第1章

MASTEROFTRINITYCOLLEGE。

CAMBRIDGE：

PRINTEDATTHEUNIVERSITYPRESS。

1862。

TO

HISROYALHIGHNESS

THEPRINCEOFWALES。IwasdeeplysensibleofthehonourofhavingtodeliverthefollowingLecturestoyourRoyalHighness，bythedirectionofyourillustriousFather，uponwhosevirtuesandwisdomIlookbackwithavenerationwhichIcannotexpress。ItwasahighgratificationtometohaveyourRoyalhighness’sattentiongiventotheseLectureswiththatintelligenceandpunctualitywhichyourRoyalHighnessgavetoallyourUniversityoccupations。AsthematteroftheLecturesrequiresrepeatedthought，Ihavewished，formyownsatisfactionatleast，toputitinamorepermanentformthanaspokenlecture。IfithadpleasedourAlmightyFathertosparetousalittlelongeryourgreatandgoodparent，hiswisdommighthave

selectedforyourRoyalHighness’sfurtherconsiderationwhatisbestworthnoticeinwhatIhavesaid。Iventuretohopethat

thegreatProblemswhichIhavehadtodealwithinLecturesV。andVI。namely，thenatureoftherecentagricultural

progressofEngland，andthechangeswhicharetakingplaceintheotherpartsofthevastBritishEmpiremustberegardedbyyourRoyalHighnesswithinterest，evenifthesolutionswhichIhavegivenofthoseproblemsbeincomplete。WithafirmconfidencethatthedestiniesofthisLandandofthisEmpire，sofarastheydependuponyourRoyalHighness’s

goodnessofhcartandwillingnesstolistentoenlightenedcounsels，arefitllofthebrightestpromise，andwithprayersthat

yourRoyalHighnessmaylongenjoythehappinessofwhichyouhavenowthenearprospect，IhavethehonourtobeYourRoyalhighness’sMostfaithfulanddevotedServant，W。WHEWELL。

PREFACE。ThefollowingLecturesweredeliveredattherequestofoneofthewisestandbestfatherswhohaveeverlived，forthe

instructionofasononwhoseeducationhebestowedmuchcarefulthought：andindeedthateducationwasamatterof

nationalaswellasoffamilyconcern，liekindlyjudgedthatIcoulddeliverashortcourseofLecturesonPoliticalEconomy

whichmightforwardhispurpose：andIwillinglyundertookthetask，renderedacceptablebytheprospectofsubmittingto

himafterwardsthepurportofwhatIhadsaidintheLectures；andofhavingthegratificationandtheadvantageofhearing

hisremarks，instructiveandinterestingastheyalwayswere。ThissatisfactionIwasnotpermittedtoenjoy。TheAll—wise

Disposerdidnotallowthefathertoseewithhisearthlyeyesthecompletionofhiswell—devisedplansforhisson’seducation：thoughIdoubtnotthatthoseplanswillbeartheirfruitinnationalblessings。TheschemeofthefollowingLectureswill，Ihope，carrywithititsownexcuse。Itseemedtomeunwiseonsuchanoccasion

toaimatanyoriginalitybeyondthatwhichselectsthebestpassagesofwritersofacknowledgedauthorityandweighsthem

againstoneanother。AndthoughtheextractsgivenintheearlierofthefollowingLecturesmaybysomebethoughtlightly

of；asbeingcommon—places，theyarccommonplaceswhichyoungmenofrank，suchasthosetowhomtheseLectureswere

addressed，oughttoknow，andwhichtheywerenotlikelytolearnunlesstheywerebroughtbeforetheminsomesuchway

asthis。ThelaterextractsandthereflexionswhichIhaveaddedtothemwillbefound，Ithink，tocontainviewsofwhichthe

importanceisnowonlybeginningtobedulyfelt。

TRINITYLODGE，Dec。18，1862。

ThefollowingaretheeditionsofbookswhicharcprincipallyreferredtointhefollowingLectures：

Smith’sWealthofNations，editedwithNotesbyJ。R。McCulloch。5thedition，1859。J。R。McCulloch，Art。PoliticalEconomyintheEncyclopaediaBritannica，recast，andin825publishedasPrinciplesof

PoliticalEconomy；andinseveralsubsequenteditions。

Malthus，OnDefinitionsinPoliticalEconomy。1831。

Ricardo，PrinciplesofPoliticalEconomyandTaxation。1817。

Chalmers’sPoliticalEconomy，inconnexionwiththeMoralStateandProspectsofSociety。1832。

HarrietMartineau，IllustrationsofPoliticalEconomy。1832，&；c。

Senior，AppendixtoWhately’sElementsofLogic。1848。

TraversTwiss，ViewoftheProgressofPoliticalEconomy。1847。

Jones，OnWealthandTaxation：PartI。Rent。1831。

JohnStuartMill，PrinciplesofPoliticalEconomy。1848。

DeLavergne，Essaisurl’EconomieRuraledel’Angleterre。1858。

F。Bastiat，EssaysonPoliticalEconomy，（EnglishTranslation。1853）。

LECTUREI。

OftheProprietyofcertainTermsemployedinPoliticalEconomy。MyobjectintheseLecturesonPoliticalEconomywillbetoexplaintheopinionswhichhavebeendeliveredonsomeofthe

leadingquestionsbelongingtothesubjectbysuccessiveeminentwriters，andtodecideamongthese。Ipropoundnosystem

ofmyown。IfIcanmakemyhearersknow，understand，andestimatesomeofthemoststrikingandmoreimportant

passagesofthebestwritersonPoliticalEconomy；thiswillbethebestinstructionwhichIcangiveonthesubject。AndI

mayadd，thattheseimportantpassagesstandardandclassicalpassageswemaycallthemareimportantinliteratureaswell

asinPoliticalEconomy；sothatapersonversedinEnglishliteratureisexpectedtoknowsuchspecimensofoureminentauthors。SomeofthesequestionsarequestionsofDefinitionquestionswhetherthisorthatistheproperDefinitionofcertainwords。

OthersciencesaswellasPoliticalEconomyhavehadsuchcontroversiesinthecourseoftheirhistory；andyoumaythink

perhapsthatsuchquestionsareoflittleconsequence，sincetheyarequestionsofwordsonly。Youask，maywenotdefine

ourtermsasweplease？NoforwemustdefineourtermssoastobeabletoassertTruePropositions。Thescienceof

PoliticalEconomydoesnotrestuponDefinitions。Itrestsuponfacts。Butfactsaretobedescribedinageneralmannerthat

is，bymeansofgeneralterms。Andthesetermsshouldbewellchosen，soastoenableustoasserttruePropositions。Ifour

Definitionsdothis，theyarenotbad，merelybecausetheboundarycasesareperplexing。

WhatisWealth？WecannotdobetterthanbeginwithAdamSmith’sWealthofNations。Jtisabookonwhichallsubsequentbookson

PoliticalEconomyrest。Anditisabookfullofactualfacts，andnotofmerehypotheticalcases。

NowspeakingoftheWealthofNations，whatdowemeanbyWealth？WhatistheDefinitionofit？

WewillseewhatMrMalthussays（Malthus，DefinPolit。Econ。p。10）：\"InadvertingtothetermsanddefinitionsofAdamSmith，inhisWealthofNations，Ithinkitwillbefoundthatliehasless

frequentlyandlessstrikinglydeviatedfromtherulesabovelaiddown，andthathehasmoreconstantlyanduniformlykeptin

viewtheparamountobjectofexplaininginthemostintelligiblemannerthecausesofthewealthofnations，accordingtothe

ordinaryacceptationoftheexpression，thananyofthesubsequentwritersintheScience，whohaveessentiallydifferedfrom

him。Hisfaultsinthisrespectarenotsomuchthathehasoftenfallenintothecommonerror，ofusingtermsiiiadifferent

sensefromthatinwhichtheyareordinarilyappliedinsociety，butthatheissometimesdeficientintheprecisionofhisdefinitions；anddoesnotalways，whenadopted，adheretothemwithsufficientstrictness。\"Hisdefinitionofwealth，forinstance，isnotsufficientlyaccurate；nordoesheadheretoitwithsufficientuniformity：yetit

cannotbedoubtedthathemeansbythetermgenerallythematerialproductswhicharenecessary，useful，andagreeableto

man，andarenotfurnishedbynatureinunlimitedabundance；andIownIfeelquiteconvincedthatitisinthissenseinwhich

itismostgenerallyunderstoodinsociety，andinwhichitmaybemostusefullyapplied，inexplainingthecausesofthe

wealthofnations。\"

OnthesamesubjectwehaveMrSenior’sremarks，whichoccurinanAppendixtoDrWhately’sLogic。Wealth。LordLauderdalehasdefinedwealthtobe`allthatmandesires。’MrMalthus，`thosematerialobjectswhichare

necessary，useful，oragreeable。’AdamSmithconfinesthetermtothatportionoftheresultsoflandandlabourwhichis

capableofbeingaccumulated。TheFrenchEconomists，tothenetproduceofland。MrMcCullochandMrStorch，tothose

materialproductswhichhaveexchangeablevalue：accordingtoColonelTorrens，itconsistsofarticleswhichpossessutility

andareproducedbysomeportionofvoluntaryeffort。M。Saydivideswealthintonaturalandsocial，andappliesthelatterto

whateverissusceptibleofexchange。Itwillbeobservedthattheprincipaldifferencebetweenthosedefinitionsconsistsintheadmissionorrejectionofthequalifications`exchangeable’and`material。\"’AsMrSeniorsays，onemainpointis，whetherwealthshallincludewhatisnotmaterial。OnthispointMrMalthussays（Def。p。71）\"MrMcCulloch，intheArticleonPoliticalEconomy，whichhepublishedintheEncyclopaediaBritannicahadexcluded

thesekindsofgratification[immaterialkinds]fromhisdefinitionofwealth，andhadgivensuchreasonsforthisexclusion，as

wouldfullyhaveconvincedmeofitspropriety，ifIhadnotbeenconvincedbefore。Heobservesthat，`ifPoliticalEconomy

weretoembraceadiscussionoftheproductionanddistributionofallthatisusefulandagreeable，itwouldincludewithin

itselfeveryotherscience；andthebestEncyclopaediawouldreallybethebesttreatiseonPoliticalEconomy。Goodhealthis

usefulanddelightful，andtherefore，onthishypothesis，thescienceofwealthoughttocomprehendthescienceofmedicine：

civilandreligiouslibertyarehighlyuseful，andthereforethescienceofwealthmustcomprehendthescienceofpolitics：

goodactingisagreeable，andtherefore，tobecomplete，thescienceofwealthmustembraceadiscussionoftheprinciplesof

thehistrionicart；andsoon。Suchdefinitionsareobviouslyworsethanuseless。Theycanhavenoeffectbuttogenerate

confusedandperplexednotionsrespectingtheobjectsandlimitsofthescience，andtopreventthestudenteveracquiringaclearanddistinctideaoftheinquiriesinwhichheisengaged。\"Thequestionthusoccurs，Doministersofreligion，education，justice；alsopoets，actors，physicians，addtothewealthofacountry？ThisquestionhasmorecommonlybeendiscussedwithreferencetoSmith’sdistinctionofproductiveandunproductive

labour，whichweshallthereforeconsider。

Isthedistinctionofproductiveandunproductivelabourasoliddistinction？

Smithsays（W。N。p。145）：\"Thereisonesortoflabourwhichaddstothevalueofthesubjectuponwhichitisbestowed；thereisanotherwhichhasno

sucheffect。Theformer，asitproducesavalue，maybecalledproductive，thelatterunproductivelabour。Thusthelabourof

amanufactureraddsgenerallytothevalueofthematerialswhichheworksupon，thatofhisownmaintenance，andofhis

master’sprofit。Thelabourofamenialservant，onthecontrary，addstothevalueofnothing。Thoughthemanufacturerhas

hiswagesadvancedtohimbyhismaster，heinrealitycostshimnoexpense，thevalueofthosewagesbeinggenerally

restored，togetherwithaprofit，intheimprovedvalueofthesubjectuponwhichhislabourisbestowed；butthemaintenance

ofamenialservantneverisrestored。Amangrowsrichbyemployingamultitudeofmanufacturers；hegrowspoorby

employingamultitudeofmenialservants。Thelabourofthelatter，however，hasitsvalue，anddeservesitsrewardaswellas

thatoftheformer；butthelabourofthemanufacturerfixesandrealisesitselfinsomeparticularsubjectorvendible

commodity，whichlastsforsometimeatleastafterthatlabourispast。Itis，asitwere，acertainquantityoflabourstocked

andstoredup，tobeemployed，ifnecessary，uponsomeotheroccasion。Thatsubject，or，whatisthesamething，thepriceof

thatsubject，canafterwards，ifnecessary，putintomotionaquantityoflabourequaltothatwhichhadoriginallyproducedit。

Thelabourofthemenialservant，onthecontrary，doesnotfix，orrealise，itselfintoanyparticularsubjectorvendible

commodity。Hisservicesgenerallyperishintheveryinstantoftheirperformance，andseldomleaveanytraceorvaluebehindthem，forwhichanequalquantityofservicecouldafterwardsbeprocured。\"ThedistinctionofproductiveandunproductivelabourhasbeenimpugnedbyMrMcCulloch：butonalargescaleitiswell

founded，whateverperplexitiestheremaybeindoubtfulcases。TheleadingpropositiononthissubjectisthatwhichSmith

asserts：\"Amangrowsrichbyemployingamultitudeofmanufacturers：hegrowspoorbyemployingamultitudeofmenial

servants。\"Theformerarecalledproductive，thelatterunproductivelabourers：andalllabourersbelongtotheoneorthe

otherastheycanbestbeclassedwiththeoneortheother。

IwilltakeMrMalthus’saccountofthecharacterandgeneraleffectofthetwokindsoflabour：\"Letussupposetwofertilecountrieswiththesamepopulationandproduce，inoneofwhichitwastheprideandpleasureof

thelandlordstoemploytheirrentschieflyinmaintainingmenialservantsandfollowers，and，intheother，chieflyinthe

purchaseofmanufacturesandtheproductsofforeigncommerce。Itisevidentthatthedifferentresultswouldbenearlywhat

