 5. Variations in the proportion between the respective values of gold and silver. Before the discovery of the minds of America, the value of fine gold to fine silver was regulated in the different minds of Europe, between the proportions of 1 to 10 and 1 to 12, that is, an ounce of fine gold was supposed to be worth from 10 to 12 ounces of fine silver. About the middle of the last century, it came to be regulated between the proportions of 1 to 14 and 1 to 15, that is, an ounce of fine gold came to be supposed worth between 14 and 15 ounces of fine silver. Gold rose in its nominal value, or in the quantity of silver which was given for it. Both metals sunk in their real value, or in the quantity of labor which they could purchase, but silver sunk more than gold. Though both the gold and silver minds of America exceeded in fertility all those which had ever been known before, the fertility of the silver minds had, it seems, been proportionally still greater than that of the gold ones. The greater quantities of silver carried annually from Europe to India have, in some of the English settlements, gradually reduced the value of that metal in proportion to gold. In the mint of Calcutta, an ounce of fine gold is supposed to be worth 15 ounces of fine silver, in the same manner as in Europe. It is in the mint, perhaps, rated too high for the value which it bears in the market of bingle. In China, the proportion of gold to silver still continues as 1 to 10, or 1 to 12. In Japan, it is said to be as 1 to 8. The proportion between the quantities of gold and silver annually imported into Europe, according to Mr. Megan's account, is as 1 to 22 nearly. That is, for one ounce of gold there are imported a little more than 22 ounces of silver. The great quantity of silver sent annually to the East Indies reduces, he supposes, the quantities of those metals which remain in Europe to the proportion of 1 to 14 or 15, the proportion of their values. The proportion between their values, he seems to think, must necessarily be the same as that between their quantities, and would therefore be as 1 to 22 were it not for this greater exportation of silver. But the ordinary proportion between the respective values of two commodities is not necessarily the same as that between the quantities of them which are commonly in the market. The price of an ox, reckoned at ten guineas, is about three score times the price of a lamb, reckoned at three shillings six pence. It would be absurd, however, to infer from thence that there are commonly in the market three score lamps for one ox, and it would be just as absurd to infer because an ounce of gold will commonly purchase from fourteen or fifteen ounces of silver, that there are commonly in the market only fourteen or fifteen ounces of silver for one ounce of gold. The quantity of silver commonly in the market, it is probable, is much greater in the proportion to that of gold than the value of a certain quantity of gold is to that of an equal quantity of silver. The whole quantity of a cheap commodity brought to market is commonly not only greater, but of greater value than the whole quantity of a dear one. The whole quantity of bread annually brought to market is not only greater, but of greater value than the whole quantity of butcher's meat. The whole quantity of butcher's meat, then the whole quantity of poultry. And the whole quantity of poultry than the whole quantity of wild fowl. There are so many more purchasers for the cheap than for the deer commodity that not only a greater quantity of it, but a greater value can commonly be disposed of. The whole quantity, therefore, of the cheap commodity must commonly be in greater proportion to the whole quantity of the deer one than the value of a certain quantity of the deer one is to the value of an equal quantity of the cheap one. When we compare the precious metals with one another, silver is a cheap and gold a deer commodity. We ought naturally to expect, therefore, that there should always be in the market not only a greater quantity, but a greater value of silver than of gold. Let any man who has a little of both compare his own silver with his gold plate, and he will probably find that not only the quantity, but the value of the former greatly exceeds that of the latter. Many people besides have a good deal of silver who have no gold plate, which, even with those who have it, is generally confined to watch cases, snuff boxes, and such like trinkets, of which the whole amount is seldom of great value. In the British coin, indeed, the value of the gold preponderates greatly, but it is not so in that of all countries. In the coin of some countries, the value of the two metals is nearly equal. In the Scotch coin, before the Union with England, the gold preponderated very little, though it did somewhat as it appears by the accounts of the mint. In the coin of many countries, the silver preponderates. In France, the largest sums are commonly paid in that metal, and it is there difficult to get more gold than what is necessary to carry about in your pocket. The superior value, however, of the silver plate above that of the gold, which takes place in all countries, will much more than compensate the preponderancy of the gold coin above the silver, which takes place only in some countries. Though, in one sense of the word, silver always has been, and probably always will be, much cheaper than gold, yet in another sense, gold may perhaps, in the present state of the Spanish market, be said to be somewhat cheaper than silver. A commodity may be said to be dear or cheap not only according to the absolute greatness or smallness of its usual price, but according as that price is more or less above the lowest for which it is possible to bring it to market for any considerable time together. This lowest price is that which barely replaces with a moderate profit, the stock which must be employed in bringing the commodity thither. It is the price which affords nothing to the landlord, of which rent makes not any component part, but which resolves itself altogether into wages and profit. But, in the present state of the Spanish market, gold is certainly somewhat nearer to this lowest price than silver. The tax of the king of Spain upon gold is only one twentieth part of the standard metal, or five percent, whereas his tax upon silver amounts to one tenth part of it, or to ten percent. In these taxes too, it has already been observed, consists the whole rent of the greater part of the gold and silver mines of Spanish America, and that upon gold is still worse paid than that upon silver. The profits of the undertakers of gold mines too, as they more rarely make a fortune, must, in general, be still more moderate than those of the undertakers of silver mines. The price of Spanish gold, therefore, as it affords both less rent and less profit, must, in the Spanish market, be somewhat nearer to the lowest price for which it is possible to bring it thither, than the price of Spanish silver. When all expenses are computed, the whole quantity of the one metal it would seem cannot in the Spanish market be disposed of so advantageously as the whole quantity of the other. The tax, indeed, of the king of Portugal upon the gold of the Brazils, is the same with the ancient tax of the king of Spain upon the silver of Mexico and Peru, or one fifth part of the standard metal. It may therefore be uncertain whether to the general market of Europe the whole mass of American gold comes at a price nearer to the lowest for which it is possible to bring it thither, than the whole mass of American silver. The price of diamonds and other precious stones may, perhaps, be still nearer to the lowest price at which it is possible to bring them to market than even the price of gold. Though it is not very probable that any part of a tax which is not only imposed upon one of the most proper subjects of taxation, a mere luxury and superfluity, but which affords so very important a revenue as the tax upon silver will ever be given up as long as it is possible to pay it. Yet the same impossibility of paying it, which, in 1736, made it necessary to reduce it from one fifth to one tenth, may in time make it necessary to reduce it still further, in the same manner as it made it necessary to reduce the tax upon gold to one twentieth. That the silver mines of Spanish America, like all other mines, become gradually more expensive in the working on account of the greater depths at which it is necessary to carry on the works and of the greater expense of drawing out the water and of supplying them with fresh air at those depths, is acknowledged by everybody who has inquired into the state of those mines. These causes, which are equivalent to a growing scarcity of silver, for a commodity may be said to grow scarce when it becomes more difficult and expensive to collect a certain quantity of it, must, in time, produce one or other of the three following events. The increase of the expense must either, first, be compensated altogether by a proportionable increase in the price of the metal, or secondly, it must be compensated altogether by a proportionable diminution of the tax upon silver, or thirdly, it must be compensated partly by the one and partly by the other of those two expedients. This third event is very possible. As gold rose in its price in proportion to silver, not withstanding a great diminution of the tax upon gold, so silver might rise in its price in proportion to labor and commodities, not withstanding an equal diminution of the tax upon silver. Such successive reductions of the tax, however, though they may not prevent altogether, must certainly retard, more or less, the rise of the value of silver in the European market. In consequence of such reductions, many mines may be wrought which could not be wrought before, because they could not afford to pay the old tax, and the quantity of silver annually brought to market must always be somewhat greater, and therefore the value of any given quantity, somewhat less, than it otherwise would have been. In consequence of the reduction in 1736, the value of silver in the European market, though it may not at this day be lower than before that reduction, is probably at least 10% lower than it would have been had the court of Spain continue to exact the old tax. That, not withstanding this reduction, the value of silver has, during the course of the present century, begun to rise somewhat in the European market. The facts and arguments which have been alleged above, disposed me to believe, or more properly, to suspect and conjecture, for the best opinion which I can form upon this subject, scarce perhaps deserve the name of belief. The rise, indeed, supposing there has been any, has hitherto been so very small, that after all that has been said, it may perhaps appear to many people uncertain, not only whether this event has actually taken place, but whether the contrary may not have taken place, or whether the value of silver may not still continue to fall in the European market. It must be observed, however, that whatever may be the supposed annual importation of gold and silver, there must be a certain period at which the annual consumption of those metals will be equal to that annual importation. Their consumption must increase as their mass increases, or rather in a much greater proportion. As their mass increases, their value diminishes. They are more used, and less cared for, and their consumption consequently increases in a greater proportion than their mass. After a certain period, therefore, the annual consumption of those metals must, in this manner, become equal to their annual importation, provided that importation is not continually increasing, which in the present times is not supposed to be the case. If, when the annual consumption has become equal to the annual importation, the annual importation should gradually diminish, the annual consumption may, for some time, exceed the annual importation. The mass of those metals may gradually and insensibly diminish, and their value gradually and insensibly rise, till the annual importation becoming again stationary, the annual consumption will gradually and insensibly accommodate itself to what that annual importation can maintain. Grounds of the suspicion that the value of silver still continues to decrease. The increase of the wealth of Europe, and the popular notion that as the quantity of the precious metals naturally increases with the increase of wealth, so their value diminishes as their quantity increases, may perhaps dispose many people to believe that their value still continues to fall in the European market, and the still gradually increasing price of many parts of the rude produce of land may confirm them still farther in this opinion. That that increase in the quantity of the precious metals, which arises in any country from the increase of wealth, has no tendency to diminish their value, I have endeavored to show already. Gold and silver naturally resort to a rich country, for the same reason that all sorts of luxuries and curiosities resort to it, not because they are cheaper there than in poorer countries, but because they are dearer, or because a better price is given for them. It is the superiority of price which attracts them, and as soon as that superiority ceases, they necessarily cease to go thither. If you accept corn and such other vegetables as are raised altogether by human industry, that all other sorts of rude produce, cattle, poultry, game of all kinds, the useful fossils and minerals of the earth, etc., naturally grow dearer, as the society advances in wealth and improvement, I have endeavored to show already. Though such commodities, therefore, come to exchange for a greater quantity of silver than before, it will not from thence follow that silver has become really cheaper, or will purchase less labor than before. But that such commodities have become really dearer, or will purchase more labor than before. It is not their nominal price only, but their real price, which rises in the progress of improvement. The rise of their nominal price is the effect, not of any degradation of the value of silver, but of the rise in their real price. End of Book 1, Chapter 11, Part 5. Part 6 of Chapter 11 of Book 1 of the Wealth of Nations. