Effects of the Progress of Improvement on the real Price of Manufactures
240 Improvement naturally reduces the real price of manufactures gradually.
- The price of all manufacturing workmanship diminishes without exception.
- Fewer labour because of better machinery, dexterity, and division and distribution of work.
- The real price of labour rises very much in a flourishing society.
- But the great reduction of the amount of labour will much more than compensate the greatest rise in its price.
241 In a few manufactures, the rise in the real price of raw materials will more than offset all the advantages derived from improvements.
- In the work of carpenters, joiners, and cabinet makers, the rise in the real price of timber from the improvement of land, will offset all the advantages from:
- the best machinery
- dexterity, and
- division of work.
242 But in all cases where the real price of raw materials rises very little, the price of manufactured commodities sink very much.
243 In the past and present centuries, this price reduction was most remarkable in manufactures that use the coarser metals.
- A watch in the mid-17th century priced at 800 shillings, may now be priced at 20 shillings.
- There was a very big price reduction in:
- the work of cutlers and locksmiths
- goods known as Birmingham and Sheffield-ware
- all the toys made of coarse metals
- This reduction in toy prices was not as big as the reduction of watch prices.
- No European workman can produce work of equal goodness for double or even triple the price.
- The manufactures requiring coarse metals have the furthest division of labour.
- Its machinery allows the most variations in improvements.
244 In the clothing manufactures, there was no sensible price reduction.
- The price of superfine cloth has risen in proportion to its quality within the last 25-30 years.
- This was caused by the rise in the price of Spanish wool.
- The price of Yorkshire cloth made from English wool fell much relative to its quality in the present century.
- Quality, however, is a very disputable matter.
- I look on all information on quality as uncertain.
- In the clothing manufactures, the division of labour is nearly the same now as it was a century ago.
- The machinery employed is not very different.
- Small improvements in division of labour and machinery may have reduced prices of clothes.
245 The reduction will appear more undeniable if we compare the price of present clothing with its price at the end of the 15th century, when the labour was probably much less subdivided and the machinery was more imperfect.
246 In 1487, it was enacted that a yard of the finest grained cloth sold above 192 pence will be fined 480 pence for every yard sold.
- 192 pence then had as much silver as 288 pence today.
- 192 pence was then a reasonable price for a yard of the finest cloth.
- The law means that such cloth was sold dearer than 192 pence.
- 252 pence is currently the highest price of cloth.
- The quality of of today’s finest cloths are much superior than before.
- But its money price was much reduced since the end of the 15th century.
- Its real price was much more reduced.
- 80 pence was then, and long afterwards, the average price of a quarter of wheat.
- 192 pence was the price of two quarters and more than three bushels of wheat.
- Valuing a quarter of wheat presently at 336 pence, the real price of a yard of fine cloth back then must have been equal to at least 798 pence today.
- The man who bought fine cloth then must have paid the same real price [two quarters of wheat] as we pay now.
247 The big reduction in the real price of the coarse manufacture was not as great as the reduction in the real price of the fine manufactures.
248 In 1463, it was enacted that no servant in husbandry, common labourer, nor servant to any artificer living in a city shall use or wear any cloth above 24 pence per yard.
- 24 pence then contained nearly the same quantity of silver as 48 pence today.
- But Yorkshire cloth, now sold at 48 pence per yard, is much superior to any clothes made then for the poorest servants.
- Even the money price of their clothing may be cheaper today than then.
- The real price is certainly much cheaper today.
- 10 pence was then the reasonable price of a bushel of wheat.
- 24 pence was the price of two bushels and near two pecks of wheat.
- At 42 pence per bushel, it would be worth 105 pence today.
- For a yard of this cloth, the poor servant must have paid what 105 pence would buy today.
- This law restrains the extravagance of the poor.
- The clothing of the poor was much more expensive then.
249 The same law prohibits the same poor servants from wearing hose priced above 14 pence a pair, equal to 28 pence today.
- But 14 pence then was the price of a bushel and near two pecks of wheat.
- At 42 pence the bushel, it would cost 63 pence today.
- Presently, this is a very high price for a pair of stockings of the poorest servant.
- But it was the common price back then.
250 At that time, the art of knitting stockings was probably unknown in Europe.
- Their hose was made of common cloth, which may have been one of the causes of their dearness.
- Queen Elizabeth was the first person to wear stockings in England.
- She received them as a gift from the Spanish ambassador.
251 The machinery in manufactures were much more imperfect back then.
- It has since received three very capital improvements.
- It is difficult to ascertain the number or importance of the many smaller improvements.
- The three capital improvements are:
- The exchange of the rock and spindle for the spinning-wheel
- The spinning-wheel will perform more than double the work for the same quantity of labour
- The use of machines which abridge the winding of worsted and woollen yarn or the proper arrangement of the warp and woof before they are put into the loom.
- This arrangement was extremely tedious before those machines were invented.
- The use of the fulling mill for thickening the cloth, instead of treading it in water.
- Wind and water mills were unknown in England and north of the Alps in the start of the 16th century.
- They were introduced into Italy before then.
- Wind and water mills were unknown in England and north of the Alps in the start of the 16th century.
252 These explain why the real price of manufactures was so much higher then than now.
- It cost more labour then.
253 England’s coarse manufactures probably were done as household manufactures, as in countries where arts and manufactures are new.
- It was occasionally performed by the members of private families.
- It was only their work when they had nothing else to do.
- It could not be the principal business from which they derived most of their subsistence.
- This kind of work is always much cheaper than the work done by a worker who principally depended on it for subsistence.
