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An Inquiry Into The Nature And Causes Of The Wealth Of Nations - Chapter 8

1. Introduction And Plan Of The Work

2. Book 1, Chapter 1

3. Chapter 2

4. Chapter 3

5. Chapter 4

6. Chapter 5

7. Chapter 6

8. Chapter 7

9. Chapter 8

10. Chapter 8 continue

11. Chapter 9

12. Chapter 10

13. Chapter 10 continue

14. Chapter 11

15. Chapter 11 continue

16. Chapter 11 continue.

17. Chapter 11 continue..

18. Chapter 11 continue...

19. Conclusion of the Chapter 11

20. Book 2 Introduction

21. Chapter 1

22. Chapter II

23. Chapter II continue

24. Chapter II continue

25. Chapter 3

26. Chapter 4

27. Chapter 5

28. Book 3, Chapter 1

29. Chapter 2

30. Chapter 3

31. Chapter 4

32. Book 4, Chapter 1

33. Chapter 1 continue

34. Chapter 2

35. Chapter 3, Part 1

36. Chapter 3, Part 2

37. Chapter 4

38. Chapter 5

39. Chapter 5 continue

40. Chapter 6

41. Chapter 7, Part 1

42. Chapter 7, Part 2

43. Chapter 7, Part 3

44. Chapter 7, Part 3 continue

45. Chapter 8

46. Chapter 9

47. Book 5, Chapter 1, Part 1

48. Chapter 1, Part 2

49. Chapter 1, Part 3

50. Chapter 1, Part 3 continue

51. Chapter 1, Part 3 continue B

52. Chapter 1, Part 4

53. Chapter 2, Part 1

54. Chapter 2, Part 2

55. Chapter 2, Part 2 continue

56. Chapter 2, Part 2 continue B

57. Chapter 2, Part 2 continue C

58. Chapter 2, Part 2 continue D

59. Chapter 3

60. Chapter 3 continue

Chapter VIII. Of The Wages Of Labour.

The produce of labour constitutes the natural recompence or wages of

In that original state of things which precedes both the appropriation
of land and the accumulation of stock, the whole produce of labour
belongs to the labourer. He has neither landlord nor master to share
with him.

Had this state continued, the wages of labour would have augmented with
all those improvements in its productive powers, to which the division
of labour gives occasion. All things would gradually have become
cheaper. They would have been produced by a smaller quantity of labour;
and as the commodities produced by equal quantities of labour would
naturally in this state of things be exchanged for one another, they
would have been purchased likewise with the produce of a smaller

But though all things would have become cheaper in reality, in
appearance many things might have become dearer, than before, or have
been exchanged for a greater quantity of other goods. Let us suppose,
for example, that in the greater part of employments the productive
powers of labour had been improved to tenfold, or that a day's
labour could produce ten times the quantity of work which it had done
originally; but that in a particular employment they had been improved
only to double, or that a day's labour could produce only twice the
quantity of work which it had done before. In exchanging the produce of
a day's labour in the greater part of employments for that of a day's
labour in this particular one, ten times the original quantity of work
in them would purchase only twice the original quantity in it. Any
particular quantity in it, therefore, a pound weight, for example, would
appear to be five times dearer than before. In reality, however, it
would be twice as cheap. Though it required five times the quantity of
other goods to purchase it, it would require only half the quantity of
labour either to purchase or to produce it. The acquisition, therefore,
would be twice as easy as before.

But this original state of things, in which the labourer enjoyed
the whole produce of his own labour, could not last beyond the first
introduction of the appropriation of land and the accumulation of
stock. It was at an end, therefore, long before the most considerable
improvements were made in the productive powers of labour; and it would
be to no purpose to trace further what might have been its effects upon
the recompence or wages of labour.

As soon as land becomes private property, the landlord demands a share
of almost all the produce which the labourer can either raise or collect
from it. His rent makes the first deduction from the produce of the
labour which is employed upon land.

It seldom happens that the person who tills the ground has wherewithal
to maintain himself till he reaps the harvest. His maintenance is
generally advanced to him from the stock of a master, the farmer who
employs him, and who would have no interest to employ him, unless he
was to share in the produce of his labour, or unless his stock was to be
replaced to him with a profit. This profit makes a second deduction from
the produce of the labour which is employed upon land.

