tegwick
fecc2fd4fa
Implements markitect/llm/ package with concrete LLMAdapter implementations:
- OpenRouterAdapter: HTTP via urllib with retry/backoff on 429/5xx
- ClaudeCodeAdapter: subprocess-based Claude CLI with stdin piping
- Factory pattern: create_adapter("openrouter") or create_adapter("claude-code")
- API key resolution chain: constructor > env var > project-root key file
- 42 unit tests, 2 integration tests (gated on API key / CLI availability)
Also adds the infospace-with-history example with Wealth of Nations VSM
analysis pipeline, templates, schemas, source chapters, and processed
output for chapters 1-2. process_chapters.py now supports --provider
and --model flags for automatic LLM-driven processing.
Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
283 lines
18 KiB
Markdown
283 lines
18 KiB
Markdown
---
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id: book-1-chapter-06
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title: "OF THE COMPONENT PART OF THE PRICE OF COMMODITIES."
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book: "1"
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chapter: 6
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artifact_type: content
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---
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CHAPTER VI.
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OF THE COMPONENT PART OF THE PRICE OF COMMODITIES.
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In that early and rude state of society which precedes both the
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accumulation of stock and the appropriation of land, the proportion
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between the quantities of labour necessary for acquiring different
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objects, seems to be the only circumstance which can afford any rule for
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exchanging them for one another. If among a nation of hunters, for
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example, it usually costs twice the labour to kill a beaver which it does
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to kill a deer, one beaver should naturally exchange for or be worth two
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deer. It is natural that what is usually the produce of two days or two
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hours labour, should be worth double of what is usually the produce of one
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day’s or one hour’s labour.
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If the one species of labour should be more severe than the other, some
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allowance will naturally be made for this superior hardship; and the
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produce of one hour’s labour in the one way may frequently exchange for
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that of two hour’s labour in the other.
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Or if the one species of labour requires an uncommon degree of dexterity
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and ingenuity, the esteem which men have for such talents, will naturally
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give a value to their produce, superior to what would be due to the time
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employed about it. Such talents can seldom be acquired but in consequence
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of long application, and the superior value of their produce may
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frequently be no more than a reasonable compensation for the time and
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labour which must be spent in acquiring them. In the advanced state of
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society, allowances of this kind, for superior hardship and superior
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skill, are commonly made in the wages of labour; and something of the same
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kind must probably have taken place in its earliest and rudest period.
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In this state of things, the whole produce of labour belongs to the
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labourer; and the quantity of labour commonly employed in acquiring or
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producing any commodity, is the only circumstance which can regulate the
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quantity of labour which it ought commonly to purchase, command, or
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exchange for.
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As soon as stock has accumulated in the hands of particular persons, some
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of them will naturally employ it in setting to work industrious people,
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whom they will supply with materials and subsistence, in order to make a
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profit by the sale of their work, or by what their labour adds to the
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value of the materials. In exchanging the complete manufacture either for
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money, for labour, or for other goods, over and above what may be
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sufficient to pay the price of the materials, and the wages of the
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workmen, something must be given for the profits of the undertaker of the
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work, who hazards his stock in this adventure. The value which the workmen
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add to the materials, therefore, resolves itself in this case into two
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parts, of which the one pays their wages, the other the profits of their
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employer upon the whole stock of materials and wages which he advanced. He
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could have no interest to employ them, unless he expected from the sale of
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their work something more than what was sufficient to replace his stock to
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him; and he could have no interest to employ a great stock rather than a
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small one, unless his profits were to bear some proportion to the extent
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of his stock.
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The profits of stock, it may perhaps be thought, are only a different name
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for the wages of a particular sort of labour, the labour of inspection and
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direction. They are, however, altogether different, are regulated by quite
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different principles, and bear no proportion to the quantity, the
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hardship, or the ingenuity of this supposed labour of inspection and
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direction. They are regulated altogether by the value of the stock
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employed, and are greater or smaller in proportion to the extent of this
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stock. Let us suppose, for example, that in some particular place, where
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the common annual profits of manufacturing stock are ten per cent. there
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are two different manufactures, in each of which twenty workmen are
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employed, at the rate of fifteen pounds a year each, or at the expense of
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three hundred a-year in each manufactory. Let us suppose, too, that the
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coarse materials annually wrought up in the one cost only seven hundred
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pounds, while the finer materials in the other cost seven thousand. The
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capital annually employed in the one will, in this case, amount only to
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one thousand pounds; whereas that employed in the other will amount to
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seven thousand three hundred pounds. At the rate of ten per cent.