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. Recording by Stephen Escalara. The Wealth of Nations by Adam Smith. Part 6 of Chapter 11 of Book 1 of the Rent of Land. Different effects of the progress of improvement upon three different sorts of rude produce. These different sorts of rude produce may be divided into three classes. The first comprehends those which it is scarce in the power of human industry to multiply at all. The second, those which it can multiply in proportion to the demand. The third, those in which the efficacy of industry is either limited or uncertain. In the progress of wealth and improvement, the real price of the first may rise to any degree of extravagance, and seems not to be limited by any certain boundary. That of the second, though it may rise greatly, has, however, a certain boundary, beyond which it cannot well pass for any considerable time together. That of the third, though its natural tendency is to rise in the progress of improvement, yet in the same degree of improvement it may sometimes happen even to fall, sometimes to continue the same, and sometimes to rise more or less, according as different accidents render the efforts of human industry in multiplying this sort of rude produce more or less successful. First sort. The first sort of rude produce of which the price rises in the progress of improvement is that which it is scarce in the power of human industry to multiply at all. It consists in those things which nature produces only in certain quantities, and which being of a very perishable nature, it is impossible to accumulate together the produce of many different seasons. Such are the greater part of rare and singular birds and fishes, many different sorts of game, almost all wild fowl, all birds of passage in particular, as well as many other things. When wealth and the luxury which accompanies it increase, the demand for these is likely to increase with them, and no effort of human industry may be able to increase the supply much beyond what it was before this increase of the demand. The quantity of such commodities, therefore, remaining the same, or nearly the same, while the competition to purchase them is continually increasing, their price may rise to any degree of extravagance, and seems not to be limited by any certain boundary. If woodcocks should become so fashionable as to sell for twenty guineas apiece, no effort of human industry could increase the number of those brought to market, much beyond what it is at present. The high price paid by the Romans, in the time of their greatest grandeur for rare birds and fishes, may in this manner easily be accounted for. These prices were not the effects of the low value of silver in those times, but of the high value of such rarities and curiosities as human industry could not multiply at pleasure. The real value of silver was higher at Rome for some time before and after the fall of the Republic than it is through the greater part of Europe at present. Three cisterti equal to about six pence sterling was the price which the Republic paid for the modius or peck of the tithe wheat of Sicily. This price, however, was probably below the average market price, the obligation to deliver their wheat at this rate being considered as a tax upon the Sicilian farmers. When the Romans therefore had occasion to order more corn than the tithe of wheat amounted to, they were bound by capitulation to pay for the surplus at the rate of four cisterti or eight pence sterling the peck, and this had probably been reckoned the moderate and reasonable, that is, the ordinary or average contract price of those times, it is equal to about one and twenty shillings the quarter. Eight and twenty shillings the quarter was before the late years of scarcity the ordinary contract price of English wheat, which in quality is inferior to the Sicilian and generally sells for a lower price in the European market. The value of silver therefore in those ancient times must have been to its value in the present as three to four inversely, that is, three ounces of silver would then have purchased the same quantity of labor and commodities, which four ounces will do at present. When we read in Pliny therefore, that Seas bought a white nightingale as a present for the Empress Agrippina at the price of six thousand cisterti, equal to about fifty pounds of our present money, and that Asinius Seller purchased a cermolet at the price of eight thousand cisterti, equal to about sixty-six pounds, thirteen shillings and four pence of our present money. The extravagance of those prices, how much so ever it may surprise us, is apt not withstanding to appear to us about one-third less than it really was. Their real price, the quantity of labor and subsistence, which was given away for them, was about one-third more than their nominal prices apt to express to us in the present times. Seas gave for the nightingale the command of a quantity of labor and subsistence equal to what sixty-six pounds, thirteen shillings, four pence, would purchase in the present times, and Asinius Seller gave for a cermolet the command of a quantity equal to what eighty-eight pounds, seventeen shillings, nine pence would purchase. What occasion the extravagance of those high prices was not so much the abundance of silver as the abundance of labor and subsistence, of which those Romans had the disposal beyond what was necessary for their own use. The quantity of silver of which they had the disposal was a good deal less than what the command of the same quantity of labor and subsistence would have procured to them in the present times. Second Sort The second sort of rude produce of which the price rises in the progress of improvement is that which human industry can multiply in proportion to the demand. It consists in those useful plants and animals which in uncultivated countries nature produces with such profuse abundance that they are of little or no value and which as cultivation advances are therefore forced to give place to some more profitable produce. During a long period in the progress of improvement the quantity of these is continually diminishing while at the same time the demand for them is continually increasing. Their real value therefore the real quantity of labor which they will purchase or command gradually rises till it lasts to get so high as to render them as profitable of produce as anything else which human industry can raise upon the most fertile and best cultivated land. When it has got so high it cannot well go higher. If it did more land and more industry would soon be employed to increase their quantity. When the price of cattle for example rises so high that it is as profitable to cultivate land in order to raise food for them as in order to raise food for man it cannot well go higher. If it did more corn land would soon be turned into pasture. The extension of tillage by diminishing the quantity of wild pasture diminishes the quantity of butcher's meat which the country naturally produces without labor or cultivation and by increasing the number of those who have either corn or what comes to the same thing the price of corn to give an exchange for it increases the demand. The price of butcher's meat therefore and consequently of cattle must gradually rise till it gets so high that it becomes as profitable to employ the most fertile and best cultivated lands in raising food for them as in raising corn. But it must always be late in the progress of improvement before tillage can be so far extended as to raise the price of cattle to this height and till it has got to this height if the country is advancing at all their price must be continually rising. There are perhaps some parts of Europe in which the price of cattle has not yet got to this height it had not got to this height in any part of Scotland before the Union. Had the Scotch cattle been always confined to the market of Scotland in a country in which the quantity of land which can be applied to no other purpose but the feeding of cattle is so great in proportion to what can be applied to other purposes it is scarce possible perhaps that their price could ever have risen so high as to render it profitable to cultivate land for the sake of feeding them. In England the price of cattle it has already been observed seems in the neighborhood of London to have got to this height about the beginning of the last century. But it was much later probably before it got through the greater part of the remoder counties and some of which perhaps it may scarce yet have got to it. Of all the different substances however which compose the second sort of rude produce cattle is perhaps that of which the price in the progress of improvement rises first to this height. Till the price of cattle indeed has got to this height it seems scarce possible that the greater part even of those lands which are capable of the highest cultivation can be completely cultivated. In all farms too distant from any town to carry manure from it that is in the far greater part of those of every extensive country the quantity of well cultivated land must be in proportion to the quantity of manure which the farm itself produces and this again must be in proportion to the stock of cattle which are maintained upon it. The land is manured either by pasturing the cattle upon it or by feeding them in the stable and from thence carrying out their dung to it. But unless the price of the cattle be sufficient to pay both the rent and profit of cultivated land the farmer cannot afford to pasture them upon it and he can still less afford to feed them in the stable. It is with the produce of improved and cultivated land only that cattle can be fed in the stable because to collect the scanty and scattered produce of waste and unimproved lands would require too much labor and be too expensive. If the price of the cattle therefore is not sufficient to pay for the produce of improved and cultivated land when they are allowed to pasture it that price will be still less sufficient to pay for that produce when it must be collected with a good deal of additional labor and brought into the stable to them. In these circumstances therefore no more cattle can with profit be fed in the stable than what are necessary for tillage. But these can never afford manure enough for keeping constantly in good condition all the lands which they are capable of cultivating. What they afford, being insufficient for the whole farm, will naturally be reserved for the lands to which it can be most advantageously or conveniently applied, the most fertile or those perhaps in the neighborhood of the farmyard. These therefore will be kept constantly in good condition and fit for tillage. The rest will, the greater part of