Idescribedinspeakingoftheconsequencesofthedefinitionoftheeconomists。Inthecountry，wherethetastesandhabits

ofthelandlordsledthemtoprefermaterialconveniencesandluxuries，therewould，inthefirstplace，beinallprobabilitya

muchbetterdivisionoflandedproperty；secondly，supposingthesameagriculturalcapital，therewouldbeaverymuch

greaterquantityofmanufacturingandmercantilecapital；andthirdly，thestructureofsocietywouldbetotallydifferent。In

theonecountry，therewouldbealargebodyofpersonslivingupontheprofitsofcapital；intheother，comparativelyavery

smallone：intheonetherewouldbealargemiddleclassofsociety；intheotherthesocietywouldbedividedalmostentirely

betweenafewgreatlandlordsandtheirmenialsanddependents：intheonecountrygoodhouses，goodfurniture，good

clothes，andgoodcarriageswouldbeincomparativeabundance；whileintheother，theseconvenienceswouldbeconfinedtoaveryfew。\"NowIwouldask，whetheritwouldnotbethegrossestviolationofallcommonlanguage，andallcommonfeelingsandapprehensions，tosaythatthetwocountrieswereequallyrich。\"Butwhatarethegroundsonwhichitisallegedthatthereisnoessentialdifferencebetweenproductiveandunproductivelabour？Theyaresuchasthese。（Malth。Def。p。75）\"MrMcCullochhasdiscoveredthatthereisaresemblancebetweentheendaccomplishedbythemenial

servantordependentandbythemanufactureroragriculturist。\"Hesays，\"theendofallhumanlabouristhesame：thatis，to

increasethesumofnecessaries，comfortsandenjoyment，anditmustbelefttothejudgmentofeveryonetodeterminewhatproportionofthecomfortshewillhaveintheshapeofmenialservices，andwhatintheshapeofnaturalproducts。\"Undoubtedly。Butthequestionwithus，asPoliticalEconomists，isnotwhethermenshallemployonekindoflabouror

another；but，whatistheeffectoftheirchoiceonthewealthofacountry？Thatthesameendisanswereddoesnotmakeit

uselesstoclassifythemeans。Itisnotbecausearesemblancemaybediscoveredamongthemeans，thatwearetoidentifyall

suchmeans。

MrMalthuswellobserves，tothiseffect：\"MrMcCullochmightunquestionablydiscoversomeresemblancebetweenthesaltandthemeatwhichitseasons：theyboth

contribute，whenusedinproperproportions，tocomposeapalatableandnutritivemeal，andingeneralwemayleaveitto

thetasteanddiscretionoftheindividualtodeterminetheseproportions；butareweonthataccounttoconfoundthetwo

substancestogether，andtoaffirmthattheyareequallynutritive？Arewetodefineandapplyourtermsinsuchawayasto

makeitfollowfromourstatementsthatiftheindividualweretocompoundhisrepastofhalfsaltandhalfmeat，itwould

equallyconducetohishealthandstrength。\"

Further，thematteristhusargued：\"MrMcCullochstates，thatatasteforthegratificationsderivedfromtheunproductivelabourersofAdamSmith，`has

exactlythesameeffectuponnationalwealthasatastefortobacco，champagne，oranyotherluxury。\"’\"This，\"saysMr

Malthus，\"maybedirectlydeniedunlesswedefinewealthinsuchamanneraswillentitleustosaythattheenjoyments

derivedbyafewgreatlandlords，fromtheparadeofmenialservantsandfollowers，willtellaseffectuallyinanestimateof

wealthasalargemassofmanufacturersandforeigncommodities。ButwhenM。Chaptalendeavouredtoestimatethewealth

ofFrance，andMrColquhounthatofEngland，wedonotfindthevalueoftheseenjoymentscomputedinanyoftheirtables。

Andcertainlyifwealthmeanswhatitisunderstoodtomea。nincommonconversation，andinthelanguageofthehighest

authoritiesinthescienceofPoliticalEconomy，noeffectsonnationalwealthcanorwillbemoredistinctthanthosewhich

resultfromatasteformaterialconveniencesandluxuries，andatasteformenialservantsandfollowers。Theexchangeofthe

ordinaryproductsoflandformanufactures，tobacco，andchampagne，necessarilygeneratescapital；andthemoresuch

exchangesprevail，themoredothoseadvantagesprevailwhichresultfromthegrowthofcapitalandabetterstructureof

society；whileanexchangeofnecessariesformenialservices，beyondacertainlimitedamount，obviouslytendstocheckthe

growthofcapital，and，ifpushedtoaconsiderableextent，topreventaccumulationentirely，andtokeepacountry

permanentlyinasemi—barbarousstate。\"DrTraversTwiss，inhisViewoftheProgressofPoliticalEconomy，statesandcriticisestheopinionsofwritersonthissubject。HethusgivesanaccountofMrMalthus’sdoctrineonthissubject。MrMalthus，toavoidtheprejudicewhichprevailsagainstwhatiscalledunproductivelabour，hadproposedtocallsuch

labourpersonalservices。DrTwissremarks，\"Labourthen，he\"[MrMalthus]says，\"maybedistinguishedintotwokinds，productivelabour，andpersonalservices，

meaningbyproductivelabour，thatlabourwhichissodirectlyproductiveofmaterialwealth，astobecapableofestimation

inthequantityorvalueoftheobjectproduced，whichobjectiscapableofbeingtransferredwithoutthepresenceofthe

producer；andmeaningbypersonalservices，thatkindoflabourorindustry，whichhoweverhighlyusefulandimportant

someofitmaybe，andhowevermuchitmayconduceindirectly，totheproductionandsecurityofmaterialwealth，doesnot

realiseitselfonanyobjectwhichcanbevaluedandtransferredwithoutthepresenceofthepersonperformingsuchservice，

andcannotthereforebemadetoenterintoanestimateofnationalwealth。\"

This，\"saysDrTwiss，\"thoughdifferinginname，isessentiallythedoctrineofAdamSmith。\"

MrSeniorputsthedistinctionveryingeniously（Ency。Metrop。art。Polit。Econ。）：\"Itappearstous，\"liewrites，\"thatthedistinctionsthathavebeenattemptedtobedrawnbetweenproductiveand

unproductivelabourers，orbetweentheproducersofmaterialandimmaterialproductsorbetweencommoditiesorservices，

restondifferencesexistingnotinthethingsthemselves，butinthemodeinwhichtheyattractourattention。Inthosecasesin

whichourattentionisprincipallycalled，nottotheactofoccasioningthealteration，buttotheresultofthatact，tothething

（as）altered，economistshavetermedthepersonwhooccasionedthatalterationaproductivelabourer，ortheproducerofa

commodityormaterialproduced。Whereontheotherhand，ourattentionisprincipallycalled，nottothething（as）altered，

buttotheactofoccasioningthealteration，economistshavetermedthepersonoccasioningthealterationanunproductive

labourer，andhisexertions，services，orimmaterialproducts。Ashoemakeraltersleatherandthreadandwaxintoapairof

shoes。Ashoe—blackaltersadirtypairofshoesintoacleanpair。Inthefirstcase，ourattentioniscalledprincipallytothe

thingasaltered。Theshoemaker，therefore，issaidtomakeorproduceshoes。Inthecaseoftheshoe—black，ourattentionis

calledprincipallytotheactasperformed。Heisnotsaidtomakeorproducethecommodity，cleanshoes，buttoperformthe

serviceofcleaningthem。Ineachcase，thereisofcourseanactandaresult；butintheonecaseourattentioniscalledprincipallytotheact；intheother，totheresult。\"\"Itmighthavebeenperhapsmorecorrect，\"saysDrTwiss，\"tohaverepresentedtheshoe—blackasalteringblackinganddirty

shoesintocleanshoes。Iftheshoe—blackisaprivateservant，lieissimplyaninstrumentofhismastertoassisthiminthe

consumptionofblacking，whichconsumptiontakesplace，notwhenitisappliedtotheboot，foracleanbootisofmore

valuethanadirtyboot，butwhenthebootissoiledafresh。Themaster，therefore，reallyconsumestheblacking，andthe

servantassistshim。Ontheotherhand，theshoe—blackmaykeepastall，asisfrequentlyseeninthestreetsofParis，andhis

servicesmaybeatthecommandofthepublic：inthiscaseheisatrader，andsuppliescleanshoesinexchangefordirtyshoesandmoney。\"DrTwiss，whopraisesandapparentlyadoptsthisview，appliesitinaparticularcaseinamannerwhich，Ithink，isquiteindefensible。Hesays（p。177）’\"ThefirstmachineofNewcomen（constructedin1765）requiredthemostunremittingattentiononthepartoftheperson

whosebusinessitwastocloseandopenincessantlycertaincocks（robinets），bywhichatonemomentthesteamwas

admittedintothecylinder，atanother，ajetofcoldwaterenteredtocondenseit。Ithappenedonaparticularoccasionthat

whilstaboynamedHumphreyPotterwasthusemployed，hiscomrades，whowereatplay，excitedhimsomuchbytheir

cries，thathefoundhimselfatlastunabletoresistthetemptationtojointhem。Butthetaskimposeduponhimwasone

whichhecouldnotventuretoabandonforasingleminute。Theexcitementofthemoment，however，kindledinhimaspark

ofgenius，andsuggestedtohimcertainrelationsbetweenthepartsofthemachine，whichhehadbeforenotobserved。Ofthe

twococks，onerequiredtobeopenedatthemomentwhenthebalancerod，whichNewcomenfirstintroduced，completedits

descendingoscillation，andtobeclosedattheconclusionofitsascendingoscillation。Theoperationsofthesecondcock

werejustthereverse。Therewasthusanecessarydependencebetweenthemovementsofthebalance—rodandtheopening

andshuttingofthetwococks，anditoccurredtoPotterthatthebalance—rodmightbemadetocommunicatethenecessary

motiontotheotherpartsofthemachine。Heatonceattachedcordsfromthehandlesofthecockstocertainpartsofthe

balance—rod，andfoundthatthetighteningandlooseningofthesecords，witheveryascendinganddescendingoscillation，

wouldproducethesameeffectthathehithertoproducedwithhishand。Forthefirsttimethesteam—engineworkedbyitself

withoutanyfurthercarethanthatoffeedingthefurnacewithcoals。Morecomplicatedconstructionsweresoonadoptedto

replacethesimplecontrivanceofthechild；buttheoriginofthemallwasowingtothemerelongingsofaboytojoinhisplayfellows。\"Headds，\"AccordingtoAdamSmith’sdivision，thisboywouldbeclassedundertheheadofunproductivelabourers。\"But

accordingtoAdamSmith’sdoctrinethisboymustcertainlyberankedamongproductivelabourers。Hewasemployedin

workingamachine；andwasjustasmuchaproductivelabourerasthedraw—boywhopullstheshedsofaloom，orastheweaverwhositsandworksattheloom。Wearecarefullytorememberthatunproductiveasappliedtolabourersisnotatermofreproachorcondemnation。Thestandardpassageonthesubjectisthis（Smith’sWealthofNations，p。146）：\"Thelabourofsomeofthemostrespectableordersinthesocietyis，likethatofmenialservants，unproductiveofanyvalue，

anddoesnotfixorrealizeitselfinanypermanentsubjectorvendiblecommoditywhichenduresafterthatlabourispast，and

forwhichanequalquantityoflabourcouldafterwardsbeprocured。Thesovereign，forexample，withalltheofficersbothof

justiceandwarwhoserveunderhim，thewholearmyandnavy，areunproductivelabourers。Theyaretheservantsofthe

public，andaremaintainedbyapartoftheannualproduceoftheindustryofotherpeople。Theirservice，howhonourable，

howuseful，orhownecessarysoever，producesnothingforwhichanequalquantityofservicecanafterwardsbeprocured。

Theprotection，security，anddefenceofthecommonwealth，theeffectoftheirlabourthisyear，willnotpurchaseits

protection，security，anddefencefortheyeartocome。Inthesameclassmustberanked，somebothofthegravestandmost

important，andsomeofthemostfrivolousprofessions；churchmen，lawyers，physicians，menoflettersofallkinds；players，

buffoons，musicians，opera—singers，opera—dancers，&；c。Thelabourofthemeanestofthesehasacertainvalue，regulatedby

theverysameprincipleswhichregulatethatofeveryothersortoflabour；andthatofthenoblestandmostusefulproduces

nothingwhichcouldafterwardspurchaseorprocureanequalquantityoflabour。Likethedeclamationoftheactor，theharangueoftheorator，orthetuneofthemusician，theworkofallofthemperishesintheveryinstantofitsproduction。\"HencetheindignationwithwhichDrChalmersrejectsthistermisreallyuncalledfor。InhisPoliticalEconomy，hischapter

xi。is\"OnthedistinctionmadebyEconomistsbetweenProductiveandUnproductiveLabour。\"Hetherespeaksofthe

disparagementthuslaidonecclesiasticsandmanyotherordersofmenwhoseservicesareindispensable：butthereisreally

nodisparagementintended。Hesaysthatithasbeenrecommendedasthebestpolicyofagovernmenttoabridgeand

economizetotheuttermostinthemaintenanceofunproductivelabourers。Butthishasnotbeenrecommendedbyanywisepoliticaleconomists。MrMalthus，asIhavesaid，proposestousethetermpersonalservicesinsteadofunproductivelabour。Butthereisno

occasionforsuchachange，anditwouldnotbeconvenient。

MrJ。S。MillhasanEssayonthetermsproductiveandunproductivelabourwhichisjudicious。Hesays：\"Theendtowhichalllabourandallexpenditurearedirected，istwofold。Sometimesitisenjoymentimmediately；the

fulfilmentofthosedesires，thegratificationofwhichiswishedforonitsownaccount。Wheneverlabourorexpenseisnot

incurredimmediatelyforthesakeofenjoyment，andisyetnotabsolutelywasted，itmustbeincurredforthepurposeofenjoymentindirectlyormediately；byeitherrepairingandperpetuating，oraddingtothepermanentsourcesofenjoyment。\"Sourcesofenjoymentmaybeaccumulatedandstoredup；enjoymentitselfcannot。Thewealthofacountryconsistsofthe

sumtotalofthepermanentsourcesofenjoyment，whethermaterialorimmaterial，containedinit：andlabourorexpenditurewhichtendstoaugmentortokeepupthesepermanentsources，should，weconceive，betermedproductive。\"Labourwhichisemployedforthepurposeofdirectlyaffordingenjoyment，suchasthelabourofaperformeronamusical

instrument，wetermunproductivelabour。Whateverisconsumedbysuchaperformer，weconsiderasunproductively

consumed：theaccumulatedtotalofthesourcesofenjoymentwhichthenationpossesses，isdiminishedbytheamountof

whathehasconsumed；whereas，ifithadbeengiventohiminexchangeforhisservicesinproducingfoodorclothing，thetotalofthepermanentsourcesofenjoymentinthecountrymighthavebeennotdiminished，butincreased。\"Theperformeronamusicalinstrumentthenis，sofarasrespectsthatact，notaproductive，butanunproductivelabourer。

