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。