them, be allowed to lie waste, producing scarce anything but some miserable pasture, just sufficient to keep alive a few straggling half-starved cattle. The farm, though much overstocked in proportion to what would be necessary for its complete cultivation, being very frequently overstocked in proportion to its actual produce. A portion of this wasteland, however, after having been pastured in this wretched manner for six or seven years together, may be plowed up when it will yield perhaps a poor crop or two of bad oats, or of some other coarse grain, and then being entirely exhausted it must be rested and pastured again as before, and another portion plowed up to be in the same manner exhausted and rested again in its turn. Such, accordingly, was the general system of management all over the low country of Scotland before the Union. The lands which were kept constantly well-manured and in good condition seldom exceeded a third or fourth part of the whole farm, and sometimes did not amount to a fifth or a sixth part of it. The rest were never manured, but a certain portion of them was in its turn notwithstanding regularly cultivated and exhausted. Under this system of management it is evident even that part of the lands of Scotland which is capable of good cultivation could produce but little in comparison of what it may be capable of producing. But how disadvantageous, however, this system may appear, yet before the Union the low price of cattle seems to have rendered it almost unavoidable. If notwithstanding a great rise in the price it still continues to prevail through a considerable part of the country, it is owing in many places no doubt to ignorance and attachment to old customs, but in most places to the unavoidable obstructions which the natural course of things opposes to the immediate or speedy establishment of a better system. First, to the poverty of the tenants, to there not having yet had time to acquire a stock of cattle sufficient to cultivate their lands more completely, the same rise of price which would render it advantageous for them to maintain a greater stock, rendering it more difficult for them to acquire it. And secondly, to there not having yet had time to put their lands in condition to maintain this greater stock properly, supposing they were capable of acquiring it. The increase of stock and the improvement of land are two events which must go hand in hand and of which the one can nowhere much outrun the other. Without some increase of stock there can be scarce any improvement of land, but there can be no considerable increase of stock, but in consequence of a considerable improvement of land, because otherwise the land could not maintain it. These natural obstructions to the establishment of a better system cannot be removed, but by a long course of frugality and industry, and a half a century or century more perhaps must pass away before the old system, which is wearing out gradually, can be completely abolished through all the different parts of the country. Of all the commercial advantages, however, which Scotland has derived from the union with England, this rise in the price of cattle is perhaps the greatest. It has not only raised the value of all Highland estates, but it has perhaps been the principal cause of the improvement of the low country. In all new colonies, the great quantity of wasteland, which can for many years be applied to no other purpose but the feeding of cattle, soon renders them extremely abundant, and in everything great cheapness is the necessary consequence of great abundance. Though all the cattle of the European colonies in America were originally carried from Europe, they soon multiplied so much there and became of so little value that even horses were allowed to run wild in the woods without any owner thinking it worth while to claim them. It must be a long time after the first establishment of such colonies before it can become profitable to feed cattle upon the produce of cultivated land. The same causes therefore, the wanta manure and the disproportion between the stock employed in cultivation and the land which is destined to cultivate, are likely to introduce there a system of husbandry, not unlike that which still continues to take place in so many parts of Scotland. Mr. Calme, the Swedish traveler, when he gives an account of the husbandry of some of the English colonies in North America, as he found it in 1749, observes accordingly that he can with difficulty discover there the character of the English nation, so well skilled in all the different branches of agriculture. They make scarce any manure for their cornfields, he says, but when one piece of ground has been exhausted by continual cropping, they clear and cultivate another piece of fresh land, and when that is exhausted, proceed to a third. Their cattle are allowed to wander through the woods and other uncultivated grounds, where they are half-starved, having long ago extirpated almost all the annual grasses, by cropping them too early in the spring, before they had time to form their flowers or to shed their seeds. The annual grasses were, it seems, the best natural grasses in that part of North America, and when the Europeans first settled there, they used to grow very thick, and to rise three or four feet high. A piece of ground which, when he wrote, could not maintain one cow, would in former times he was assured have maintained four, each of which would have given four times the quantity of milk, which that one was capable of giving. The porous of the pasture had, in his opinion, occasioned the degradation of their cattle, which degenerated sensibly from one generation to another. They were probably not unlike that stunted breed which was common all over Scotland thirty or forty years ago, and which is now so much mended through the greater part of the low country, not so much by a change of the breed, though that expedient has been employed in some places, as by a more plentiful method of feeding them. Though it is late, therefore, in the progress of improvement, before cattle can bring such a price as to render it profitable to cultivate land for the sake of feeding them, yet of all the different parts which compose this second sort of rude produce, they are perhaps the first which bring this price, because, till they bring it, it seems impossible that improvement can be brought near even to that degree of perfection to which it has arrived in many parts of Europe. As cattle are among the first, so perhaps venison is among the last parts of this sort of rude produce which bring this price. The price of venison in Great Britain, how extravagant so ever it may appear, is not near sufficient to compensate the expense of a deer park, as is well known to all those who have had any experience in the feeding of deer. If it was otherwise, the feeding of deer would soon become an article of common farming, in the same manner as the feeding of those small birds, called turdye, was among the ancient Romans. Varro and Colomella assures us that it was a most profitable article. The fattening of orderlands, birds of passage which arrived lean in the country, is said to be so in some parts of France. If venison continues in fashion and the wealth and luxury of Great Britain increase as they had done for some time past, its price may very probably rise still higher than it is at present. Between that period and the progress of improvement, which brings to its height the price of so necessary an article as cattle, and that which brings it to the price of such a superfluity as venison, there is a very long interval in the course of which many other sorts of rude produce gradually arrive at their highest price, some sooner and some later, according to different circumstances. Thus in every farm, the offals of the barn and stable will maintain a certain number of poultry. These, as they are fed with what would otherwise be lost, are a mere save-all, and as they cost the farmer scarce anything so he can afford to sell them for very little. Almost all that he gets is pure gain, and their price can scarce be so low as to discourage him from feeding this number. But in countries cultivated and therefore but thinly inhabited, the poultry which are thus raised without expense, are often fully sufficient to supply the whole demand. In this state of things, therefore, they are often as cheap as butcher's meat or any other sort of animal food. But the whole quantity of poultry which the farm in this manner produces without expense, must always be much smaller than the whole quantity of butcher's meat which is reared upon it, and in times of wealth and luxury, what is rare, with only nearly equal merit, is always preferred to what is common. As wealth and luxury increase, therefore, in consequence of improvement and cultivation, the price of poultry gradually rises above that of butcher's meat till at last it gets so high that it becomes profitable to cultivate land for the sake of feeding them. When it has got to this height, it cannot well go higher. If it did, more land would soon be turned to this purpose. In several provinces of France, the feeding of poultry is considered as a very important article in rural economy, and sufficiently profitable to encourage the farmer to raise a considerable quantity of Indian corn and buckwheat for this purpose. A middling farmer will there sometimes have four hundred fowls in his yard. The feeding of poultry seems scarce yet to be generally considered as a matter of so much importance in England. They are certainly, however, dearer in England than in France, as England receives considerable supplies from France. In the progress of improvements, the period at which every particular sort of animal food is dearest must naturally be that which immediately precedes the general practice of cultivating land for the sake of raising it. For some time before this practice becomes general, the scarcity must necessarily raise the price. After it has become general, new methods of feeding are commonly fallen upon, which enable the farmer to raise upon the same quantity of ground a much greater quantity of that particular sort of animal food. The plenty not only obliges him to sell cheaper, but in consequence of these improvements he can afford to sell cheaper, for if he could not afford it, the plenty would not be of long continuance. It has been probably in this manner that the introduction of clover, turnips, carrots, cabbages, etc., has contributed to sink the common price of butcher's meat in the London market, somewhat below what it was about the beginning of the last century. The hog that finds his food among order and greedily devours many things rejected by every other useful animal is, like poultry, originally kept as a save-all. As long as the number of such animals, which can thus be reared at little or no expense, is fully sufficient to supply the demand, this sort of butcher's meat comes to market at a much lower price than any other. But when the demand rises beyond what this quantity can supply, when it becomes necessary to raise food on purpose for feeding and fattening hogs in the same manner as for feeding and fattening other cattle, the price necessarily rises and becomes proportionably either higher or lower than that of other butcher's meat, according as the nature of the country and the state of its agriculture happened to render the feeding of hogs more or less expensive than that of other cattle. In France, according to Mr. Buffon, the price of pork is nearly equal to that of beef. In most parts of Great Britain it is at present somewhat higher. The great rise in the price both of hogs and poultry has in Great Britain been frequently imputed to the diminution of the number of cottagers and other small occupiers of land, an event which has in every part of Europe been the immediate forerunner of improvement and better cultivation, but which at the same time may have contributed to raise the price of those articles, both somewhat sooner and somewhat faster than it would otherwise have risen. As the poorest family can often maintain a cat or dog without any expense, so the poorest occupiers of land can commonly maintain a few poultry or a sow and a few pigs at very little. The little offals of their own table, their whey, skimmed milk, and buttermilk supply those animals with a part of their food, and they find the rest in the neighboring fields without doing any sensible damage to anybody. By diminishing the number of those small occupiers, therefore, the