Butwhatshallwesayoftheworkmanwhomadethemusicalinstrument？He，mostpersonswouldsay，isaproductive

labourer；andwithreason；becausethemusicalinstrumentisapermanentsourceofenjoyment，whichdoesnotbeginandendwiththeenjoying，andthereforeadmitsofbeingacccumulated。\"Theskillofatailor，andtheimplementsheemploys，contributeinthesamewaytotheconvenienceofhimwhowearsthe

coat，namely，aremoteway：itisthecoatitselfwhichcontributesimmediately。TheskillofMadamePasta，andthebuilding

anddecorationswhichaidtheeffectofherperformance，contributeinthesamewaytotheenjoymentoftheaudience，

namely，animmediateway，withoutanyintermediateinstrumentality。Thebuildinganddecorationsareconsumed

unproductively，andMadamePastalaboursandconsumesunproductively；forthebuildingisusedandwornout，and

MadamePastaperforms，immediatelyforthespectator’senjoyment，andwithoutleaving，asaconsequenceofthe

performance，anypermanentresultpossessingexchangeablevalue：consequentlytheepithetunproductivemustbeequally

appliedtothegradualwearingoutofthebricksandmortar，thenightlyconsumptionofthemoreperishable`properties’of

thetheatre，thelaboursofMadamePastainacting，andoftheorchestrainplaying。Butnotwithstandingthis，thearchitect

whobuiltthetheatrewasaproductivelabourer；soweretheproducersoftheperishablearticles；sowere。thosewho

constructedthemusicalinstruments；andso，wemustbepermittedtoadd，werethosewhoinstructedthemusicians，andall

personswho，bytheinstructionswhichtheymayhavegiventoMadamePasta，contributedtotheformationofhertalent。All

thesepersonscontributedtotheenjoymentoftheaudienceinthesameway，viz，intheproductionofapermanentsourceofenjoyment。\"Thedifferencebetweenthiscase，andthecaseofthecotton—spinneralreadyadvertedto，isthis。Thespinning—jenny，andthe

skillofthecotton~spinner，arenotonlytheresultofproductivelabour，butarethemselvesproductivelyconsumed。The

musicalinstrumentandtheskillofthemusicianareequallytheresultofproductivelabour，butarethemselvesunproductivelyconsumed。\"MissMartineau，inherTale，LifeintheWilds，oneofherTalesentitledIllustrationsofPoliticalEconomy，describesaparty

ofpersonswho，inasettlementneartheCapeofGoodHope，arcdeprivedofalltheirpossessionsbyanonslaughtof

Caffres，andhavetobeginlifeafresh，withouttools，capital，orsocialorganization。Thereisaninstructiveaccountgivenof

themannerinwhichtoolsandcapitalaregraduallyacquired：andofthemannerinwhichthewagesoflabourarepaid。And

inthiscase，besidestheproductivelabourers，thereisfoundaneedforaministerofreligionandagovernor，andthesearealsopaid，thoughunproductivelabourers；productivemeaning，asMissMartineausays，productiveofwealth。Thereisnothingunusualinthisarbitrarylimitationofthemeaningofaphrase。`TheQuarterly’meanstheQuarterlyReview。

WithusinCambridge`theLong’meanstheLongVacation。Inarchitecture，the`Decoratedstyle’meansthatinwhichthe

windowsaredecoratedwithtracery。Thetenacitywithwhichsomewritershaveurgedthatthatlabourcannotbeproperlycalledunproductivewhichproducesenjoyment，involvesarejectionoftheordinaryusagesoflanguage。Norisittruethatbecauseallthekindsoflabourtendtothesameendtheyneedtobeclassedtogether，thoughDrTwissurgesthisargument。Hesays：\"Thefirstlinkofachain—cableisjustasinstrumentalasthelastlinkinholdingashipbyitsanchor；andsoeachindividual，

whoformsalinkinthegreatchainofoperationsofhumanlabour，howeverfarremotehisplacemaybefromthatofthe

personoutofwhosehandstheproductissues，initsfinishedstateofpreparationfortheconsumer，ashehasinhisplace

contributedashareofthatgeneralresult，seemsjustlyentitledtobeconsideredaproductivelabourerequallywiththelastworkman。\"Buttothiswereply，thatacablemaybeofdifferentmaterialsandhavedifferentpropertiesinonepartandanother。Ifthe

cablebehalfanironchainandhalfahempenrope，shallwebeforbiddentoexaminethedifferentpropertiesofironchain

andhempenropebecausethefirstlinkofoneandthelastfathomoftheotherareequallyinstrumentalinholdingashiptoitsanchor？Iconceivetherefore，that，asIhavesaid，DrTwiss’sargumentisofnoforce，andthedistinctionofproductiveand

unproductivelabourremainsafundamentalpointinPoliticalEconomy。

LECTUREII

TheComponentsofPriceareWages，Profit，Rent。Allthingswhichmanusesaretheresultsoflabour。Takeforexampletheobjectsbeforeandaboutusthetable，the

table—cloth，theink—stand，thewindow，thecarpet，thefire—irons，thegoldwatchwecaneasilytracetheprocessesofhumanlabourbywhichthesebecamewhattheyare。Allthesethingshavetheirprice。Uponwhatdoestheirpricedepend？ThePriceofanyarticleinvolvesthreeelements，Wages，Profits，Rent。ThisisoneofthecardinalpointsandfoundationstonesofSmith’sdoctrines。Heteaches（B。i。c。vi。），aswehavesaid，thatallthingswhichmanneedsordesiresisprovidedbylabour。Andthatatfirst，

allthusproducedbelongstothelabourer；andwhathegetsforitishiswages。Butwhenmenhavecapitalorstockonwhich

theycansupportotherswhiletheylabour（thatis，havefood，clothing，&；c。），orhavethecommandofthesebyraising

money，theysetotherstowork，andchargethelabourwithaprofitinthepriceofwhattheyproduce。Further，the

productionofmanythingsrequiresland；andwhenthelandhasallbeenappropriated，rentisdemandedforit。Nowlandhas

everywherebeenappropriatedinaveryearlystageofsociety。Forinstance，inNewZealandtheclaimtopropertyinlandisastechnicalandasobstinatelyurgedasinEngland。（Smith，W。N。p。22。）\"Assoonasstockhasaccumulatedinthehandsofparticularpersons，someofthemwillnaturally

employitinsettingtoworkindustriouspeople，whomtheywillsupplywithmaterialsandsubsistence，inordertomakea

profitbythesaleoftheirwork，orbywhattheirlabouraddstothevalueofthematerials。Inexchangingthecomplete

manufactureeitherformoney，forlabour，orforothergoods，overandabovewhatmaybesufficienttopaythepriceofthe

materialsandthewagesoftheworkmen，somethingmustbegivenfortheprofitsoftheundertakerofthework，who

hazardshisstockinthisadventure。Thevaluewhichtheworkmenaddtothematerials，therefore，resolvesitselfinthiscase

intotwoparts，ofwhichtheonepaystheirwages，theothertheprofitsoftheiremployeruponthewholestockofmaterials

andwageswhichheadvanced。Hecouldhavenointeresttoemploythem，unlessheexpectedfromthesaleoftheirwork

somethingmorethanwhatwassufficienttoreplacehisstocktohimandhecouldhavenointeresttoemployagreatstockratherthanasmallone，unlesshisprofitsweretobearsomeproportiontotheextentofhisstock。\"Theprofitsofstock，itmayperhapsbethought，areonlyadifferentnameforthewagesofaparticularsortoflabour，the

labourofinspectionanddirection。Theyarehoweveraltogetherdifferent，areregulatedbyquitedifferentprinciples，and

bearnoproportiontothequantity，thehardship，andtheingenuityofthissupposedlabourofinspectionanddirection。They

areregulatedaltogetherbythevalueofthestockemployed，andaregreaterorsmallerinproportiontotheextentofthis

stock。Letussuppose，forexample，thatinsomeparticularplace，wherethecommonannualprofitsofmanufacturingstock

aretenpercent。therearetwodifferentmanufactures，ineachofwhichtwentyworkmenareemployedattherateoffifteen

poundsayeareach，orattheexpenseofthreehundredayearineachmanufactory。Letussupposetoothatthecoarse

materialsannuallywroughtupintheonecostonlysevenhundredpounds，whilethefinermaterialsintheothercostseven

thousand。Thecapitalannuallyemployedintheonewillinthiscaseamountonlytoonethousandpounds；whereasthat

employedintheotherwillamounttoseventhousandthreehundredpounds。Attherateoftenpercent。，therefore，the

undertakeroftheonewillexpectayearlyprofitofaboutonehundredpoundsonly；whilethatoftheotherwillexpectabout

sevenhundrelandthirtypounds。Butthoughtheirprofitsaresoverydifferent，theirlabourofinspectionanddirectionmay

beeitheraltogetherorverynearlythesame。Inmanygreatworks，almostthewholelabourofthiskindiscommittedtosome

principalclerk。Hiswagesproperlyexpressthevalueofthislabourofinspectionanddirection。Thoughinsettlingthem

someregardishadcommonly，notonlytohislabourandskill，buttothetrustwhichisreposedinhim，yettheyneverbear

anyregularproportiontothecapitalofwhichheoverseesthemanagement；andtheownerofthiscapital，thoughheisthus

dischargedofalmostalllabour，stillexpectsthathisprofitsshallbeararegularproportiontohiscapital。Inthepriceof

commodities，therefore，theprofitsofstockconstituteacomponentpartaltogetherdifferentfromthewagesoflabour，andregulatedbyquitedifferentprinciples。\"Inthisstateofthings，thewholeproduceoflabourdoesnotalwaysbelongtothelabourer。Hemustinmostcasesshareit

withtheownerofthestockwhichemployshim。Neitheristhequantityoflabourcommonlyemployedinacquiringor

producinganycommoditytheonlycircumstancewhichcanregulatethequantitywhichitoughtcommonlytopurchase，

command，orexchange，for。Anadditionalquantity，itisevident，mustbeduefortheprofitsofthestockwhichadvancedthewagesandfurnishedthematerialsofthatlabour。\"Assoonasthelandofanycountryhasallbecomeprivateproperty，thelandlords，likeallothermen，lovetoreapwhere

theyneversowed，anddemandarentevenforitsnaturalproduce。Thewoodoftheforest，thegrassofthefield，andallthe

naturalfruitsoftheearth`which，whenlandwasincommon，costthelaboureronlythetroubleofgatheringthem，come，

eventohim，tohaveanadditionalpricefixeduponthem。Hemustthenpayforthelicencetogatherthem；andmustgiveup

tothelandlordaportionofwhathislaboureithercollectsorproduces。Thisportion，or，whatcomestothesamething，the

priceofthisportion，constitutestherentofland，andinthepriceofthegreaterpartofthecommoditiesmakesathird

componentpart。\"

ThusWages，Profits，Rent，arethethreecomponentpartsofPrice。AtfirstitmightappearasiftherewereafourthelementofPrice；namely，Materials。Thusthetable，besidesthewagesofthe

journeymanandtheprofitofthemastercabinet—maker，costalsothepriceofthewood。Butthen，ofwhatdoesthepriceof

thewoodconsist？oftheRentoftheLandonwhichitgrows；theProfitofthelandlordforleavingittogrow；andtheWagesofthewoodmanwhocutitdown。AndthusPriceisreducedtoWages，ProfitsandRent。Wages，’aswehavesaid，istherewardoflabour。Profitsistherewardofabstinence：oftheabstinenceofthemaster

cabinet—maker，whoemployedhismoneytopayajourneymancarpenter，insteadofspendingitineating，drinking，clothes，

