else, is the toil and trouble which it can save Every commodity, besides, is more frequent. to himself, and which it can impose upon ly exchanged for, and thereby compared with other people. What is bought with money, other commodities, than with labour. It is or with goods, is purchased by labour, as much more natural, therefore, to estimate its exas what we acquire by the toil of our own changeable value by the quantity of some other body. That money, or those goods, indeed, commodity, than by that of the labour which save us this toil. They contain the value of it can produce. The greater part of people, a certain quantity of labour, which we ex- too, understand better what is meant by a change for what is supposed at the time to quantity of a particular commodity, than by a contain the value of an equal quantity. La- quantity of labour. The one is a plain palp. bour was the first price, the original purchase-able object; the other an abstract notion, which money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.

though it can be made sufficiently intelligible, is not altogether so natural and obvious.

But when barter ceases, and money has be come the common instrument of commerce, every particular commodity is more frequently exchanged for money than for any other commodity. The butcher seldom carries his beef or his mutton to the baker or the brewer, in order to exchange them for bread or for beer; but he carries them to the market, where he exchanges them for money, and afterwards exchanges that money for bread and for beer. The quantity of money which he gets for them regulates, too, the quantity of bread and beer which he can afterwards purchase. It is more natural and obvious to him, therefore, to esti

Wealth, as Mr Hobbes says, is power. But the person who either acquires, or succeeds to a great fortune, does not necessarily acquire or succeed to any political power, either civil or military. His fortune may, perhaps, afford him the means of acquiring both; but the mere possession of that fortune does not necessarily convey to him either. The power which that possession immediately and direct-mate their value by the quantity of money, ly conveys to him, is the power of purchasing a certain command over all the labour, or over all the produce of labour which is then in the market. His fortune is greater or less, precisely in proportion to the extent of this power, or to the quantity either of other men's labour, or, what is the same thing, of the produce of other men's labour, which it enables him to purchase or command. The exchangeable value of every thing must always be precisely equal to the extent of this power which it conveys to its owner.

the commodity for which he immediately ex changes them, than by that of bread and beer, the commodities for which he can exchange them only by the intervention of another commodity; and rather to say that his butcher's meat is worth threepence or fourpence a-pound, than that it is worth three or four pounds of bread, or three or four quarts of small beer. Hence it comes to pass, that the exchangeable value of every commodity is more frequently estimated by the quantity of money, than by the quantity either of labour or of any other commodity which can be had in exchange for it.

But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly Gold and silver, however, like every other estimated. It is often difficult to ascertain commodity, vary in their value; are sometimes the proportion between two different quantities cheaper and sometimes dearer, sometimes of of labour. The time spent in two different easier and sometimes of more difficult pursorts of work will not always alone determine chase. The quantity of labour which any parthis proportion. The different degrees of hard- ticular quantity of them can purchase or comship endured, and of ingenuity exercised, must mand, or the quantity of other goods which it likewise be taken into account. There may will exchange for, depends always upon the be more labour in an hour's hard work, than fertility or barrenness of the mines which hap in two hours easy business; or in an hour's pen to be known about the time when such application to a trade which it cost ten years exchanges are made. The discovery of the abour to learn, than in a month's industry, at abundant mines of America, reduced, in the an ordinary and obvious employment. But sixteenth century, the value of gold and silver it is not easy to find any accurate measure in Europe to about a third of what it had either of hardship or ingenuity. In exchan-been before. As it cost less labour to bring ging, indeed, the different productions of dif- those metals from the mine to the market, so, ferent sorts of labour for one another, some when they were brought thither, they could allowance is commonly made for both. It is purchase or command less labour; and this adjusted, however, not by any accurate mea- revolution in their value, though perhaps the sure, but by the higgling and bargaining of the greatest, is by no means the only one of which market, according to that sort of rough equa-history gives some account. But as a meality which, though not exact, is sufficient for sure of quantity, such as the natural foot, facarrying on the business of common lifc. thom, or handful, which is continually vary.

ing in its own quantity, can never be an ac- arise from the different quantities of gold and curate measure of the quantity of other things; silver which are contained at different times so a commodity which is itself continually va- in coin of the same denomination; and, serying in its own value, can never be an accu- condly, to those which arise from the different rate measure of the value of other commodi-values of equal quantities of gold and silver Equal quantities of labour, at all times at different times.

