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>
361 lines
23 KiB
Markdown
361 lines
23 KiB
Markdown
---
|
||
id: book-1-chapter-07
|
||
title: "OF THE NATURAL AND MARKET PRICE OF COMMODITIES."
|
||
book: "1"
|
||
chapter: 7
|
||
artifact_type: content
|
||
---
|
||
|
||
CHAPTER VII.
|
||
OF THE NATURAL AND MARKET PRICE OF COMMODITIES.
|
||
|
||
|
||
|
||
There is in every society or neighbourhood an ordinary or average rate,
|
||
both of wages and profit, in every different employment of labour and
|
||
stock. This rate is naturally regulated, as I shall shew hereafter, partly
|
||
by the general circumstances of the society, their riches or poverty,
|
||
their advancing, stationary, or declining condition, and partly by the
|
||
particular nature of each employment.
|
||
|
||
There is likewise in every society or neighbourhood an ordinary or average
|
||
rate of rent, which is regulated, too, as I shall shew hereafter, partly
|
||
by the general circumstances of the society or neighbourhood in which the
|
||
land is situated, and partly by the natural or improved fertility of the
|
||
land.
|
||
|
||
These ordinary or average rates may be called the natural rates of wages,
|
||
profit and rent, at the time and place in which they commonly prevail.
|
||
|
||
When the price of any commodity is neither more nor less than what is
|
||
sufficient to pay the rent of the land, the wages of the labour, and the
|
||
profits of the stock employed in raising, preparing, and bringing it to
|
||
market, according to their natural rates, the commodity is then sold for
|
||
what may be called its natural price.
|
||
|
||
The commodity is then sold precisely for what it is worth, or for what it
|
||
really costs the person who brings it to market; for though, in common
|
||
language, what is called the prime cost of any commodity does not
|
||
comprehend the profit of the person who is to sell it again, yet, if he
|
||
sells it at a price which does not allow him the ordinary rate of profit
|
||
in his neighbourhood, he is evidently a loser by the trade; since, by
|
||
employing his stock in some other way, he might have made that profit. His
|
||
profit, besides, is his revenue, the proper fund of his subsistence. As,
|
||
while he is preparing and bringing the goods to market, he advances to his
|
||
workmen their wages, or their subsistence; so he advances to himself, in
|
||
the same manner, his own subsistence, which is generally suitable to the
|
||
profit which he may reasonably expect from the sale of his goods. Unless
|
||
they yield him this profit, therefore, they do not repay him what they may
|
||
very properly be said to have really cost him.
|
||
|
||
Though the price, therefore, which leaves him this profit, is not always
|
||
the lowest at which a dealer may sometimes sell his goods, it is the
|
||
lowest at which he is likely to sell them for any considerable time; at
|
||
least where there is perfect liberty, or where he may change his trade as
|
||
often as he pleases.
|
||
|
||
The actual price at which any commodity is commonly sold, is called its
|
||
market price. It may either be above, or below, or exactly the same with
|
||
its natural price.
|
||
|
||
The market price of every particular commodity is regulated by the
|
||
proportion between the quantity which is actually brought to market, and
|
||
the demand of those who are willing to pay the natural price of the
|
||
commodity, or the whole value of the rent, labour, and profit, which must
|
||
be paid in order to bring it thither. Such people may be called the
|
||
effectual demanders, and their demand the effectual demand; since it maybe
|
||
sufficient to effectuate the bringing of the commodity to market. It is
|
||
different from the absolute demand. A very poor man may be said, in some
|
||
sense, to have a demand for a coach and six; he might like to have it; but
|
||
his demand is not an effectual demand, as the commodity can never be
|
||
brought to market in order to satisfy it.