The produce of almost all other labour is liable to the like deduction
of profit. In all arts and manufactures, the greater part of the workmen
stand in need of a master, to advance them the materials of their work,
and their wages and maintenance, till it be completed. He shares in the
produce of their labour, or in the value which it adds to the materials
upon which it is bestowed; and in this share consists his profit.

It sometimes happens, indeed, that a single independent workman has
stock sufficient both to purchase the materials of his work, and to
maintain himself till it be completed. He is both master and workman,
and enjoys the whole produce of his own labour, or the whole value which
it adds to the materials upon which it is bestowed. It includes what are
usually two distinct revenues, belonging to two distinct persons, the
profits of stock, and the wages of labour.

Such cases, however, are not very frequent; and in every part of Europe
twenty workmen serve under a master for one that is independent, and the
wages of labour are everywhere understood to be, what they usually
are, when the labourer is one person, and the owner of the stock which
employs him another.

What are the common wages of labour, depends everywhere upon the
contract usually made between those two parties, whose interests are
by no means the same. The workmen desire to get as much, the masters to
give as little, as possible. The former are disposed to combine in order
to raise, the latter in order to lower, the wages of labour.

It is not, however, difficult to foresee which of the two parties must,
upon all ordinary occasions, have the advantage in the dispute, and
force the other into a compliance with their terms. The masters, being
fewer in number, can combine much more easily: and the law, besides,
authorises, or at least does not prohibit, their combinations, while it
prohibits those of the workmen. We have no acts of parliament against
combining to lower the price of work, but many against combining to
raise it. In all such disputes, the masters can hold out much longer. A
landlord, a farmer, a master manufacturer, or merchant, though they did
not employ a single workman, could generally live a year or two upon the
stocks, which they have already acquired. Many workmen could not subsist
a week, few could subsist a month, and scarce any a year, without
employment. In the long run, the workman may be as necessary to his
master as his master is to him; but the necessity is not so immediate.

We rarely hear, it has been said, of the combinations of masters, though
frequently of those of workmen. But whoever imagines, upon this account,
that masters rarely combine, is as ignorant of the world as of the
subject. Masters are always and everywhere in a sort of tacit, but
constant and uniform, combination, not to raise the wages of labour
above their actual rate. To violate this combination is everywhere a
most unpopular action, and a sort of reproach to a master among his
neighbours and equals. We seldom, indeed, hear of this combination,
because it is the usual, and, one may say, the natural state of
things, which nobody ever hears of. Masters, too, sometimes enter into
particular combinations to sink the wages of labour even below this
rate. These are always conducted with the utmost silence and secrecy
till the moment of execution; and when the workmen yield, as they
sometimes do without resistance, though severely felt by them, they
are never heard of by other people. Such combinations, however, are
frequently resisted by a contrary defensive combination of the workmen,
who sometimes, too, without any provocation of this kind, combine,
of their own accord, to raise the price of their labour. Their usual
pretences are, sometimes the high price of provisions, sometimes the
great profit which their masters make by their work. But whether their
combinations be offensive or defensive, they are always abundantly heard
of. In order to bring the point to a speedy decision, they have always
recourse to the loudest clamour, and sometimes to the most shocking
violence and outrage. They are desperate, and act with the folly and
extravagance of desperate men, who must either starve, or frighten their
masters into an immediate compliance with their demands. The masters,
upon these occasions, are just as clamorous upon the other side, and
never cease to call aloud for the assistance of the civil magistrate,
and the rigorous execution of those laws which have been enacted with
so much severity against the combination of servants, labourers, and
journeymen. The workmen, accordingly, very seldom derive any advantage
from the violence of those tumultuous combinations, which, partly from
the interposition of the civil magistrate, partly from the superior
steadiness of the masters, partly from the necessity which the greater
part of the workmen are under of submitting for the sake of present
subsistence, generally end in nothing but the punishment or ruin of the

But though, in disputes with their workmen, masters must generally have
the advantage, there is, however, a certain rate, below which it seems
impossible to reduce, for any considerable time, the ordinary wages even
of the lowest species of labour.