ties.

and places, may be said to be of equal value Princes and sovereign states have frequentto the labourer. In his ordinary state of ly fancied that they had a temporary interest health, strength, and spirits; in the ordinary to diminish the quantity of pure metal condegree of his skill and dexterity, he must al-tained in their coins; but they seldom have ways lay down the same portion of his ease, fancied that they had any to augment it. The his liberty, and his happiness. The price which quantity of metal contained in the coins, I he pays must always be the same, whatever believe of all nations, has accordingly been may be the quantity of goods which he re- almost continually diminishing, and hardly ceives in return for it. Of these, indeed, it ever augmenting. Such variations, therefore, may sometimes purchase a greater and some-tend almost always to diminish the value of a times a smaller quantity; but it is their value money rent. which varies, not that of the labour which pur- The discovery of the mines of America dichases them. At all times and places, that is minished the value of gold and silver in Eudear which it is difficult to come at, or which rope. This diminution, it is commonly supit costs much labour to acquire; and that posed, though I apprehend without any cercheap which is to be had easily, or with very tain proof, is still going on gradually, and is little labour. Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only.

likely to continue to do so for a long time. Upon this supposition, therefore, such variations are more likely to diminish than to augment the value of a money rent, even though it should be stipulated to be paid, not in such a quantity of coined money of such denomination (in so many pounds sterling, for example), but in so many ounces, either of pure silver, or of silver of a certain stand

But though equal quantities of labour are always of equal value to the labourer, yet to the person who employs him they appear sometimes to be of greater, and sometimes of small-ard. er value. He purchases them sometimes with The rents which have been reserved in a greater, and sometimes with a smaller quantity of goods, and to him the price of labour seems to vary like that of all other things. It appears to him dear in the one case, and cheap in the other. In reality, however, it is the goods which are cheap in the one case, and dear in the other.

In this popular sense, therefore, labour, like commodities, may be said to have a real and a nominal price. Its real price may be said to consist in the quantity of the necessaries and conveniencies of life which are given for it; its nominal price, in the quantity of money. The labourer is rich or poor, is well or ill rewarded, in proportion to the real, not to the nominal price of his labour.

corn, have preserved their value much better than those which have been reserved in money, even where the denomination of the coin has not been altered. By the 18th of Elizabeth, it was enacted, that a third of the rent of all college leases should be reserved in corn, to be paid either in kind, or according to the current prices at the nearest public market The money arising from this corn rent, though originally but a third of the whole, is, in the present times, according to Dr. Blackstone, commonly near double of what arises from the other two-thirds. The old money rents of colleges must, according to this account, have sunk almost to a fourth part of their ancient value, or are worth little more than a The distinction between the real and the fourth part of the corn which they were fornominal price of commodities and labour is merly worth. But since the reign of Philip not a matter of mere speculation, but may and Mary, the denomination of the English sometimes be of considerable use in practice. coin has undergone little or no alteration, and The same real price is always of the same va- the same number of pounds, shillings, and ie; but on account of the variations in the pence, have contained very nearly the same value of gold and silver, the same nominal quantity of pure silver. This degradation, price is sometimes of very different values. therefore, in the value of the money rents of When a landed estate, therefore, is sold with colleges, has arisen altogether from the dea reservation of a perpetual rent, if it is in-gradation in the price of silver. tended that this rent should always be of the When the degradation in the value of silver same value, it is of importance to the family is combined with the diminution of the quanin whose favour it is reserved, that it should tity of it contained in the coin of the same not consist in a particular sum of money. Its denomination, the loss is frequently still greatvalue would in this case be liable to variations er. In Scotland, where the denomination of of two different kinds: first, to those which the coin has undergone much greater alter.

