Wages of Labour

Profit of Capital

Rent of Land

[V. 1.]
....An increase in wages arouses in the worker the same desire to get rich as in the capitalist, but he can only satisfy this desire by sacrificing his mind and body. An increase in wages presupposes, and brings about, the accumulation of capital, and thus opposes the product of labour to the worker as something increasingly alien to him. Similarly, the division of labour makes him more and more one-sided and dependent, introducing competition from machines as well as from men. Since the worker has been reduced to a machine, the machine can confront him as a competitor. Finally, just as the accumulation of capital increases the quantity of industry and, therefore, the number of workers, so it enables the same quantity of industry to produce a greater quantity of products. This leads to overproduction and ends up either by putting a large number of workers out of work or by reducing their wages to a pittance.
Such are the consequences of a condition of society which is most favorable to the worker -- i.e., a condition of growing wealth.
But, in the long run, the time will come when this state of growth reaches a peak. What is the situation of the worker then?

"In a country which had acquired that full complement of riches...both the wages of labour and the profits of stock would probably be very low... the competition for employment would necessarily be so great as to reduce the wages of labour to what was barely sufficient to keep up the number of labourers, and, the country being already fully peopled, that number could never be augmented." [Smith I, p. 84]
....The surplus population would have to die.
So, in a declining state of society, we have the increasing misery of the worker; in an advancing state, complicated misery; and in the terminal state, static misery.

[VI. 1.]

[V. 2.]
and the different values which it may add to the annual produce of the land and labour of the society, according as it is employed in one or other of those different ways, never enter into his thoughts." [Smith, p. 355]
...."The most useful employment of capital for the capitalist is that which, with the same degree of security, yields him the largest profit; but this employment is not always the most useful for society... the most useful is that which... stimulates the productive power of its land and labour." [Say, II, pp. 130-31]
...."The plans and projects of the employers of stock regulate and direct all the most important operations of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity and fall with the declension of the society. On the contrary, it is naturally low in rich and high in poor countries, and it is always highest in countries which are going fastest to ruin. The interest of this third order [those who live by profit], therefore, has not the same connection with the general interest of the society as that of the other two.... The interest of the dealer, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers... and order of men whose interest is never exactly the same as that of the public, who have generally an interest to decisive and even to oppress the public..." [Smith I, pp. 231-2]

4. The Accumulation of Capitals and the Competition among the

...."The increase of capitals, which raises wages, tends to lower profits, as a result of the competition among capitalists. [Smith, p. 78]
If, for example, the capital which is necessary for the grocery trade of a particular town is divided between two different grocers, their competition will tend to make both of them sell cheaper than if it were in the hands of one only; and if it were divided among 20,

[VI. 2.]

[V. 3.]
in the crop." [Smith, I, p. 153 ]
...."Rent is seldom less than a fourth, and frequently more than a third of the whole produce." [Smith, I, p. 325 ]
...."Ground rent cannot be paid in the case of all commodities. For example, in many districts no rent is paid for stones.
Such parts only of the produce of land can commonly be brought to market of which the ordinary price is sufficient to replace the stock which must be employed in bringing them thither, together with its ordinary profits. If the ordinary price is more than this, the surplus part of it will naturally go to the rent of the land. If it is not more, though the commodity may be brought to market, it can afford no rent to the landlord. Whether the price is or is not more depends upon the demand." [Smith, I, p. 132 ]
...."Rent, it is to be observed, therefore, enters into the composition of the price of commodities in a different way from wages and profit. High or low wages and profit are the causes of high or low prices; high or low rent is the effect of it." [Smith, I, p. 132 ]

....Among the products which always yield a rent is food.
...."As men, like all other animals, naturally multiply in proportion the means of subsistence, food is always, more or less, in demand. It can always purchase or command a greater or smaller
[VI. 3.]














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