can be asserted that those occupations which demand specific abilities
or longer training have on the whole become more lucrative; while the
commensurate wage for mechanically uniform activity, in which everyone
can be quickly and easily trained, has fallen, and inevitably so, as a
result of growing competition. And it is precisely this kind of labour
which, under the present system of labour organisation, is by far the
....So, if a worker in the first category
now earns seven times as much as he did 50 years ago, while another in
the second category continues to earn the same as he did then, then on
average they earn four times as much.
....But if in a given country there are only
a thousand workers in the first category and a million in the second,
then 999,000 are no better off than 50 years ago, and they are worse off
if the prices of staple goods have risen.
....And yet people are trying to deceive
themselves about the most numerous class of the population with superficial
average calculations of this sort.
....Moreover, the size of wages is only one
factor in evaluating a worker's income: it is also essential to take into
account the length of time for which such wages are guaranteed, and there
is no question of guarantees in the anarchy of so-called free competition
with its continual fluctuations and stagnation. Finally, we must bear
in mind the hours of work which were usual earlier and those which are
usual now. And for the English cotton workers, the working day has been
increased, as a result of the entrepreneurs' mania for profit,
a large capital accumulates more rapidly, in proportion
to its size, than does a small capital.
....This means that, quite apart from competition,
the accumulation of large capital takes place at a much faster rate than
that of small capital. But, let us follow this process further.
....As capitals multiply, the profits on
capital diminish, as a result of competition. So, the first to suffer
is the small capitalist.
a country which had acquired its full complement of riches, ...as the
ordinary rate of clear profit would be very small, so the usual market
rate of interest which could be afforded out of it would be so low as
to render it impossible for any but the very wealthiest of people to live
upon the interest of their money. All people of small or middling fortunes
would be obliged to super-intend themselves the employment of their own
stocks. It would be necessary that almost every man should be a man of
business, or engage in some sort of trade."
[Smith I, p. 86]
is the situation most dear to the heart of political economy.
proportion between capital and revenue, therefore, seems everywhere to
regulate the proportion between industry and idleness. Wherever capital
predominates, industry prevails: wherever revenue, idleness." [Smith,
....But, what about
the employment of capital in this increased competition?
the quantity of stock to be lent at interest increases, the interest,
or the price which must be paid for the use of that stock, necessarily
diminishes, not only from those general causes, which make the market
price of things commonly diminish as their quantity increases, but from
other causes which are peculiar to this particular case.
....As capitals increase in any country,
the profits which can be made by employing them necessarily diminish.
It becomes gradually more and more difficult to find within the country
a profitable method of employing any new capital. There arises, in consequence,
a competition between different capitals, the owner of one endeavouring
to get possession of that employment which is occupied by another.
But, on most occassions he can hope to jostle that other out of this employment
by no other means but by dealing upon more reasonable terms. He must not
only sell what he deals in somewhat cheaper, but, in order to get it to
sell, he must sometimes, too, buy it dearer.
The demand for productive labour, by the increase of the funds which are
destined for maintaining it, grows every day greater and greater. Labourers
easily find employment,
....Let us now sees
how the landlord exploits everything which is to the benefit of society.
....(1) The rent of land increases with population.
....(2) We have already learnt from Say how
ground rent rises with railways, etc., and with the improvement, security,
and multiplication of the means of communication.
... every improvement in the circumstances of the society tends either
directly or indirectly to raise the real rent of land, to increase the
real wealth of the landlord, his power of purchasing the labour, or the
produce of the labour of other people.
....The extension of improvement and cultivation
tends to raise it directly. The landlord's share of the produce necessarily
increases with an increase of the produce.
....That rise in the real price of those
parts of the rude produce of land... the rise in the price of cattle,
for example, tends too to raise the rent of land directly, and in a still
greater proportion. The real value of the landlord's share, his real command
of the labour of other people, not only rises with the real value of the
produce, but the proportion of his share to the whole produce rises with
it. That produce, after the rise in its real price, requires no more labour
to collect it than before. A smaller proportion of it will, therefore,
be sufficient to replace, with the ordinary profit, the stock which employs
that labour. A greater proportion of it must, consequently, belong to
[Smith, I, pp. 228-29]