quantity of this sort of provisions which is thus produced at little or no expense, must certainly have been a good deal diminished, and their price must consequently have been raised both sooner and faster than it would otherwise have risen. Sooner or later, however, in the progress of improvement, it must at any rate have risen to the utmost height of which it is capable of rising, or to the price which pays the labor and expense of cultivating the land which furnishes them with food, as well as these are paid upon the greater part of other cultivated land. The business of the dairy, like the feeding of hogs and poultry, is originally carried on as a save-all. The cattle necessarily kept upon the farm produced more milk than either the rearing of their own young or the consumption of the farmer's family requires, and they produced most at one particular season. But of all the productions of land, milk is perhaps the most perishable. In the warm season, when it is most abundant, it will scarce keep four and twenty hours. The farmer, by making it into fresh butter, stores a small part of it for a week, by making it into salt butter for a year, and by making it into cheese, he stores a much greater part of it for several years. Part of all these is reserved for the use of his own family. The rest goes to market in order to find the best price which is to be had, and which can scarce be so low as to discourage him from sending thither whatever is over and above the use of his own family. If it is very low indeed, he will be likely to manage his dairy in a very slovenly and dirty manner, and will scarce perhaps think it worthwhile to have a particular room or building on purpose for it, but will suffer the business to be carried on amidst the smoke, filth, and nastiness of his own kitchen, as was the case of almost all the farmer's dairies in Scotland thirty or forty years ago, and as is the case of many of them still. The same causes which gradually raise the price of butcher's meat, the increase of the demand, and in consequence of the improvement of the country, the diminution of the quantity which can be fed at little or no expense, raise in the same manner that of the produce of the dairy, of which the price naturally connects with that of butcher's meat, or with the expense of feeding cattle. The increase of price pays for more labor, care, and cleanliness. The dairy becomes more worthy of the farmer's attention, and the quality of its produce gradually improves. The price at last gets so high that it becomes worthwhile to employ some of the most fertile and best cultivated lands in feeding cattle merely for the purpose of the dairy, and when it has got to this height it cannot well go higher. If it did, more land would soon be turned to this purpose. It seems to have got to this height through the greater part of England, where much good land is commonly employed in this manner. If you accept the neighborhood of a few considerable towns, it seems not yet to have got to this height anywhere in Scotland, where common farmers seldom employ much good land in raising food for cattle, merely for the purpose of the dairy. The price of the produce, though it has risen very considerably within these few years, is probably still too low to admit of it. The inferiority of the quality, indeed, compared with that of the produce of English dairies, is fully equal to that of the price. But this inferiority of quality is perhaps rather the effect of this lowness of price than the cause of it. Though the quality was much better, the greater part of what is brought to market could not, I apprehend, in the present circumstances of the country, be disposed of at a much better price. And the present price, it is probable, would not pay the expense of the land and labor necessary for producing a much better quality. Through the greater part of England, notwithstanding the superiority of price, the dairy is not reckoned a more profitable employment of land than the raising of corn or the fattening of cattle, the two great objects of agriculture. Through the greater part of Scotland, therefore, it cannot yet be even so profitable. The lands of no country, it is evident, can ever be completely cultivated and improved till once the price of every produce, which human industry is obliged to raise upon them, has got so high as to pay for the expense of complete improvement and cultivation. In order to do this, the price of each particular produce must be sufficient, first, to pay the rent of good corn land, as it is that which regulates the rent of the greater part of other cultivated land, and secondly, to pay the labor and expense of the farmer, as well as they are commonly paid upon good corn land, or, in other words, to replace with the ordinary profits the stock which he employs about it. This rise in the price of each particular produce must evidently be previous to the improvement and cultivation of the land which is destined for raising it. Gain is the end of all improvement, and nothing could deserve that name of which loss was to be the necessary consequence. But loss must be the necessary consequence of improving land for the sake of a produce of which the price could never bring back the expense. If the complete improvement and cultivation of the country be, as it most certainly is, the greatest of all public advantages, this rise in the price of all those different sorts of rude produce, instead of being considered as a public calamity, ought to be regarded as the necessary forerunner and attendant of the greatest of all public advantages. This rise, too, in the nominal or money price of all those different sorts of rude produce, has been the effect not of any degradation in the value of silver, but of a rise in their real price. They have become worth not only a greater quantity of silver, but a greater quantity of labor and subsistence than before. As it costs a greater quantity of labor and subsistence to bring them to market, so, when they are brought thither, they represent or are equivalent to a greater quantity. End of Book 1, Chapter 11, Part 6 Part 7 of Chapter 11 of Book 1 of the Wealth of Nations This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org Recording by Stephen Escalara The Wealth of Nations by Adam Smith Part 7 of Chapter 11 of Book 1 of the Rent of Land Third Sort The third and last sort of rude produce, of which the price naturally rises in the progress of improvement, is that in which the efficacy of human industry in augmenting the quantity is either limited or uncertain. Though the real price of this sort of rude produce, therefore, naturally tends to rise in the progress of improvement, yet according as different accidents happen to render the efforts of human industry more or less successful in augmenting the quantity, it may happen sometimes even to fall, sometimes to continue the same, in very different periods of improvement, and sometimes to rise more or less in the same period. There are some sorts of rude produce which nature has rendered a kind of appendages to other sorts, so that the quantity of the one which any country can afford is necessarily limited by that of the other. The quantity of wool or of raw hides, for example, which any country can afford, is necessarily limited by the number of great and small cattle that are kept in it. The state of its improvement and the nature of its agriculture again necessarily determined this number. The same causes which in the progress of improvement gradually raised the price of butchers' meat should have the same effect, it may be thought, upon the prices of wool and raw hides, and raise them to, nearly in the same proportion. It probably would be so if in the rude beginnings of improvement the market for the latter commodities was confined within as narrow bounds as that for the former, but the extent of their respective markets is commonly extremely different. The market for butchers' meat is almost everywhere confined to the country which produces it. Ireland and some part of British America, indeed, carry on a considerable trade in salt provisions, but they are, I believe, the only countries in the commercial world which do so, or which export to other countries any considerable part of their butchers' meat. The market for wool and raw hides on the contrary is in the rude beginnings of improvement very seldom confined to the country which produces them. They can easily be transported to distant countries, wool without any preparation, and raw hides with very little, and as they are the materials of many manufacturers, the industry of other countries may occasion a demand for them, though that of the country which produces them might not occasion any. In countries ill-cultivated and therefore but thinly inhabited, the price of the wool and of the hide bears always a much greater proportion to that of the whole beast than in countries where improvement and population being further advanced, there is more demand for butchers' meat. Mr. Hume observes that in the Saxon times the fleece was estimated at two-fifths of the value of the whole sheep and that this was much above the proportion of its present estimation. In some provinces of Spain I have been assured the sheep is frequently killed merely for the sake of the fleece and the tallow. The carcass is often left to rot upon the ground or to be devoured by beasts and birds of prey. If this sometimes happens even in Spain it happens almost constantly in Chile, at Buenos Aires, and in many other parts of Spanish America where the horn cattle are almost constantly killed merely for the sake of the hide and the tallow. This too used to happen almost constantly in Hispaniola while it was infested by the buccaneers, and before the settlement improvement and populistness of the French plantations, which now extend round the coast of almost the whole western half of the island, had given some value to the cattle of the Spaniards who still continued to possess not only the eastern part of the coast, but the whole inland mountainous part of the country. Though in the progress of improvement and population the price of the whole beast necessarily rises, yet the price of the carcass is likely to be much more affected by this rise than that of the wool and the hide. The market for the carcass being in the rude state of society confined always to the country which produces it must necessarily be extended in proportion to the improvement and population of that country. But the market for the wool and the hides, even of a barbarous country, often extending to the whole commercial world, it can very seldom be enlarged in the same proportion. The state of the whole commercial world can seldom be much affected by the improvement of any particular country, and the market for such commodities may remain the same, or very nearly the same, after such improvements as before. It should, however, in the natural course of things rather, upon the whole, be somewhat extended in consequence of them. If the manufacturers, especially of which those commodities are the materials, should ever come to flourish in the country, the market, though it might not be much enlarged, would at least be brought much nearer to the place of growth than before, and the price of those materials might at least be increased by what had usually been the expense of transporting them to distant countries. Though it might not rise therefore in the same proportion as that of butcher's meat, it ought naturally to rise somewhat, and ought certainly not to fall. In England, however, notwithstanding the flourishing state of its wool and manufacture, the price of English wool has fallen very considerably since the time of Edward III. There are many authentic records which demonstrate that, during the reign of that prince, towards the middle of the 14th century, or about 1339, what was reckoned the moderate and reasonable price of the tod, or twenty-eight pounds of English wool, was not less than ten shillings of the money of those times, containing at the rate of twenty pence the ounce, six ounces of silver, tower weight, equal to about thirty shillings of our present money. In the present times, one and twenty shillings the tod may be reckoned a good price for very good English wool. The money price of wool, therefore, in the time of Edward III, was to its money price in the present times as ten to seven. The superiority of its real price was still greater. At the rate of six shillings and eight pence the quarter, ten shillings was in those ancient