An Inquiry into the Nature and Causes of the Wealth of Nations.docVIP

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An Inquiry into the Nature and Causes of the Wealth of Nations.doc

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An Inquiry into the Nature and Causes of the Wealth of Nations.doc

******************************************* An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith 1776 Book 1, Chapter 6 OF THE COMPONENT PARTS OF THE PRICE OF COMMODITIES [I, vi, 1, p. 65] In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, should be worth double of what is usually the produce of one days or one hours labour. [I, vi, 4, p. 65]In this state of things, the whole produce of labour belongs to the labourer; and the quantity of labour commonly employed in acquiring or producing any commodity is the only circumstance which can regulate the quantity exchange for which it ought commonly to purchase, command, or exchange for. As soon as stock has accumulated in the hands of particular persons, some of them will naturally employ it in setting to work industrious people, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work, or by what their labour adds to the value of the materials. In exchanging the complete manufacture either for money, for labour, or for other goods, over and above what may be sufficient to pay the price of the materials, and the wages of the workmen, something must be given for the profits of the undertaker of the work who hazards his stock in this adventure. The value which the workmen add to the materials, therefore, resolves itself in this ease into two parts, of which the one pays their wages, the other the profits of their employer upon the w