&；c。Rentisamonopoly，butanecessaryandinevitablemonopoly，forlandmustbeappropriated；andalwayshasbeen

appropriated，aswehavesaid。

Smithgivesanexampletoillustratethemannerinwhichthethreeelementsofpriceshowthemselves（p。20）：\"Inthepriceofcorn，forexample，onepartpaystherentofthelandlord，anothorpaysthewagesormaintenanceofthe

labourersandlabouringcattleemployedinproducingit，andthethirdpaystheprofitofthefarmer。Thesethreepartsseem

eitherimmediatelyorultimatelytomakeupthewholepriceofcorn。Afourthpart，itmayperhapsbethought，isnecessary

forreplacingthestockofthefarmer，orforcompensatingthewearandtearofhislabouringcattle，andotherinstrumentsof

husbandry。Butitmustbeconsideredthatthepriceofanyinstrumentofhusbandry，suchasalabouringhorse，isitselfmade

upofthesamethreeparts；therentofthelanduponwhichheisreared，thelabouroftendingandrearinghim，andthe

profitsofthefarmerwhoadvancesboththerentofthislandandthewagesofthislabour。Thoughthepriceofthecorn，

therefore，maypaythepriceaswellasthemaintenanceofthehorse，thewholepricestillresolvesitselfeitherimmediatelyorultimatelyintothesamethreepartsofrent，oflabour，andprofit。\"Inthepriceofflourormeal，wemustaddtothepriceofthecorntheprofitsofthemillerandthewagesofhisservants；in

thepriceofbread，theprofitsofthebakerandthewagesofhisservants；inthepriceofboth，thelabouroftransportingthe

cornfromthehouseofthefarmertothatofthemiller，andfromthatofthemillertothatofthebaker，togetherwiththeprofitsofthosewhoadvancethewagesofthatlabour。\"Thepriceofflaxresolvesitselfintothesamethreepartsasthatofcorn。Inthepriceoflinenwemustaddtothispricethe

wagesoftheflax—dresser，ofthespinner，oftheweaver，ofthebleacher，&；c。，togetherwiththeprofitsoftheirrespectiveemployers。\"Asanyparticularcommoditycomestobemoremanufactured，thatpartofthepricewhichresolvesitselfintowagesand

profit，comestobegreaterinproportiontothatwhichresolvesitselfintorest。Intheprogressofthemanufacture，notonly

thenumberofprofitsincrease，buteverysubsequentprofitisgreaterthantheforegoing；becausethecapitalwhichfromitis

derivedmustalwaysbegreater。Thecapitalwhichemploystheweaver，forexample，mustbegreaterthanthatwhich

employsthespinners，becauseitnotonlyreplacesthatcapitalwithitsprofits，butpays，besides，thewagesoftheweavers；

andtheprofitsmustalwaysbearsomeproportiontothecapital。\"

Therearehoweverexceptionstothepropositionthatthesethreeelementsofpricealwaysexist。

Exceptionstotheabove。（Smith，p。23。）\"Eveninthe。mostimprovedsocieties，therearealwaysafewcommoditiesofwhichthepriceresolvesitselfintotwoparts

only，thewagesoflabour，andtheprofitsofstock；andastillsmallernumber，inwhichitconsistsaltogetherinthewagesof

labour。Inthepriceofsea—fish，forexample，onepartpaysthelabourofthefishermen，andtheothertheprofitsofthecapital

employedinthefishery。Rentveryseldommakesanypartofit，thoughitdoessometimes，asIshallshowhereafter。Itis

otherwise，atleastthroughthegreaterpartofEurope，inriverfisheries。Asalmon—fisherypaysarent；andrent，thoughit

cannotwellbecalledtherentofland，makesapartofthepriceofasalmonaswellaswagesandprofit。Insomepartsof

Scotlandafewpoorpeoplemakeatradeofgathering，alongtheseashore，thoselittlevariegatedstonescommonlyknown

bythenameofScotchPebbles。Thepricewhichispaidtothembythestone—cutterisaltogetherthewagesoftheirlabour；

neitherrentnotprofitmakeanypartofit。\"

Again，therearecasesinwhichthethreeelements，ortwoofthem，areliabletobeconfounded。\"Agentlemanwhofarmsapartofhisownestate，afterpayingtheexpenseofcultivation，shouldgainboththerentofthe

landlordandtheprofitofthefarmer。Heisapttodenominatehiswholegain，profit，andthusconfoundsrentwithprofit，at

leastincommonlanguage。ThegreaterpartofourNorthAmericanandWestIndianplantersareinthissituation。Theyfarm，

thegreaterpartofthem，theirownestates，andaccordinglyweseldomhearoftherentofaplantation，butfrequentlyofitsprofits。\"Commonfarmersseldomemployanyoverseertodirectthegeneraloperationsofthefarm。Theygenerally，too，worka

gooddealwiththeirownhands，asploughmen，harrowers，&；c。Whatremainsofthecropafterpayingtherent，therefore，

shouldnotonlyreplacetothemtheirstockemployedincultivation，togetherwithitsordinaryprofits，butpaythemthe

wageswhichareduetothem，bothaslabourersandoverseers。Whateverremains，however，afterpayingtherentand

keepingupthestock，iscalledprofit。Butwagesevidentlymakeapartofit。Thefarmer，byhavingthesewages，mustnecessarilygainthem。Wages，therefore，areinthiscaseconfoundedwithprofit。###第2章\"Anindependentmanufacturer，whohasstockenoughbothtopurchasematerials，andtomaintainhimselftillhecancarry

hisworktomarket，shouldgainboththewagesofajourneymanwhoworksunderamaster，andtheprofitwhichthat

mastermakesbythesaleofthejourneyman’swork。Hiswholegains，however，arecommonlycalledprofit，andwagesare，inthiscasetoo，confoundedwithprofit。\"Agardenerwhocultivateshisowngardenwithhisownhands，unitesinhisownpersonthethreedifferentcharactersof

landlord，farmer，andlabourer。Hisproduce，therefore，shouldpayhimtherentofthefirst，theprofitofthesecond，andthe

wagesofthethird。Thewholehoweveriscommonlyconsideredastheearningsofhislabour。Bothrentandprofitare，inthiscase，confoundedwithwages。\"AndthusthethreeelementsofPriceareWages，Profits，andRent；andtheseexist，withfewexceptions，inallcases，though

sometimestwoofthemmaybeconfounded。

FixedandCirculatingcapital。

CapitalisfurtherdistinguishedasFixedCapitalandCirculatingCapital。（Smith，p。120。）\"Therearetwodifferentwaysinwhichthecapitalofamerchantmaybeemployedsoastoyieldaprofittoitsemployer。\"First，Itmaybeemployedinraising，manufacturing，orpurchasinggoods，andsellingthemagainwithaprofit。Thecapital

employedinthismanneryieldsnorevenueorprofittoitsemployerwhileiteitherremainsinhispossession，orcontinuesin

thesameshape。Thegoodsofthemerchantyieldhimnorevenueorprofittillhesellsthemformoney，andthemoneyyields

himaslittletillitisagainexchangedforgoods。Hiscapitaliscontinuallygoingfromhiminoneshapeandreturningtohim

inanother，anditisonlybymeans。ofsuchcirculation，orsuccessiveexchanges，thatitcanyieldhimanyprofit。SuchcapitalsthereforemayveryproperlybecalledCirculatingCapitals。\"Secondly，Itmaybeemployedintheimprovementofland，inthepurchaseofusefulmachines，andinstrumentsoftrade，or

insuch—likethingsasyieldarevenueorprofitwithoutchangingmasters，orcirculatinganyfurther。Suchcapitalstherefore

mayveryproperlybecalledFixedCapitals。

\"Differentoccupationsrequireverydifferentproportionsbetweenthefixedandcirculatingcapitalsemployedinthem。\"Thecapitalofamerchant，forexample，isaltogetheracirculatingcapital。Hehasoccasionfornomachinesorinstrumentsoftrade，unlesshisshoporwarehousebeconsideredassuch。\"Somepartofthecapitalofeverymaster，artificer，ormanufacturer，mustbefixedintheinstrumentsofhistrade。Thispart

howeverisverysmallinsomeandverygreatinothers。Amastertailorrequiresnootherinstrumentsoftradebutaparcelof

needles。Thoseofamastershoemakerarealittle，thoughbutaverylittlemoreexpensive。Thoseoftheweaverriseagood

dealabovethoseoftheshoemaker。Thefargreaterpartofthecapitalofallsuchmasterartificers，however，iscirculatedeitherinthewagesoftheirworkmen，orinthepriceoftheirmaterials，andrepaidwithaprofitbythepriceofthework。\"Inotherworksamuchgreaterfixedcapitalisrequired。InagreatIron—work，forexample，thefurnaceformeltingtheore，

theforge，theslitt—mill，areinstrumentsoftradewhichcannotbeerectedwithoutaverygreatexpense。Incoal—worksand

minesofeverykind，themachinerynecessary，bothfordrawingoutthewaterandforotherpurposes，isfrequentlystillmoreexpensive。\"Thatpartofthecapitalofthefarmerwhichisemployedintheinstrumentsofagriculture，isafixed，thatwhichisemployed

inthewagesandmaintenanceofhislabouringservants，isacirculatingcapital。Hemakesaprofitoftheonebykeepingitin

hisownpossession，andoftheotherbypartingwithit。Thepriceorvalueofhislabouringcattleisafixedcapitalinthesame

mannerasthatoftheinstrumentsofhusbandry；theirmaintenanceisacirculatingcapital，inthesamemannerasthatofthe

labouringservants。Thefarmermakeshisprofitbykeepingthelabouringcattle，andbypartingwiththeirmaintenance。Both

thepriceandthemaintenanceofthecattle，whichareboughtin，andfattened，notforlabour，butforsale，areacirculating

capital。Thefarmermakeshisprofitbypartingwiththem。Aflockofsheep，oraherdofcattle，thatinabreedingcountryis

boughtinneitherforlabournorforsale，butinordertomakeaprofitbytheirwool，bytheirmilk，andbytheirincrease，isa

fixedcapital。Theirprofitismadebykeepingthem。Theirmaintenanceiscirculatingcapital。Theprofitismadebyparting

withit，anditcomesbackwithbothitsownprofit，andtheprofituponthewholepriceofthecattle，inthepriceofthewool，

themilk，andtheincrease。Thewholevalueoftheseed，too，isproperlyafixedcapital。Thoughitgoesbackwardsand

forwardsbetweenthegroundandthegranary，itneverchangesmasters，andthereforedoesnotproperlycirculate。The

farmermakeshisprofitnotbyitssale，butbyitsincrease。\"

LECTUREIII。

DifferenteffectsofFixedandCirculatingCapitalonPrice。Wehaveseenthatthepriceofeverythingdependsonthreeelements，Wages，Rent，CapitalandtheCapitaliseitherFixed，

asMachinery，orCirculating，asWagesandMaterials。Fixedcapitalhoweverisnotabsolutelyfixed。Allmachines，for

instance，wearoutinthecourseoftime，andmustbereplacedasthattimeexpires。Andaccordingtothelengthoftime

whichanyarticleofFixedCapitallasts，theeffectofthatportionofCapitalorPriceisdifferent。

Wewilltakeexamples。ATailormaybetakenasanexampleofaproducerwhohaslittleFixedCapital。Herequiresonlyneedles，thread，ashop—boardandhisgoose。ALinenManufacturer（whobothspinsandweaves）hasmuchFixedCapital，asSpinningJennies，Looms，&；c。；probablySteamEngines。SupposetheTailorpaysannually，toiomen，L500inwages，andpays？ooformaterials（cloth）supposeprofitstobeten

percent，andhemakes100suitsofclothes，whatisthepriceofeachsuit？

WageswithProfits……550

MaterialswithProfits550

1100

Thisgives100suitsat？1each。SupposetheLinen—Manufacturerpaysannuallytoiomen？00inwages；andpays？00formaterials（flax）：andhas

machineryworth？00whichlastsioyears：andproduces1000shirtsayear。Whatisthepriceofeachshirt？

Theobviouscalculationis：

Wageswithprofits550

Materialswithprofits110

Toreplace？00in10years40

700

Thisgives1000shirtsat？1/10or148。Butthiscalculationisnotright。ThefixedcapitalmustbereplacedwithProfits，aswellasthecirculatingcapital。Andwe

mustaskwhatannuitytocontinueforioyears，isworth？00presentvalue。Theansweris，？4。

Hencetodeterminetheprice：？

WageswithProfits550

MaterialswithProfits110

Toreplace？00in10yearswithProfits64

724

Thisgives1000shirtsat？724pershirt，whichis14。48s。，or148。6d。nearly。Andifanyoftheelementschangc，numnberoflabourers，rateofwages，rateofprofits，durationofFixedCapital，wecancalculatetheeffectuponpriceinthesamemannerasintheseexamples。ThemodeofcalculatingtheeffectofFixedCapital，byconsideringthesumneededtoreplaceitasthepresentvalueofan

annuity，isplainlyright。ToreplaceaFixedCapitalof？00whichisexhaustedin10years，anannualpaymentof？0ineach

futureyearwillsuffice。ButtheManufacturerwillriotgivethis？0atpresentexcepthecanhaveitreturnedwithprofit：and

forthatpurposenot？0，but？4ayearisrequisite。

ThiscorrectionofthemodeofcalculatingtheresultofFixedCapitalwas，Ibelieve，firstintroducedbyMrRicardo，inhisPrinciplesofPoliticalEconomypublishedin1817。

