or all of those three parts; as whatever part
of it remains after paying the rent of the land,
and the price of the whole labour employed in
raising, manufacturing, and bringing it to
market, must necessarily be profit to somebody.
As the price or exchangeable value of every
particular commodity, taken separately, resolves
itself into some one or other, or all of
those three parts; so that of all the commodities
which compose the whole annual produce
of the labour of every country, taken complexly,
must resolve itself into the same three
parts, and be parcelled out among different inhabitants
of the country, either as the wages
of their labour, the profits of their stock, or
the rent of their land. The whole of what is
annually either collected or produced by the
labour of every society, or, what comes to the
same thing, the whole price of it, is in this
manner originally distributed among some of
its different members. Wages, profit, and
rent, are the three original sources of all revenue,
as well as of all exchangeable value. All
other revenue is ultimately derived from some
one or other of these.
Whoever derives his revenue from a fund
which is his own, must draw it either from
his labour, from his stock, or from his land.
The revenue derived from labour is called
wages; that derived from stock, by the person
who manages or employs it, is called profit;
that derived from it by the person who
does not employ it himself, but lends it to another,
is called the interest or the use of money.
It is the compensation which the borrower
pays to the lender, for the profit which
he has an opportunity of making by the use
of the money. Part of that profit naturally
belongs to the borrower, who runs the risk
and takes the trouble of employing it, and part
to the lender, who affords him the opportunity
of making this profit. The interest of money
is always a derivative revenue, which, if
it is not paid from the profit which is made by
the use of the money, must be paid from some
other source of revenue, unless perhaps the
borrower is a spendthrift, who contracts a second
debt in order to pay the interest of the
first. The revenue which proceeds altogether
from land, is called rent, and belongs to the
landlord. The revenue of the farmer is derived
partly from his labour, and partly from
his stock. To him, land is only the instrument
which enables him to earn the wages of
this labour, and to make the profits of this
stock. All taxes, and all the revenue which
is founded upon them, all salaries, pensions,
and annuities of every kind, are ultimately derived
from some one or other of those three
original sources of revenue, and are paid either
immediately or mediately from the wages
of labour, the profits of stock, or the rent of
land.
When those three different sorts of revenue
belong to different persons, they are readily
distinguished; but when they belong to the
same, they are sometimes confounded with
one another, at least in common language.
A gentleman who farms a part of his own
estate, after paying the expense of cultivation,
should gain both the rent of the landlord and
the profit of the farmer. He is apt to denominate,
however, his whole gain, profit, and
thus confounds rent with profit, at least in
common language. The greater part of our
North American and West Indian planters
are in this situation. They farm, the greater
part of them, their own estates; and accordingly
we seldom hear of the rent of a plantation,
but frequently of its profit.
Common farmers seldom employ any overseer
to direct the general operations of the
farm. They generally, too, work a good deal
with their own hands, as ploughmen, harrowers,
&c. What remains of the crop, after paying
the rent, therefore, should not only replace
to them their stock employed in cultivation,
together with its ordinary profits, but
pay them the wages which are due to them,
both as labourers and overseers. Whatever
remains, however, after paying the rent and
keeping up the stock, is called profit. But
wages evidently make a part of it. The farmer,
by saving these wages, must necessarily
gain them. Wages, therefore, are in this case
confounded with profit.
An independent manufacturer, who has
stock enough both to purchase materials, and to
maintain himself till he can carry his work to
market, should gain both the wages of a journeyman
who works under a master, and the
profit which that master makes by the sale of
that journeyman's work. His whole gains,
however, are commonly called profit, and
wages are, in this case, too, confounded with
profit.
A gardener who cultivates his own garden
with his own hands, unites in his own person
the three different characters, of landlord,
farmer, and labourer. His produce, therefore,
should pay him the rent of the first, the
profit of the second, and the wages of the
third. The whole, however, is commonly considered
as the earnings of his labour. Both
rent and profit are, in this case, confounded
with wages.
As in a civilized country there are but few
commodities of which the exchangeable value
arises from labour only, rent and profit contributing
largely to that of the far greater
part of them, so the annual produce of its labour
will always be sufficient to purchase or
command a much greater quantity of labour
than what was employed in raising, preparing,
and bringing that produce to market. If the
society were annually to employ all the labour
which it can annually purchase, as the quantity
of labour would increase greatly every
year, so the produce of every succeeding year