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, 184.] [Ibid. pp. 183-201.] time, an extensive commerce in lace, stockings, cutlery, and various other branches of manufacture; but watchmaking, and every branch of clockwork, were the articles in which they particularly excelled. They not only made every utensil employed in the manufacture, but had invented several peculiar to themselves; and all sorts of trade, subservient to those principally carried on, had gradually risen up among them. The number of watches annually made was reckoned at 40,000. Not many years ago, the greatest part of the territory contiguous to these villages, which is now covered with flourishing hamlets and fertile pastures, was almost one continued forest. So rapidly, however, has the population increased, that the produce of the country, which was formerly more than sufficient for the whole of the inhabitants, now scarcely furnishes, according to Mr. Coxe, an eighth part of the provisions necessary for the interior consumption, the remainder being drawn from the adjoining province of Franche Comté in France. The truth is, that every stranger who brought a certificate of good behaviour was at liberty to settle in the district, and follow any trade he chose, without restriction. "The origin of watchmaking,” says Mr. Coxe, "in this part of Switzerland, as related by Mr. Osterwald, ancient banneret of Neufchatel, (the historiographer of these mountains,) is extremely curious; and the truth of his account was confirmed to me by several artists both of Locle and La Chaux de Fond. In 1679, one of the inhabitants brought with him from London a watch, the first that had been seen in these parts; which happening to be out of order, he ventured to trust it in the hands of one Daniel John Richard of La Sagne. Richard, after examining the mechanism with great attention, conceived himself capable, and was determined to attempt, to make a watch from the model before him; but to this end he was destitute of every other assistance than the powers of his own native genius. Accordingly, he employed a whole year in inventing and in finishing the several instruments previously necessary for executing his purpose; and in six months from that period, by the sole force of his own penetrating and per severing talents, he produced a complete watch. But his ambition and industry did not stop here; besides applying himself successfully to the invention of several new instruments useful for the perfection of his work, he took a journey to Geneva, where he gained considerable information in the art. He continued for some time the only man in these parts who could make a watch; but business increasing, he took in and instructed several associates, by whose assistance he was enabled to supply from his single shop all the demands of the neighbouring country. Towards the beginning of the present century, he removed to Locle, where he died in 1741, leaving five sons, who all of them followed their father's occupation. From these the knowledge and practice of the art gradually spread itself, till it at length became almost the universal business of the inhabitants, and the principal cause of the populousness of these mountains."* Nor has the inventive genius of the people stopped here. A variety of mathematical instruments are to be found in their houses; and several natives have acquired very considerable fortunes by exhibiting mathematical figures and other objects of mechanical curiosity, in the different countries of Europe. The point of view, however, in which restraints on the freedom of competition appear most injurious to the public prosperity is, when we attend to the undue advantage which they give to the industry of the towns over that of the country. It is from the country that every town draws its whole subsistence, and all the materials of its industry. "It pays for these chiefly in two ways: first, by sending back to the country a part of those materials wrought up and manufactured; in which case their price is augmented by the wages of the workmen, and the profits of their masters or immediate employers. Secondly, by sending to it a part both of the rude and manufactured produce, either of other countries, or of distant parts of the same country, imported into the town; in which case too the original price [Sketches of the Natural, Civil, and Political State of Swisserland; in a Series of Letters to William Melmoth, Esq., 1779. Letter XXVII. pp. 338, 339.] |