ProfitsarenottheresultofLabour。InhisPrinciplesofPoliticalEconomy，MrRicardomaintainedthatcommoditiesuniversallyexchangeforeachotheraccordingtothequantityoflabourworkedupinthem。MrMcCullochattemptedfurthertosupportthisassertion，bymaintainingthatwhatarecommonlycalledProfitsmaybecalledLabour；andthusheheldthatProfitsandLabourarenotdistinctelementsofPrice。UponthisMrMalthusobserves（Defp。100），\"Thereisnothingthatmaynotbeprovedbyanewdefinition。Acomposition

offlour，milk，suet，andstonesisaplum—pudding；ifbystonesbemeantplums。Uponthisprinciple，MrMcCulloch

undertakestoshow，thatcommoditiesdoreallyexchangewitheachotheraccordingtothequantityoflabouremployed

uponthem；anditmustbeacknowledged，thatintheinstanceswhichhehaschosenhehasnotbeendeterredbyapparentdifficulties。Hehastakenthebullbythehorns。Thecasesarenearlyasstrongasthatoftheplum—pudding。\"Theyarethetwofollowingnamely，thattheincreaseofvaluewhichacaskofwineacquires，bybeingkeptacertain

numberofyearsuntouchedinacellar，isoccasionedbytheincreasedquantityoflabouremployeduponit；andthatan

oak—treeofahundredyears’growth，worth？5，whichmaynothavebeentouchedbyman，beast，ormachineforacentury，derivesitswholevaluefromlabour。\"MrMcCullochacknowledgesthatMrRicardowasinclinedtomodifyhisgrandprinciple，thattheexchangeablevalueof

commoditiesdependedonthequantityoflabourrequiredfortheirproduction，sofarastoallowthattheadditional

exchangeablevaluethatissometimesgiventocommodities，bykcepingthemaftertheyhavebeenpurchasedorproduced

untiltheybecomefittobeused，wasnottobeconsideredasaneffectoflabour，butasanequivalentfortheprofitswhich

thecapitallaidoutonthecommoditieswouldhaveyieldedhaditbeenactuallyemployed。Thiswaslookingatthesubjectin

thetruepointofview，andshowingthathewouldnotgetoutofthedifficultybychangingthemeaningofthetermlabour；

butMrMcCullochsaysIconfess，however，notwithstandingthehesitationIcannotbutfeelindifferingfromsogreatanauthority，thatIseeno

goodreasonformakingthisexception。Suppose，toillustratetheprinciple，thatacaskofnewwine，whichcost？0，isput

intoacellar，andthatattheendoftwelvemonthsitisworththequestionis，whetheroughtthe？ofadditionalvaluegiven

tothewinetobeconsideredasacompensationforthetimethe？0worthofcapitalhasbeenlockedup，oroughtittobe

consideredasthevalueofadditionallabouractuallylaidoutonthewine。Ithinkthatitoughttobeconsideredinthelatter

pointofview，andforthis，asitappearstomeamostsatisfactoryandconclusivereason，thatifwekeepacommodity，asa

caskofwinewhichhasnotarrivedatmaturity，andonwhichthereforeachangeoreffectistobeproduced，itwillbe

possessedofadditionalvalueattheyear’send；whereas，hadwekeptacaskofwinewhichhadalreadyarrivedatmaturity，

andonwhichnobeneficialordesirableeffectcouldbeproducedforahundredorathousandyears，itwouldnothavebeen

worthasingleadditionalfarthing。Thisseemstoproveincontrovertiblythattheadditionalvalueacquiredbythewineduring

theperiodithasbeenkeptinthecellarisnotacompensationorreturnfortime，butfortheeffectorchangethathasbeen

producedonit。Timecannotofitselfproduceanyeffect，itmerelyaffordsspaceforreallyefficientcausestooperate；anditisthereforeclear，thatitcanhavenothingtodowiththevalue。’\"Onthispassageitshouldberemarked，inthefirstplace，thatthequestionstatedinitisnotthemainquestioninreference

tothenewmeaningwhichMrMcCullochmustgivetothetermlabour，inordertomakeouthisproposition。lie

acknowledgesthattheincreasedvalueacquiredbythewineiseitherowingtotheoperationofnatureduringtheyearin

improvingitsquality，ortotheprofitsacquiredbythecapitalistforbeingdeprivedforayearfromusinghiscapitalof？0in

anyotherway。ButineithercaseMrMcCulloch’slanguageisquiteunwarranted。Whenheusestheexpression，`additional

labouractuallylaidoutuponthewine，’whocouldpossiblyimaginethat，insteadofmeaninghumanlabour，hemeantthe

processescarriedonbynatureinthecaskofwineduringthetimethatitiskept？Thisisatoncegivinganentirelynewmeaningtothetermlabour。\"But，further，itismostjustlystatedbyMrRicardo，thatwhenthepowersofnaturecanbecalledintoactioninunlimited

abundance，shealwaysworksgratis；andherprocessesneveraddtothevalue，thoughtheymayaddverygreatlytotheutilityoftheobjectstowhichtheyareapplied。\"ThistruthisalsofullyadoptedandstronglystatedbyMrMcCullochhimself’。`Alltherudeproducts（hesays）andallthe

productivepowersandcapacitiesofnaturearegratuitouslyofferedtoman。Natureisnotniggardlyorparsimonious；she

neitherdemandsnorreceivesanequivalentforherfavours。Anobjectwhichitdoesnotrequireanyportionoflabourto

appropriateortoadapttoourusemaybeoftheveryhighestutility，butasitisthefreegiftofnature，itisutterlyimpossible

itcanbepossessedofthesmallestvalue。’Consequently，astheprocesseswhicharecarryingoninthecaskof’wine，whileit

iskept，areunquestionablythefreegiftofnature，andareattheserviceofallwhowantthem，itisutterlyimpossible，evenif

theireffectsweretentimesgreaterthantheyare，thattheyshouldaddinthesmallestdegreetothepriceofthewine。Itis，

nodoubt，perfectlytrue，asstatedbyMrMcCulloch，thatifwinewerenotimprovedbykeeping，itwouldnotbewortha

singleadditionalfarthingafterbeingkeptahundredorevenathousandyears。Butthisprovesnothingbutthat，inthatcase，

noonewouldeverthinkofkeepingwinelongerthanwasabsolutelynecessaryforitsconvenientsaleorconvenientconsumption。\"Theimprovementwhichwinoderivesfromkeepingisunquestionablythecauseofitsbeingkept；butwhenonthisaccount

thewine—merchanthaskepthiswine，theadditionalpricewhichheisenabledtoputuponitisregulateduponprinciples

totallydistinctfromtheaveragedegreeofimprovementwhichthewineacquires。Itisregulatedexclusively，asstatedbyMr

Ricardo，bytheaverageprofitswhichthecapitalengagedinkeepingthewinewouldhaveyieldedifithadbeenactively

employed；andthatthisistileregulatingprincipleoftheadditionalprice，andnotthedegreeofimprovement，isquitecertain：

becauseitwouldbeuniversallyallowedthatif，inthecasesupposedbyMrMcCulloch，theordinaryrateofprofitshadbeen

20percent。，insteadof10percent。，acaskofnewwine，worth？0，afterithadbeenkeptayear，wouldhavebeen

increasedinvalue？0insteadof？，althoughtheprocessesofnatureandtheimprovementoftimewinewerepreciselythe

sameinthetwocases；andtherecannotbetheleastdoubt，asIsaidbefore，thatifthequalityofwine，byayear’skeeping，

wereordinarilyimprovedinadegreetentimesasgreatasatpresent，thepricesofwineswouldnotberaised；because，iftheyweresoraised，allwine—merchantswhosoldkeptwineswouldbemakinggreaterprofitsthanotherdealers。\"Nothingthencanbeclearerthanthattheadditionalvalueofthekeptwineisderivedfromtheadditionalamountofprofitsofwhichitiscomposed，determinedbythetimeforwhichthecapitalwasadvancedandtheordinaryrateofprofits。\"Thevalueoftheoak—treeofahundredyears’growthisderived，inaveryconsiderabledegree，fromthesamecause；though，inrichandcultivatedcountries，wherealoneitcouldbeworth？5，rentwouldnecessarilyformapartofthisvalue。\"Ifthenumberofacornsnecessaryonanaveragetorearonegoodoakwereplantedbythehandofman，theywouldbe

plantedonappropriatedland；andaslandislimitedinquantity，thepowersofvegetationinthelandcannotbecalledinto

actionbyeveryonewhoisinpossessionofacorns，inthesamewayastheimprovingoperationsofnaturemaybecalledinto

actionbyeverypersonwhopossessesacaskofwine。Butsettingthispartofthevalueaside，andsupposingtheacornstobe

plantedatacertainexpense，itisquiteclear，thatalmostthewholeoftheremainingvaluewouldbederivedfromthe

compoundinterestorprofitsupontheadvancesofthelabourrequiredforthefirstplantingoftheacorns，andthesubsequent

protectionof’theyoungtrees。Amuchlargerpart，therefore，ofthefinalvalueofthetreethanofthefinalvalueofthewinewouldbeowingtoprofits。\"Now，ifweweretocompareanoak—tree，worth？5，withaquantityofhardware[forinstance，axes，]worththesamesum，

thevalueofwhichwaschieflymadeupofhumanlabour；andasthereasonwhythesetwoobjectswereofthesamevalue，

weretostatethatthesamequantityoflabourhadbeenworkedupinthemweshouldobviouslystateadirectfalsity，

accordingtothecommonusageoflanguage；andnothingcouldmakethestatementtrue，butthemagicalinfluenceofanew

meaninggiventothetermlabour。ButtomakeLabourmeanprofits，orfermentation，orvegetation，orrent，appearstome

quiteasunwarrantableastomakestonesmeanplums。\"

AreProfitsjustifiable？WehavehadinEnglandacontroversy，WhatisProfit？aswehavejustseen。InFrancetherehasbeenacontroversy，

WhetherthereoughttobeProfits？WhethercapitaloughttobeallowedtobringProfittoitsowner？Ithasbeenmaintained

bythesocialiststhattheProfitofcapitalisathingwhichiswrongandagainstnature。

（Bastiat，p。3。）\"ItisthusthatthedemocraticSocialist，Thoré；，expresseshimself：\"`Therevolutionwillalwayshavetoberecommenced，solongasweoccupyourselveswithconsequencesonly，without

havingthelogickorthecouragetoattacktheprincipleitself\"。Thisprincipleiscapital，falseproperty，interest，andusury，whichbytheoldregime，ismadetoweighuponlabour。\"`Eversincethearistocratsinventedtheincrediblefiction，thatcapitalpossessesthepowerofreproducingitself，theworkershavebeenatthemercyoftheidle。\"`Attheendofayear，willyoufindanadditionalcrowninabagofonehundredshillings？Attheendoffourteenyears，will

yourshillinghavedoubledinyourbag？

\"`Willaworkofindustryorofskillproduceanother，attheendoffourteenyears？

\"`Letusbegin，then，bydemolishingthisfatalfiction。’\"Ihavequotedtheabove，\"Bastiatsays，\"merelyforthesakeofestablishingthefact，thatmanypersonsconsiderthe

productivenessofcapitalafalse，afatal，andaniniquitousprinciple。Butquotationsaresuperfluous；itiswellknownthatthe

peopleattributetheirsufferingstowhattheycalldietraffickinginmanbyman。

\"Infact，thephrase，tyrannyofcapital，hasbecomeproverbial。\"Bastiatarguesagainstthisdoctrinewithgreatforceandingenuity。Tousthematterwillseemtoneednoargument。Aman

whohascapitalwillnotgivetheuseofitfornothing。Andnoonewouldaccumulatecapitalifhewastogetnothingbyit。Bastiatgivesacuriousillustrationofthis。（Bastiat，p。45。）\"Afriendofmine，commissionedtomakeenquiryintoParisianindustry，hasassuredmethatthe

manufacturershaverevealedtohimaverystrikingfact，whichproves，betterthananyreasoningcan，howmuchinsecurity

anduncertaintyinjuretheformationofcapital。Itwasremarked，thatduringthemostdistressingperiod，thepopular

expensesofmerefancyhadnotdiminished。Thesmalltheatres，thefightinglists，thepublic—houses，andtobaccodepots，

wereasmuchfrequentedasinprosperoustimes。Intheinquiry，theoperativesthemselvesexplainedthisphenomenonthus：’

Whatistheuseofpinching？Whoknowswhatwillhappentous？Whoknowsthatinterestwillnotbeabolished？Who

knowsbutthattheStatewillbecomeauniversalandgratuitouslender，andthatitwillwishtoannihilateallthefruitsthatwe

mightexpectfromoursavings？’Well!Isay，thatifsuchideascouldprevailduringtwosingleyears，itwouldbeenoughto

turnourbeautifulFranceintoaTurkeymiserywouldbecomegeneralandendemic，and，mostassuredly，thepoorwouldbe

thefirstuponwhomitwouldfall。\"

MercantilePriceismeant。

IreturntothesubjectofPrice。Price，asIhavesaid，dependsonthreeelements；Wages，Profits，andRent。ThePriceherespokenofiswhatmaybecalled

MercantilePrice。

MrMillnoticesthisdulyaccordingtoitsimportance（Pol。Econ。pp。519，521），hesays：\"Imustgivewarning，onceforall，thatthecasesIcontemplatearethoseinwhichvalueandpricesaredeterminedby

competitionalone。Insofaronlyastheyarethusdetermined，cantheybereducedtoanyassignablelaw。`rhobuyersmustbe

supposedasstudioustobuycheap，asthesellerstoselldear。Thevaluesandprices，therefore，towhichourconclusions

apply，aremercantilevaluesandprices；suchpricesasarequotedinprice—currents；pricesinthewholesalemarkets，inwhich

buyingaswellassellingisamatterofbusiness；inwhichthebuyerstakepainstoknow，andgenerallydoknow，thelowest

priceatwhichanarticleofagivenqualitycanbeobtained，andinwhich，therefore，theaxiomistrue，thattherecannotbe，

forthesamearticle，ofthesamequality，twopricesinthesamemarket。Ourpropositionswillbetrueinamuchmore

qualifiedsense，ofretailprices；thepricespaidinshops，forarticlesofpersonalconsumption。Forsuchthingsthereoftenare

notmerelytwo，butmanypricesindifferentshops，oreveninthesameshop；habitandaccidenthaveasmuchtodointhe

matterasgeneralcauses。Purchasesforprivateuse，evenbypeopleinbusiness，arenotalwaysmadeonbusinessprinciples：

thefeelingswhichcomeintoplayintheoperationofgettingandthatofspendingtheirincome，areoftenextremelydifferent。

Eitherfromindolence，orinsouciance，orbecausepeoplethinkitfinetopayandasknoquestions，three—fourthsofthose

whocanaffordit，givemuchhigherpricesthannecessaryforthethingstheyconsume；whilethepooroftendothesame

fromignoranceanddefectofjudgment，wantoftimeforsearchingandmakingenquiry，andnotunfrequentlyfromcoercion，

openordisguised。Forthesereasons，retailpricesdonotfollowwithalltheregularitywhichmightbeexpected，theaction

ofthecauseswhichdeterminewholesalel）rices。Theinfluenceofthosecausesisultimatelyfeltintheretailmarkets，andis

therealsourceofsuchvariationsinretailpricesasareofageneralandpermanentcharacter。Butthereisnoregularorexact

correspondence。Shoesofequallygoodqualityaresoldindifferentshopsatpriceswhichdifferconsiderably；andtheprice

ofleathermayfallwithoutcausingthericherclassofbuyerstopaylessforshoes。Nevertheless，shoesdosometimesfallin

price；andwhentheydo，thecauseisalwayssomesuchgeneralcircumstanceasthecheapeningofleather；aridwhenleather

ischeapened，evenifnodifferenceshowsitselfinshopsfrequentedbyrichpeople，theartisanandthelabourergenerallyget

theirshoescheaper，andthereisavisiblediminutioninthecontractpricesatwhichshoesaredeliveredforthesupplyofa

workhouseorofaregiment。Inallreasoningaboutpricestheprovisomustbeunderstood，`supposingallpartiestotakecare

oftheirowninterest。’Inattentiontothesedistinctionshasledtoimproperapplicationsoftheabstractprinciplesofpolitical

economy，andstilloftenertoanunduediscreditingofthoseprinciplesthroughtheirbeingcomparedwithadifferentsortof

factsfromthosewhichtheycontemplate，orwhichcanfairlybeexpectedtoaccordwiththem。\"

