3   4                               0  10   0
  1288      0   0   8
            0   1   0
            0   1   4
            0   1   6
            0   1   8         0   3   0¼            0   9   1¾
            0   2   0
            0   3   4
            0   9   4
  1289      0  12   0
            0   6   0
            0   2   0         0  10   1½            1  10   4½
            0  10   8
            1   0   0
  1290      0  16   0                               2   8   0
  1294      0  16   0                               2   8   0
  1302      0   4   0                               0  12   0
  1309      0   7   2                               1   1   6
  1315      1   0   0                               3   0   0
  1316      1   0   0
            1  10   0         1  10   6             4  11   6
            1  12   0
            2   0   0
  1317      2   4   0
            0  14   0
            2  13   0         1  19   6             5  18   6
            4   0   0
            0   6   8
  1336      0   2   0                               0   6   0
  1338      0   3   4                               0  10   0
                                          Total    23   4  11¼
                                          Average   1  18   8

  1339      0   9   0                               1   7   0
  1349      0   2   0                               0   5   2
  1359      1   6   8                               3   2   2
  1361      0   2   0                               0   4   8
  1363      0  15   0                               1  15   0
  1369      1   0   0
            1   4   0         1   2   0             2   9   4
  1379      0   4   0                               0   9   4
  1387      0   2   0                               0   4   8
  1390      0  13   4
            0  14   0         0  14   5             1  13   7
            0  16   0
  1401      0  16   0                               1  17   6
  1407      0   4   4¾
            0   3   4         0   3  10             0   8  10
  1416      0  16   0                               1  12   0
                                         Total     15   9   4
                                         Average    1   5   9½

  1423      0   8   0                                       0
  1425      0   4   0                                       0
  1434      1   6   8                                       4
  1435      0   5   4                                       8
  1439      1   0   0
            1   6   8         1   3   4             2   6   8
  1440      1   4   0                               2   8   0
  1444      0   4   4         0   4   2             0   4   8
            0   4   0
  1445      0   4   6                               0   9   0
  1447      0   8   0                               0  16   0
  1448      0   6   8                               0  13   4
  1449      0   5   0                               0  10   0
  1451      0   8   0                               0  16   0
                                         Total     12  15   4
                                         Average    1   1   3⅓

  1453      0   5   4                               0  10   8
  1455      0   1   2                               0   2   4
  1457      0   7   8                               1  15   4
  1459      0   5   0                               0  10   0
  1460      0   8   0                               0  16   0
  1463      0   2   0         0   1  10             0   3   8
            0   1   8
  1464      0   6   8                               0  10   0
  1486      1   4   0                               1  17   0
  1491      0  14   8                               1   2   0
  1494      0   4   0                               0   6   0
  1495      0   3   4                               0   5   0
  1497      1   0   0                               1  11   0
                                         Total      8   9   0
                                         Average    0  14   1

  1499      0   4   0                               0   6   0
  1504      0   5   8                               0   8   6
  1521      1   0   0                               1  10   0
  1551      0   8   0                               0   8   0
  1553      0   8   0                               0   8   0
  1554      0   8   0                               0   8   0
  1555      0   8   0                               0   8   0
  1556      0   8   0                               0   8   0
  1557      0   8   0
            0   4   0         0  17   8½            0  17   8½
            0   5   0
            2  13   4
  1558      0   8   0                               0   8   0
  1559      0   8   0                               0   8   0
  1560      0   8   0                               0   8   0
                                         Total      6   0   2½
                                         Average    0  10   0½

  1561      0   8   0                               0   8   0
  1562      0   8   0                               0   8   0
  1574      2  16   0
            1   4   0         2   0   0             2   0   0
  1587      3   4   0                               3   4   0
  1594      2  16   0                               2  16   0
  1595      2  13   0                               2  13   0
  1596      4   0   0                               4   0   0
  1597      5   4   0
            4   0   0         4  12   0             4  12   0
  1598      2  16   8                               2  16   8
  1599      1  19   2                               1  19   8
  1600      1  17   8                               1  17   8
  1601      1  14  10                               1  14  10
                                         Total     28   9   4
                                         Average    2   7   5½



      PRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT
      AT WINDSOR MARKET, ON LADY DAY AND MICHAELMAS, FROM 1595 TO 1764 BOTH
      INCLUSIVE; THE PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE HIGHEST
      PRICES OF THESE TWO MARKET DAYS.


