The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface
• Editor’s Introduction
• Introduction and Plan of the Work
• 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.
• Chapter I: Of the Division of Labour 1
• Chapter II: Of the Principle Which Gives Occasion to the Division of Labour
• Chapter III: That the Division of Labour Is Limited By the Extent of the Market
• Chapter IV: Of the Origin and Use of Money
• Chapter V: Of the Real and Nominal Price of Commodities, Or of Their Price In Labour, and Their Price In Money
• Chapter VI: Of the Component Parts of the Price of Commodities
• Chapter VII: Of the Natural and Market Price of Commodities 1
• Chapter VIII: Of the Wages of Labour
• Chapter IX: Of the Profits of Stock
• Chapter X: Of Wages and Profit In the Different Employments of Labour and Stock 1
• Part I: Inequalities Arising From the Nature of the Employments Themselves 1
• Part II: Inequalities Occasioned By the Policy of Europe
• Chapter XI: Of the Rent of Land
• Part I: Of the Produce of Land Which Always Affords Rent
• Part II: Of the Produce of Land Which Sometimes Does, and Sometimes Does Not, Afford Rent
• 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
• Book II: Of the Nature, Accumulation, and Employment of Stock
• Introduction
• Chapter I: Of the Division of Stock
• 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
• Chapter III: Of the Accumulation of Capital, Or of Productive and Unproductive Labour
• Chapter IV: Of Stock Lent At Interest
• Chapter V: Of the Different Employment of Capitals
• Book III: Of the Different Progress of Opulence In Different Nations
• Chapter I: Of the Natural Progress of Opulence
• Chapter II: Of the Discouragement of Agriculture In the Ancient State of Europe After the Fall of the Roman Empire
• Chapter III: Of the Rise and Progress of Cities and Towns, After the Fall of the Roman Empire
• Chapter IV: How the Commerce of the Towns Contributed to the Improvement of the Country
• Book IV: Of Systems of Political Œconomy
• Introduction
• Chapter I: Of the Principle of the Commercial Or Mercantile System
• Chapter II: Of Restraints Upon the Importation From Foreign Countries of Such Goods As Can Be Produced At Home
• 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
• Part I: Of the Unreasonableness of Those Restraints Even Upon the Principles of the Commercial System 1
• Part II: Of the Unreasonableness of Those Extraordinary Restraints Upon Other Principles 2

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 increasing improvementThe general course of progress is for produce other than food to become dearer, 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 cloathing and lodging, the useful fossils and minerals 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.

but there are interruptions,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 smallas in the case of silver, 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 largewhen new fertile mines are discovered. country in the neighbourhood of the mine. Even though the world in general were improving, yet, if, in the course of its improvement, 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.

Silver would grow dearer in the general progress of improvement,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.

but might grow cheaper if some accident increased the supply for many years together: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 the 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,or remain stationary if demand and supply increased equally. 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,These three things have happened during the last 400 years. each of those three different combinations seem1 to have taken place in the European market, and nearly in the same order too in which I have here set them down.

[1 ] [Ed. 1 reads ‘seems’.]