NaturalPriceandMarketPrice。Buteventhepricesdeterminedbycompetitiondonotagreesteadilywiththeresultsofsuchcalculationsaswehavemade。

Suchcalculationsgivethenaturalpriceofcommoditiesandtothisnaturalpricetheactualpriceconstantlytends，andnever

canbefaraboveorfarbelowit。Butforatimethemarketpricemaybeaboveorbelowthenaturalprice。

SoSmith（B。i。c。vii。）：\"Themarket—priceofeveryparticularcommodityisregulatedbytheproportionbetweenthequantitywhichisactually

broughttomarket，andthedemandofthosewhoarewillingtopaythenaturalpriceofthecommodity，orthewholevalue

oftherent，labour，andprofit，whichmustbepaidinordertobringitthither。Suchpeoplemaybecalledtheeffectual

demanders，andtheirdemandtheeffectualdemand；sinceitmaybesufficienttoeffectuatethebringingofthecommodityto

market。Itisdifferentfromtheabsolutedemand。Averypoormanmaybesaidinsomesensetohaveademandforacoach

andsix；hemightliketohaveit；buthisdemandisnotaneffectualdemand，asthecommoditycanneverbebroughttomarketinordertosatisfyit。\"Whenthequantityofanycommoditywhichisbroughttomarketfallsshortoftheeffectualdemand，allthosewhoare

willingtopaythewholevalueoftherent，wages，andprofit，whichmustbepaidinordertobringitthither，cannotbe

suppliedwiththequantitywhichtheywant。Ratherthanwantitaltogether，someofthemwillbewillingtogivemore。A

competitionwillimmediatelybeginamongthem，andthemarket—pricewillrisemoreorlessabovethenaturalprice，

accordingaseitherthegreatnessofthedeficiency，orthewealthandwantonluxuryofthecompetitors，happentoanimate

moreorlesstheeagernessofthecompetition。Amongcompetitorsofequalwealthandluxury，thesamedeficiencywill

generallyoccasionamoreorlesseagercompetition，accordingastheacquisitionofthecommodityhappenstobeofmore

orlessimportancetothem。Hencetheexorbitantpriceofthenecessariesoflifeduringtheblockadeofatownorinafamine。\"Ontheotherhand，\"Whenthequantitybroughttomarketexceedstheeffectualdemand，itcannotbeallsoldtothosewho

arewillingtopaythewholevalueoftherent，wages，andprofit，whichmustbepaidinordertobringitthither。Somepart

mustbesoldtothosewhoarewillingtopayless，andthelowpricewhichtheygiveforitmustreducethepriceofthe

whole。Themarket—pricewillsinkmoreorlessbelowthenaturalprice，accordingasthegreatnessoftheexcessincreases

moreorlessthecompetitionoftheseller，oraccordingasithappenstobemoreorlessimportanttothemtoget

immediatelyridofthecommodity。Thesameexcessintheimportationofperishablewilloccasionamuchgreater

competitionthaninthatofdurablecommodities；intheimportationoforanges，forexample，thaninthatofoldiron。\"

ValueinUseandValueinExchange。

Inconnectionwiththis，wemusttakeanotherdistinctionmadebySmith。DrAdamSmithdistinguishestwokindsofvalue；theonearisingfromutility，theotherfromwhatcanbeobtainedin

exchange。Hesays，\"Thewordvalue，itistobeobserved，hastwodifferentmeanings；itsometimesexpressestimeutilityof

someparticularobject，andsometimesthepowerofpurchasingothergoodswhichthepossessionofthatobjectconveys。

Theonemaybecalledvalueinuse，theothervalueinexchange。Thethingswhichhavethegreatestvalueinuse，have

frequentlylittleornovalueinexchange；and，onthecontrary，thosethathavethegreatestvalueinexchange，have

frequentlylittleornovalueinuse。Nothingismoreusefulthanwater，butitwillpurchasescarceanything；scarceanything

canbehadinexchangeforit。Adiamond，onthecontrary，hasscarceanyvalueinuse，butaverygreatquantityofothergoodsmayfrequentlybehadinexchangeforit。\"Natureworksforusgratuitously；andwhenshesuppliesuswitharticlesinsuchabundance，thatnolabourisrequiredto

procurethem，thosearticles，howeverusefultheymaybe，havenotexchangeablevalue：butnosoonerdoesthelabourof

manbecomenecessarytoprocureustheenjoymentsofanycommodity，thanthatcommodityacquiresavalue；eitheraprice

ispaidforitinmoney，orotherthingsaregiveninexchangeforit。Light，air，andwaterarethefreeandbountifulgiftsof

nature，butifamanconstructsalamp，wemustpayforthelightitdiffuses；ifweareindebtedtohislabour。foraventilator，

orevenafan，wepayfortheairtheyprocureus；andwhenwaterisconveyedthroughpipesintoourhouses，raisedbypumps，orbroughttousinanymannerbytheartofman，apriceispaidforit。\"Utilitymaythereforebeconsideredasthesolecauseofvalueinuse，whilstvalueinexchangemaybeproducedbyany

circumstancewhichrendersthepossessionof’anobjectsodifficultofattainment，andatthesametimesodesirable，that

menarewillingtogivesomethinginexchangeforit。Thusnotonlyutilitybutbeauty，curiosity，fashion，rarity，andmany

otherqualitiesmaycreateexchangeablevalue；anditistothisvaluethat，inpoliticaleconomy，wechieflyconfineourattention。\"DemandandSupplyPrice，thatisMarketPrice，ashasbeensaid，dependsuponDemandandSupply。Inwhatmanner，bywhatlawdoesitso

depend？ifthesupplyincrease，inwhatproportionwillthepricefall？Ifthesupplydiminish，inwhatproportionwilltheprice

rise？

Withaviewtoanswerthisquestioncommoditieshavebeendividedintothreeclasses。

（1）Thoseofwhichthesupplycannotbeincreasedatallancientstatues，pictures，specialwines，asJohannisburg。

Inthesethepricedependsentirelyonthedemand。AsanexamplewemaytakewhatMrMillquotes，p。523。ThistopicishappilyillustratedbyMrDeQuincey。`Walkintoalmostanypossibleshop，buythefirstarticleyousee；what

willdetermineitsprice？Inninety—ninecasesoutofahundred，simplytheelementDdifficultyofattainment。Theother

element，U，orintrinsicutility，willbeperfectlyinoperative。Letthething（measuredbyitsuses）be，foryourpurposes，worth

tenguineas，sothatyouwouldrathergivetenguineasthanloseit；yet，ifthedifficultyofproducingitbeonlyworthone

guinea，oneguineaisthepricewhichitwillbear。Butstillnottheless，thoughUisinoperative，canUbesupposedabsent？

Bynopossibility；forifithadbeenabsent，assuredlyyouwouldnothaveboughtthearticleevenatthelowestprice。Uacts

uponyou，thoughitdoesnotactupontheprice。Ontheotherhand，inthehundredthcase，wewillsupposethe

circumstancesreversed：youareonLakeSuperiorinasteam—boat，makingyourwaytoanunsettledregion8oomilesahead

ofcivilization，andconsciouslywithnochanceatallofpurchasinganyluxurywhatsoever，littleluxuryorbigluxury，forthe

spaceoftenyearstocome。Onefellowpassenger，whomyouwillpartwithbeforesunset，hasapowerfulmusical—snuffbox：

knowingbyexperiencethepowerofsuchatoyoveryourownfeelings，themagicwithwhichattimesitlullsyouragitations

ofmind，youarevehementlydesiroustopurchaseit。InthehourofleavingLondonyouhadforgottodoso；hereisafinal

chance。Buttheowner，awareofyoursituationnotlessthanyourself，isdeterminedtooperatebyastrainpuslie（ltothevery

uttermostuponU，upontheintrinsicworthofthearticleinyourindividualestimateforyourindividualpurposes。Hewillnot

hearofDasanycontrollingpowerormitigatingagencyinthecase；andfinally，althoughatsixguineasa—pieceinLondonor

Parisyoumighthaveloadedawaggonwithsuchboxes，youpaysixtyratherthanloseitwhenthelastknelloftheclockhas

sounded，whichsummonsyoutobuynowortoforfeitforever。Here，asbefore，onlyoneclementisoperative：beforeitwas

D，nowitisU。Butafterall，Dwasnotabsent，thoughinoperative。TheinertnessofDallowedUtoputforthitstotaleffect。

ThepracticalcompressionofDbeingwithdrawn，Uspringsup，likewaterinapump，whenreleasedfromthepressureof

air。YetstillthatDwaspresentinyourthoughts，thoughthepricewasotherwiseregulated，isevident；bothbecauseUand

Dmustco—existinordertofoundanycaseofexchangevaluewhatever，andbecauseundeniablyyoutakeintovery

particularconsiderationthisD，theextremedifficultyofattainment（whichhereisthegreatestpossible，viz，animpossibility）

beforeyouconsenttohavethepricerackeduptoU。ThespecialDhasvanished；butitisreplacedinyourthoughtsbyan

unlimitedD。UndoubtedlyyouhavesubmittedtoUinextremityastheregulatingforceoftheprice；butitwasunderasense

ofD’slatentpresence。YetDissofarfromexertinganypositiveforce，thattheretirementofDfromallagencywhateveron

thepricethisitiswhichcreatesasitwereaperfectvacuum，andthroughthatvacuumUrushesuptoitshighestandultimategradation。\"Thiscase，inwhichthevalueiswhollyregulatedbythenecessitiesordesiresofthepurchaser，isthecaseofstrictand

absolutemonopoly；inwhich，thearticledesiredbeingonlyobtainablefromoneperson，hecanexactanyequivalent，shortof

thepointatwhichnopurchasercouldbefound。Butitisnotanecessaryconsequence，evenofcompletemonopoly，thatthe

valueshouldbeforceduptothisultimatelimit：aswillbeseenwhenwehaveconsideredthelawofvalueinsofaras

dependingontheotherelement，difficultyofattainment。\"

（2）Thesecondclassiscommoditiessusceptibleofindefinitemultiplication，aslinens，woollens，cottons，axes，watches。Inthesethemarket—pricetendsrapidlytothenaturalprice：andyettheremaybegreatderangement，asforinstanceifthesupplyofmaterial，ascotton，shouldfailforatime。（3）Thethirdclassiscommoditiessusceptibleofmultiplicationbyincreasedexpense，thatis，byincreasedlabour。Ofthese

cornisthetype，andforus，themostimportant。

Ifthesupplyofcorn`bediminished，howmuchisthepriceincreased？ThestatementgenerallygivenonthissubjectisthatmadebySirW。Davenant，andquotedbyMrTookeinhisbook，On。

HighandLowPrices。

Thestatementisthis：thatadeficiencyinthecropof1/10，2/10，3/10，4/10，5/10，raisestheprice3/10，8/10，16/10，28/10，45/10。

respectively。

Whichamountstothis：thatwhenthesupplyis1098765，thepriceis101318263855。Ofcoursenothinglikemathematicalexactnessorabsolutesteadinesscanbelookedforinsuchcases。Andmoreoverthe

effectoftheimportationofcornissetaside。Iftheabovenumbersweretobemadethebasisofamathematicalrule，itwouldbefoundthatthepricevariesinverselyasthesquareofthesupply；orratherinahigherratio。ButthispartofPoliticalEconomyisnotsofaradvancedintheestablishmentofgeneralrules，thatwecanapply

mathematicalcalculationtoitwithanyadvantage。Todosowouldonlygiveafalseimpressionofthecertaintyand

exactnessofourresults。LECTUREIV。Rent。

WehavespokenofWagesandofProfits。WehavenowtospeakofRent。

RentiswhatispaidfortheuseofLand。RentisanelementofpriceinadifferentwayfromWagesandProfits。

Smith，p。67，speaksasfollows：

\"Rent，itistobeobserved，therefore，entersintothecompositionofthepriceofcommoditiesinadifferentwayfromwagesandprofit。Highorlowwagesandprofitarethecausesofhighorlowprice；highorlowrentistheeffectofit。Itisbecausehighorlowwagesandprofitmustbepaidinordertobringaparticularcommoditytomarket，thatitspriceishighorlow。Butitisbecauseitspriceishighorlow，agreatdealmore，orverylittlemore，ornomore，thanwhatissufficienttopaythosewagesandprofit，thatitaffordsahigh。rent，oralowrent，ornorentatall。\"

Smith’sviewofthegradationsofrentindifferentkindsoflandisexcellent。Hebeginsfromthefundamentalprinciplethatlandalmosteverywherecanproducemorefoodthanisexpendedinraisingtheproduceandreplacingthestock。SomethingthereforealwaysremainsforrenttotheLandlord。

Hethentakesexamples（Smith，pp。67—69）

\"ThemostdesertmoorsinNorwayandScotlandproducesomesortofpastureforcattle，ofwhichthemilkandtheincreasearealwaysmorethansufficient，notonlytomaintainallthelabournecessaryfortendingthem，andtopaytheordinaryprofittothefarmerorowneroftheherdorflock，buttoaffordsomesmallrenttothelandlord。Therentincreasesinproportiontothegoodnessofthepasture。Thesameextentofgroundnotonlymaintainsagreaternumberofcattle，butastheyarebroughtwithinasmallercompass，lesslabourbecomesrequisitetotendthem，andtocollecttheirproduce。

Thelandlordgains1）0thways；bytheincreaseoftheproduce，andbythediminutionofthelabourwhichmustbemaintaineduponit。

