The Online Library of Liberty

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• Preface
• Key to Abbreviations and References
• General Introduction
• The Text and Apparatus
• Advertisement a
• Advertisement to the Fourth Edition
• Introduction and Plan of the Work
• [i] Book I: Of the Causes of Improvement In the Productive Powers of Labour, and of the Order According to Which Its Produce Is Naturally Distributed Among the Different Ranks of the People
• [i.i] Chapter I: Of the Division of Labour
• [i.ii] Chapter II: Of the Principle Which Gives Occasion to the Division of Labour
• [i.iii] Chapter III: That the Division of Labour Is Limited By the Extent of the Market 1
• [i.iv] Chapter IV: Of the Origin and Use of Money 1
• [i.v] Chapter V: Of the Real and Nominal Price of Commodities, Or of Their Price In Labour, and Their Price In Money
• [i.vi] Chapter VI: Of the Component Parts of the Price of Commodities
• [i.vii] Chapter VII: Of the Natural and Market Price of Commodities 1
• [i.viii] Chapter VIII: Of the Wages of Labour
• [i.ix] Chapter IX: Of the Profits of Stock
• [i.x.a] Chapter X: Of Wages and Profit In the Different Employments of Labour and Stock
• [i.x.b] Part I: Inequalities Arising From the Nature of the Employments Themselves
• [i.x.c] Part II: Inequalities Occasioned By the Policy of Europe
• [i.xi.a] Chapter XI: Of the Rent of Land
• [i.xi.b] Part I: Of the Produce of Land Which Always Affords Rent
• [i.xi.c] Part II: Of the Produce of Land Which Sometimes Does, and Sometimes Does Not, Afford Rent
• [i.xi.d] 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
• Digression Concerning the Variations In the Value of Silver During the Course of the Four Last Centuries
• [i.xi.e] First Period
• [i.xi.f] Second Period
• [i.xi.g] Third Period
• [i.xi.h] Variations In the Proportion Between the Respective Values of Gold and Silver
• [i.xi.i] Grounds of the Suspicion That the Value of Silver Still Continues to Decrease
• [i.xi.j] Different Effects of the Progress of Improvement Upon the Real Price of Three Different Sorts of Rude Produce
• [i.xi.k] First Sort
• [i.xi.l] Second Sort
• [i.xi.m] Third Sort
• [i.xi.n] Conclusion of the Digression Concerning the Variations In the Value of Silver
• [i.xi.o] Effects of the Progress of Improvement Upon the Real Price of Manufactures
• [i.xi.p] Conclusion of the Chapter
• [ii] Book II: Of the Nature, Accumulation, and Employment of Stock
• Introduction
• [ii.i] Chapter I: Of the Division of Stock
• [ii.ii] Chapter II: Of Money Considered As a Particular Branch of the General Stock of the Society, Or of the Expence of Maintaining the National Capital
• [ii.iii] Chapter III: Of the Accumulation of Capital, Or of Productive and Unproductive Labour
• [ii.iv] Chapter IV: Of Stock Lent At Interest
• [ii.v] Chapter V: Of the Different Employment of Capitals
• [iii] Book III: Of the Different Progress of Opulence In Different Nations
• [iii.i] Chapter I: Of the Natural Progress of Opulence
• [iii.ii] Chapter II: Of the Discouragement of Agriculture In the Antient State of Europe After the Fall of the Roman Empire 1
• [iii.iii] Chapter III: Of the Rise and Progress of Cities and Towns, After the Fall of the Roman Empire
• [iii.iv] Chapter IV: How the Commerce of the Towns Contributed to the Improvement of the Country
• [iv] Book IV: Of Systems of Political Oeconomy
• Introduction
• [iv.i] Chapter I: Of the Principle of the Commercial, Or Mercantile System 1
• [iv.ii] Chapter II: Of Restraints Upon the Importation a From Foreign Countries of Such Goods a As Can Be Produced At Home
• [iv.iii] Chapter III: Of the Extraordinary Restraints Upon the Importation of Goods of Almost All Kinds, From Those Countries With Which the Balance Is Supposed to Be Disadvantageous
• [iv.iii.a] Part I: Of the Unreasonableness of Those Restraints Even Upon the Principles of the Commercial System a
• [iv.iii.b] Digression Concerning Banks of Deposit, Particularly Concerning That of Amsterdam 1
• [iv.iii.c] Part II: Of the Unreasonableness of Those Extraordinary Restraints Upon Other Principles a
• [iv.iv] Chapter IV: Of Drawbacks
• [iv.v.a] Chapter V: Of Bounties
• [iv.v.b] Digression Concerning the Corn Trade and Corn Laws a – a

second period

1But how various soever may have been the opinions of the learned concerning the progress of the value of silver during ^athis^a first period, they are unanimous concerning it during the second.1

2From 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.

3The 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.2 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 ^btwenty^b years before.3

4From 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 2l. 1s. 6d. 9/13. From which sum, neglecting the fraction, and deducting a ninth,4 or 4s. 7d. ⅓, the price of the quarter of eight bushels comes out to have been 1l. 16s. 10d.⅔. And from this sum, neglecting likewise the fraction, and deducting a ninth, or 4s. 1d. 1/9, 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 1l. 12s. 8d. 8/9, or about six ounces and one–third of an ounce of silver.

5From 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 2l. 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 1l. 19s. 6d. or about seven ounces and two–thirds of an ounce of silver.

[a–a]the 6

[1 ]‘Everybody agrees that the abundance of money or its increase in exchange, raises the price of everything. The quantity of money brought from America to Europe for the last two centuries justifies this truth by experience.’ (Cantillon, Essai, 212, ed. Higgs 161.)

[2 ]See above, I.v.7, and below, IV.i.32 and V.ii.c.5.

[b–b]thirty 1–2 (twenty 2e–6)

[3 ]LJ (A) vi.134–5 comments that ‘From the fall of the Roman empire till the discovery of the Span. West Indies prices continually rose, since which they have fallen, unless at the Revolution when they rose for some time.’ Cf. LJ (B) 254, ed. Cannan 198.

[4 ]‘It hath been found that the value of all the Wheat fit for bread, if mixed together, would be eight ninths of the value of the best Wheat, and the same proportion may reasonable be supposed in Barley’. (C. Smith, Three Tracts on the Corn Trade and Corn Laws (2nd ed., London, 1766), 104.)