- The fine manufacture was then done in the rich, commercial country of Flanders, not in England.
- It was probably done then by people who made their whole living from it, as we do today.
- It was a foreign manufacture which must have paid some duty to the king.
- This duty was probably not very great.
- Back then, it was not the policy of Europe to restrain foreign manufactures by high import duties.
- Rather it encouraged them so that merchants could supply the great men with the luxuries they wanted.
254 These explain why the real price of the coarse manufacture in ancient times was, relative to the real price of fine manufactures, was so much lower than today.
255 Every improvement in the circumstances of the society tends to directly or indirectly:
- Raise the real rent of land
- Increase the real wealth of the landlord.
256 The extension of improvement and cultivation raises it directly.
- The landlord’s share of the produce increases with the increase of the produce.
257 That rise in the real price of the rude produce of land is first the effect of extended improvement and cultivation.
- It is afterwards the cause of the improvement being further extended,
- For example, the rise in cattle prices raises land rent directly in a greater proportion.
- The real value of the landlord’s share rises with the real value of the produce.
- His share to the whole produce rises with the rise of the real value of the produce.
- After the rise in the real value of produce, the produce will require no more labour to collect it than before.
- Fewer labour will be sufficient to replace the stock which employs that labour, with ordinary profit.
- More labour consequently must belong to the landlord.
258 The increase in productivity directly reduces the real price of manufactures.
- It indirectly raises the real rent of land.
- The landlord exchanges his excess rude produce for manufactured produce.
- Whatever reduces the real price of manufactures, raises the real price of the rude produce.
- An equal quantity of rude produce becomes equal to more manufactured produce.
- The landlord can then purchase more of the conveniencies and luxuries he wants.
259 “Every increase in the real wealth of the society, every increase in the quantity of useful labour employed within it, tends indirectly to raise the real rent of land.”
- “A certain proportion of this labour naturally goes to the land.”
- More men and cattle are employed in cultivation.
- This increases its produce which then increases its rent.
260 The real rent of land and the real wealth of the landlord is all reduced by:
- The fall in the real price of rude produce
- The neglect of cultivation and improvement of land
- The rise in the real price of manufactures from the decay of manufacturing art and industry
- The decline of the real wealth of society
The Three Orders of People
261 The national annual produce of every country naturally divides itself into rent, wages, and profits;
It makes up a revenue to three orders of people:
- Those who live by rent
- Those who live by wages
- Those who live by profit.
“These are the three great, original, and constituent orders of every civilized society, from whose revenue that of every other order is ultimately derived.”
262 The interest of those who live by rent is strictly and inseparably connected with the general interest of the society.
- Whatever promotes or obstructs society, promotes or obstructs those who live by rent.
- When the public deliberates any law, the land owners can never mislead it.
- Because land owners will promote the interest of their own order as long as they know it.
- Too often, they do not know their own interest.
- They are the only order who does not need to labour nor care about their revenue.
- Because it comes by its own accord, independent of any plan or project of their own.
- This naturally creates indolence from the ease and security of their situation.
- This renders them ignorant and incapable of thinking about the consequences of any public law.
263 The interest of those who live by wages is as strictly connected with the interest of the society as those who live by rent.
- The wages of the labourer are highest when the demand for labour is continually rising.
- When the real wealth of society becomes stationary, his wages are soon reduced to what is barely enough to raise a family and continue the race of labourers.
- When the society declines, they fall even below this.
- Those who live by profits may gain more by the prosperity of society than the labourers.
- But those who live by wages suffer the cruelest from its decline.
- The labourer is unable to understand that his interest is strictly connected with the interest of society.
- His has no time to receive the necessary information.
- His education and habits render him unfit to judge even if he was fully informed.
- In the public deliberations, his voice is little heard and less regarded,
- It is only heard when his clamour is animated and supported by his employers for their own purposes.
264 His employers constitute those who live by profit.
“It is the stock that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society.”
“The plans and projects of the employers of stock regulate and direct all the most important operations of labour”
- Profit is the end proposed by all those plans and projects.
- But unlike rent and wages, profits do not rise with the prosperity and fall with the decline of society.
- On the contrary, profits are naturally low in rich countries and high in poor countries.
- It is always highest in countries going fastest to ruin.
- The interest of this third order, has not the same connection with the general interest of the society as the other two.
- Merchants and master manufacturers are the two classes in this order who employ the largest capitals
- By their wealth, they draw to themselves the greatest share of the public consideration.
- They are engaged in plans and projects their whole lives.
- They have more acuteness of understanding than most country gentlemen.
- Their thoughts and judgement commonly revolve around the interest of their own business, than around the interest of society.
- They know better their own interests than country gentleman know the interest of country gentlemen.
- By this superior knowledge of their own interest, they have frequently imposed on the generosity of country gentlemen.
- The former have persuaded the latter:
- to give up their own interest and that of the public
- that the interest of merchants and manufacturers was the interest of the public.
- The interest of any dealer is always different from, and even opposite to, the interest of the public.
- To widen the market and to narrow the competition is always the interest of dealers.
- To widen the market may frequently be agreeable to the interest of the public.
- But to narrow the competition must always be against the public interest.
- It only enables the dealers to levy an absurd tax on the rest of their fellow-citizens, raising their profits unnaturally.
- The proposal of any new commercial law which comes from this order, should always be listened to with great precaution.
- It should never be adopted until after long and careful examination with the most scrupulous and the most suspicious attention.
- It comes from an order of men whose interest is never exactly the same with the public interest.
- This order generally has an interest to deceive and even oppress the public.
- They have done so on many occasions.