then known may be more barren than any that
was wrought before the discovery of the mines
of America. Whether the one or the other of
those two events may happen to take place, is
of very little importance to the real wealth
and prosperity of the world, to the real value
of the annual produce of the land and labour
of mankind. Its nominal value, the quantity
of gold and silver by which this annual produce
could be expressed or represented, would,
no doubt, be very different; but its real value,
the real quantity of labour which it could
purchase or command, would be precisely the
same. A shilling might, in the one case, represent
no more labour than a penny does at
present; and a penny, in the other, might represent
as much as a shilling does now. But
in the one case, he who had a shilling in his
pocket would be no richer than he who has a
penny at present; and in the other, he who
had a penny would be just as rich as he who
has a shilling now. The cheapness and abundance
of gold and silver plate would be the
sole advantage which the world could derive
from the one event; and the dearness and
scarcity of those trifling superfluities, the only
inconveniency it could suffer from the other.
Conclusion of the Digression concerning the Variations
in the Value of Silver.
The greater part of the writers who have
collected the money price of things in ancient
times, seem to have considered the low money
price of corn, and of goods in general, or, in
other words, the high value of gold and silver,
as a proof, not only of the scarcity of
those metals, but of the poverty and barbarism
of the country at the time when it took
place. This notion is connected with the system
of political economy, which represents
national wealth as consisting in the abundance
and national poverty in the scarcity, of gold
and silver; a system which I shall endeavour
to explain and examine at great length in the
fourth book of this Inquiry. I shall only observe
at present, that the high value of the
precious metals can be no proof of the poverty
or barbarism of any particular country at the
time when it took place. It is a proof only
of the barrenness of the mines which happened
at that time to supply the commercial world.
A poor country, as it cannot afford to buy
more, so it can as little afford to pay dearer
for gold and silver than a rich one; and the
value of those metals, therefore, is not likely
to be higher in the former than in the latter.
In China, a country much richer than any
part of Europe, the value of the precious metals
is much higher than in any part of Europe.
As the wealth of Europe, indeed, has
increased greatly since the discovery of the
mines of America, so the value of gold and
silver has gradually diminished. This diminution
of their value, however, has not been
owing to the increase of the real wealth of
Europe, of the annual produce of its land
and labour, but to the accidental discovery of
more abundant mines than any that were
known before. The increase of the quantity
of gold and silver in Europe, and the increase
of its manufactures and agriculture, are two
events which, though they have happened
nearly about the same time, yet have arisen
from very different causes, and have scarce
any natural connection with one another. The
one has arisen from a mere accident, in which
neither prudence nor policy either had or could
have any share; the other, from the fall of
the feudal system, and from the establishment
of a government which afforded to industry
the only encouragement which it requires,
some tolerable security that it shall enjoy the
fruits of its own labour. Poland, where the
feudal system still continues to take place, is
at this day as beggarly a country as it was before
the discovery of America. The money
price of corn, however, has risen; the real value
of the precious metals has fallen in Poland,
in the same manner as in other parts of
Europe. Their quantity, therefore, must have
increased there as in other places, and nearly
in the same proportion to the annual produce
of its land and labour. This increase of the
quantity of those metals, however, has not, it
seems, increased that annual produce, has neither
improved the manufactures and agriculture
of the country, nor mended the circumstances
of its inhabitants. Spain and Portugal,
the countries which possess the mines,
are, after Poland, perhaps the two most beggarly
countries in Europe. The value of the
precious metals, however, must be lower in
Spain and Portugal than in any other part of
Europe, as they come from those countries to
all other parts of Europe, loaded, not only
with a freight and an insurance, but with the
expense of smuggling, their exportation being
either prohibited or subjected to a duty.
In proportion to the annual produce of the
land and labour, therefore, their quantity must
be greater in those countries than in any other
part of Europe; those countries, however,
are poorer than the greater part of Europe.
Though the feudal system has been abolished
in Spain and Portugal, it has not been succeeded
by a much better.
As the low value of gold and silver, therefore,
is no proof of the wealth and flourishing
state of the country where it takes place; so
neither is their high value, or the low money
price either of goods in general, or of corn in
particular, any proof of its poverty and barbarism.
But though the low money price, either of
goods in general, or of corn in particular, be
no proof of the poverty or barbarism of the
times, the low money price, of some particular
sorts of goods, such as cattle, poultry