# permanent-enhancement

## Definition

Permanent enhancement refers to sustained increases in market prices above natural prices that can last for many years or even centuries, typically caused by natural scarcity of production conditions or monopolistic control. Unlike temporary accidental fluctuations, permanent enhancements result from structural factors that prevent effectual demand from ever being fully supplied.

## Source Chapter

Book 1, Chapter 7: "OF THE NATURAL AND MARKET PRICE OF COMMODITIES."

## Context

Smith distinguishes permanent enhancements from temporary price fluctuations, identifying natural scarcity and monopolies as the primary causes. He explains how these structural factors can maintain prices above natural levels indefinitely by preventing full market supply.

## Economic Domain

Regulation

## Smith's Original Wording

"Some natural productions require such a singularity of soil and situation, that all the land in a great country, which is fit for producing them, may not be sufficient to supply the effectual demand. The whole quantity brought to market, therefore, may be disposed of to those who are willing to give more than what is sufficient to pay the rent of the land which produced them, together with the wages of the labour and the profits of the stock which were employed in preparing and bringing them to market, according to their natural rates. Such commodities may continue for whole centuries together to be sold at this high price."

## Modern Interpretation

Permanent enhancements represent structural market inefficiencies that persist due to natural resource constraints or artificial market power. These concepts are central to understanding long-term price determination and the welfare effects of monopoly and natural resource economics.