Therentoflandnotonlyvarieswithitsfertility，whateverbeitsproduce，butwithitssituation，whateverbeitsfertility。Landintheneighbourhoodofatowngivesagreaterrentthanlandequallyfertileinadistantpartofthecountry。Thoughitmaycostnomorelabourtocultivatetheonethantheother，itmustalwayscostmoretobringtheproduceofthedistantlandtomarket。A。greaterquantityoflabour，therefore，mustbemaintainedoutofit；andthesurplus，fromwhicharedrawnboththeprofitofthefarmerandtherentofthelandlord，mustbediminished。

Butinremotepartsofthecountry，therateofprofits，ashasalreadybeenshewn，isgenerallyhigherthanintheneighbourhoodofalargetown。

Asmallerproportionofthisdiminishedsurplus，therefore，mustbelongtothelandlord。

Goodroads，canals，andnavigablerivers，bydiminishingtheexpenseofcarriage，puttheremotepartsofthecountrymorenearlyuponalevelwiththoseintheneighbourhoodofthetown。Theyareuponthataccountthegreatestofallimprovements。Theyencouragethecultivationoftheremote，whichmustalwaysbethemostextensivecircleofthecountry。

Theyareadvantageoustothetown，bybreakingdownthemonopolyofthecountryinitsneighbourhood。Theyareadvantageouseventothatpartofthecountry。Thoughtheyintroducesomerivalcommoditiesintotheoldmarket，theyopenmanynewmarketstoitsproduce。Monopoly，besides，isagreatenemytogoodmanagement，whichcanneverbeuniversallyestablished，butinconsequenceofthatfreeanduniversalcompetitionwhichforceseverybodytohaverecoursetoitforthesakeofself—defence。Itisnotmorethanfiftyyearsago，thatsomeofthecountiesintheneighbourhoodofLondonpetitionedtheParliamentagainsttheextensionoftheturnpike—roadsintotheremotercounties。Thoseremotercounties，theypretended，fromthecheapnessoflabour，wouldbeabletoselltheirgrassandcorncheaperintheLondonmarketthanthemselves，andwouldtherebyreducetheirrents，andruintheircultivation。Theirrents，however，haverisen，andtheircultivationhasbeenimprovedsincethattime。

\"Acornfieldofmoderatefertilityproducesa。muchgreaterquantityoffoodforman，thanthebestpastureofequalextent。Thoughitscultivationrequiresmuchmorelabour，yetthesurpluswhichremains，afterreplacingtheseed，andmaintainingallthatlabour，islikewisemuchgreater。Ifapoundofbutcher’smeat，therefore，wasneversupposedtobeworthmorethanapoundofbread，thisgreatersurpluswouldeverywherebeofgreatervalue，andconstituteagreaterfund，bothfortheprofitofthefarmerandtherentofthelandlord。Itseemstohavedonesouniversallyintherudebeginningsofagriculture。

\"Buttherelativevaluesofthesetwodifferentspeciesoffood，breadandbutcher’smeat，areverydifferentinthedifferentperiodsofagriculture。

Initsrudebeginningstheunimprovedwilds，whichthenoccupythefargreaterpartofthecountry，areallabandonedtocattle。Thereismorebutcher’smeatthanbread，andbread，therefore，isthefoodforwhichthereisthegreatestcompetition，andwhichconsequentlybringsthegreatestprice。AtBuenosAyres，wearetoldbyUlloa，fourreals（one—and—twentypencehalfpennysterling）wasfortyorfiftyyearsagotheordinarypriceofanox，chosenfromaherdoftwoorthreehundred。liesaysnothingofthepriceofbread，probablybecausehefoundnothingremarkableaboutit。Anoxthere，hesays，costslittlemorethanthelabourofcatchinghim。Butcorncannowhereberaisedwithoutagreatdealoflabour；andinacountrywhichliesupontheriverPlate，atthattimethedirectroadfromEuropetothesilverminesofPotosi，themoneypriceoflabourcouldnotbeverycheap。Itisotherwisewhencultivationisextendedoverthegreaterpartofthecountry。Thereisthenmorebreadthanbutcher’smeat。

Thecompetitionchangesitsdirection，andthepriceofbutcher’smeatbecomesgreaterthanthepriceofbread。

\"Bytheextensionbesidesofcultivation，theunimprovedwildsbecomeinsufficienttosupplythedemandforbutcher’smeat。Agreatpartofthecultivatedlandsmustbeemployedinrearingandfatteningcattle，ofwhichtheprice，therefore，mustbesufficienttopay，notonlythelabournecessaryfortendingthem，buttherentwhichthelandlordandtheprofitwhichthefarmercouldhavedrawnfromsuchland。employedintillage。Thecattlebreduponthemostuncultivatedmoors，whenbroughttothesamemarket，are，inproportiontotheirweightorgoodness，soldatthesamepriceasthosewhicharereareduponthemostimprovedland。Theproprietorsofthosemoorsprofitbyit，andraisetherentoftheirlandinproportiontothepriceoftheircattle。Itisnotmorethanacenturyago，thatinmanypartsofthehighlandsofScotlandbutcher’smeatwasascheap，orcheaper，thanevenbreadmadeofoatmeal。TheunionopenedthemarketofEnglandtothehighlandcattle。Theirordinarypriceisatpresentaboutthreetimesgreaterthanatthebeginningofthecentury，andtherentsofmanyhighlandestateshavebeentripledandquadrupledinthesametime。

InalmosteverypartofGreatBritain，apoundofthebestbutcher’smeatis，inthepresenttimes，generallyworthmorethantwopoundsofthebestwhitebread；andinplentifulyearsitissometimesworththreeorfourpounds。

\"Itisthusthatintheprogressofimprovement，therentandprofitofunimproved，pasturecometoberegulatedinsomemeasurebytherentandprofitofwhatisimproved，andtheseagainbytherentandprofitofcorn。Cornisanannualcrop；butcher’smeatacropwhichrequiresfourorfiveyearstogrow。Asanacreofland，therefore，willproduceamuchsmallerquantityoftheonespeciesoffoodthanoftheother，theinferiorityofthequantitymustbecompensatedbythesuperiorityoftheprice。Ifitwasmorethancompensated，morecornlandwouldbeturnedintopastureandifitwasnotcompensated，partofwhatwasinpasturewouldbebroughtbackintocorn。

\"Thisequality，however，betweentherentandprofitofgrassandthoseofcorn，ofthelandofwhichtheimmediateproduceisfoodforcattle，andofthatofwhichtheimmediateproduceisfoodformen，mustbeunderstoodtotakeplaceonlythroughthegreaterpartoftheimprovedlandsofagreatcountry。Insomeparticularlocalsituationsitisquiteotherwise，andtherentandprofitofgrassaremuchsuperiortowhatcanbemadebycorn。

\"Thusintheneighbourhoodofagreattownthedemandformilkandforforagetohorsesfrequentlycontribute，togetherwiththehighpriceofbutcher’smeat，toraisethevalueofgrassabovewhatmaybecalleditsnaturalproportiontothatofcorn。Thislocaladvantage，itisevident，cannotbecommunicatedtothelandsatadistance。

\"ParticularcircumstancesIhavesometimesrenderedsomecountriessopopulous，thatthewholeterritory，likethelandsintheneighbourhoodofagreattown，hasnotbeensufficienttoproduceboththegrassandthecornnecessaryforthesubsistenceoftheirinhabitants。Theirlands，therefore，havebeenprincipallyemployedintheproductionofgrass，themorebulkycommodity，andwhichcannotbesoeasilybroughtfromagreatdistance；andcorn，thefoodofthegreatbodyofthepeople，hasbeenchieflyimportedfromforeigncountries。Hollandisatpresentinthissituation，andaconsiderablepartofancientItalyseemstohavebeensoduringtheprosperityoftheRomans。Tofeed[cattle]well，oldCatosaid，aswearetoldbyCicero，wasthefirstandmostprofitablethinginthemanagementofaprivateestate；tofeedtolerablywell，thesecond；

andtofeedill，thethird。Toplough，herankedonlyinthefourthplaceofprofitandadvantage。Tillage，indeed，inthatpartofancientItaly，whichlayintheneighbourhoodofRome，musthavebeenverymuchdiscouragedbythedistributionsofcorn，whichwerefrequentlymadetothepeople，eithergratuitously，orataverylowprice。Thiscornwasbroughtfromtheconqueredprovinces，ofwhichseveral，insteadoftaxes，wereobligedtofurnishatenthpartoftheirproduceatastate（lprice，aboutsixpenceapeck，totheRepublic。ThelowpriceatwhichthiscornwasdistributedtothepeoplemustnecessarilyhavesunkthepriceofwhatcouldbebroughttotheRomanmarketfromLatium，ortheancientterritoryofRome，andmusthavediscourageditscultivationinthatcountry。

\"Inanopencountrytoo，ofwhichtheprincipalproduceiscorn，awell—inclosedpieceofgrasswillfrequentlyrenthigherthananycornfieldinitsneighbourhood。

Itisconvenientforthemaintenanceofthecattleemployedinthecultivationofthecorn，anditshighrentis，inthiscase，notsoproperlypaidfromthevalueofitsownproduce，asfromthatofthecornlandswhicharecultivatedbymeansofit。Itislikelytofall，ifevertheneighbouringlandsarecompletelyinclosed。ThepresenthighrentofinclosedlandinScotlandseemsowingtothescarcityofinclosure，andwillprobablylastnolongerthanthatscarcity。Theadvantageofinclosureisgreaterforpasturethanforcorn。Itsavesthelabourofguardingthecattle，whichfeedbettertoowhentheyarenotliabletobedisturbedbytheirkeeperorhisdog。

\"Butwherethereisnolocaladvantageofthiskind，therentandprofitofcorn，orwhateverelseisthecommonvegetablefoodofthepeople，mustnaturallyregulate，uponthelandwhichisfitforproducingit，therentandprofitofpasture。

\"Theuseoftheartificialgrasses，ofturnips，carrots，cabbages，andtheotherexpedientswhichhavebeenfallenupontomakeanequalquantityoflandfeedagreaternumberofcattlethanwheninnaturalgrass，shouldsomewhatreduce，itmightbeexpected，thesuperioritywhich，inanimprovedcountry，thepriceofbutcher’smeatnaturallyhasoverthatofbread。

Itseemsaccordinglytohavedoneso；andthereissomereasonforbelievingthat，atleastintheLondonmarket，thepriceofbutcher’smeat，inproportiontothepriceofbread，isagooddeallowerinthepresenttimesthanitwasinthebeginningofthelastcentury。\"

ThusRentistheresultofthemonopolyoftheLandinacertainway。

Buttheoperationofthismonopolyaccordingtotheprogressofacountryinwealthandpopulation，andalsoinskill，mayliefollowedintosomefurtherpropositions：andthesepropositionscomposewhathasinmorerecenttimesbeencalledtheDoctrineofRent。

TheDoctrineofRentisbrieflythis：thattheRentoflandisthepaymentfortheexcessofvalueofthebetterlandoverthepoorestlandwhichcanbecultivatedwithoutloss。

ThisDoctrineisregardedasaveryimportantpointinPoliticalEconomy。

MrMillsaysthatthisDoctrineofRentisthePonsAsinorurnofPoliticalEconomy：thatis，likethecelebratedfourthPropositionofEuclid’sElements，itaffordsatestwhetherthestudenthasacapacityforunderstandingdemonstrativereasoningonthesubjectwhichisplacedbeforehim。

OnthehistoryofthisdoctrineMrMcCullochspeaksasfollows：

\"Thetheoryofrentwasfirstpromulgatedandsatisfactorilyestablishedinatractonthecornlawspublishedin1777，byDrJamesAnderson，anativeofHermandstoninMidlothian。Andersonwasattheperiodreferredto，extensivelyengagedinfarminginAberdeenshire；buthavingremovedtoLondonin1797，heeditedvariouspublications，andamongothers，`ObservationsinAgriculture，andNaturalHistory，&；c。，’inwhichhegaveaclearandableexpositionofthenature，origin，andprogressofrent。Butnotwithstandingtheserepeatedpublications，itdoesnotappearthathisprofoundandimportantdisquisitionsattractedanyattention。AndsocompletelyweretheyforgottenthatwhenSirEdwardWestandMrMalthuspublishedtheirtractsonrent，in1815，theywereuniversallyregardedastherealauthorsofthetheory。

Thereis，webelieve，noquestionastotheiroriginality；butitmaywellbedoubtedwhethertheysucceededinexplainingthetheoryaswellasithadbeenexplainedaboutfortyyearsbefore。\"

LECTUREVI。

TRANSITIONSOFFORMSOFRENTS。

TransitionfromMé；tayerRents。Iwillresumewhathasjustbeensaid。TheDoctrineofRentasdeliveredbymoderneconomists，hasbeenconsideredasthe

mostremarkableexampleofreasoningonsuchsubjects。ButthisdoctrineappliesonlytoFarmers’Rents；nowFarmers’

RentsarethesumspaidfortheuseoftheLandbycapitalist，farmingforProfit：itbeingimpliedthatprofitsaredetermined

bycompetition；andthatifthefarmersdonotmakesuchanamountofprofittheywillremovetheircapitaltosomeother

employment。Buttheseconditionsarenotgenerallyverifiedincountriesastheyexistactually。Thecultivatorisnota

capitalist，andthestockemployeduponthelandisnotmoveable。Takingthesurfaceoftheearthatlarge，theconditionson

whichthecultivatorholdsitaredifferentindifferentcountries；butFarmers’RentsexistnowhereexceptinEnglandanda

fewregionselsewhere。Takingtheactualconditionsofculture，itappearsthattenantsmaybedivided，asIsaidbefore，intofourclasses；Mé；tayers，Serfs，Ryots，andCottiers，inadditiontoFarmers。Itmaybeobservedthatwehave，in。thisnewviewofthesubject，anexampleoftheinductivemethodappliedtoPolitical

