Chap 11q: Conclusion

Conclusion of the Digression concerning the Variations in the Value of Silver

229 Most of the writers who collected the money prices in ancient times, considered the low money price of corn and other goods (the high value of gold and silver) as a proof of the scarcity of those metals and the poverty of the country then.

  • “This notion is connected with the system of political œconomy which represents national wealth as consisting in the abundance, and national poverty in the scarcity, of gold and silver”
    • I will explain this system in Book 4.
  • The high value of any country’s precious metals can be no proof of its poverty.
    • It is only a proof of the barrenness of the mines at that time.
  • A poor country which cannot afford to buy more metals cannot afford to pay dearer for metals than a rich one.
    • The value of those metals is not likely to be higher in a poor country than in a rich country.
  • China is much richer than any European country.
    • The value of the precious metals there is much higher than in any European country.
  • European wealth has increased greatly since the discovery of the American mines.
    • The value of gold and silver has gradually diminished.
    • This reduction in value was due to the accidental discovery of those abundant mines.
      • It was not caused by the increase of the real wealth of Europe.
  • There were two events which happened at nearly the same time but had different causes and no natural connection with one another:
    1. The increase of the quantity of gold and silver in Europe
      • This was a mere accident.
    2. The increase of European manufactures and agriculture
      • This was caused by the fall of the feudal system.
  • The establishment of a government gave security to industry that it shall enjoy the fruits of its own labour.
    • It is the only encouragement industry requires.
  • Poland still has the feudal system.
    • It is still as poor as it was before the discovery of America.
    • The money price of corn in Poland has risen.
    • The real value of the precious metals there has fallen just as in other parts of Europe.
    • The quantity of the precious metals must have increased there also, in the proportion to its national produce.
      • This increase in precious metals, however, has not increased that produce.
      • It has has neither improved the manufactures and agriculture nor its people’s circumstances.
  • Spain and Portugal possess the mines and are the two poorest countries in Europe after Poland.
    • The value of the precious metals must be lower in Spain and Portugal than elsewhere in Europe.
    • Those metals are sourced there and loaded with freight, insurance, and smuggling costs.
      • This smuggling arises from the export ban or high export taxation.
  • In proportion to the national productivity, there must be more precious metals in Spain and Portugal than elsewhere in Europe.
  • Though the feudal system has been abolished in Spain and Portugal, it has not been replaced by a better system.

230 The high or low value of gold and silver, therefore, is no proof of the wealth or poverty of a country.

The Second Kind of Rude Produce As A Measure of Wealth

231 Though the low money price of goods or corn can be no proof of the poverty of the times, the low money price of some goods, such as cattle, poultry, game, etc. relative to corn is a most decisive proof.

  • It clearly demonstrates:
    1. their great abundance relative to corn
      • The great extent of the land they occupied relative to the land occupied by corn.
    2. the low value of this land relative to the value of corn land
      • The unimproved state of most of the lands of the country.
  • It clearly demonstrates that:
    • A country’s stock and population is not proportional to its territory.
      • In civilized countries those must be proportional.
    • Society at that time was in its infancy.
  • From the high or low money price of goods or corn, we can only infer the fertility of mines, not whether the country was rich or poor.
    • But from the high or low money price of cattle, poultry, game, etc., we can certainly infer the richness or poorness of a country.

232 Any rise in the money price of goods caused by the degradation of the value of silver, would affect all goods equally.

  • It would and raise their price universally 1/3 or 1/4 higher, as silver lost 1/3 or 1/4 of its value.
    • But the rise in the price of provisions, does not affect all kinds of provisions equally.
  • In the present century, corn prices rose much less than the price of other provisions.
    • The rise in the price of other provisions cannot be caused by the degradation of the value of silver.
    • It is caused by the variations of the three kinds of rude produce.

233 From 1700 to 1764 and before the bad seasons, the corn prices were lower than from 1636 to 1700.

  • This fact is attested by the accounts of:
    • Windsor market
    • The public fiars of Scotland
    • Mr. Messance and by Mr. Duprè de St. Maur regarding several French markets
  • Corn prices are naturally very difficult to ascertain.
    • Those accounts can serve as complete evidence.

The badness of the seasons are the cause of the high corn prices in the last 10-12 years, without supposing any degradation in the value of silver.

235 The opinion that silver is continually sinking in its value, is not founded on any good observations of the prices of corn or other provisions.

236 The same quantity of silver may presently purchase far fewer provisions than during the last century.

  • Finding out whether this change is due to the fall in the real value of silver or the rise in the value of provisions, is a useless service to the man who has a fixed income or only has a certain quantity of silver.
    • It will only be useful if it can enable him to buy cheaper.

237 Finding an easy proof of a country’s prosperity may be useful to the public.

  • If the rise in the price of provisions are caused by a fall in the value of silver, then the rise is due only to the fertility of the American mines.
    • The real wealth of the country may be gradually declining as in Portugal and Poland, or gradually advancing as in other parts of Europe.
  • But if the rise in the price of provisions are caused by a rise in the real value of the land which produces them, then the rise is due to the prosperity and advance of the country.
  • The land is the greatest, most important, and most durable part of the wealth of every extensive country.
    • It will be surely useful to the public to have a decisive proof of the increasing value of land.


238 Regulating the monetary reward of some inferior servants may also be useful to the public.

  • If the rise in the price of provisions is caused by a fall in the value of silver, the monetary reward of inferior servants should be increased proportionally to this fall, provided their rewards were not too large before.
    • If it is not increased, their real recompence will be so much reduced.
  • But if this rise of price is due to the increased value from the improved land fertility which produces such provisions, it becomes nicer to judge how any monetary reward should be increased or whether it should be increased at all.
  • The extension of cultivation raises meat prices and lowers the price of vegetable food.
    • It raises meat prices because it allows more corn land to be cultivated.
      • Meat price includes corn price or the rent and profit of that corn land.
    • It lowers the price of vegetable food because it increases vegetable production.
      • The improvements of agriculture also introduce many kinds of vegetable food.
  • Vegetable food requires less land and not more labour than corn and thus is much cheaper.
    • Examples of vegetable food are potatoes and corn.
      • These are the two most important improvements received by European agriculture from the extension of its commerce and navigation.
  • In the rude state of agriculture, vegetable food such as turnips, carrots, cabbages, etc. are:
    • confined to the kitchen-garden, and
    • raised by the spade
  • In the improved state of agriculture, they are:
    • grown in fields, and
    • raised by the plough.
  • If in the progress of improvement, the real price of one species of food rises and the price of another species falls, it becomes more convenient to judge how the rise in the one may be compensated by the fall in the other.
    • The real price of meat in Great Britain reached its height more than a century ago, except for hogs flesh.
    • When meat prices reaches its height, any rise in the price of animal food cannot much affect the poor people.
      • They cannot be much distressed by any rise in the price of poultry, fish, wild-fowl, or venison because they are relieved by the fall in potato prices.

239 In the present season of scarcity, the high corn prices distress the poor.

  • But in times of moderate plenty, when corn is at its average price, the natural rise in the price of rude produce cannot much affect them.
  • They suffer more by the artificial rise caused by taxes on manufactured commodities such as salt, soap, leather, candles, malt, beer, and ale, etc.

Next: Book 1, Chapter 11r: Chapter Conclusion

Words: 1,561

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