ations than it ever did in England, and in money price of corn, therefore, may, during France, where it has undergone still greater so long a period, continue the same, or very than it ever did in Scotland, some ancient nearly the same, too, and along with it the rents, originally of considerable value, have, money price of labour, provided, at least, the in this manner, been reduced almost to no-society continues, in other respects, in the thing. same, or nearly in the same, condition. In Equal quantities of labour will, at distant the mean time, the temporary and occasional times, be purchased more nearly with equal price of corn may frequently be double one quantities of corn, the subsistence of the la-year of what it had been the year before, or bourer, than with equal quantities of gold and fluctuate, for example, from five-and-twenty silver, or, perhaps, of any other commodity. to fifty shillings the quarter. But wher, corn Equal quantities of corn, therefore, will, at is at the latter price, not only the nominal, distant times, be more nearly of the same real but the real value of a corn rent, will be value, or enable the possessor to purchase or double of what it is when at the former, or command more nearly the same quantity of will command double the quantity either of the labour of other people. They will do labour, or of the greater part of other commothis, I say, more nearly than equal quantities dities; the money price of labour, and along of almost any other commodity; for even with it that of most other things, continuing equal quantities of corn will not do it exactly. the same during all these fluctuations. The subsistence of the labourer, or the real Labour, therefore, it appears evidently, is price of labour, as I shall endeavour to shew the only universal, as well as the only accnhereafter, is very different upon different occa-rate, measure of value, or the only standard sions; ore liberal in a society advancing to by which we can compare the values of difopulence, than in one that is standing still, ferent commodities, at all times, and at all and in one that is standing still, than in one places. We cannot estimate, it is allowed, that is going backwards. Every other com- the real value of different commodities from modity, however, will, at any particular time, century to century by the quantities of silver purchase a greater or smaller quantity of la- which were given for them. We cannot es bour, in proportion to the quantity of subsist-timate it from year to year by the quantities ence which it can purchase at that time. A of corn. By the quantities of labour, we can, rent, therefore, reserved in corn, is liable only with the greatest accuracy, estimate it, both to the variations in the quantity of labour from century to century, and from year to which a certain quantity of corn can purchase. year. From century to century, corn is a But a rent reserved in any other commodity better measure than silver, because, from cenis liable, not only to the variations in the tury to century, equal quantities of corn wil! quantity of labour which any particular quan- command the same quantity of labour more tity of corn can purchase, but to the variations nearly than equal quantities of silver. From in the quantity of corn which can be purchas- year to year, on the contrary, silver is a better el by any particular quantity of that commo-measure than corn, because equal quantities dity. of it will more nearly conimand the same

Though the real value of a corn rent, it is quantity of labour. to be observed, however, varies much less But though, in establishing perpetual rents, from century to century than that of a money or even in letting very long leases, it may be rent, it varies much more from year to year. of use to distinguish between real and nomiThe money price of labour, as I shall endea- nal price; it is of none in buying and selling, vour to shew hereafter, does not fluctuate the more common and ordinary transactions from year to year with the money price of of human life.

corn, but seems to be everywhere accommo- At the same time and place, the real and dated, not to the temporary or occasional, but the nominal price of all commodities are exto the average or ordinary price of that neces-actly in proportion to one another. The more sary of life. The average or ordinary price or less money you get for any commodity, in of corn, again is regulated, as I shall likewise the London market, for example, the more or endeavour to shew hereafter, by the value of less labour it will at that time and place ensilver, by the richness or barrenness of the able you to purchase or command. At the mines which supply the market with that same time and place, therefore, money is the metal, or by the quantity of labour which exact measure of the real exchangeable value must be employed, and consequently of corn of all commodities. It is so, however, at the which must be consumed, in order to bring same time and place only. any particular quantity of silver from the Though at distant places there is no regular miue to the market. But the value of silver, proportion between the real and the money though it sometimes varies greatly from cen- price of commodities, yet the merchant who tury to century, seldom varies much from year carries goods from the one to the other, has to year, but frequently continues the same, or nothing to consider but the money price, or very nearly the same, for half a century or a the difference between the quantity of silver century together. The ordinary or average for which he buys them, and that for which

use of as the instrument of commerce. Hav. ing once begun to use it as their standard, which they must have done when they had no other money, they have generally continued to do so even when the necessity was not the same.