|
||
|
||
When the quantity of any commodity which is brought to market falls short
|
||
of the effectual demand, all those who are willing to pay the whole value
|
||
of the rent, wages, and profit, which must be paid in order to bring it
|
||
thither, cannot be supplied with the quantity which they want. Rather than
|
||
want it altogether, some of them will be willing to give more. A
|
||
competition will immediately begin among them, and the market price will
|
||
rise more or less above the natural price, according as either the
|
||
greatness of the deficiency, or the wealth and wanton luxury of the
|
||
competitors, happen to animate more or less the eagerness of the
|
||
competition. Among competitors of equal wealth and luxury, the same
|
||
deficiency will generally occasion a more or less eager competition,
|
||
according as the acquisition of the commodity happens to be of more or
|
||
less importance to them. Hence the exorbitant price of the necessaries of
|
||
life during the blockade of a town, or in a famine.
|
||
|
||
When the quantity brought to market exceeds the effectual demand, it
|
||
cannot be all sold to those who are willing to pay the whole value of the
|
||
rent, wages, and profit, which must be paid in order to bring it thither.
|
||
Some part must be sold to those who are willing to pay less, and the low
|
||
price which they give for it must reduce the price of the whole. The
|
||
market price will sink more or less below the natural price, according as
|
||
the greatness of the excess increases more or less the competition of the
|
||
sellers, or according as it happens to be more or less important to them
|
||
to get immediately rid of the commodity. The same excess in the
|
||
importation of perishable, will occasion a much greater competition than
|
||
in that of durable commodities; in the importation of oranges, for
|
||
example, than in that of old iron.
|
||
|
||
When the quantity brought to market is just sufficient to supply the
|
||
effectual demand, and no more, the market price naturally comes to be
|
||
either exactly, or as nearly as can be judged of, the same with the
|
||
natural price. The whole quantity upon hand can be disposed of for this
|
||
price, and can not be disposed of for more. The competition of the
|
||
different dealers obliges them all to accept of this price, but does not
|
||
oblige them to accept of less.
|
||
|
||
The quantity of every commodity brought to market naturally suits itself
|
||
to the effectual demand. It is the interest of all those who employ their
|
||
land, labour, or stock, in bringing any commodity to market, that the
|
||
quantity never should exceed the effectual demand; and it is the interest
|
||
of all other people that it never should fall short of that demand.
|
||
|
||
If at any time it exceeds the effectual demand, some of the component
|
||
parts of its price must be paid below their natural rate. If it is rent,
|
||
the interest of the landlords will immediately prompt them to withdraw a
|
||
part of their land; and if it is wages or profit, the interest of the
|
||
labourers in the one case, and of their employers in the other, will
|
||
prompt them to withdraw a part of their labour or stock, from this
|
||
employment. The quantity brought to market will soon be no more than
|
||
sufficient to supply the effectual demand. All the different parts of its
|
||
price will rise to their natural rate, and the whole price to its natural
|
||
price.
|
||
|
||
If, on the contrary, the quantity brought to market should at any time
|
||
fall short of the effectual demand, some of the component parts of its
|
||
price must rise above their natural rate. If it is rent, the interest of
|
||
all other landlords will naturally prompt them to prepare more land for
|
||
the raising of this commodity; if it is wages or profit, the interest of
|
||
all other labourers and dealers will soon prompt them to employ more
|
||
labour and stock in preparing and bringing it to market. The quantity
|
||
brought thither will soon be sufficient to supply the effectual demand.
|
||
All the different parts of its price will soon sink to their natural rate,
|
||
and the whole price to its natural price.
|
||
|
||
The natural price, therefore, is, as it were, the central price, to which
|
||
the prices of all commodities are continually gravitating. Different
|
||
accidents may sometimes keep them suspended a good deal above it, and
|
||
sometimes force them down even somewhat below it. But whatever may be the
|
||
obstacles which hinder them from settling in this centre of repose and
|
||
continuance, they are constantly tending towards it.