            £   s   d
  1595      2   0   0
  1596      2   8   0
  1597      3   9   6
  1598      2  16   8
  1599      1  19   2
  1600      1  17   8
  1601      1  14  10
  1602      1   9   4
  1603      1  15   4
  1604      1  10   8
  1605      1  15  10
  1606      1  13   0
  1607      1  16   8
  1608      2  16   8
  1609      2  10   0
  1610      1  15  10
  1611      1  18   8
  1612      2   2   4
  1613      2   8   8
  1614      2   1   8½
  1615      1  18   8
  1616      2   0   4
  1617      2   8   8
  1618      2   6   8
  1619      1  15   4
  1620      1  10   4
        26)54   0   6½
    Average 2   1   6¾

  1621      1  10    4
  1622      2  18    8
  1623      2  12    0
  1624      2   8    0
  1625      2  12    0
  1626      2   9    4
  1627      1  16    0
  1628      1   8    0
  1629      2   2    0
  1630      2  15    8
  1631      3   8    0
  1632      2  13    4
  1633      2  18    0
  1634      2  16    0
  1635      2  16    0
  1636      2  16    8
        16)40   0    0
    Average 2  10    0

  1637      2  13    0
  1638      2  17    4
  1639      2   4   10
  1640      2   4    8
  1641      2   8    0
  1646      2   8    0
  1647      3  13    0
  1648      4   5    0
  1649      4   0    0
  1650      3  16    8
  1651      3  13    4
  1652      2   9    6
  1653      1  15    6
  1654      1   6    0
  1655      1  13    4
  1656      2   3    0
  1657      2   6    8
  1658      3   5    0
  1659      3   6    0
  1660      2  16    6
  1661      3  10    0
  1662      3  14    0
  1663      2  17    0
  1664      2   0    6
  1665      2   9    4
  1666      1  16    0
  1667      1  16    0
  1668      2   0    0
  1669      2   4    4
  1670      2   1    8
  1671      2   2    0
  1672      2   1    0
  1673      2   6    8
  1674      3   8    8
  1675      3   4    8
  1676      1  18    0
  1677      2   2    0
  1678      2  19    0
  1679      3   0    0
  1680      2   5    0
  1681      2   6    8
  1682      2   4    0
  1683      2   0    0
  1684      2   4    0
  1685      2   6    8
  1686      1  14    0
  1687      1   5    2
  1688      2   6    0
  1689      1  10    0
  1690      1  14    8
  1691      1  14    0
  1692      2   6    8
  1693      3   7    8
  1694      3   4    0
  1695      2  13    0
  1696      3  11    0
  1697      3   0    0
  1698      3   8    4
  1699      3   4    0
  1700      2   0    0
      60) 153   1    8
   Average  2  11    0⅓

  1701      1  17    8
  1702      1   9    6
  1703      1  16    0
  1704      2   6    6
  1705      1  10    0
  1706      1   6    0
  1707      1   8    6
  1708      2   1    6
  1709      3  18    6
  1710      3  18    0
  1711      2  14    0
  1712      2   6    4
  1713      2  11    0
  1714      2  10    4
  1715      2   3    0
  1716      2   8    0
  1717      2   5    8
  1718      1  18   10
  1719      1  15    0
  1720      1  17    0
  1721      1  17    6
  1722      1  16    0
  1723      1  14    8
  1724      1  17    0
  1725      2   8    6
  1726      2   6    0
  1727      2   2    0
  1728      2  14    6
  1729      2   6   10
  1730      1  16    6
  1731      1  12   10                     1  12   10
  1732      1   6    8                     1   6    8
  1733      1   8    4                     1   8    4
  1734      1  18   10                     1  18   10
  1735      2   3    0                     2   3    0
  1736      2   0    4                     2   0    4
  1737      1  18    0                     1  18    0
  1738      1  15    6                     1  15    6
  1739      1  18    6                     1  18    6
  1740      2  10    8                     2  10    8
                                      10) 18  12    8
                                           1  17    3½