he is likely to sell them. Half an ounce of metal, for those of still smaller consideration.
silver at Canton in China may command a They have always, however, considered one of
greater quantity both of labour and of the ne- those metals as more peculiarly the measure
cessaries and conveniencies of life, than an of value than any of the other two; and this
ounce at London.
A commodity, therefore, preference seems generally to have been given
which sells for half an ounce of silver at Can-to the metal which they happen first to make
ton, may there be really dearer, of more real
importance to the man who possesses it there,
than a commodity which sells for an ounce at
London is to the man who possesses it at
London. If a London merchant, however,
can buy at Canton, for half an ounce of sil-
ter, a commodity which he can afterwards The Romans are said to have had nothing
sell at London for an ounce, he gains a hund- but copper money till within five years be-
red per cent. by the bargain, just as much as fore the first Punic war, when they first be-
if an ounce of silver was at London exactly of gan to coin silver. Copper, therefore, ap-
the same value as at Canton. It is of no im- pears to have continued always the measure
portance to him that half an ounce of silver at of value in that republic. At Rome all ac-
Canton would have given him the command counts appear to have been kept, and the
of more labour, and of a greater quantity of value of all estates to have been computed,
the necessaries and conveniencies of life than either in asses or in sestertü. The as was al-
an ounce can do at London. An ounce at ways the denomination of a copper coin.
London will always give him the command The word sestertius signifies two asses and a
of double the quantity of all these, which half half. Though the sestertius, therefore, was
an ounce could have done there, and this is originally a silver coin, its value was estimat-
precisely what he wants.
ed in copper.
At Rome, one who owed a
great deal of money was said to have a great
deal of other people's copper.

As it is the nominal or money price of goods, therefore, which finally determines the prudence or imprudence of all purchases and sales, and thereby regulates almost the whole business of common life in which price is concerned, we cannot wonder that it should have been so much more attended to than the real price.

The northern nations who established them. selves upon the ruins of the Roman empire, seem to have had silver money from the first beginning of their settlements, and not to have known either gold or copper coins for several ages thereafter. There were silver In such a work as this, however, it may coins in England in the time of the Saxons; sometimes be of use to compare the different but there was little gold coined till the time real values of a particular commodity at dif- of Edward III, nor any copper till that of ferent times and places, or the different de- James I. of Great Britain. In England, grees of power over the labour of other peo- therefore, and for the same reason, I believe, ple which it may, upon different occasions, in all other modern nations of Europe, all have given to those who possessed it. We accounts are kept, and the value of all goods must in this case compare, not so much the and of all estates is generally computed, in different quantities of silver for which it was silver; and when we mean to express the commonly sold, as the different quantities of amount of a person's fortune, we seldom menlabour which those different quantities of sil- tion the number of guineas, but the number ver could have purchased. But the current of pounds sterling which we suppose would prices of labour, at distant times and places, be given for it. can scarce ever be known with any degree of Originally, in all countries, I believe, a leexactness. Those of corn, though they have gal tender of payment could be made only in in few places been regularly recorded, are in the coin of that metal which was peculiarly general better known, and have been more considered as the standard or measure of frequently taken notice of by historians and value. In England, gold was not considered other writers. We must generally, therefore, as a legal tender for a long time after it was content ourselves with them, not as being al- coined into money. The proportion between ways exactly in the same proportion as the the values of gold and silver money was not current prices of labour, but as being the fixed by any public law or proclamation, but nearest approximation which can commonly was left to be settled by the market. If a be had to that proportion. I shall hereafter debtor offered payment in gold, the creditor have occasion to make several comparisons of might either reject such payment altogether,

this kind.

In the progress of industry, commercial nations have found it convenient to coin several different metals into money; gold for larger payments, silver for purchases of moderate value, and copper, or some other coarse

or accept of it at such a valuation of the gold as he and his debtor could agree upon. Copper is not at present a legal tender, except in the change of the smaller silver coins.