|
||
|
||
The whole quantity of industry annually employed in order to bring any
|
||
commodity to market, naturally suits itself in this manner to the
|
||
effectual demand. It naturally aims at bringing always that precise
|
||
quantity thither which may be sufficient to supply, and no more than
|
||
supply, that demand.
|
||
|
||
But, in some employments, the same quantity of industry will, in different
|
||
years, produce very different quantities of commodities; while, in others,
|
||
it will produce always the same, or very nearly the same. The same number
|
||
of labourers in husbandry will, in different years, produce very different
|
||
quantities of corn, wine, oil, hops, etc. But the same number of spinners
|
||
or weavers will every year produce the same, or very nearly the same,
|
||
quantity of linen and woollen cloth. It is only the average produce of the
|
||
one species of industry which can be suited, in any respect, to the
|
||
effectual demand; and as its actual produce is frequently much greater,
|
||
and frequently much less, than its average produce, the quantity of the
|
||
commodities brought to market will sometimes exceed a good deal, and
|
||
sometimes fall short a good deal, of the effectual demand. Even though
|
||
that demand, therefore, should continue always the same, their market
|
||
price will be liable to great fluctuations, will sometimes fall a good
|
||
deal below, and sometimes rise a good deal above, their natural price. In
|
||
the other species of industry, the produce of equal quantities of labour
|
||
being always the same, or very nearly the same, it can be more exactly
|
||
suited to the effectual demand. While that demand continues the same,
|
||
therefore, the market price of the commodities is likely to do so too, and
|
||
to be either altogether, or as nearly as can be judged of, the same with
|
||
the natural price. That the price of linen and woollen cloth is liable
|
||
neither to such frequent, nor to such great variations, as the price of
|
||
corn, every man’s experience will inform him. The price of the one species
|
||
of commodities varies only with the variations in the demand; that of the
|
||
other varies not only with the variations in the demand, but with the much
|
||
greater, and more frequent, variations in the quantity of what is brought
|
||
to market, in order to supply that demand.
|
||
|
||
The occasional and temporary fluctuations in the market price of any
|
||
commodity fall chiefly upon those parts of its price which resolve
|
||
themselves into wages and profit. That part which resolves itself into
|
||
rent is less affected by them. A rent certain in money is not in the least
|
||
affected by them, either in its rate or in its value. A rent which
|
||
consists either in a certain proportion, or in a certain quantity, of the
|
||
rude produce, is no doubt affected in its yearly value by all the
|
||
occasional and temporary fluctuations in the market price of that rude
|
||
produce; but it is seldom affected by them in its yearly rate. In settling
|
||
the terms of the lease, the landlord and farmer endeavour, according to
|
||
their best judgment, to adjust that rate, not to the temporary and
|
||
occasional, but to the average and ordinary price of the produce.
|
||
|
||
Such fluctuations affect both the value and the rate, either of wages or
|
||
of profit, according as the market happens to be either overstocked or
|
||
understocked with commodities or with labour, with work done, or with work
|
||
to be done. A public mourning raises the price of black cloth (with which
|
||
the market is almost always understocked upon such occasions), and
|
||
augments the profits of the merchants who possess any considerable
|
||
quantity of it. It has no effect upon the wages of the weavers. The market
|
||
is understocked with commodities, not with labour, with work done, not
|
||
with work to be done. It raises the wages of journeymen tailors. The
|
||
market is here understocked with labour. There is an effectual demand for
|
||
more labour, for more work to be done, than can be had. It sinks the price
|
||
of coloured silks and cloths, and thereby reduces the profits of the
|
||
merchants who have any considerable quantity of them upon hand. It sinks,
|
||
too, the wages of the workmen employed in preparing such commodities, for
|
||
which all demand is stopped for six months, perhaps for a twelvemonth. The
|
||
market is here overstocked both with commodities and with labour.