times the price of twelve bushels of wheat. At the rate of twenty-eight shillings the quarter, one and twenty shillings is in the present times the price of six bushels only. The proportion between the real price of ancient and modern times, therefore, is as twelve to six, or as two to one. In those ancient times, a tod of wool would have purchased twice the quantity of subsistence which it will purchase at present, and consequently twice the quantity of labor if the real recompense of labor had been the same in both periods. This degradation, both in the real and nominal value of wool, can never have happened in consequence of the natural course of things. It has, accordingly, been the effect of violence and artifice. First, of the absolute prohibition of exporting wool from England. Secondly, of the permission of importing it from Spain, duty-free. Thirdly, of the prohibition of exporting it from Ireland to another country but England. In consequence of these regulations, the market for English wool, instead of being somewhat extended, in consequence of the improvement of England has been confined to the home market where the wool of several other countries is allowed to come into competition with it, and where that of Ireland is forced into competition with it. As the woolen manufacturers to of Ireland are fully as much discouraged as is consistent with justice and fair dealing, the Irish can work up but a smaller part of their own wool at home, and are therefore obliged to send a greater proportion of it to Great Britain, the only market they are allowed. I have not been able to find any such authentic records concerning the price of raw hides in ancient times. Wool was commonly paid as a subsidy to the King, and its valuation in that subsidy ascertains, at least in some degree, what was its ordinary price. But this seems not to have been the case with raw hides. Fleetwood, however, from an account in fourteen twenty-five between the prior of Berchester-Oxford and one of his cannons gives us their price, at least as it was stated upon that particular occasion, namely five oxhides at twelve shillings, five cowhides at seven shillings and three pints, thirty-six sheepskins of two years old at nine shillings, sixteen calfskins at two shillings. In fourteen twenty-five, twelve shillings contained about the same quantity of silver as four and twenty shillings of our present money. An ox hide, therefore, was in this account valued at the same quantity of silver as four shillings, four-fifths of our present money. Its nominal price was a good deal lower than at present. But at the rate of six shillings in eight pints the quarter, twelve shillings wood in those times have purchased fourteen bushels and four-fifths of a bushel of wheat, which at three and six pints the bushel wood in the present times cost fifty-one shillings four pints. An ox hide, therefore, would in those times have purchased as much corn as ten shillings and three pints would purchase at present. Its real value was equal to ten shillings and three pints of our present money. In those ancient times, when the cattle were half-starved during the greater part of the winter, we cannot suppose that they were of a very large size. An ox hide, which weighs four stone of sixteen pounds of adder de poise is not in the present times reckoned a bad one, and in those ancient times would probably have been reckoned a very good one. But at half a crown the stone, which at this moment, February 1773, I understand to be the common price such a hide would at present cost only ten shillings. Though its nominal price, therefore, is higher in the present than it was in those ancient times, its real price, the real quantity of subsistence which it will purchase or command is rather somewhat lower. The price of cow hides, as stated in the above account, is nearly in the common proportion to that of ox hides. That of sheep skins is a good deal above it. They had probably been sold with the wool. That of calf skins, on the contrary, is greatly below it. In countries where the price of cattle is very low, the calves, which are not intended to be reared in order to keep up the stock, are generally killed very young, as was the case in Scotland twenty or thirty years ago. It saves the milk, which their price would not pay for. Their skins, therefore, are commonly good for little. The price of raw hides is a good deal lower at present than it was a few years ago, owing probably to the taking of the duty upon seal skins and to the allowing for limited time the importation of raw hides from Ireland and from the plantations duty-free which was done in 1769. Take the whole of the present century at an average, their real price has probably been somewhat higher than it was in those ancient times. The nature of the commodity renders it not quite so proper for being transported to distant markets as wool. It suffers more by keeping. A salted hide is reckoned inferior to a fresh one and sells for a lower price. This circumstance must necessarily have some tendency to sink the price of raw hides produced in a country which does not manufacture them but is obliged to export them and comparatively to raise that of those produced in a country which does manufacture them. It must have some tendency to sink their price in a barbarous and to raise it in an improved and manufacturing country. It must have had some tendency therefore to sink it in ancient and to raise it in modern times. Our tanners besides have not been quite so successful as our clothiers in convincing the wisdom of the nation that the safety of the commonwealth depends upon the prosperity of their particular manufacturer. They have accordingly been much less favored. The exportation of raw hides has indeed been prohibited and declared in nuisance but their importation from foreign countries has been subjected to a duty and though this duty has been taken off from those of Ireland and the plantations for the limited time of five years only yet Ireland has not been confined to the market of Great Britain for the sale of its surplus hides or of those which are not manufactured at home. The hides of common cattle have but within these few years been put among the enumerated commodities which the plantations can send nowhere but to the mother country. Neither has the commerce of Ireland been in this case oppressed hitherto in order to support the manufacturers of Great Britain. Whatever regulations tend to sink the price either of wool or of raw hides below what it naturally would be must in an improved and cultivated country have some tendency to raise the price of butchers meat. The price both of the great and small cattle which are fed on improved and cultivated land must be sufficient to pay the rent which the landlord and the profit which the farmer has reason to expect from improved and cultivated land. If it is not they will soon cease to feed them. Whatever part of this price therefore is not paid by the wool and the hide must be paid by the carcass. The less there is paid for the one the more must be paid for the other. In what manner this price is to be divided upon the different parts of the beast is indifferent to the landlords and farmers provided it is all paid to them. In an improved and cultivated country therefore their interest as landlords and farmers cannot be much affected by such regulations though their interest as consumers may by the rise in the price of provisions. It would be quite otherwise however in an unimproved and uncultivated country where the greater part of the lands could be applied to no other purpose but the feeding of cattle and where the wool and the hide made the principal part of the value of those cattle. Their interest as landlords and farmers would in this case be very deeply affected by such regulations and their interest as consumers very little. The fall and the price of the wool and the hide would not in this case raise the price of the carcass because the greater part of the lands of the country being applicable to no other purpose but the feeding of cattle the same number would still continue to be fed. The same quantity of butcher's meat would still come to market. The demand for it would be no greater than before. Its price therefore would be the same as before. The whole price of cattle would fall and along with it both the rent and the profit of all those lands of which cattle was the principal produce that is of the greater part of the lands of the country. The perpetual prohibition of the exportation of wool which is commonly but very falsely ascribed to Edward III would in the then circumstances of the country have been the most destructive regulation which could well have been thought of. It would not only have reduced the actual value of the greater part of the lands in the kingdom but by reducing the price of the most important species of small cattle it would have retarded very much its subsequent improvement. The wool of Scotland fell very considerably in its price and consequence of the Union with England by which it was excluded from the great market of Europe and confined to the narrow one of Great Britain. The value of the greater part of the lands in the southern countries of Scotland which are chiefly a sheep country would have been very deeply affected by this event had not the rise in the price of butchers meat fully compensated the fall in the price of wool. As the efficacy of human industry in increasing the quantity either a wool or of raw hides is limited so far as it depends upon the produce of the country where it is exerted so it is uncertain so far as it depends upon the produce of other countries. It so far depends not so much upon the quantity which they produce as upon that which they do not manufacture and upon the restraints which they may or may not think proper to impose upon the exportation of this sort of rude produce. These circumstances as they are altogether independent of domestic industry so then necessarily render the efficacy of its efforts more or less uncertain and multiplying this sort of rude produce therefore the efficacy of human industry is not only limited but uncertain. In multiplying another very important sort of rude produce the quantity of fish that is brought to market it is likewise both limited and uncertain. It is limited by the local situation of the country by the proximity or distance of its different provinces from the sea by the number of its lakes and rivers and by what may be called the fertility or barreness of those seas, lakes and rivers as to this sort of rude produce. As population increases as the annual produce of the land and labor of the country grows greater and greater there come to be more buyers of fish and those buyers too have a greater quantity and variety of other goods or what is the same thing the price of a greater quantity and variety of other goods to buy with. But it will generally be impossible to supply the great and extended market without employing a quantity of labor greater than in proportion to what had been requisite for supplying the narrow and confined one. A market which from requiring only one thousand comes to require annually ten thousand ton of fish can seldom be supplied without employing more than ten times the quantity of labor which had before been sufficient to supply it. The fish must generally be sought for at a greater distance larger vessels must be employed and more expensive machinery of every kind made use of. The real price of this commodity therefore naturally rises in the progress of improvement. It has accordingly done so I believe more or less in every country. Though the success of a particular day's fishing may be a very uncertain matter yet the local situation of the country being supposed the general efficacy of industry and bringing a certain quantity of fish to market taking the course of a year or of several years together it may perhaps be thought is certain enough and it no doubt is so. As it depends more however upon the local situation of the country then upon the state of its wealth and industry as upon this account it may in different countries be the same in very different periods of improvement and very different in the same period. Its connection with the state of improvement is uncertain and it is of this sort of uncertainty that I am here speaking. In increasing the quantity of the different minerals and metals which are drawn from the bowels of the earth that of the more precious ones particularly the efficacy of human industry seems not