  1741      2   6    8                     2   6    8
  1742      1  14    0                     1  14    0
  1743      1   4   10                     1   4   10
  1744      1   4   10                     1   4   10
  1745      1   7    6                     1   7    6
  1746      1  19    0                     1  19    0
  1747      1  14   10                     1  14   10
  1748      1  17    0                     1  17    0
  1749      1  17    0                     1  17    0
  1750      1  12    6                     1  12    6
                                      10) 16  18    2
                                           1  13    9¾

  1751      1  18    6
  1752      2   1   10
  1753      2   4    8
  1754      1  13    8
  1755      1  14   10
  1756      2   5    3
  1757      3   0    0
  1758      2  10    0
  1759      1  19   10
  1760      1  16    6
  1761      1  10    3
  1762      1  19    0
  1763      2   0    9
  1764      2   6    9
      64) 129  13    6
   Average  2   0    6¾


## Extraction Guidelines

---
id: extraction-rules
name: extraction_rules
artifact_type: content
description: Guidelines for extracting economic entities from source text
version: 1.0.0
---

# Entity Extraction Rules

## What Constitutes an Entity

An economic entity is a distinct concept, actor, mechanism, or institution
that plays a functional role in Adam Smith's economic analysis. Extract
entities at the level of specificity where they carry independent meaning.

## Extraction Criteria

1. **Concepts**: Abstract economic ideas (e.g., "division of labour",
   "effectual demand", "natural price"). Extract when Smith defines,
   explains, or argues about the concept.

2. **Actors**: Economic agents with defined roles (e.g., "the labourer",
   "the merchant", "the sovereign"). Extract when the actor performs
   a distinct economic function.

3. **Mechanisms**: Processes or dynamics that produce economic effects
   (e.g., "accumulation of stock", "market price adjustment",
   "foreign trade"). Extract when the mechanism is described as
   producing specific outcomes.

4. **Institutions**: Organised structures that shape economic behaviour
   (e.g., "the corporation", "the guild", "the joint-stock company").
   Extract when the institution's economic function is described.

## Granularity Rules

- Extract at the level of a single coherent concept.
- Do NOT extract synonyms as separate entities — choose the primary term
  Smith uses and note variations.
- DO extract distinct aspects of a broad concept as separate entities when
  Smith treats them independently (e.g., "wages of labour" and "profits
  of stock" are separate from "price of commodities" even though they
  compose it).
- If an entity appears across multiple chapters, extract it on first
  significant appearance and note cross-references in later chapters.

## Naming Conventions

- Use Smith's own terminology where possible.
- Normalise to lowercase except for proper nouns.
- Use the most common form Smith uses (e.g., "division of labour" not
  "divided labour").

## Quality Checks

- Each entity must have a definition that would be comprehensible without
  reading the source chapter.
- Each entity must cite the specific book and chapter of first appearance.
- **Economic Domain** must be EXACTLY ONE of: Production, Distribution,
  Exchange, Consumption, Accumulation, Regulation, or General Theory.
  Do not combine multiple domains. Do not use any other value.
- **Source Chapter format**: Use `Book [Roman numeral], Chapter [number]`
  — for example `Book I, Chapter 3`. Do not include the chapter title,
  quotation marks, markdown formatting, or asterisks. Use Roman numerals
  for the book (I, II, III, IV, V).


## VSM Framework Context

Use the following VSM framework as context to guide your extraction.
Prioritize entities that are likely to have clear mappings to VSM concepts,
but do not exclude entities simply because they lack an obvious mapping.

---
id: vsm-framework
name: vsm_framework
artifact_type: content
description: Stafford Beer's Viable System Model reference for economic analysis
version: 1.0.0
---

# Stafford Beer's Viable System Model (VSM)

The Viable System Model (VSM) is a model of the organisational structure of any
autonomous system capable of producing itself. It was created by management
cybernetician Stafford Beer in his books *Brain of the Firm* (1972) and
*The Heart of Enterprise* (1979).

## Core Principle: Viability

A viable system is any system organised in such a way as to meet the demands
of surviving in a changing environment. One of the prime features of systems
that survive is that they are adaptable. The VSM expresses a model for a
viable system, which is an abstracted cybernetic description applicable to
any organisation that is a going concern.