|
||
|
||
But though the market price of every particular commodity is in this
|
||
manner continually gravitating, if one may say so, towards the natural
|
||
price; yet sometimes particular accidents, sometimes natural causes, and
|
||
sometimes particular regulations of policy, may, in many commodities, keep
|
||
up the market price, for a long time together, a good deal above the
|
||
natural price.
|
||
|
||
When, by an increase in the effectual demand, the market price of some
|
||
particular commodity happens to rise a good deal above the natural price,
|
||
those who employ their stocks in supplying that market, are generally
|
||
careful to conceal this change. If it was commonly known, their great
|
||
profit would tempt so many new rivals to employ their stocks in the same
|
||
way, that, the effectual demand being fully supplied, the market price
|
||
would soon be reduced to the natural price, and, perhaps, for some time
|
||
even below it. If the market is at a great distance from the residence of
|
||
those who supply it, they may sometimes be able to keep the secret for
|
||
several years together, and may so long enjoy their extraordinary profits
|
||
without any new rivals. Secrets of this kind, however, it must be
|
||
acknowledged, can seldom be long kept; and the extraordinary profit can
|
||
last very little longer than they are kept.
|
||
|
||
Secrets in manufactures are capable of being longer kept than secrets in
|
||
trade. A dyer who has found the means of producing a particular colour
|
||
with materials which cost only half the price of those commonly made use
|
||
of, may, with good management, enjoy the advantage of his discovery as
|
||
long as he lives, and even leave it as a legacy to his posterity. His
|
||
extraordinary gains arise from the high price which is paid for his
|
||
private labour. They properly consist in the high wages of that labour.
|
||
But as they are repeated upon every part of his stock, and as their whole
|
||
amount bears, upon that account, a regular proportion to it, they are
|
||
commonly considered as extraordinary profits of stock.
|
||
|
||
Such enhancements of the market price are evidently the effects of
|
||
particular accidents, of which, however, the operation may sometimes last
|
||
for many years together.
|
||
|
||
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; and that part of it
|
||
which resolves itself into the rent of land, is in this case the part
|
||
which is generally paid above its natural rate. The rent of the land which
|
||
affords such singular and esteemed productions, like the rent of some
|
||
vineyards in France of a peculiarly happy soil and situation, bears no
|
||
regular proportion to the rent of other equally fertile and equally well
|
||
cultivated land in its neighbourhood. The wages of the labour, and the
|
||
profits of the stock employed in bringing such commodities to market, on
|
||
the contrary, are seldom out of their natural proportion to those of the
|
||
other employments of labour and stock in their neighbourhood.
|
||
|
||
Such enhancements of the market price are evidently the effect of natural
|
||
causes, which may hinder the effectual demand from ever being fully
|
||
supplied, and which may continue, therefore, to operate for ever.
|
||
|
||
A monopoly granted either to an individual or to a trading company, has
|
||
the same effect as a secret in trade or manufactures. The monopolists, by
|
||
keeping the market constantly understocked by never fully supplying the
|
||
effectual demand, sell their commodities much above the natural price, and
|
||
raise their emoluments, whether they consist in wages or profit, greatly
|
||
above their natural rate.
|
||
|
||
The price of monopoly is upon every occasion the highest which can be got.
|
||
The natural price, or the price of free competition, on the contrary, is
|
||
the lowest which can be taken, not upon every occasion indeed, but for any
|
||
considerable time together. The one is upon every occasion the highest
|
||
which can be squeezed out of the buyers, or which it is supposed they will
|
||
consent to give; the other is the lowest which the sellers can commonly
|
||
afford to take, and at the same time continue their business.
|
||
|
||
The exclusive privileges of corporations, statutes of apprenticeship, and
|
||
all those laws which restrain in particular employments, the competition
|
||
to a smaller number than might otherwise go into them, have the same
|
||
tendency, though in a less degree. They are a sort of enlarged monopolies,
|
||
and may frequently, for ages together, and in whole classes of
|
||
employments, keep up the market price of particular commodities above the
|
||
natural price, and maintain both the wages of the labour and the profits
|
||
of the stock employed about them somewhat above their natural rate.