to be limited but to be altogether uncertain. The quantity of the precious metals which is to be found in any country is not limited by anything in its local situation such as the fertility or barrenness of its own minds. Those metals frequently abound in countries which possess no minds. Their quantity in every particular country seems to depend upon two different circumstances. First upon its power of purchasing upon the state of its industry upon the annual produce of its land and labor and consequence of which it can afford to employ a greater or a smaller quantity of labor and subsistence in bringing or purchasing such superfluities as gold and silver either from its own minds or from those of other countries and secondly upon the fertility or barrenness of the minds which may happen at any particular time to supply the commercial world with those metals. The quantity of those metals in the country's most remote from the minds must be more or less affected by this fertility or barrenness on account of the easy and cheap transportation of those metals of their small bulk and great value. Their quantity in China and in the stand must have been more or less affected by the abundance of the minds of America. So far as their quantity in any particular country depends upon the former of those two circumstances the power of purchasing their real price like that of all other luxuries and superfluities is likely to rise with the wealth and improvement of the country and to fall with his poverty and depression. Countries which have a great quantity of labor and subsistence to spare can afford to purchase any particular quantity of those metals at the expense of a greater quantity of labor and subsistence than countries which have less to spare. So far as their quantity in any particular country depends upon the latter of those two circumstances the fertility or barrenness of the minds which happen to supply the commercial world their real price the real quantity of labor and subsistence which they will purchase or exchange for will no doubt sink more or less in proportion to the fertility and rise in proportion to the barreness of those minds. The fertility or barrenness of the minds however which may happen at any particular time to supply the commercial world is a circumstance which it is evident may have no sort of connection with the state of industry in a particular country. It seems even to have no very necessary connection with that of the world in general. As arts and commerce indeed gradually spread themselves over a greater and a greater part of the earth the search for new minds being extended over a wider surface may have somewhat a better chance for being successful than when confined within narrower bounds. The discovery of new minds however as the old ones come to be gradually exhausted is a matter of the greatest uncertainty and such as no human skill or industry can ensure. All indications it is acknowledged are doubtful and the actual discovery and successful working of a new mind can alone ascertain the reality of its value or even of its existence. In this search there seem to be no certain limits either to the possible success or to the possible disappointment of human industry. In the course of a century or two it is possible that new minds may be discovered more fertile than any that have ever yet been known and it is just equally possible that the most fertile mind then known may be more barren than any that was wrought before the discovery of the minds of America. Whether the one or the other of those two events may happen to take place is of very little importance to the real wealth and prosperity of the world to the real value of the annual produce of the land and labor of mankind. Its nominal value the quantity of gold and silver by which this annual produce could be expressed or represented would no doubt be very different but its real value the real quantity of labor which it could purchase or command would be precisely the same. A shilling might in the one case represent no more labor than a penny does at present and a penny in the other might represent as much as a shilling does now. But in the one case he who had a shilling in his pocket would be no richer than he who has a penny at present and in the other he who had a penny would be just as rich as he who has a shilling now. The cheapness and abundance of gold and silver plate would be the sole advantage which the world could derive from the one event and the dearness and scarcity of those trifling superfluities the only inconvenience it could suffer from the other. End of Book 1 Chapter 11 Part 7 Part 8 of Chapter 11 of Book 1 of the wealth of nations This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer please visit LibriVox.org Recording by Stephen Escalera The Wealth of Nations by Adam Smith Part 8 of Chapter 11 of Book 1 of the rent of land Conclusion of the digression concerning the variations in the value of silver The greater part of the writers who have collected the money price of things in ancient times seem to have considered the low money price of corn and of goods in general or in other words the high value of gold and silver as a proof not only of the scarcity of those metals but of the poverty and barbarism of the country at the time when it took place. This notion is connected with the system of political economy which represents national wealth as consisting in the abundance and national poverty in the scarcity of gold and silver. A system which I shall endeavor to explain and examine at a great length in the fourth book of this inquiry. I shall only observe at present that the high value of the precious metals can be no proof of the poverty or barbarism of any particular country at the time when it took place. It is a proof only of the barrenness of the mines which happened at that time to supply the commercial world. A poor country as it cannot afford to buy more so it can as little afford to pay dearer for gold and silver than a rich one. And the value of those metals therefore is not likely to be higher in the former than in the latter. In China a country much richer than any part of Europe the value of the precious metals is much higher than in any part of Europe. As the wealth of Europe indeed has increased greatly since the discovery of the mines of America so the value of gold and silver are gradually diminished. This diminution of their value however has not been owing to the increase of the real wealth of Europe of the annual produce of its land and labor but to the accidental discovery were known before. The increase of the quantity of gold and silver in Europe and the increase of its manufacturers and agriculture are two events which though they have happened nearly about the same time yet have risen from very different causes and have scarce any natural connection with one another. The one has arisen from a mere accident in which neither prudence nor policy either had or could have any share. The other from the fall of the feudal system and from the establishment of a government which afforded to industry the only encouragement which it requires some tolerable security that it shall enjoy the fruits of its own labor. Poland where the feudal system still continues to take place is at this day as beggarly a country as it was before the discovery of America. The money price of corn however has risen. The real value of the precious metals has fallen in Poland in the same manner as in other parts of Europe. Their quantity therefore to the annual produce of its land and labor. This increase of the quantity of those metals however has not it seems increase that annual produce has neither improved the manufacturers and agriculture of the country nor mended the circumstances of its inhabitants. Spain and Portugal the countries which possess the mines are after Poland perhaps the two most beggarly countries in Europe. The value of the precious metals however must be lower in Spain and Portugal than in any other part of Europe as they come from those countries to all other parts of Europe loaded not only with a freight and an insurance but with the expense of smuggling their exportation being either prohibited or subjected to a duty. In proportion to the annual produce of the land and labor therefore their quantity must be greater in those countries than in any other part of Europe. Those countries however are poorer than the greater part of Europe. Though the feudal system has been abolished in Spain and Portugal it has not been succeeded by much better. As the low value of gold and silver therefore is no proof of the wealth and flourishing state of the country where it takes place so neither is their high value or the low money price either of goods in general or of corn in particular any proof of its poverty and barbarism. But though the low money price either of goods in general or of corn in particular be no proof of the poverty or barbarism of the times the low money price of some particular sorts of goods such as cattle poultry game of all kinds etc in proportion to that of corn is a most decisive one. It clearly demonstrates first their great abundance in proportion to that of corn and consequently the great extent of the land which they occupied in proportion to what was occupied by corn. And secondly the low value of this land in proportion to that of corn land and consequently the uncultivated and unimproved state of the far greater part of the lands of the country. It clearly demonstrates that the stock and population of the country did not bear the same proportion to the extent of its territory which they commonly do in civilized countries and that society was at that time and in that country but in its infancy. From the high or low money price either of goods in general or of corn in particular we can infer only that the mines which at that time happen to supply the commercial world with gold and silver or fertile or barren not that the country was rich or poor. But from the higher low money price of some sorts of goods in proportion to that of others we can infer with a degree of probability that approaches almost to certainty that it was rich or poor that the greater part of its lands were improved or unimproved and that it was either in a more or less barbarous state or in a more or less civilized one. Any rise in the money price of goods which proceeded altogether from the degradation of the value of silver would affect all sorts of goods equally and raise their price universally a third or a fourth or a fifth part higher according as silver happen to lose a third or a fourth or a fifth part of its former value. But the rise in the price of provisions which has been the subject of so much reasoning and conversation does not affect all sorts of provisions equally. Taking the course of the present century at an average the price of corn it is acknowledged even by those who account for this rise by the degradation of the value of silver has risen much less than that of some other sorts of provisions. The rise in the price of those other sorts of provisions therefore cannot be owing altogether to the degradation of the value of silver. Some other causes must be taken into the account and those which have been above assigned will perhaps without having recourse to the supposed degradation of the value of silver sufficiently explained this rise in those particular sorts of provisions of which the price has actually risen in proportion to that of corn. As to the price of corn itself it has during the 64 first years of the present century and before the late extraordinary course of bad seasons been somewhat lower than it was during the 64 last years of the preceding century. This fact is attested not only by the accounts of Windsor Market but by the public fires of all the different counties of Scotland and by the accounts of several different markets in France which have been collected with great diligence and fidelity by Mr. Missant's and by Mr. Dupri de Semal. The evidence is more complete than could well have been expected in a matter which is naturally so very difficult to be ascertained. As to the high price of corn during these last 10 or 12 years it can be sufficiently accounted for from the badness of the seasons without supposing any degradation in the value of silver. The opinion therefore that silver is continually sinking in its value seems not to be founded upon any good observations either upon the prices of corn or upon those of other provisions. The same quantity of silver it may