A man must always live by his work, and his wages must at least be
sufficient to maintain him. They must even upon most occasions be
somewhat more, otherwise it would be impossible for him to bring up a
family, and the race of such workmen could not last beyond the first
generation. Mr Cantillon seems, upon this account, to suppose that the
lowest species of common labourers must everywhere earn at least double
their own maintenance, in order that, one with another, they may be
enabled to bring up two children; the labour of the wife, on account of
her necessary attendance on the children, being supposed no more than
sufficient to provide for herself: But one half the children born, it
is computed, die before the age of manhood. The poorest labourers,
therefore, according to this account, must, one with another, attempt to
rear at least four children, in order that two may have an equal chance
of living to that age. But the necessary maintenance of four children,
it is supposed, may be nearly equal to that of one man. The labour of an
able-bodied slave, the same author adds, is computed to be worth double
his maintenance; and that of the meanest labourer, he thinks, cannot be
worth less than that of an able-bodied slave. Thus far at least seems
certain, that, in order to bring up a family, the labour of the husband
and wife together must, even in the lowest species of common labour, be
able to earn something more than what is precisely necessary for
their own maintenance; but in what proportion, whether in that
above-mentioned, or many other, I shall not take upon me to determine.

There are certain circumstances, however, which sometimes give
the labourers an advantage, and enable them to raise their wages
considerably above this rate, evidently the lowest which is consistent
with common humanity.

When in any country the demand for those who live by wages, labourers,
journeymen, servants of every kind, is continually increasing; when
every year furnishes employment for a greater number than had been
employed the year before, the workmen have no occasion to combine
in order to raise their wages. The scarcity of hands occasions a
competition among masters, who bid against one another in order to get
workmen, and thus voluntarily break through the natural combination of
masters not to raise wages. The demand for those who live by wages, it
is evident, cannot increase but in proportion to the increase of the
funds which are destined to the payment of wages. These funds are of two
kinds, first, the revenue which is over and above what is necessary for
the maintenance; and, secondly, the stock which is over and above what
is necessary for the employment of their masters.

When the landlord, annuitant, or monied man, has a greater revenue than
what he judges sufficient to maintain his own family, he employs either
the whole or a part of the surplus in maintaining one or more menial
servants. Increase this surplus, and he will naturally increase the
number of those servants.

When an independent workman, such as a weaver or shoemaker, has got more
stock than what is sufficient to purchase the materials of his own work,
and to maintain himself till he can dispose of it, he naturally employs
one or more journeymen with the surplus, in order to make a profit by
their work. Increase this surplus, and he will naturally increase the
number of his journeymen.

The demand for those who live by wages, therefore, necessarily increases
with the increase of the revenue and stock of every country, and cannot
possibly increase without it. The increase of revenue and stock is the
increase of national wealth. The demand for those who live by wages,
therefore, naturally increases with the increase of national wealth, and
cannot possibly increase without it.

It is not the actual greatness of national wealth, but its continual
increase, which occasions a rise in the wages of labour. It is not,
accordingly, in the richest countries, but in the most thriving, or in
those which are growing rich the fastest, that the wages of labour
are highest. England is certainly, in the present times, a much richer
country than any part of North America. The wages of labour, however,
are much higher in North America than in any part of England. In the
province of New York, common labourers earned in 1773, before the
commencement of the late disturbances, three shillings and sixpence
currency, equal to two shillings sterling, a-day; ship-carpenters, ten
shillings and sixpence currency, with a pint of rum, worth sixpence
sterling, equal in all to six shillings and sixpence sterling;
house-carpenters and bricklayers, eight shillings currency, equal to
four shillings and sixpence sterling; journeymen tailors, five shillings
currency, equal to about two shillings and tenpence sterling. These
prices are all above the London price; and wages are said to be as
high in the other colonies as in New York. The price of provisions is
everywhere in North America much lower than in England. A dearth has
never been known there. In the worst seasons they have always had a
sufficiency for themselves, though less for exportation. If the money
price of labour, therefore, be higher than it is anywhere in the
mother-country, its real price, the real command of the necessaries and
conveniencies of life which it conveys to the labourer, must be higher
in a still greater proportion.