## The Five Systems

### System 1 (S1) — Operations

The primary activities that produce the organisation's purpose. These are the
operational units that directly create value. Each operational element is itself
a viable system (the principle of recursion).

**In economic terms:** Productive enterprises, factories, farms, workshops,
individual labourers performing specialised tasks, merchant operations.

**Key properties:** Autonomy within constraints, self-organisation,
direct engagement with the environment.

### System 2 (S2) — Coordination

The information channels and bodies that allow the primary activities in
System 1 to communicate with each other and that allow System 3 to monitor
and coordinate activities. System 2 dampens oscillations and resolves
conflicts between operational units.

**In economic terms:** Market price mechanisms, trade customs, standard
weights and measures, commercial law, banking clearinghouses, trade guilds.

**Key properties:** Anti-oscillatory, dampening, scheduling, conflict
resolution, standardisation.

### System 3 (S3) — Control / Operational Management

The structures and controls that establish the rules, resources, rights,
and responsibilities of System 1 and provide an interface between Systems 1
and Systems 4/5. System 3 represents the day-to-day control of the
organisation. It optimises the internal environment.

**In economic terms:** Government regulation of trade, taxation policy, labour
laws, enforcement of contracts, the "invisible hand" as emergent internal
regulation, guilds and corporations governing members.

**Key properties:** Internal regulation, resource allocation, accountability,
synergy extraction, performance management.

### System 3* (S3*) — Audit / Monitoring

The audit and monitoring channel that allows System 3 to verify information
coming from System 1 through channels other than those provided by System 2.
System 3* provides sporadic, direct access to operational reality.

**In economic terms:** Market inspections, quality checks, auditing of accounts,
surprise investigations into trade practices, verification of weights and measures.

**Key properties:** Sporadic direct investigation, reality checking, bypassing
normal reporting channels.

### System 4 (S4) — Intelligence / Adaptation

The bodies and processes that look outward to the environment to monitor
how the organisation needs to adapt to remain viable. System 4 captures
all relevant information about the outside-and-then environment. It is
responsible for strategic responses.

**In economic terms:** Foreign intelligence about trade opportunities,
market research, new technology adoption, colonial exploration and trade
route development, understanding of foreign economic systems.

**Key properties:** Environmental scanning, future orientation, strategic
planning, modelling, research and development.

### System 5 (S5) — Policy / Identity

The policy-making body that balances demands from Systems 3 and 4 and defines
the identity, values, and purpose of the organisation. System 5 provides
closure to the whole system and represents its supreme authority.

**In economic terms:** Sovereign authority, constitutional principles governing
economic policy, national economic identity, the philosophical foundations
of economic systems (mercantilism vs. free trade), the overarching purpose
of the commonwealth.

**Key properties:** Identity, ethos, supreme command, policy closure,
balancing internal and external perspectives.

## Key Concepts

### Recursion

Every viable system contains and is contained in a viable system. The same
five-system structure recurs at every level of organisation. A workshop is
a viable system within a factory, which is a viable system within an
industry, which is a viable system within a national economy.

### Variety

A measure of the number of possible states of a system. The Law of Requisite
Variety (Ashby's Law) states that only variety can absorb variety. A
controller must have at least as much variety as the system it controls.

### Requisite Variety

The principle that for effective regulation, the variety of the regulator
must match the variety of the system being regulated. This is achieved
through variety attenuation (reducing the variety coming up from operations)
and variety amplification (increasing the variety of management's responses).

### Attenuation and Amplification

Variety engineering mechanisms. Attenuation reduces variety (e.g., reporting
summaries, statistical aggregation, standardisation). Amplification increases
variety (e.g., delegation, empowerment, decentralisation).

### Algedonic Signals

Emergency signals that bypass the normal management hierarchy to alert
higher systems of critical situations requiring immediate attention. Named
from the Greek words for pain (algos) and pleasure (hedone).

**In economic terms:** Market panics, famine signals, sudden price collapses,
trade embargoes, economic crises that demand immediate sovereign intervention.