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therefore, the undertaker of the one will expect a yearly profit of about
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one hundred pounds only; while that of the other will expect about seven
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hundred and thirty pounds. But though their profits are so very different,
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their labour of inspection and direction may be either altogether or very
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nearly the same. In many great works, almost the whole labour of this kind
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is committed to some principal clerk. His wages properly express the value
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of this labour of inspection and direction. Though in settling them some
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regard is had commonly, not only to his labour and skill, but to the trust
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which is reposed in him, yet they never bear any regular proportion to the
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capital of which he oversees the management; and the owner of this
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capital, though he is thus discharged of almost all labour, still expects
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that his profit should bear a regular proportion to his capital. In the
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price of commodities, therefore, the profits of stock constitute a
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component part altogether different from the wages of labour, and
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regulated by quite different principles.
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In this state of things, the whole produce of labour does not always
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belong to the labourer. He must in most cases share it with the owner of
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the stock which employs him. Neither is the quantity of labour commonly
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employed in acquiring or producing any commodity, the only circumstance
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which can regulate the quantity which it ought commonly to purchase,
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command or exchange for. An additional quantity, it is evident, must be
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due for the profits of the stock which advanced the wages and furnished
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the materials of that labour.
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As soon as the land of any country has all become private property, the
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landlords, like all other men, love to reap where they never sowed, and
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demand a rent even for its natural produce. The wood of the forest, the
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grass of the field, and all the natural fruits of the earth, which, when
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land was in common, cost the labourer only the trouble of gathering them,
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come, even to him, to have an additional price fixed upon them. He must
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then pay for the licence to gather them, and must give up to the landlord
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a portion of what his labour either collects or produces. This portion,
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or, what comes to the same thing, the price of this portion, constitutes
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the rent of land, and in the price of the greater part of commodities,
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makes a third component part.
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The real value of all the different component parts of price, it must be
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observed, is measured by the quantity of labour which they can, each of
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them, purchase or command. Labour measures the value, not only of that
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part of price which resolves itself into labour, but of that which
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resolves itself into rent, and of that which resolves itself into profit.
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In every society, the price of every commodity finally resolves itself
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into some one or other, or all of those three parts; and in every improved
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society, all the three enter, more or less, as component parts, into the
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price of the far greater part of commodities.
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In the price of corn, for example, one part pays the rent of the landlord,
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another pays the wages or maintenance of the labourers and labouring
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cattle employed in producing it, and the third pays the profit of the
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farmer. These three parts seem either immediately or ultimately to make up
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the whole price of corn. A fourth part, it may perhaps be thought is
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necessary for replacing the stock of the farmer, or for compensating the
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wear and tear of his labouring cattle, and other instruments of husbandry.
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But it must be considered, that the price of any instrument of husbandry,
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such as a labouring horse, is itself made up of the same time parts; the
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rent of the land upon which he is reared, the labour of tending and
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rearing him, and the profits of the farmer, who advances both the rent of
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this land, and the wages of this labour. Though the price of the corn,
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therefore, may pay the price as well as the maintenance of the horse, the
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whole price still resolves itself, either immediately or ultimately, into
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the same three parts of rent, labour, and profit.
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In the price of flour or meal, we must add to the price of the corn, the
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profits of the miller, and the wages of his servants; in the price of
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bread, the profits of the baker, and the wages of his servants; and in the
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price of both, the labour of transporting the corn from the house of the
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farmer to that of the miller, and from that of the miller to that of the
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baker, together with the profits of those who advance the wages of that
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labour.
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The price of flax resolves itself into the same three parts as that of
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corn. In the price of linen we must add to this price the wages of the
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flax-dresser, of the spinner, of the weaver, of the bleacher, etc.
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together with the profits of their respective employers.
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As any particular commodity comes to be more manufactured, that part of
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the price which resolves itself into wages and profit, comes to be greater
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in proportion to that which resolves itself into rent. In the progress of
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the manufacture, not only the number of profits increase, but every
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subsequent profit is greater than the foregoing; because the capital from
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which it is derived must always be greater. The capital which employs the
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weavers, for example, must be greater than that which employs the
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spinners; because it not only replaces that capital with its profits, but
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pays, besides, the wages of the weavers: and the profits must always bear
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some proportion to the capital.
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In the most improved societies, however, there are always a few
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commodities of which the price resolves itself into two parts only: the
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wages of labour, and the profits of stock; and a still smaller number, in
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which it consists altogether in the wages of labour. In the price of
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sea-fish, for example, one part pays the labour of the fisherman, and the
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other the profits of the capital employed in the fishery. Rent very seldom
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makes any part of it, though it does sometimes, as I shall shew hereafter.
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It is otherwise, at least through the greater part of Europe, in river
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fisheries. A salmon fishery pays a rent; and rent, though it cannot well
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be called the rent of land, makes a part of the price of a salmon, as well
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as wares and profit. In some parts of Scotland, a few poor people make a
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trade of gathering, along the sea-shore, those little variegated stones
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commonly known by the name of Scotch pebbles. The price which is paid to
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them by the stone-cutter, is altogether the wages of their labour; neither
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rent nor profit makes any part of it.
