would be of vastly greater value than that of
the foregoing. But there is no country in
which the whole annual produce is employed in
maintaining the industrious. The idle everywhere
consume a great part of it; and, according
to the different proportions in which
it is annually divided between these two different
orders of people, its ordinary or average
value must either annually increase or diminish,
or continue the same from one year
to another.
CHAP. VII.
OF THE NATURAL AND MARKET PRICE OF COMMODITIES.
There is in every society or neighbourhood
an ordinary or average rate, both of wages
and profit, in every different employment of
labour and stock. This rate is naturally regulated,
as I shall show hereafter, partly by
the general circumstances of the society, their
riches or poverty, their advancing, stationary,
or declining condition, and partly by the particular
nature of each employment.
There is likewise in every society or neighbourhood
an ordinary or average rate of rent,
which is regulated, too, as I shall shew hereafter,
partly by the general circumstances of
the society or neighbourhood in which the
land is situated, and partly by the natural
improved fertility of the land.
These ordinary or average rates may be
called the natural rates of wages, profit and
rent, at the time and place in which they
commonly prevail.
When the price of any commodity is neither
more nor less than what is sufficient to pay
the rent of the land, the wages of the labour,
and the profits of the stock employed in raising,
preparing, and bringing it to market, according
to their natural rates, the commodity
is then sold for what may be called its natural
price.
The commodity is then sold precisely for
what it is worth, or for what it really costs
the person who brings it to market; for
though, in common language, what is called
the prime cost of any commodity does not
comprehend the profit of the person who is
sell it again, yet, if he sells it at a price which
does not allow him the ordinary rate of profit
in his neighbourhood, he is evidently a loser
by the trade; since, by employing his stock
in some other way, he might have made that
profit. His profit, besides, is his revenue,
the proper fund of his subsistence. As,
while he is preparing and bringing the goods
to market, he advances to his workmen their
wages, or their subsistence, so he advances to
himself, in the same manner, his own subsistence,
which is generally suitable to the profit
which he may reasonably expect from the sale
of his goods. Unless they yield him this
profit, therefore, they do not repay him what
they may very properly be said to have really
cost him.
Though the price, therefore, which leaves
him this profit, is not always the lowest at
which a dealer may sometimes sell his goods,
it is the lowest at which he is likely to sell
them for any considerable time; at least
where there is perfect liberty, or where he
may change his trade as often as he pleases.
The actual price at which any commodity is
commonly sold, is called its market price. It
may either be above, or below, or exactly the
same with its natural price.
The market price of every particular commodity
is regulated by the proportion between
the quantity which is actually brought to
market, and the demand of those who are
willing to pay the natural price of the commodity,
or the whole value of the rent, labour,
and profit, which must be paid in order to
bring it thither, Such people may be called
the effectual demanders, and their demand the
effectual demand; since it may be sufficient
to effectuate the bringing of the commodity
to market. It is different from the absolute
demand. A very poor man may be said, in
some sense, to have a demand for a coach and
six; he might like to have it; but his demand
is not an effectual demand, as the commodity
can never he brought to market in
order to satisfy it.
When the quantity of any commodity which
is brought to market falls short of the effectual
demand, all those who are willing to pay
the whole value of the rent, wages, and profit,
which must he paid in order to bring it thither,
cannot be supplied with the quantity which
they want. Rather than want it altogether,
some of them will be willing to give more. A
competition will immediately begin among
them, and the market price will rise more or
less above the natural price, according as
either the greatness of the deficiency, or the
wealth and wanton luxury of the competitors,
happen to animate more or less the eagerness
of the competition. Among competitors of
equal wealth and luxury, the same deficiency
will generally occasion a more or less eager
competition, according as the acquisition of
the commodity happens to be of more or less
importance to them. Hence the exorbitant
price of the necessaries of life during the
blockade of a town, or in a famine.
When the quantity brought to market exceeds
the effectual demand, it cannot be all
sold to those who are willing to pay the whole
value of the rent, wages, and profit, which
must be paid in order to bring it thither.
Some part must be sold to those who are
willing to pay less, and the low price which