But though North America is not yet so rich as England, it is much
more thriving, and advancing with much greater rapidity to the further
acquisition of riches. The most decisive mark of the prosperity of
any country is the increase of the number of its inhabitants. In Great
Britain, and most other European countries, they are not supposed to
double in less than five hundred years. In the British colonies in North
America, it has been found that they double in twenty or five-and-twenty
years. Nor in the present times is this increase principally owing
to the continual importation of new inhabitants, but to the great
multiplication of the species. Those who live to old age, it is said,
frequently see there from fifty to a hundred, and sometimes many more,
descendants from their own body. Labour is there so well rewarded, that
a numerous family of children, instead of being a burden, is a source of
opulence and prosperity to the parents. The labour of each child, before
it can leave their house, is computed to be worth a hundred pounds clear
gain to them. A young widow with four or five young children, who, among
the middling or inferior ranks of people in Europe, would have so little
chance for a second husband, is there frequently courted as a sort of
fortune. The value of children is the greatest of all encouragements to
marriage. We cannot, therefore, wonder that the people in North America
should generally marry very young. Notwithstanding the great increase
occasioned by such early marriages, there is a continual complaint of
the scarcity of hands in North America. The demand for labourers, the
funds destined for maintaining them increase, it seems, still faster
than they can find labourers to employ.

Though the wealth of a country should be very great, yet if it has been
long stationary, we must not expect to find the wages of labour very
high in it. The funds destined for the payment of wages, the revenue
and stock of its inhabitants, may be of the greatest extent; but if they
have continued for several centuries of the same, or very nearly of the
same extent, the number of labourers employed every year could easily
supply, and even more than supply, the number wanted the following year.
There could seldom be any scarcity of hands, nor could the masters be
obliged to bid against one another in order to get them. The hands,
on the contrary, would, in this case, naturally multiply beyond their
employment. There would be a constant scarcity of employment, and the
labourers would be obliged to bid against one another in order to get
it. If in such a country the wages off labour had ever been more than
sufficient to maintain the labourer, and to enable him to bring up a
family, the competition of the labourers and the interest of the masters
would soon reduce them to the lowest rate which is consistent with
common humanity. China has been long one of the richest, that is, one of
the most fertile, best cultivated, most industrious, and most populous,
countries in the world. It seems, however, to have been long stationary.
Marco Polo, who visited it more than five hundred years ago, describes
its cultivation, industry, and populousness, almost in the same terms
in which they are described by travellers in the present times. It had,
perhaps, even long before his time, acquired that full complement of
riches which the nature of its laws and institutions permits it to
acquire. The accounts of all travellers, inconsistent in many other
respects, agree in the low wages of labour, and in the difficulty which
a labourer finds in bringing up a family in China. If by digging the
ground a whole day he can get what will purchase a small quantity of
rice in the evening, he is contented. The condition of artificers is,
if possible, still worse. Instead of waiting indolently in their
work-houses for the calls of their customers, as in Europe, they are
continually running about the streets with the tools of their respective
trades, offering their services, and, as it were, begging employment.
The poverty of the lower ranks of people in China far surpasses that
of the most beggarly nations in Europe. In the neighbourhood of Canton,
many hundred, it is commonly said, many thousand families have no
habitation on the land, but live constantly in little fishing-boats
upon the rivers and canals. The subsistence which they find there is
so scanty, that they are eager to fish up the nastiest garbage thrown
overboard from any European ship. Any carrion, the carcase of a dead dog
or cat, for example, though half putrid and stinking, is as welcome
to them as the most wholesome food to the people of other countries.
Marriage is encouraged in China, not by the profitableness of children,
but by the liberty of destroying them. In all great towns, several are
every night exposed in the street, or drowned like puppies in the water.
The performance of this horrid office is even said to be the avowed
business by which some people earn their subsistence.

China, however, though it may, perhaps, stand still, does not seem to
go backwards. Its towns are nowhere deserted by their inhabitants. The
lands which had once been cultivated, are nowhere neglected. The same,
or very nearly the same, annual labour, must, therefore, continue to
be performed, and the funds destined for maintaining it must not,
consequently, be sensibly diminished. The lowest class of labourers,
therefore, notwithstanding their scanty subsistence, must some way or
another make shift to continue their race so far as to keep up their
usual numbers.