* Pliny, lib xxxii. cap. 3

In this state of things, the distinction between one regulated proportion between the respecthe metal which was the standard, and that tive values of the different metals in coin, the which was not the standard, was something value of the most precious metal regulates the more than a nominal distinction. value of the whole coin. Twelve copper pence

In process of time, and as people became contain half a pound avoirdupois of copper, gradually more familiar with the use of the of not the best quality, which, before it is different metals in coin, and consequently bet-coined, is seldom worth sevenpence in silver. ter acquainted with the proportion between But as, by the regulation, twelve such pence their respective values, it has, in most coun- are ordered to exchange for a shilling, they tries, I believe, been found convenient to as- are in the market considered as worth a shilcertain this proportion, and to declare by a ling, and a shilling can at any time be had for public law, that a guinea, for example, of such them. Even before the late reformation of a weight and fineness, should exchange for the gold coin of Great Britain, the gold, that one-and-twenty shillings, or be a legal tender part of it at least which circulated in London for a debt of that amount. In this state of and its neighbourhood, was in general less dethings, and during the continuance of any one graded below its standard weight than the regulated proportion of this kind, the distinc- greater part of the silver. One-and-twenty tion between the metal, which is the standard, worn and defaced shillings, however, were and that which is not the standard, becomes considered as equivalent to a guinea, which, little more than a nominal distinction. perhaps, indeed, was worn and defaced too, In consequence of any change, however, in but seldom so much so. The late regulations this regulated proportion, this distinction be- have brought the gold coin as near, perhaps, comes, or at least seems to become, something to its standard weight as it is possible to bring more than nominal again. If the regulated the current coin of any nation; and the order value of a guinea, for example, was either re- to receive no gold at the public offices but by duced to twenty, or raised to two-and-twenty weight, is likely to preserve it so, as long as shillings, all accounts being kept, and almost that order is enforced. The silver coin still

ver.

all obligations for debt being expressed, in continues in the same worn and degraded state silver money, the greater part of payments as before the reformation of the cold coin. In could in either case be made with the same the market, however, one-and-twenty shillings quantity of silver money as before; but would of this degraded silver coin are still considerrequire very different quantities of gold mo- ed as worth a guinea of this excellent gold ney; a greater in the one case, and a smaller coin. in the other. Silver would appear to be more invariable in its value than gold. Silver would appear to measure the value of gold, aud gold would not appear to measure the value of sil- In the English mint, a pound weight of The value of gold would seem to de- gold is coined into forty-four guineas and a pend upon the quantity of silver which it half, which at one-and-twenty shillings the would exchange for, and the value of silver guinea, is equal to forty-six pounds fourteen would not seem to depend upon the quantity shillings and sixpence. An ounce of such of gold which it would exchange for. This gold coin, therefore, is worth L.3: 17: 10 difference, however, would be altogether ow-in silver. In England, no duty or seignorage ing to the custom of keeping accounts, and of is paid upon the coinage, and he who carries expressing the amount of all great and small a pound weight or an ounce weight of standsums rather in silver than in gold money. ard gold bullion to the mint, gets back a One of Mr Drummond's notes for five-and-pound weight or an ounce weight of gold in twenty or fifty guineas would, after an altera- coin, without any deduction. Three pounds

The reformation of the gold coin has evidently raised the value of the silver coin which can be exchanged for it.

tion of this kind, be still payable with five-seventeen shillings and tenpence halfpenny an and-twenty or fifty guineas, in the same man-ounce, therefore, is said to be the mint price ner as before. It would, after such an altera- of gold in England, or the quantity of gold tion, be payable with the same quantity of gold coin which the mint gives in return for standas before, but with very different quantities of ard gold bullion.

silver. In the payment of such a note, gold Before the reformation of the gold coin, would appear to be more invariable in its va- the price of standard gold bullion in the mar lue than silver. Gold would appear to mea-ket had, for many years, been upwards of sure the value of silver, and silver would not L.3: 18s. sometimes L.3: 19s. and very freappear to measure the value of gold. If the quently L.4 an ounce; that sum, it is prob custom of keeping accounts, and of expressing promissory-notes and other obligations for money, in this manner should ever become general, gold, and not silver, would be considered as the metal which was peculiarly the standard

or measure of value.

In reality, during the continuance of any

able, in the worn and degraded gold coin, sel-
dom containing more than an ounce of stand
ard gold. Since the reformation of the gold
coin, the market price of standard gold bullion
seldom exceeds L.3: 17: 7 an ounce.
fore the reformation of the gold coin, the mar-
ket price was always more or less above the

Be