Europe; importations occasioned chiefly by the great difference in the value of money in this country, and in these nations; in consequence of which, they have it always in their power so to suit their prices to our market, as to keep them below that at which we can produce the same articles ourselves. It frequently happens, that avarice counteracts this state of things, in some instances to a great degree, and to a certain degree in all. Thus, for example, we can supply ourselves with iron at as cheap a rate as the Swedes and Russians now are disposed to do it, but not at so low a price as they might sell it. Had they been disposed to extend the iron trade, instead of demanding the highest prices which they could get, we should never have made the progress we have made in this very important article of manufacture. The price, in fact, of every article which we purchase from the north, is regulated by the price which the same article could be raised at in England, and not according to what Mr. Smith calls the natural price. Thus, we are assured by the best authorities, that the tallow and hides which come into the English market, are sold for above three times the natural proportion which they should bear to the price of that part of the beast which is consumed in Russia. According to the principles which have been seen to regulate the natural price of commodities, the pound of tallow should not be sold at a higher price than the pound of meat; whereas, in Russia, it is sold at more than ten, and even fifteen times that price. This, however, it is added, was not the case till the exportation of tallow to England became general. My reason for entering here into this detail, was the illustration it affords of the difference between the principles which regulate the natural and the market prices of commodities. Among the articles imported from Russia, there are very few which we cannot produce ourselves; but the fact is, that the value of money is so different in the two countries, that whatever is brought to this market becomes too dear for their own consumption. A Russian peasant, accordingly, although supplied with abundance of animal food, is not able to afford to burn a candle; while we find that the English peasants burn candles made of Russian tallow, while they cannot afford to live upon butchers' meat. "It is the great price which England can afford to give, and actually gives, that," as remarked by a late intelligent writer, "raises all over Europe the price of every sort of article which comes to her market. The dearth of corn in England has enriched Poland, and many other countries, in a few years, and its wealth is gradually diffusing its influence over other parts of the world." It is painful to observe, after this very judicious preamble, the same author relapse soon afterwards into the exploded errors of the mercantile system. These facts, which turn almost entirely on the different values of money in different countries, are evidently by no means inconsistent with Mr. Smith's general principle, that in the same society or neighbourhood, the market price of commodities has always a tendency to adjust itself to the natural price. "The quantity of every commodity brought to market," says Mr. Smith, naturally suits itself to the effectual demand. It is the interest of all those who employ their land, labour, or stock, in bringing any commodity to market, that the quantity never should exceed the effectual demand; and it is the interest of all other people that it never should fall short of that demand."* Notwithstanding, however, this natural tendency in the supply to adjust itself to the demand, a variety of circumstances may prevent it from actually taking place even in the same society or neighbourhood. "But, in some employments, the same quantity of industry will, in different years, produce very different quantities of commodities, while in others it will produce always the same, or very nearly the same. The same number of labourers in husbandry will, in different years, produce very different quantities of corn, wine, oil, hops, &c. But the same number of spinners and weavers will every year produce the same, or very nearly the same, quantity of linen and woollen cloth. It is only the average produce of the one species of industry which can be suited in any respect to the effectual demand; and as its actual produce is frequently much greater, and frequently much less than its average produce, the quantity * [Wealth of Nations, Book I. chap. vii.; Vol. I. p. 86, tenth edition.] of the commodities brought to market will sometimes exceed a good deal, and sometimes fall short a good deal, of the effectual demand. Even though that demand therefore should continue always the same, their market price will be liable to great fluctuations, will sometimes fall a good deal below, and sometimes rise a good deal above, their natural price. In the other species of industry, the produce of equal quantities of labour being always the same, or very nearly the same, it can be more exactly suited to the effectual demand. While that demand continues the same, therefore, the market price of the commodities is likely to do so too, and to be either altogether, or as nearly as can be judged of, the same with the natural price.”* Abstracting from these circumstances, other causes may produce the same effects. These Mr. Smith refers to three heads, first, particular accidents, which give one society of men an advantage over others in supplying the markets; secondly, local peculiarities of soil and climate; and, thirdly, particular regulations of police.† It is to the last of these circumstances (particular regulations of police, such as monopolies, statutes of apprenticeship, &c.) that I am to confine myself in the following observations :— In entering on this subject, Mr. Smith lays it down as a fundamental maxim, that "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 an 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 to choose what occupation he thought proper. Every man's interest would prompt him to the advantageous, and to shun the disadvantageous employment. *[Ibid. pp. 87, 88.] † [Ibid. p. 90.] "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 imaginations 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."* It is with the latter of these circumstances alone that we are properly concerned at present. But the enumeration of the circumstances referred to under the former head, may be useful, as affording an illustration of the general principles which regulate this article of Political Economy. The subject, too, is important in itself; and I shall compress the leading ideas of Mr. Smith into a very few sentences. According to him, the wages of labour vary by relation to"1. The ease or hardship, cleanness or dirtiness, honourableness or dishonourableness of the employment. "2. The easiness and cheapness, or the difficulty and expense of learning the business; hence the pecuniary recompense of painters and sculptors, lawyers and physicians, ought to be, and generally is, much more liberal than that of the mechanical employments. "3. The constancy or inconstancy of employment; hence masons and bricklayers are paid higher in proportion than manufacturers, who are sure of constant employment. "4. The great or small trust reposed in the workmen ; and— "5. The greater or less probability of success in the employment."+ "Of the five circumstances, therefore, which vary the wages of labour, two only affect the profits of stock,-the agreeableness or disagreeableness of the business, and the risk or security with which it is attended." * [Wealth of Nations, Book I. chap. x.; Vol. I. p. 151, seq., tenth edition.] [For Mr. Smith's illustrations of these, see Wealth of Nations, Book I. But what I should wish chiefly to remark at present is, that these circumstances, though they occasion considerable inequalities in the wages of labour and the profits of stock, occasion none in the whole of the advantages and disadvantages, real or imaginary, of the different employments of either. This distribution, however, of labour and stock, which, in so far as it results from the unrestrained choice of individuals, may be regarded as the appointment of nature, has been disturbed in various ways by the policy of modern Europe. Of these, three are mentioned by Mr. Smith as more particularly deserving of attention. "First, by restraining the competition in some employments to a smaller number than would otherwise be disposed to enter into them; secondly, by increasing it in others beyond what it naturally would be; and thirdly, by obstructing the free circulation of labour and stock, both from employment to employment, and from place to place. "First, The policy of Europe occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock, by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them. "The exclusive privileges of corporations are the principal means it makes use of for this purpose."* Mr. Smith's reasonings against apprenticeships will be found in Book I. chap. x. part ii. Were competition increased by their removal, he observes; "the trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.” A remarkable illustration of this last observation is furnished by the history of two villages, which I had once an opportunity of observing with some attention, the villages of La Chaux de Fond and Locle, situated in a small district, which forms part of the principality of Neufchatel. The number of inhabitants in these two villages, and in the adjoining district, was computed, some years ago, at six thousand. They carried on, at that † [Ibid. pp. 183-201.] *[Ibid. pp. 183, 184.] |