Chap 10d, Part I: Inequalities From The Nature of Employments

42 Those five circumstances create inequalities in wages and profits.

  • But they create equality when the advantages and disadvantages in employments are both taken into account.
    • They balance out gains and losses.

43 To create this balance or equality, three things are needed on top of the most perfect freedom:

  1. 44 The employments must be well known and long established in the neighbourhood
    • 45 Where all other circumstances are equal, wages are higher in new than in old trades.
    • Before an entrepreneur establishes a new manufacture, he must at first entice workmen from other employments with higher wages
      • A considerable time must pass before he can reduce them to the common level.
    • Manufactures for products with ever-changing demand, arising from fashion and fancy, seldom last long.
      • Manufactures for products with constant demand, arising from necessity, may continue for centuries.
    • Wages are likely to be higher in manufactures of products with changing demand, than in those with constant demand.
      • Birmingham deals chiefly with products of changing demand and are said to have higher wages than Sheffield which deals with products of constant demand.
    • 46 The establishment of any new manufacture or branch of commerce or new agricultural practice, is always a speculation from an entrepreneur who desires extraordinary profits.
      • These profits can be very great or very small.
      • In general, their profits bear no regular proportion to those of other old trades in the neighbourhood.
      • If the project succeeds, profits are commonly at first very high.
        • When the trade becomes thoroughly established and well known, competition reduces them to the level of other trades.
  1. 47 This equality can take place only in the ordinary or natural state of those employments.
    • 48  The demand for labour constantly changes.
      • The demand and wages for country labour is greatest at hay-time and harvest.
      • In wartime, when 40,000-50,000 sailors are forced from the merchant service into the navy, the demand for sailors in merchant ships rises.
        • Their wages rise from a guinea and 27 shillings to 40 shillings and 3 pounds a month.
      • In a decaying manufacture, many workmen are content with smaller wages rather than quit their old trade.
    • 49 Profits vary with the price of the commodities in which stock is employed.
      • Profits change as prices change relative to the ordinary rate.
      • Some commodities are more liable to price variations than others.
      • In manufactured commodities, the quantity of industry annually employed is regulated by the annual demand so that the average annual produce may be equal to the average annual consumption.
      • In some employments, the same quantity of industry will always produce nearly the same quantity of commodities.
        • In the linen or woollen manufactures, for example, the same number of workers will annually work up nearly the same quantity of linen and woollen cloth.
        • The variations in the market price of such commodities can arise only from some accidental variation in the demand.
      • A public mourning raises the price of black cloth.
        • But the price of plain linen and woollen cloth is uniform because the demand is also uniform.
      • There are other employments in which the same quantity of industry will not always produce the same quantity of commodities.
        • An example is corn, wine, hops, sugar, tobacco, etc.
      • The price of agricultural commodities,varies with the variations of demand and quantity produced.
        • It is consequently extremely fluctuating.
        • The profit of some of those dealers must fluctuate with the price of the commodities.
        • Thus, there are many speculators in agricultural commodities.
  1. 50 This equality can take place only in the sole or principal employments of those who occupy them.
    • 51  When a person derives his subsistence from an employment which can give him some free time, he is often willing to work at another for less wages than normal.
    • 52 Cotters (or Cottagers) of Scotland were frequent some years ago.
      • They are out-servants of the landlords and farmers.
      • They receive from their master a house, a small garden for pot herbs, as much grass as will feed a cow, and, an acre or two of bad arable land.
      • When their master needs their labour, he gives them an additional two pecks of oatmeal a week, worth about 16 pence sterling.
        • He has no need for their labour during most of the year.
      • The cultivation of their own small land is insufficient to keep them occupied.
      • In the past, they were willing to work for anybody at a very small pay, even less than other labourers.
      • In ancient times, they were common in Europe.
      • In countries ill cultivated, with few people, most landlords and farmers could not provide themselves with many workers required by agricultural work during certain seasons.
      • The low pay received by Cotters from their masters was not the whole price of their labour.
        • Many authors who wrote about wages in ancient times thought them to be.
        • Their small tenement made a big part of their pay.
      • 53 The produce of Cotters’ labour is cheaper than natural.
        • Stockings in Scotland are knit much cheaper than the ones produced with the loom.
          • They are made by servants who derive their principal subsistence from some other employment.
        • More than a thousand pairs priced 5 to 7 pence a pair of Shetland stockings are annually imported into Leith.
        • Learwick is the small capital of the Shetland islands
          • 10 pence a day is a price of common labour there.
          • People of those islands knit worsted stockings worth a guinea a pair or more.
        • 54 The spinning of linen yarn in Scotland is done by servants who are chiefly hired for other purposes, in the same way as those who knit stockings.
          • They earn very little.
            • They do those trades to add to their livelihood.
          • In most parts of Scotland, a good spinner can earn 20 pence a week.

55 The market of opulent countries is so extensive, that any one trade is sufficient to fully employ those who work in it.

  • Instances of people living by one employment while deriving some little wage from another, occur chiefly in poor countries though it also happens in the capital of a very rich country.
  • London has the most expensive house rent in Europe.
    • It is also the only capital where apartment rent can be so cheap.
    • Lodging is much cheaper in London than in Paris and Edinburgh
    • The dearness of house-rent is the cause of the cheapness of lodging.
  • The dearness of house-rent in London arises from:
    1. The dearness of labour
    2. The building materials which must be brought from far away
    3. Most of all, the dearness of ground-rent.
      • Every landlord acts as a monopolist.
      • He exacts a higher rent for a single acre of bad land in a town than can be had for a hundred of the best in the countryside
    4. The peculiar customs of the people which oblige every master of a family to hire a whole house from top to bottom.
  • A dwelling-house in England means every thing contained under the same roof.
    • In France, Scotland, and other European countries, it means a single story.
  • A tradesman in London is obliged to hire a whole house where his customers live.
    • His shop is on the ground-floor
    • He and his family sleep in the attic.
    • He pays a part of his house-rent by renting out the two middle stories to lodgers.
    • He maintains his family by his trade, not by his lodgers.
  • In Paris and Edinburgh, the people who rent out lodgings commonly have  no other means of subsistence.
    • The rent of the lodging must pay the rent of the house and the whole expence of the family.

Next: Book 1, Chapter 10E: Part 2 (Inequalities by Policy) Apprenticeships

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