### Autonomy

The degree of freedom granted to operational units (System 1) to self-organise
within constraints set by System 3. Beer argued that maximum autonomy
consistent with systemic cohesion yields maximum viability.

### Viability

The capacity of a system to maintain a separate existence and survive in a
changing environment. A viable system continuously adapts while maintaining
its identity.


## Existing Entities

The following entities have already been extracted from previous chapters
of this work. Do NOT re-extract any of these. If one of these entities
appears in the current chapter, you may omit it entirely — the infospace
already contains it. Only extract entities that are genuinely new.

- accumulation-of-stock
- adulteration-of-metals
- adulterine-guilds
- advanced-state-of-society
- advancing-state-of-manufacture
- agricultural-labour
- annual-industry-employed-in-production
- apprenticeships
- artificial-market-creation
- artisan-specialisation
- assaying
- assize-of-bread
- aulnagers
- average-price-of-corn
- barbarous-nations-barrier
- barter-and-exchange
- benevolence
- bleacher
- butcher-trade
- canal-communication
- capital-employed
- certificates
- cheap-years
- coal-heaver
- coarser-and-finer-materials
- coined-money
- collier
- colony-prosperity
- combination-of-masters
- combination-of-workmen
- command-over-labour
- commercial-interactions
- commercial-society
- commercial-transactions
- common-annual-profits-of-manufacturing-stock
- common-labour-wages
- common-returns-of-stock
- competition-among-buyers
- competition-among-dealers
- competition-among-sellers
- complete-manufacture
- component-parts-of-price
- contract
- copper-money
- corn-rent
- corporation-laws
- corporation-privileges-and-market-prices
- dear-years
- debasement-of-currency
- declining-manufacture
- degradation-of-coin
- demand-for-labour
- division-of-labour
- double-coincidence-of-wants
- early-and-rude-state-of-society
- early-navigation-advantages
- economic-accessibility-determinants
- economic-accessibility-gradient
- economic-backwardness
- economic-connectivity-importance
- economic-development-constraints
- economic-development-geography
- economic-development-geography-theory
- economic-development-sequence
- economic-development-spatial-patterns
- economic-geography
- economic-geography-determinism
- economic-geography-impact
- economic-isolation-effects
- economic-opportunity-cost
- economic-opportunity-geography
- economic-prosperity-symptoms
- economic-spatial-inequality
- economic-spatial-organisation
- economic-stagnation-symptoms
- effectual-demand
- exchange
- exchangeable-value
- exchequer
- exclusive-corporation
- extraordinary-profits
- farmer
- favour
- flax-grower
- fluctuations-in-value-of-gold-and-silver
- foreign-trade
- frozen-ocean-barrier
- funds-for-maintaining-labour
- gold-money
- higgling-and-bargaining-of-the-market
- human-nature
- idle-consumers
- inland-market-limitation
- inland-navigation-extent
- inland-parts-of-the-country
- inland-trade
- inn-or-tavern-keeper
- instruments-of-husbandry
- interest
- interest-of-money
- interest-or-use-of-money
- journeymen
- judgment-in-labour-application
- labour-of-inspection-and-direction
- labouring-cattle
- labouring-poor
- land-carriage
- landlord
- legal-rate-of-interest
- legal-tender
- licence-to-gather-natural-produce
- lowest-rate-of-wages
- machinery-invention
- manufacturer
- maritime-commerce-development
- maritime-employment
- market-access-cost-structure
- market-access-development-sequence
- market-access-economic-potential
- market-access-gradient
- market-access-inequality
- market-access-opportunity-cost
- market-based-economic-geography
- market-based-economic-identity
- market-based-economic-structure
- market-based-productivity-limits
- market-based-specialisation
- market-communication-channels
- market-development-prerequisites
- market-driven-division
- market-extent
- market-extent-economic-impact
- market-extent-measurement
- market-integration-barriers
- market-integration-potential
- market-integration-timeline
- market-obstruction
- market-price-adjustment
- market-price-of-bullion
- market-price-of-commodities
- market-rate-of-interest
- market-regulation-of-prices
- market-separation
- market-size-economies
- market-size-specialisation-threshold
- market-size-threshold
- market-town-economy
- master-manufacturer
- materials-and-subsistence
- measure-of-exchangeable-value
- mediterranean-civilisation-pattern
- menial-servants
- merchant
- metal-currency
- military-employment
- mint
- mint-price
- money
- money-rent
- monopoly-effects-on-market-price
- mutual-good-offices
- natural-complement-of-riches
- natural-market-advantages
- natural-price-as-central-price
- natural-price-of-commodities
- natural-produce-of-land
- natural-rates-of-wages-profit-and-rent
- natural-state-of-employments
- navigable-rivers
- necessity
- nominal-measure-of-value
- nominal-price-of-commodities
- non-standard-metal
- occasional-and-temporary-market-fluctuations
- ordinary-rates-of-wages-profit-and-rent
- ordinary-state-of-employments
- overstocked-market-conditions
- payment-in-kind
- perfect-liberty-in-trade
- permanent-market-price-enhancements
- piece-work-wages
- pin-maker-trade
- poacher
- price-in-labour
- price-in-money
- price-of-commodities
- prime-cost-of-commodities
- principal-clerk
- principal-employments
- productive-powers-of-labour
- profits-of-stock
- progressive-state-of-society
- proportion-between-metals
- public-education-of-professionals
- public-executioner
- public-law-on-coinage
- public-lottery
- public-mourning-effects
- public-registers-of-manufactures
- quantity-of-labour
- rate-of-profit
- real-measure-of-value
- real-price-of-commodities
- real-value-of-corn-rent
- regulated-proportion
- religious-occupational-restrictions
- rent-of-land
- retail-trade
- river-navigation-infrastructure
- scarcity-of-hands
- sea-coast-development
- seignorage
- self-love
- settlement-laws
- silver-money
- skill-and-dexterity
- smuggling-trade
- species-of-industry-with-consistent-output
- species-of-industry-with-variable-output
- speculative-trade
- stamp-masters
- standard-metal
- standard-weight-of-coin
- stationary-country
- statutes-of-apprenticeship-effects
- sterling-mark
- stock-of-the-country
- stock-of-the-farmer
- subsistence
- subsistence-agriculture
- subsistence-of-the-dealer
- superfluity
- superior-hardship-and-superior-skill
- tale
- temporary-price-of-corn
- three-original-sources-of-revenue
- thriving-country
- toil-and-trouble-of-acquiring
- trade-encouragement
- trade-route-dependency
- transportation-cost-differential
- transportation-infrastructure-importance
- transportation-mode-economic-effects
- treaty
- truck
- university-of-trades
- unstamped-bars
- value-in-exchange
- value-in-use
- value-of-gold
- value-of-silver
- variety-of-talents
- venison
- victuals
- wages-of-a-journeyman
- wages-of-labour
- water-carriage
- weighing
- whole-produce-of-labour
- wholesale-trade
- wool-grower

