to have been uniformly the fame as at prefent, though the value of each has been very different. For in every country of the world, I believe, the avarice and injuftice of princes and fovereign ftates, abusing the confidence of their fubjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins. The Roman As, in the latter ages of the Republick, was reduced to the twenty-fourth part of its original value, and, instead of weighing a pound, came to weigh only half an ounce. The English pound and penny contain at present about a third only; the Scots pound and penny about a thirty-fixth; and the French pound and penny about a fixty-fixth part of their original value. By means of those operations the princes and fovereign ftates which performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a smaller quantity of filver than would otherwise have been requifite. It was indeed in appearance only; for their creditors were really defrauded of a part of what was due to them. All other debtors in the state were allowed the fame privilege, and might pay with the fame nominal fum of the new and debased coin whatever they had borrowed in the old. Such operations, therefore, have always proved favourable to the debtor, and ruinous to the creditor, and have fometimes produced a greater and more univerfal revolution in the fortunes of private perfons, than could have been occafioned by a very great publick calamity.

IT is in this manner that money has become in all civilized nations the universal instrument of commerce, by the intervention of which goods of all kinds are bought and fold, or exchanged for one another.

WHAT are the rules which men naturally observe in exchanging them either for money or for one another, I fhall now proceed

VOL. I.

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to

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to examine. These rules determine what may be called the relative or exchangeable value of goods.

THE Word VALUE, it is to be observed, has two different meanings, and fometimes expreffes the utility of fome particular object, and fometimes the power of purchasing other goods which the poffeffion of that object conveys. The one may be called, "value in "ufe," the other, "value in exchange." The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce any thing; fcarce any thing can be had in exchange for it. A diamond, on the contrary, has fcarce any value in ufe; but a very great quantity of other goods may frequently be had in exchange for it.

In order to investigate the principles which regulate the exchangeable value of commodities, I fhall endeavour to fhew,

FIRST, what is the real measure of this exchangeable value; or, wherein consists the real price of all commodities.

SECONDLY, what are the different parts of which this real price is compofed or made up.

AND, laftly, what are the different circumftances which fometimes raise fome or all of thefe different parts of price above, and fometimes fink them below their natural or ordinary rate; or, what are the caufes which fometimes hinder the market price, that is, the actual price of commodities, from coinciding exactly with what may be called their natural price.

I SHALL endeavour to explain, as fully and diftinctly as I can, those three fubjects in the three following chapters, for which I

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IV.

muft very earnestly entreat both the patience and attention of the CHAP. reader: his patience in order to examine a detail which may perhaps in fome places appear unneceffarily tedious; and his attention in order to understand what may, perhaps, after the fulleft explication which I am capable of giving of it, appear ftill in fome degree obfcure. I am always willing to run fome hazard of being tedious in order to be fure that I am perfpicuous; and after taking the utmost pains that I can to be perfpicuous, fome obfcurity may ftill appear to remain upon a fubject in its own nature extremely abstracted.

CHA P. V.

Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money.

E

VERY man is rich or poor according to the degree in which

he can afford to enjoy the neceffaries, conveniencies, and amufements of human life. But after the divifion of labour has once thoroughly taken place, it is but a very fmall part of these with which a man's own labour can fupply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the perfon who poffeffes it and who means not to ufe or confume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.

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THE real price of every thing, what every thing really cofts to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to difpofe of it or exchange it for fomething else, is the toil and trouble which it can fave to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour as much as what we acquire by the toil of our own body. That money or thofe goods indeed fave us this toil. They contain the value of a certain quantity of labour which we exchange for what is fuppofed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by filver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who poffefs it and who want to exchange it for fome new productions, is precifely equal to the quantity of labour which it can enable them to purchase or command.

BUT though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to afcertain the proportion between two different quantities of labour. The time spent in two different forts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account. There may be more labour in an hour's hard work than in two hours eafy business; or in an hour's application to a trade which it cost ten years labour to learn, than in a month's industry at an ordinary and obvious employment. But it is not eafy to find any accurate measure either of hardship or ingenuity. In exchanging indeed the different productions of different forts of labour for one another, fome allowance is commonly made for both. It is adjusted, how

ever,

7

V.

ever, not by any accurate measure, but by the higgling and CHAP. bargaining of the market, according to that fort of rough equality which, though not exact, is fufficient for carrying on the business of common life.

EVERY commodity befides, is more frequently exchanged for, and thereby compared with, other commodities than with labour. It is more natural, therefore, to estimate its exchangeable value by the quantity of fome other commodity than by that of the labour which it can purchase. The greater part of people too understand better what is meant by a quantity of a particular commodity, than by a quantity of labour. The one is a plain palpable object; the other an abstract notion, which, though it can be made fufficiently intelligible, is not altogether so natural and obvious.

BUT when barter ceases, and money has become the common inftrument of commerce, every particular commodity is more frequently exchanged for money than for any other commodity. The butcher feldom carries his beef or his mutton to the baker, or the brewer, in order to exchange them for bread or for beer; but he carries them to the market, where he exchanges them for money, and afterwards exchanges that money for bread and for beer. The quantity of money which he gets for them regulates too the quantity of bread and beer which he can afterwards purchase. It is more natural and obvious to him, therefore, to eftimate their value by the quantity of money, the commodity for which he immediately exchanges them, than by that of bread and beer, the commodities for which he can exchange them, only by the intervention of another commodity; and rather to fay that his butcher's meat is worth threepence or fourpence a pound, than that it is worth three or four pounds of bread, or three or four quarts of fmall beer. Hence it comes to pass that the exchange

able