But it would be otherwise in a country where the funds destined for the
maintenance of labour were sensibly decaying. Every year the demand
for servants and labourers would, in all the different classes of
employments, be less than it had been the year before. Many who had been
bred in the superior classes, not being able to find employment in their
own business, would be glad to seek it in the lowest. The lowest
class being not only overstocked with its own workmen, but with the
overflowings of all the other classes, the competition for employment
would be so great in it, as to reduce the wages of labour to the most
miserable and scanty subsistence of the labourer. Many would not be able
to find employment even upon these hard terms, but would either starve,
or be driven to seek a subsistence, either by begging, or by the
perpetration perhaps, of the greatest enormities. Want, famine, and
mortality, would immediately prevail in that class, and from thence
extend themselves to all the superior classes, till the number
of inhabitants in the country was reduced to what could easily be
maintained by the revenue and stock which remained in it, and which had
escaped either the tyranny or calamity which had destroyed the rest.
This, perhaps, is nearly the present state of Bengal, and of some other
of the English settlements in the East Indies. In a fertile country,
which had before been much depopulated, where subsistence, consequently,
should not be very difficult, and where, notwithstanding, three or four
hundred thousand people die of hunger in one year, we maybe assured that
the funds destined for the maintenance of the labouring poor are fast
decaying. The difference between the genius of the British constitution,
which protects and governs North America, and that of the mercantile
company which oppresses and domineers in the East Indies, cannot,
perhaps, be better illustrated than by the different state of those

The liberal reward of labour, therefore, as it is the necessary effect,
so it is the natural symptom of increasing national wealth. The scanty
maintenance of the labouring poor, on the other hand, is the natural
symptom that things are at a stand, and their starving condition, that
they are going fast backwards.

In Great Britain, the wages of labour seem, in the present times, to be
evidently more than what is precisely necessary to enable the labourer
to bring up a family. In order to satisfy ourselves upon this point, it
will not be necessary to enter into any tedious or doubtful calculation
of what may be the lowest sum upon winch it is possible to do this.
There are many plain symptoms, that the wages of labour are nowhere in
this country regulated by this lowest rate, which is consistent with
common humanity.

First, in almost every part of Great Britain there is a distinction,
even in the lowest species of labour, between summer and winter wages.
Summer wages are always highest. But, on account of the extraordinary
expense of fuel, the maintenance of a family is most expensive in
winter. Wages, therefore, being highest when this expense is lowest, it
seems evident that they are not regulated by what is necessary for this
expense, but by the quantity and supposed value of the work. A labourer,
it may be said, indeed, ought to save part of his summer wages, in order
to defray his winter expense; and that, through the whole year, they do
not exceed what is necessary to maintain his family through the whole
year. A slave, however, or one absolutely dependent on us for immediate
subsistence, would not be treated in this manner. His daily subsistence
would be proportioned to his daily necessities.

Secondly, the wages of labour do not, in Great Britain, fluctuate
with the price of provisions. These vary everywhere from year to year,
frequently from month to month. But in many places, the money price
of labour remains uniformly the same, sometimes for half a century
together. If, in these places, therefore, the labouring poor can
maintain their families in dear years, they must be at their ease in
times of moderate plenty, and in affluence in those of extraordinary
cheapness. The high price of provisions during these ten years past, has
not, in many parts of the kingdom, been accompanied with any sensible
rise in the money price of labour. It has, indeed, in some; owing,
probably, more to the increase of the demand for labour, than to that of
the price of provisions.

Thirdly, as the price of provisions varies more from year to year than
the wages of labour, so, on the other hand, the wages of labour vary
more from place to place than the price of provisions. The prices of
bread and butchers' meat are generally the same, or very nearly the
same, through the greater part of the united kingdom. These, and most
other things which are sold by retail, the way in which the labouring
poor buy all things, are generally fully as cheap, or cheaper, in great
towns than in the remoter parts of the country, for reasons which I
shall have occasion to explain hereafter. But the wages of labour in
a great town and its neighbourhood, are frequently a fourth or a fifth
part, twenty or five-and--twenty per cent. higher than at a few miles
distance. Eighteen pence a day may be reckoned the common price of
labour in London and its neighbourhood. At a few miles distance, it
falls to fourteen and fifteen pence. Tenpence may be reckoned its price
in Edinburgh and its neighbourhood. At a few miles distance, it falls to
eightpence, the usual price of common labour through the greater part
of the low country of Scotland, where it varies a good deal less than
in England. Such a difference of prices, which, it seems, is not
always sufficient to transport a man from one parish to another,
would necessarily occasion so great a transportation of the most bulky
commodities, not only from one parish to another, but from one end of
the kingdom, almost from one end of the world to the other, as would
soon reduce them more nearly to a level. After all that has been said
of the levity and inconstancy of human nature, it appears evidently from
experience, that man is, of all sorts of luggage, the most difficult
to be transported. If the labouring poor, therefore, can maintain their
families in those parts of the kingdom where the price of labour is
lowest, they must be in affluence where it is highest.

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