## Instructions

1. Read the source chapter carefully.
2. Review the list of existing entities above and do not duplicate them.
3. Identify all distinct economic concepts, actors, mechanisms, and institutions
   that are NOT already in the existing entities list.
4. For each new entity, produce a separate markdown document following the
   Economic Entity Schema v1.0.
5. Each entity document must include:
   - An H1 heading with the entity name
   - A Definition section (20-150 words)
   - A Source Chapter section citing the specific chapter
   - A Context section describing where in the argument the entity appears
   - An Economic Domain section classifying the entity
6. Optionally include Smith's Original Wording (direct quote) and
   Modern Interpretation sections.
7. Use neutral, analytical language throughout.
8. Ensure each entity is distinct and self-contained.

## Output Format

Output each entity as a separate markdown document, delimited by
`--- ENTITY: <entity-name> ---` markers.

Use **H2 headings** (`##`) for each section inside the entity document.
Do NOT use inline `Section:` format or H3 headings.

Example of a correctly formatted entity:

```
--- ENTITY: division of labour ---

# Division of Labour

## Definition

The separation of a work process into distinct tasks performed by specialised
workers, increasing productivity through greater dexterity, saved time, and
the invention of labour-saving machinery.

## Source Chapter

Book I, Chapter 1

## Context

The opening chapter's central argument, illustrated by Smith's pin factory
example showing how dividing 18 operations dramatically increases output.

## Economic Domain

Production

---
```
