Wages of Labour

Profit of Capital

Rent of Land

[IV. 1.]
class of men who do nothing but work increases the competition among the workers and therefore lowers their price. In the factory system, conditions such as these reach their climax.
....(c) In a society which is becoming increasingly prosperous, only the very richest can continue to live from the interest on money. All the rest must run a business with their capital, or put it on the market. As a result, the competition among the capitalists increases, there is a growing concentration of capital, the big capitalists ruin the small ones, and a section of the former capitalists sinks into the class of the workers -- which, because of this increase in numbers, suffers a further depression of wages and becomes even more dependent on the handful of big capitalists. Because the number of capitalists has fallen, competition for workers has increased, the competition among them has become all the more considerable, unnatural and violent. Hence, a section of the working class is reduced to beggary or starvation with the same necessity as a section of the middle capitalists ends up in the working class.
So, even in the state of society most favorable to him, the inevitable consequence for the worker and early death, reduction to a machine, enslavement to capital which piles up in threatening opposition to him, fresh competition and starvation or beggary for a section of the workers.

[V. 1.]

[IV. 2.]
it is derived must always be greater. The capital which employs the weavers, for example, must be greater than that which employs the spinners; because it not only replaces that capital with its profits, but pays besides, the wages of the weavers; and the profits must always bear some proportion to the capital" [Smith, p. 45]
....Hence, the growing role played by human labour in fashioning the natural product increases not the wages of labour but partly the number of profitable capitals and partly the size of each capital in proportion to those that precede it.
....More later about the profit which the capitalist derives from the division of labour.
....He profits in two ways: firstly, from the division of labour and secondly, and more generally, from the growing role played by human labour in fashioning the natural product. The larger the human share in a commodity, the larger the profit of dead capital.

...."In one and the same society, the average rates of profit on capital are more nearly upon a level than are the wages of different kinds of labour. [Smith, p. 45] In the different employments of capital, the ordinary rate of profit varies more or less with the certainty or uncertainty of the returns;
... the ordinary profit of stock, though it rises with the risk, does not always seem to rise in proportion to it." [ Smith, pp. 99-100]

....Needless to say, profits also rise if the means of circulation (e.g., paper money) improve or become less expensive.

3. The Rule of Capital over Labour and the Motives of the Capitalist

...."The consideration of his own private profit is the sole motive which determines the owner of any capital to employ it either in agriculture, in manufactures, or in some particular branch of the wholesale or retail trade. The different quantities of productive labour which may put it into motion,
[V. 2.]

[IV. 3.]
.... This portion... may still be considered as the natural rent of land, or the rent for which it is actually meant that land should for the most part be let." [Smith, I, p. 130-31 ]
...."The landlords, says Say, operate a certain kind of monopoly against the tenants. The demands for their commodity, which is land, is capable of an infinite expansion; but the supply can only increase up to a certain point.... The agreement reached between landlord and tenant is always as advantageous as possible to the former.... Apart from the advantage which he derives from the nature of the case, he derives a further one from his position, his larger fortune, his credit and his standing; but the first of these advantages is in itself enough to enable him at all times to profit from the favorable circumstances of the land. The opening of a canal or road and a growth in population and prosperity in a canton always raise the price of the rent.... What is more, even if the tenant makes improvement on his plot of land at his own expense, he can only benefit from this capital for the duration of his lease; when his lease runs out, this capital remains in the hands of the landlord. From this moment on, it is the latter who reaps the interest, even though it was not he who made the original outlay; for now the rent is raised proportionately."
[Say, II, pp. 142-3 ]
...."Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land."
[Smith, I, p. 130 ]
...."The rent of an estate above ground commonly mounts to what is supposed to be a third of the gross produce; and it is generally a rent certain and independent of the occassional variations

[V. 3.]












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