perhaps be said will in the present times even according to the account which has been here given purchase a much smaller quantity of several sorts of provisions than it would have done during some part of the last century and to ascertain whether this change be owing to a rise in the value of those goods or to a fall on the value of silver is only to establish a vain and useless distinction which can be of no sort of service to the man who has only a certain quantity of silver to go to market with or a certain fixed revenue and money. I certainly do not pretend that the knowledge of this distinction will enable him to buy cheaper. It may not however upon that account be altogether useless. It may be of some use to the public by affording an easy proof of the prosperous condition of the country. If the rise in the price of some sorts of provisions be owing altogether to a fall in the value of silver it is owing to a circumstance from which nothing can be inferred but the fertility of the American minds. The real wealth of the country the annual produce of its land and labor may not withstanding the circumstance be either gradually declining as in Portugal and Poland or gradually advancing as in most other parts of Europe. But if this rise in the price of some sorts of provisions be owing to a rise in the real value of the land which produces them to its increased fertility or in consequence of more extended improvement and good cultivation to its having been rendered fit for producing corn it is owing to a circumstance which indicates in the clearest manner the prosperous and advancing state of the country. The land constitutes by far the greatest the most important and the most durable part of the wealth of every extensive country. It may surely be of some use or at least it may give some satisfaction to the public to have so decisive a proof of the increasing value of by far the greatest the most important and the most durable part of its wealth. It may too be of some use to the public and regulating the pecuniary reward of some of its inferior servants. If this rise in the price of some sorts of provisions be owing to a fall in the value of silver their pecuniary reward provided it was not too large before ought certainly to be augmented in proportion to the extent of this fall. If it is not augmented their real recompense will evidently be so much diminished. But if this rise of price is owing to the increased value in consequence of the improved fertility of the land which produces such provisions it becomes a much nicer matter to judge either in what proportion any pecuniary reward ought to be augmented or whether it ought to be augmented at all. The extension of improvement and cultivation as it necessarily raises more or less in proportion to the price of corn that of every sort of animal food so it as necessarily lowers that of I believe every sort of vegetable food it raises the price of animal food because a great part of the land which produces it being rendered fit for producing corn must afford to the landlord and the farmer the rent and profit of corn land it lowers the price of vegetable food because by increasing the fertility of the land it increases its abundance the improvements of agriculture too introduced many sorts of vegetable food which requiring less land and not more labor than corn come much cheaper to market such our potatoes and maize or what is called Indian corn the two most important improvements which the agriculture of Europe perhaps which Europe itself has received from the great extension of its commerce and navigation many sorts of vegetable food besides which in the rude state of agriculture are confined to the kitchen garden and raised only by the spade come in its improved state to be introduced into common fields and to be raised by the plow such as turnips carrots cabbages etc if in the progress of improvement therefore the real price of one species of food necessarily rises that of another as necessarily falls and it becomes a matter of more nicety to judge how far the rise in the one may be compensated by the fall and the other when the real price of butchers meat has once got to its height which with regard to every sort except perhaps that of hogs flesh it seems to have done through a great part of England more than a century ago any rise which can afterwards happen in that of any other sort of animal food cannot much affect the circumstances of the inferior ranks of people the circumstances of the poor through a great part of England cannot surely be so much distressed by any rise in the price of poultry fish wildfowl or venison as they must be relieved by the fall and that of potatoes in the present season of scarcity the high price of corn no doubt distresses the poor but in times of moderate plenty when corn is at its ordinary or average price the natural rise in the price of any other sort of rude produce cannot much affect them they suffer more perhaps by the artificial rise which has been occasioned by taxes in the price of some manufactured commodities as of salt soap leather candles malt beer ale etc effects of the progress of improvement upon the real price of manufacturers it is the natural effect of improvement however to diminish gradually the real price of almost all manufacturers that of the manufacturing workmanship diminishes perhaps in all of them without exception in consequence of better machinery of greater dexterity and of a more proper division and distribution of work all of which are the natural effects of improvement a much smaller quantity of labor becomes requisite for executing any particular piece of work and though in consequence of the flourishing circumstances of the society the real price of labor should rise very considerably yet the great diminution of the quantity will generally much more than compensate the greatest rise which can happen in the price there are indeed a few manufacturers in which the necessary rise in the real price of the rude materials will more than compensate all the advantages which improvement can introduce into the execution of the work and carpenters and joiners work and in the coarser sort of cabinet work the necessary rise in the real price of more than compensate all the advantages which can be derived from the best machinery the greatest dexterity and the most proper division and distribution of work but in all cases in which the real price of the rude material either does not rise at all or does not rise very much that of the manufactured commodity sinks very considerably this diminution of price has in the course of the present and preceding century been most remarkable in those manufacturers of which the materials are the coarser metals a better movement of a watch than about the middle of the last century could have been bought for 20 pounds may now perhaps be had for 20 shillings in the work of cutlers and locksmiths and all the toys which are made of the coarser metals and in all those goods which are commonly known by the name of Birmingham and Sheffield Ware there has been during the same period a very great reduction of price though not altogether so great as in watchwork it has however been sufficient to astonish the workmen of every other part of Europe who in many cases acknowledge that they can produce no work of equal goodness for double or even for triple the price there are perhaps no manufacturers in which the division of labor can be carried further or in which the machinery employed admits of a greater variety of improvements than those of which the materials are the coarser metals in the clothing manufacture there has during the same period been no such sensible reduction of price the price of super fine cloth I have been assured on the contrary has within these five and twenty or thirty years risen somewhat in proportion to its quality owing it was said to a considerable rise in the price of the material which consists altogether of Spanish wool that of the Yorkshire cloth which is made altogether of English wool is said indeed during the course of the present century to have fallen a good deal in proportion to its quality quality however is so very disputable a matter that I look upon all information of this kind as somewhat uncertain and the clothing manufacture the division of labor is nearly the same now as it was a century ago and the machinery employed is not very different there may however have been some small improvements in both which may have occasion some reduction of price but the reduction will appear much more sensible and undeniable if we compare the price of this manufacture in the present times with what it was in a much remote period towards the end of the 15th century when the labor was probably much less subdivided and the machinery employed was much more imperfect than it is at present in 1487 being the fourth of Henry VII it was enacted that whosoever shall sell by retail a broad yard of the finest scarlet grain or of other grain cloth of the finest making above sixteen shillings shall forfeit forty shillings for every yard so sold sixteen shillings therefore containing about the same quantity of silver as four and twenty shillings of our present money was at that time reckoned not an unreasonable price for a yard of the finest cloth and as this is a sumptuary law such cloth it is probable had usually been sold somewhat dearer a guinea may be reckoned the highest price in the present times even though the quality of the cloths therefore should be supposed equal and that of the present times is most probably much superior yet even upon this supposition the money price of the finest cloth appears to have been considerably reduced since the end of the fifteenth century but its real price has been much more reduced six shillings and eight pence was then and long afterwards reckoned the average price of a quarter of wheat sixteen shillings therefore was the price of two quarters and more than three bushels of wheat valuing a quarter of wheat in the present times at eight and twenty shillings the real price of a yard of fine cloth must in those times have been equal to at least three pounds six shillings and six pence of our present money the man who bought it must have parted with the command of a quantity of labor and subsistence equal to what that sum would purchase in the present times the reduction in the real price of the coarse manufacture though considerable has not been so great as in that of the fine in fourteen sixty-three being the third of Edward the fourth it was enacted that no servant in husbandry nor common laborer nor servant to any artificer inhabiting out of a city or burl shall use or wear in their clothing any cloth above two shillings the broad yard in the third of Edward the fourth two shillings contained very nearly the same quantity of silver as four of our present money but the Yorkshire cloth which is now sold at four shillings the yard is probably much superior to any that was then made for the wearing of the very poorest order of common servants even the money price of their clothing therefore may in proportion to the quality be somewhat cheaper in the present than it was in those ancient times the real price is certainly a good deal cheaper ten pence was then reckoned what is called the moderate and reasonable price of a bushel of wheat two shillings therefore was the price of two bushels and near two pecks of wheat which in the present times at three shillings and six pence the bushel would be worth eight shillings and nine pence for a yard of this cloth the poor servant must have parted with the power of purchasing a quantity of subsistence equal to what eight shillings and nine pence would purchase in the present times this is a sumtuary law too restraining the luxury and extravagance of the poor their clothing therefore had commonly been much more expensive the same order of people are by the same law prohibited from wearing hose of which the price should exceed fourteen pence the pair equal to about eight and twenty pence of our present money but fourteen pence was in those times the price of a bushel and near two pecks of wheat which in the present times at three and six pence the bushel would cost five shillings and three pence we should in the present times consider this as a very high price for a pair of stockings to a servant of the poorest and lowest order he must however in those times have paid what was really equivalent to this price for them in the time of Edward IV the art of knitting stockings was probably not known