|
||
|
||
Such enhancements of the market price may last as long as the regulations
|
||
of policy which give occasion to them.
|
||
|
||
The market price of any particular commodity, though it may continue long
|
||
above, can seldom continue long below, its natural price. Whatever part of
|
||
it was paid below the natural rate, the persons whose interest it affected
|
||
would immediately feel the loss, and would immediately withdraw either so
|
||
much land or so much labour, or so much stock, from being employed about
|
||
it, that the quantity brought to market would soon be no more than
|
||
sufficient to supply the effectual demand. Its market price, therefore,
|
||
would soon rise to the natural price; this at least would be the case
|
||
where there was perfect liberty.
|
||
|
||
The same statutes of apprenticeship and other corporation laws, indeed,
|
||
which, when a manufacture is in prosperity, enable the workman to raise
|
||
his wages a good deal above their natural rate, sometimes oblige him, when
|
||
it decays, to let them down a good deal below it. As in the one case they
|
||
exclude many people from his employment, so in the other they exclude him
|
||
from many employments. The effect of such regulations, however, is not
|
||
near so durable in sinking the workman’s wages below, as in raising them
|
||
above their natural rate. Their operation in the one way may endure for
|
||
many centuries, but in the other it can last no longer than the lives of
|
||
some of the workmen who were bred to the business in the time of its
|
||
prosperity. When they are gone, the number of those who are afterwards
|
||
educated to the trade will naturally suit itself to the effectual demand.
|
||
The policy must be as violent as that of Indostan or ancient Egypt (where
|
||
every man was bound by a principle of religion to follow the occupation of
|
||
his father, and was supposed to commit the most horrid sacrilege if he
|
||
changed it for another), which can in any particular employment, and for
|
||
several generations together, sink either the wages of labour or the
|
||
profits of stock below their natural rate.
|
||
|
||
This is all that I think necessary to be observed at present concerning
|
||
the deviations, whether occasional or permanent, of the market price of
|
||
commodities from the natural price.
|
||
|
||
The natural price itself varies with the natural rate of each of its
|
||
component parts, of wages, profit, and rent; and in every society this
|
||
rate varies according to their circumstances, according to their riches or
|
||
poverty, their advancing, stationary, or declining condition. I shall, in
|
||
the four following chapters, endeavour to explain, as fully and distinctly
|
||
as I can, the causes of those different variations.
|
||
|
||
First, I shall endeavour to explain what are the circumstances which
|
||
naturally determine the rate of wages, and in what manner those
|
||
circumstances are affected by the riches or poverty, by the advancing,
|
||
stationary, or declining state of the society.
|
||
|
||
Secondly, I shall endeavour to shew what are the circumstances which
|
||
naturally determine the rate of profit; and in what manner, too, those
|
||
circumstances are affected by the like variations in the state of the
|
||
society.
|
||
|
||
Though pecuniary wages and profit are very different in the different
|
||
employments of labour and stock; yet a certain proportion seems commonly
|
||
to take place between both the pecuniary wages in all the different
|
||
employments of labour, and the pecuniary profits in all the different
|
||
employments of stock. This proportion, it will appear hereafter, depends
|
||
partly upon the nature of the different employments, and partly upon the
|
||
different laws and policy of the society in which they are carried on. But
|
||
though in many respects dependent upon the laws and policy, this
|
||
proportion seems to be little affected by the riches or poverty of that
|
||
society, by its advancing, stationary, or declining condition, but to
|
||
remain the same, or very nearly the same, in all those different states. I
|
||
shall, in the third place, endeavour to explain all the different
|
||
circumstances which regulate this proportion.
|
||
|
||
In the fourth and last place, I shall endeavour to shew what are the
|
||
circumstances which regulate the rent of land, and which either raise or
|
||
lower the real price of all the different substances which it produces.
|