might not be the same in countries where the
ordinary rate of profit was either a good deal
lower, or a good deal higher. If it were a
good deal lower, one half of it, perhaps, could
not be afforded for interest; and more might
be afforded if it were a good deal higher.
In countries which are fast advancing to
riches, the low rate of profit may, in the price
of many commodities, compensate the high
wages of labour, and enable those countries
to sell as cheap as their less thriving neighbours,
among whom the wages of labour may
be lower.
In reality, high profits tend much more to
raise the price of work than high wages. If,
in the linen manufacture, for example, the
wages of the different working people, the flax-dressers,
the spinners, the weavers, &c. should
all of them be advanced twopence a-day, it
would be necessary to heighten the price of a
piece of linen only by a number of twopences
equal to the number of people that had been
employed about it, multiplied by the number
of days during which they had been so employed.
That part of the price of the commodity
which resolved itself into the wages,
would, through all the different stages of the
manufacture, rise only in arithmetical proportion
to this rise of wages. But if the profits
of all the different employers of those working
people should be raised five per cent. that
part of the price of the commodity which resolved
itself into profit would, through all the
different stages of the manufacture, rise in
geometrical proportion to this rise of profit.
The employer of the flax-dressers would, in
selling his flax, require an additional five per
cent. upon the whole value of the materials
and wages which he advanced to his workmen.
The employer of the spinners would require
an additional five per cent. both upon the advanced
price of the flax, and upon the wages
of the spinners. And the employer of the
weavers would require a like five per cent.
both upon the advanced price of the linen-yarn,
and upon the wages of the weavers. In
raising the price of commodities, the rise of
wages operates in the same manner as simple
interest does in the accumulation of debt.
The rise of profit operates like compound interest.
Our merchants and master manufacturers
complain much of the bad effects of
high wages in raising the price, and thereby
lessening the sale of their goods, both at home
and abroad. They say nothing concerning
the bad effects of high profits; they are silent
with regard to the pernicious effects of their
own gains; they complain only of those of
other people.
CHAP. X.
OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS
OF LABOUR AND STOCK.
The whole of the advantages and disadvantages
of the different employments of labour
and stock, must, in the same neighbourhood,
be either perfectly equal, or continually tending
to equality. If, in the same neighbourhood,
there was any employment evidently
either more or less advantageous than the rest,
so many people would crowd into it in the one
case, and so many would desert it in the other,
that its advantages would soon return to the
level of other employments. This, at least,
would be the case in a society where things
were left to follow their natural course, where
there was perfect liberty, and where every man
was perfectly free both to choose what occupation
he thought proper, and to change it as
often as he thought proper. Every man's interest
would prompt him to seek the advantageous,
and to shun the disadvantageous employment.
Pecuniary wages and profit, indeed, are
everywhere in Europe extremely different, according
to the different employments of labour
and stock. But this difference arises, partly
from certain circumstances in the employments
themselves, which, either really, or at
least in the imagination of men, make up for
a small pecuniary gain in some, and counterbalance
a great one in others, and partly from
the policy of Europe, which nowhere leaves
things at perfect liberty.
The particular consideration of those circumstances,
and of that policy, will divide
this Chapter into two parts.
Part I.—Inequalities arising from the nature
of the employments themselves.
The five following are the principal circumstances
which, so far as I have been able to
observe, make up for a small pecuniary gain
in some employments, and counterbalance a
great one in others. First, the agreeableness
or disagreeableness of the employments themselves;
secondly, the easiness and cheapness,
or the difficulty and expense of learning them;
thirdly, the constancy or inconstancy of employment
in them; fourthly, the small or great
trust which must be reposed in those who exercise
them; and, fifthly, the probability or
improbability of success in them.
First, the wages of labour vary with the
ease or hardship, the cleanliness or dirtiness,
the honourableness or dishonourableness, of
the employment. Thus in most places, take
the year round, a journeyman tailor earns less
than a journeyman weaver. His work is much