in any part of Europe their hose were made of common cloth which may have been one of the causes of their dearness the first person that wore stockings in England is said to have been Queen Elizabeth she received them as a present from the Spanish ambassador but in the course and in the fine woolen manufacture the machinery employed was much more imperfect in those ancient than it is in the present times it has since received three very capital improvements besides probably many smaller ones of which it may be difficult to ascertain either the number or the importance the three capital improvements are first the exchange of the rock and spindle for the spinning wheel which with the same quantity of labor will perform more than double the quantity of work secondly the use of several very ingenious machines which facilitate and abridge in a still greater proportion the winding of the worsted and woolen yarn or the proper arrangement of the warp and wolf before they are put into the loom an operation which previous to the invention of those machines must have been extremely tedious and troublesome thirdly the employment of the fulling mill for thickening the cloth instead of treading it in water neither wind nor water mills of any kind were known in England so early as the beginning of the 16th century nor so far as I know in any other part of Europe north of the Alps they had been introduced into Italy some time before the consideration of these circumstances may perhaps in some measure explain to us why the real price both of the course and of the fine manufacturer was so much higher in those ancient than it is in the present times it costs a greater quantity of labor to bring the goods to market when they were brought thither therefore they must have purchased or exchanged for the price of a greater quantity the course manufacturer probably was in those ancient times carried on in England in the same manner as it always has been in countries where arts and manufacturers are in their infancy it was probably a household manufacturer in which every different part of the work was occasionally performed by all the different members of almost every private family but so as to be their work only when they had nothing else to do and not to be the principal business from which any of them derived the greater part of their subsistence the work which is performed in this manner it has already been observed comes always much cheaper to market than that which is the principal or sole fund of the workman's subsistence the fine manufacturer on the other hand was not in those times carried on in England but in the rich and commercial country of Flanders and it was probably conducted then in the same manner as now by people who derived the whole or the principal part of their subsistence from it it was besides a foreign manufacturer and must have paid some duty the ancient custom of tonnage and poundage at least to the king this duty indeed would not probably be very great it was not then the policy of Europe to restrain by high duties the importation of foreign manufacturers but rather to encourage it in order that merchants might be enabled to supply at as easy a rate as possible the great men with the conveniences and luxuries which they wanted and which the industry of their own country could not afford them the consideration of these circumstances may perhaps in some measure explain to us why in those ancient times the real price of the course manufacturer was in proportion to that of the fine so much lower than in the present times conclusion of the chapter I shall conclude this very long chapter with observing that every improvement in the circumstances of the society tends either directly or indirectly to raise the real rent of land to increase the real wealth of the landlord his power of purchasing the labor or the produce of the labor of other people the extension of improvement and cultivation tends to raise it directly the landlord's share of the produce necessarily increases with the increase of the produce that rise in the real price of those parts of the rude produce of land which is first the effect of the extended improvement and cultivation and afterwards the cause of their being still further extended the rise in the price of cattle for example tends to to raise the rent of land directly and in a still greater proportion the real value of the landlord's share his real command of the labor of other people not only rises with the real value of the produce but the proportion of his share to the whole produce rises with it that produce after the rise in its real price requires no more labor to collect it than before a smaller proportion of it will therefore be sufficient to replace with the ordinary profit the stock which employs that labor a greater proportion of it must consequently belong to the landlord all those improvements in the productive powers of labor which tend directly to reduce the rent price of manufacturers tend indirectly to raise the real rent of land the landlord exchanges that part of his rude produce which is over and above his own consumption or what comes to the same thing the price of that part of it for manufactured produce whatever reduces the real price of the latter raises that of the former an equal quantity of the former becomes thereby equivalent to a greater quantity of the latter and the landlord is enabled to purchase a greater quantity of the conveniences ornaments or luxuries which he has occasion for every increase in the real wealth of the society every increase in the quantity of useful labor employed within it tends indirectly to raise the real rent of land a certain proportion of this labor naturally goes to the land a greater number of men and cattle are employed in its cultivation the produce increases with the increase of the stock which is thus employed in raising it and the rent increases with the produce the contrary circumstances the neglect of cultivation and improvement the fall on the real price of any part of the rude produce of land the rise in the real price of manufacturers from the decay of manufacturing art and industry the declension of the real wealth of the society all tend on the other hand to lower the real rent of land to reduce the real wealth of the landlord to diminish his power of purchasing either the labor or the produce of the labor of other people the whole annual produce of the land and labor of every country or what comes to the same thing the whole price of that annual produce naturally divides itself it has already been observed into three parts the rent of land the wages of labor and the profits of stock and constitutes a revenue to three different orders of people to those who live by rent to those who live by wages and to those who live by profit these are the three great original and constituent orders of every civilized society from whose revenue that of every other order is ultimately derived the interest of the first of those three great orders it appears from what has been just now said is strictly and inseparably connected with the general interest of the society whatever either promotes or obstructs the one necessarily promotes or obstructs the other when the public deliberates concerning any regulation of commerce or police the proprietors of land never can mislead it with a view to promote the interest of their own particular order at least if they have any tolerable knowledge of that interest they are indeed too often defective in this tolerable knowledge they are the only one of the three orders whose revenue costs them neither labor nor care but comes to them as it were of its own accord and independent of any plan or project of their own that indolence which is the natural effect of the ease and security of their situation renders them too often not only ignorant but incapable of that application of mind which is necessary in order to foresee and understand the consequence of any public regulation the interest of the second order that of those who live by wages is as strictly connected with the interest of the society is that of the first the wages of the laborer it has already been shown are never so high as when the demand for labor is continually rising or when the quantity employed is every year increasing considerably when this real wealth of the society becomes stationary his wages are soon reduced to what is barely enough to enable him to bring up a family or to continue the race of laborers when the society declines they fall even below this the order of proprietors may perhaps gain more by the prosperity of the society than that of laborers but there is no order that suffers so cruelly from its decline but though the interest of the laborer is strictly connected with that of the society he is incapable either of comprehending that interest or of understanding its connection with his own his condition leaves him no time to receive the necessary information and his education and habits are commonly such as to render him unfit to judge even though he was fully informed in the public deliberations therefore his voice is little heard and less regarded except upon particular occasions when his clamor is animated set on and supported by his employers not for his but their own particular purposes his employers constitute the third order that of those who live by profit it is the stock that is employed for the sake of profit which puts into motion the greater part of the useful labor of every society the plans and projects of the employers of stock regulate and direct all the most important operation of labor and profit is the end proposed by all those plans and projects but the rate of profit does not, like rent and wages, rise with the prosperity and fall with the declension of the society on the contrary it is naturally low in rich and high in poor countries and it is always highest in the countries which are going fastest to ruin the interest of this third order therefore has not the same connection with the general interest of the society as that of the other two merchants and master manufacturers are in this order the two classes of people who commonly employ the largest capitals and who by their wealth draw to themselves the greatest share of the public consideration as during their whole lives they are engaged in plans and projects they have frequently more acuteness of understanding than the greater part of country gentlemen as their thoughts however are commonly exercised rather about the interest of their own particular branch of business then about that of the society their judgment even when given with the greatest candor which it has not been upon every occasion is much more to be depended upon with regard to the former of those two objects than with regard to the latter their superiority over the country gentlemen is not so much in their knowledge of the public interest as in they're having a better knowledge of their own interest than he has of his it is by the superior knowledge of their own interest that they have frequently imposed upon his generosity and persuaded him to give up both his own interest and that of the public from a very simple but honest conviction that their interest and not his was the interest of the public the interest of the dealers however in any particular branch of trade or manufacturers is always in some respects different from and even opposite to that of the public to widen the market and to narrow the competition is always the interest of the dealers to widen the market may frequently be agreeable enough to the interest of the public but to narrow the competition must always be against it and can only serve to enable the dealers by raising their profits above what they naturally would be to levy for their own benefit and absurd tax upon the rest of their fellow citizens the proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution and ought never to be adopted till after having been long and carefully examined not only with the most scrupulous but with the most suspicious attention it comes from an order of men whose interest is never exactly the same with that of the public who have generally an interest to deceive and even to oppress the public and who accordingly have upon many occasions both deceived and oppressed it end of book one chapter eleven part eight end of book one of the wealth of nations of the causes of improvement in the productive powers of labor and of the order according to which it's produce is naturally distributed among the different ranks of the people