An Inquiry Into the Nature and Causes of the Wealth of Nations · Adam Smith
PART FIRST.--OF VALUES IN PARTICULAR.
The essential quality which constitutes wealth, and without which it would not be entitled to the name, is its _exchangeable value_. Exchangeable value differs from the value of utility--book 1, end of chap. iv. The relation existing between two exchangeable values, when expressed by a value generally agreed upon, is denominated _price_. The value generally agreed on among civilized nations, is that of metals. Motives to this preference. Origin of money--book 1, chap. iv. Relation between money and the metal in the state of bullion--book 1, chap. v. The price in money, or _nominal_ price of a thing, differs from its _real_ price, which is its valuation by the quantity of labour expended upon it, or which it represents--ibid. Laws, according to which the price of wealth is naturally fixed; and those accidental circumstances which occasion the actual to differ from the natural price, and which gave rise to a distinction between the _natural_ and the _market price_--book 1, chap. vii. The price of a thing, in most cases, consists of three distinct elements--the wages of the labour, the profit of the master who directs the labour, and the rent of the ground that furnishes the materials on which it is erected. There are, however, some descriptions of merchandize in which the rent forms no part of the price; and others, in which the profit forms no part of it; but none, in which it is not formed principally by the wages--book 1, chap. vi.
1. That produce which is always necessarily disposed of in such a way as to bring a rent to the landed proprietor. 2. That which, according to circumstances, may be disposed of so as to bring, or so as not to bring, a rent. The produce of the first description is derived from the ground appropriated to furnishing subsistence for man, or for those animals which he uses as food. The value of the produce of the ground cultivated for the support of man, determines the value of the produce of all other ground proper for this species of culture. This general rule allows of some exceptions. Causes of these exceptions. The produce of the second class consists of the materials of clothing, lodging, fuel, and the ornaments of dress and furniture. The value of this species of produce depends on that of the first description. Some circumstances render it possible that the produce of the second kind may be disposed of in such a way as to furnish a rent to the landed proprietor. Principles which regulate the proportion of the price of these products, which is formed by the rent--book 1, chap. xi. Relation between the respective values of the produce of the first class, and those of the produce of the second. Variations which may take place in this relation, and the causes of such variations--ibid.
Relation existing between the values of the two descriptions of rude produce above mentioned, and the values of the produce of manufacture. Variations which may occur in this relation--ibid. Certain kinds of rude produce, procured from very different sources, are, however, intended for the same kind of consumption; and hence it happens, the value of one determines and limits that of another--ibid. The relations between values of different natures vary according to the state of society. This state is _improving_, _declining_, or _stationary_; that is to say, society is either increasing in wealth, or falling into poverty, or remaining in the same unchanged state of opulence. Of the effects of these different states of society, Upon the price of wages--book 1, chap. viii. Upon the rate of profit--book 1, chap. ix. Upon the value of the rude produce of the earth, and on that of the produce of manufacture--book 1, chap. xi. Difference, in this respect, between the various kinds of rude produce, viz. 1. Those which the industry of man cannot multiply: 2. Those which his industry can always multiply in proportion to the demand: 3. Those over which human exertions have only an uncertain or limited influence--ibid.
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