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But the whole price of any commodity must still finally resolve itself
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into some one or other or all of those three parts; as whatever part of it
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remains after paying the rent of the land, and the price of the whole
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labour employed in raising, manufacturing, and bringing it to market, must
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necessarily be profit to somebody.
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As the price or exchangeable value of every particular commodity, taken
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separately, resolves itself into some one or other, or all of those three
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parts; so that of all the commodities which compose the whole annual
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produce of the labour of every country, taken complexly, must resolve
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itself into the same three parts, and be parcelled out among different
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inhabitants of the country, either as the wages of their labour, the
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profits of their stock, or the rent of their land. The whole of what is
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annually either collected or produced by the labour of every society, or,
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what comes to the same thing, the whole price of it, is in this manner
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originally distributed among some of its different members. Wages, profit,
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and rent, are the three original sources of all revenue, as well as of all
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exchangeable value. All other revenue is ultimately derived from some one
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or other of these.
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Whoever derives his revenue from a fund which is his own, must draw it
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either from his labour, from his stock, or from his land. The revenue
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derived from labour is called wages; that derived from stock, by the
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person who manages or employs it, is called profit; that derived from it
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by the person who does not employ it himself, but lends it to another, is
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called the interest or the use of money. It is the compensation which the
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borrower pays to the lender, for the profit which he has an opportunity of
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making by the use of the money. Part of that profit naturally belongs to
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the borrower, who runs the risk and takes the trouble of employing it, and
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part to the lender, who affords him the opportunity of making this profit.
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The interest of money is always a derivative revenue, which, if it is not
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paid from the profit which is made by the use of the money, must be paid
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from some other source of revenue, unless perhaps the borrower is a
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spendthrift, who contracts a second debt in order to pay the interest of
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the first. The revenue which proceeds altogether from land, is called
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rent, and belongs to the landlord. The revenue of the farmer is derived
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partly from his labour, and partly from his stock. To him, land is only
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the instrument which enables him to earn the wages of this labour, and to
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make the profits of this stock. All taxes, and all the revenue which is
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founded upon them, all salaries, pensions, and annuities of every kind,
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are ultimately derived from some one or other of those three original
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sources of revenue, and are paid either immediately or mediately from the
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wages of labour, the profits of stock, or the rent of land.
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When those three different sorts of revenue belong to different persons,
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they are readily distinguished; but when they belong to the same, they are
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sometimes confounded with one another, at least in common language.
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A gentleman who farms a part of his own estate, after paying the expense
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of cultivation, should gain both the rent of the landlord and the profit
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of the farmer. He is apt to denominate, however, his whole gain, profit,
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and thus confounds rent with profit, at least in common language. The
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greater part of our North American and West Indian planters are in this
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situation. They farm, the greater part of them, their own estates: and
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accordingly we seldom hear of the rent of a plantation, but frequently of
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its profit.
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Common farmers seldom employ any overseer to direct the general operations
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of the farm. They generally, too, work a good deal with their own hands,
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as ploughmen, harrowers, etc. What remains of the crop, after paying the
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rent, therefore, should not only replace to them their stock employed in
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cultivation, together with its ordinary profits, but pay them the wages
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which are due to them, both as labourers and overseers. Whatever remains,
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however, after paying the rent and keeping up the stock, is called profit.
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But wages evidently make a part of it. The farmer, by saving these wages,
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must necessarily gain them. Wages, therefore, are in this case confounded
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with profit.
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An independent manufacturer, who has stock enough both to purchase
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materials, and to maintain himself till he can carry his work to market,
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should gain both the wages of a journeyman who works under a master, and
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the profit which that master makes by the sale of that journeyman’s work.
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His whole gains, however, are commonly called profit, and wages are, in
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this case, too, confounded with profit.
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A gardener who cultivates his own garden with his own hands, unites in his
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own person the three different characters, of landlord, farmer, and
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labourer. His produce, therefore, should pay him the rent of the first,
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the profit of the second, and the wages of the third. The whole, however,
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is commonly considered as the earnings of his labour. Both rent and profit
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are, in this case, confounded with wages.
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As in a civilized country there are but few commodities of which the
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exchangeable value arises from labour only, rent and profit contributing
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largely to that of the far greater part of them, so the annual produce of
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its labour will always be sufficient to purchase or command a much greater
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quantity of labour than what was employed in raising, preparing, and
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bringing that produce to market. If the society were annually to employ
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all the labour which it can annually purchase, as the quantity of labour
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would increase greatly every year, so the produce of every succeeding year
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would be of vastly greater value than that of the foregoing. But there is
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no country in which the whole annual produce is employed in maintaining
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the industrious. The idle everywhere consume a great part of it; and,
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according to the different proportions in which it is annually divided
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between those two different orders of people, its ordinary or average
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value must either annually increase or diminish, or continue the same from
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one year to another.
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