Economy，indistinctionfromthedeductivemethod，whichisthatofRicardoandhisschool。Theirmethodconsistsintaking

definitions，andreasoningdownwardsfromthem，asisdoneingeometry；andthus，asMillsays，wecometopropositions

which，likethoseofgeometry，requireanaptitudeforsuchreasoninginthestudent。WetakethedefinitionofRent，thatitis

whatispaidbyacapitalistfortheuseoftheland，andwecometothepropositionthatRentistheexcessofgoodsoils

abovetheworst。Intheothermethodwebeginnotfromdefinitions，butfromfacts。Wetakethefactsaswefindtheminthe

variouscountriesoftheglobe：weclassifythesefacts；andhavingsoclassifiedthem，weseewhatpropositionscanbetruly

assertedconcerningeachclass。Andthismethodisthemoreuseful，becausethetruthstowhichwearethusledarethose

whicharecharacteristicofthesocialandpoliticalconditionofeachpeople；oftherelationsofranks；andofthemeansand

chancesofchangeandprogress。Iwillmentionafewsuchpropositionsmainlyasexamples。TheworkofMrJonesonRenttowhichIhavealreadyreferred，isoccupiedalmostentirelywiththeconsiderationofsuchsubjects。NexttoFarmers’Rents，whichoccupythesoilofEngland，wemayconsiderMé；tayerRents，whichoccupyalargepartofthe

soilofFranceandItaly。Theusualformofsuchrentsis，asthenameimplies，thattheproprietorandthecultivatordividethe

produceequally。AFrenchgentlemanwhocamefromaMé；tayerpartofFrancegavemeaverydefiniteimageofthisequal

division。Hesaidthattheproducewaseveryyeargarneredbythecultivatorintotwobarns，lockeduptherewithtwokeys，

andthentheproprietortookwhichkeyhechose，thecultivatortakingtheother，eachbeingthusputinpossessionofhishalfoftheharvest。CountriesinastateofMé；tayeragearecommonlyfarlessrichandpopulousthancountrieswhereFarmers’rentsprevail：but

thedifferenceisnotadifferencewhichcanberemediedbyanyalterationinthesystem。Thesystemitselfdependsuponthe

generalstateofwealthandpopulationinthecountry。M。deLavergnehaspointedoutwithgreatprecisionthedifferenceof

FranceandEnglandinthisrespect：andhasmadearemarkwhichappearstobeofthehighestimportance，followingArthur

Young：namely：thattheprogressofagriculturefromthesystemofmé；tayeragetothesystemoffarmersdependsontheexistenceofaMarket（dé；bouché；s）foragriculturalproduce。Hesays（p。166）：\"BeginningwiththereignofQueenAnne，EnglandvisiblygetsthestartofFranceinindustryandcommerce；thatistosay，

ineverything，forprogressintheserespectsincludesallotherprogress。AftertheAmericanwar，whenthenation，afflictedat

thelossofitsprincipalcolony，threwitselfbackuponitselftofindcompensationinitsownresources，thevigourofits

advancewasquitewithoutparallel。ThenappearsAdamSmith，whoinanimportantwork，examinesthecauseofthewealth

andgreatnessofnations。Thenappearedgreatinventors，asArkwrightandWatt，whoareasitweretheinstrumentsof

AdamSmith，torealizehistheoriesinthepracticeofindustry。ThenappearsWilliamPitt，whocarriesthesamespiritinto

theadministrationofpublicaffairs。FinallythereappearArthurYoungandBakewell，whoapplythenewideastoagriculture。\"ThesystemofArthurYoungisverysimple。Itiscomprizedinasingleword，ofwhichAdamSmithhadrecentlyfixedthe

meaning——amarket。TillthattimetheEnglishcultivators，likethoseofthecontinent，hadworkedbutlittlewithaviewtoa

market。Thegreaterpartofagriculturalproducehadbeenconsumeduponthespotbytheproducersthemselves：andthough

morewassoldinEnglandthanelsewhere，theideaofthemarketwasnotthatwhichgovernedtheprocessofproduction。

ArthurYoungisthefirstwhomadetheEnglishagriculturistsunderstandthegrowingimportanceofamarket，thatis，ofthe

saleofagriculturalproducetoanon—agriculturalpopulation。Thisnon—agriculturalpopulation，tillthattimesmall，beganto

growintoimportance；andsincethen，thankstotheexpansionofindustryandcommerce，themultiplicationoftheirpopulationisbecomeimmense。M。deLavergnethennoticestheenormousprogresswhichtheuseofsteamhasproducedinEngland，especiallyin

LancashireandtheWestRidingofYorkshire：cottonatManchester，ironatSheffield，woolatLeeds，commerceat

Liverpool。Henoticesthewealtharisingfromthecoal—fields。\"Underthesecircumstances，\"liesays，\"thepopulationofGreat

Britainrosebetween1801and1851from10millionsto21。ThepopulationofLancashireandoftheWestRidingwas

tripled。Franceinnoinstanceshewsanythinglikethis：inthesameintervalitincreasedonlybyaquarter[athird]。It

advancedfrom27millionsto36。Themostpopulousdepartments，thoseduRhoneandduNord，haveonlytwoinhabitantsperhectare。\"IfwepassintothedepartmentsofFrancewhicharemostbackward，thoseduCentreandduMidi，whatdowefindthereA

thinpopulationreachingatmosttothethirdoftheEnglishpopulation，oneinhabitantfortwohectares，insteadofthree

inhabitants。Andthispopulationisalmostexclusivelyagricultural。Fewornocities：fewornomanufactures：tradeonlyso

muchasisstrictlyrequisiteforthenarrowneedsoftheinhabitants：thecentresofconsumptionbeingfarasunderandthe

meansofcommunicationdearanddifficult，theexpensesoftransportwouldabsorbthewholevalueoftheproduce。Herethe

cultivatorcanfindlittleornothingtosell。Forwhatpurposethendoeshelabour？Tofeedhimselfandhismasterwiththe

produce。Themastersharestheproduceinkind，andconsumeshispart。Ifitiswheatorwine，themasterandthemé；tayer

eatwheatanddrinkwine。Ifitisrye，sarrasin，potatoes，masterandmé；tayereatrye，sarrasin，andpotatoes。Woolandhemp

aresharedinlikemanner，andservetomakethecoarsestuffsinwhichthetwopartnersalikearedressed。Ifbesidesthis

thereareafewleansheepinthesheds，afewcalvessuckledwithdifficultybycowsexhaustedwithlabour，andtowhichthemilkisgrudged，thesetheyselltopaythetaxes。\"Thissystem，\"hegoesontosay，\"hasbeenmuchblamed：butitisreallytheonlypossiblesystemthere，wherethereareno

markets。Insuchacountryasthis，agriculturecannotbeaprofession，aspeculation，atrade。Inordertospeculateaman

mustsell，andhecannotsellwhenhefindsnoonetobuy。WhenIsaynoone，itistopushthesuppositiontoanextreme

point，whichitseldomreachesinfact。InFrance，eveninthemostsecludedcantons，therearealwayssomesmallnumberof

buyers：sometimesatenth，sometimesafifth，sometimesafourth，ofthatpopulationwhichlivessolelyonagriculture。Andin

proportionasthenumberoftheseconsumersincreases，theconditionofthecultivatorimproves；exceptithappensthathe

himselfsuppliestheincomeofthesecustomersundertheformoflegaldues，orinterestofloans，whichhappensatleastin

someinstances。Butthetenth，thefifth，eventhefourth，isnotenoughtofurnishasufficientmarket；especiallyifthispartofthepopulationalsoiscomposedofproducers，thatis，oftradesmenandmanufacturers。\"Inthiscasethecultivatormustgrowfood，inordertolive。Solongasthepopulationisthin，thismaybedone；butwhenpopulationincreases，thewantofsubsistenceisfelt。\"ButletusnowpasstothepartofFrancewhichismostpopulousandmostindustrious，thatoftheWesternNorth。Wefind

therenotexactlythecounterpartoftheEnglishpopulation；wefindaninhabitantforeachhectare，insteadof1？（asin

England）：butthisisalreadythedoubleofwhatwehadelsewhere；andofthispopulation，onehalfappliesitselftotrade，

manufactures，andtheliberalprofessions。Whatisespeciallycalledthecountryisnotmorepopulousthaninthecentre，and

theSouth；butinadditiontothepopulationwefindcitiesnumerous，rich，theseatsofmanufacturers；andamongthese，the

largestandmostopulentofthemall，Paris。Thereisinthisregionalargetradeinagriculturalproduce。Onallsides，the

grain，thewines，thecattle，thewools，thefowls，theeggs，themilk，streamfromthecountrytothetowns，whichpaywith

theirmanufacturesforwhattheypurchase。Whenwereachthisstage，farmers’rentsbecomepossible，andarefoundpaidin

fact：thisisthetruecauseoffarmers’rents。Theexistenceofsuchrentsisaninfallibleindicationofaneconomicalsituation，wherethesaleofproduceistherule，andwhereconsequentlycultivationcanbecomeatrade。\"Andthusthetransitionfrommé；tayerrentstofarmers’rentsdependsupontheexistenceofaregularmarket。Andastheauthorsays，thatwhichwaspreviouslyaseriesofproblems，isperfectlyexplained。M。deLavergnetracestheconsequenceofthisviewintovariousinterestingdetails：butfortheseIhavenottime。Iwillturn

toanothertransitionfromoneformofRenttoanother。Forthesetransitionsmarkthegreatstepsintheprogressofeach

nation，andarereallyfarmoreimportantthanthegreatestevents，intheirhistory，ashistoryiscommonlynarrated。

TransitionfromSerfRents。Serfrentsare，asIhavesaid，therentspaid：inlabourtotheownerofthesoilbyapeasantwhoisallowedtoraisehisown

subsistencebylabouringonthesoil。TheyprevailnowinRussiaandintheeasternpartofEurope。Butpreviouslythey

existedoverthewholeofEurope：theyexistedinEngland。HowweretheygotridofinEngland？Whendidthisgreateventtakeplace。IwillgiveyouMrJonessaccountofthischange，（p。40）：\"ThirteenhundredyearshaveelapsedsincethefinalestablishmentoftheSaxons。Eighthundredofthesehadpassedaway，

andtheNormanshadbeenfortwocenturiessettledhere，andaverylargeproportionofthebodyofcultivatorswasstill

preciselyinthesituationoftheRussianserf。Duringthenextthreehundred，theunlimitedlabourrentspaidbythevilleinsfor

thelandsallottedtothemweregraduallycommutedfordefiniteservices，stillpayableinkind；andtheyhadalegalrightto

thehereditaryoccupationoftheircopyholds。Twohundredyearshavebarelyelapsedsincethechangetothisextentbecame

quiteuniversal，orsincethepersonalbondageofthevilleinsceasedtoexistamongus。Thelastclaimofvilleinagerecorded

inourcourtswasinthe15thofJamesI。，1618。Instancesprobablyexistedsometimeafterthis。Theultimatecessationof

therighttodemandtheirstipulatedservicesinkindhasbeensincebroughtabout，silentlyandimperceptibly，not。bypositivelaw；for，whenotherpersonalserviceswereabolishedattheRestoration，thoseofcopyholderswereexceptedandreserved。\"MrJonesgoesontosaythatthroughoutGermany，similarchangesaretakingplace：thoughtheyareperfectedperhaps

nowhere，andinsomelargedistrictstheyexhibitthemselvesinverybackwardstages。Wehaveheardlatelythatgreat

changesintheconditionoftheSerfsareaimedatinRussia。TheEmperor，wearetold，hastakenlargestepsforthe

emancipationofhisSerfs。ButsuchaimsandsuchmeasuresarefarfromnewinRussia。MrJonesdescribestheseaimsandattempts（p。63）：\"Awishtoextendtheauthorityandprotectionofthegeneralgovernmentoverthemassofcultivatorsandtoincreasetheir

efficiency，andthroughthatthewealthandfinancialresourcesofthestate，hasledthedifferentsovereignsalwaysto

co—operate，andoftentotakethelead，inputtinganendtothepersonaldependenceoftheserf，andmodifyingthetermsof

histenure。Tothesereasonsofthesovereignsandlandlords，dictatedbyobviousself—interest，wemustaddothermotives

whichdohonortotheircharactersandtotheage，theexistenceofwhichitwouldbeamereaffectationofhard—hearted

wisdomtodoubt；namely，apaternaldesireonthepartofsovereignstoelevatetheconditionandincreasethecomfortsof

themostnumerousclassofthehumanbeingscommittedtotheircharge；andaphilanthropicdislikeonthepartofthe

proprietorstobesurroundedbyaraceofwretcheddependents，whosedegradationandmiseryreflectdiscrediton

themselves。Thesefeelingshaveproducedthefermentationonthesubjectoflabourrents，whichisatthismomentworking

throughoutthelargedivisionofEuropeinwhichtheyprevail。FromthecrownlandsinRussia，throughPoland，Hungary，

andGermany，therehavebeenwithinthelastcentury，orarenow，plansandschemesonfoot，eitheratonceorgraduallyto

getridofthetenure，orgreatlytomodifyitseffectsandimproveitscharacter；andifthewishesortheauthorityofthestate，

oroftheproprietors，couldabolishthesystem，andsubstituteabetterinitsplace，itwouldvanishfromthefaceofEurope。

Theactualpovertyoftheserfs，however，andthedegradationoftheirhabitsofindustry，presentaninsurmountableobstacle

toanygeneralchangewhichistobecompleteandsudden。Intheirimperfectcivilizationandhalf—savagecarelessness，the

necessityoriginatedwhichforcedproprietorsthemselvestoraisetheproduceonwhichtheirfamiliesweretosubsist。That

necessityhasnotceased；thetenantryarenotyetripeinsomeinstancesnotriperthantheywere。athousandyearsagotobe

entrustedwiththeresponsibilityofraisingandpayingproducerents。Butasthepastprogressandactualcircumstancesofdifferentdistrictsarefoundunlike，sotheircapacityforpresentchangediffersinkindanddegree。\"Itmustbeforfutureyearstodeterminewhethertheattemptsmadeinourtimetoacceleratethischangearceffectual；and

whatistheresultoftheeffortatsogreatasocialrevolution。