1776SmithAdamTheWealthOfNationsFIRSTREADING

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Back to Unedited Philosophy Quotes and Ramblings about Intequinism.

Reader: Mr MD Pienaar

Author: Adam Smith

Editor: Edwin Cannan

Book name: The Wealth of Nations (Originally published in 1776, this edition based on the fifth edition as edited and annotated by Edwin Cannan in 1904.

Edition: Bantam Classic Edition / March 2003

Publisher: Bantam Dell

Place: New York, New York

ISBN: 0-553-58597-5

BOOK I: OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.

BOOK I: OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.

CHAPTER V: OF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF THEIR PRICE IN LABOUR, AND THEIR PRICE IN MONEY

'Labour was the first price, the original purchase-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.'

The power that wealth brings is a result of the labour which can be bought by the wealth.

'There may be more labour in an hour's hard work than in two hours easy business; or in an hour's application to a trade which it cost ten years labour to learn, than in a month's industry at an ordinary and obvious employment. But it is not easy to find any accurate measure of hardship or ingenuity. In exchanging indeed the different productions of different sorts of labour for one another, some allowance is commonly made for both. It is adjusted, however, not by any accurate measure, but by the higgling and bargaining of the market, according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life.'

'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.'

'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.'

'In England no duty or seignorage is paid upon the coinage, and he who carries a pound weight or an ounce weight of standard gold bullion to the mint, gets back a pound weight or an ounce weight of gold in coin, without any deduction.'

'In France a seignorage of about eight per cent. Is imposed upon the coinage, and the French coin, when exported, is said to return home again of its own accord.'

CHAPTER VI: OF THE COMPONENT PARTS OF THE PRICE OF COMMODITIES

The prices of most things consist of one third labour, one third rent for land and one third profits.

CHAPTER VII: OF THE NATURAL AND MARKET PRICE OF COMMODITIES

The natural price of goods can be compared to the third parts mentioned in Chapter VI but it will vary from place to place because of quality of land and labour for example. The market prices of goods are the prices after demand and supply have been taken into consideration.

'The natural price, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating.'

CHAPTER VIII: OF THE WAGES OF LABOUR

'In that original state of things, which precedes both the appropriation of land and the accumulation of stock, the whole produce of labour belongs to the labourer.'

'No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged.

Poverty, though it no doubt discourages, does not always prevent marriage. It seems even to be favourable to generation. A half-starved Highland women frequently bears more than twenty children, while a pampered fine lady is often incapable of bearing any, and is generally exhausted by two or three.'

'It is because the demand for labour increases in years of sudden and extraordinary plenty, and diminishes in those of sudden and extraordinary scarcity, that the money price of labour sometimes rises in the one, and sinks in the other.'

Own: The cause of the above is partly the quantity theory of money, because above the line the labour, let's say valued in US$ stays more or less the same in the short term. The currency (Rand) in circulation, below the line, also stays the same because new currency is not printed. The assets and options / equity and intequity above the line increases with new opportunities, therefore the labour costs more. The cost of labour and the value of a currency is therefore nearly the same thing. It could perhaps explain that countries where people are most honest will have the strongest currency, because they will be the most creative.

'..; which is probably in part the reason why the wages of labour are every-where so much more steady and permanent than the price of provisions.'

CHAPTER IX: OF THE PROFITS OF STOCK

'It may be laid down as a maxim, that wherever a great deal can be made by the use of money. A great deal will commonly be given for the use of it; and that wherever little can be made by it, less will commonly be given for it...By the 37^th of Henry VIII.(4) all interest above ten per cent. Was declared unlawful. More, it seems, had sometimes been taken before that. In the reign of Edward VI. religious zeal prohibited all interest.(5) This prohibition, however, like all others of the same kind, is said to have produced no effect, and probably rather increased than diminished the evil of usury.'

'The legal rate of interest in France has not, during the course of the present century, been always regulated by the market rate.(15) In 1720 interest was reduced from the twentieth to the fiftieth penny, or from five to two per cent. In 1724 it was raised to the thirtieth penny, or to 3 1/3 per cent.'

'High wages of labour and high profits of stock, however, are things, perhaps, which scarce ever go together, except in the peculiar circumstances of new colonies.'

'The demand for labour increases with the increase of stock whatever be its profits; and after these are diminished, stock may not only continue to increase, but to increase much faster than before.'

Own: Comparing the increase of stock and demand for labour will have a bigger causal effect when manufacturing takes place than when trading takes place.

'In a country fully peopled in proportion to what either its territory could maintain or its stock employ, 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 already being fully peopled, that number could never be augmented. In a country fully stocked in proportion to all the business it had to transact, as great a quantity of stock would be employed in every particular branch as the nature and extent of the trade would admit. The competition, therefore, would every-where be as great, and consequently the ordinary profit as low as possible.

But perhaps no country has ever yet arrived at this degree of opulence. China seems to have been long stationary, and had probably long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions. But this complement may be much inferior to what, with other laws and institutions, the nature of its soil, climate, and situation might admit of.'

'A country which neglects or despises foreign commerce, and which admits the vessels of foreign nations into one or two of its ports only, cannot transact the same quantity of business which it might do with different laws and institutions. In a country too, where, though the rich or the owners of large capitals enjoy good deal of security, the poor or the owners of small capitals enjoy scarce any, but are liable, under the pretence of justice, to be pillaged and plundered at any time by the inferior mandarines, the quantity of stock employed in all the different branches of business transacted within it, can never be equal to what the nature and extent of that business might admit.'

Own: The above passage seems to refer to China during the 1700 when it was maybe controlled by an emperor who allowed foreign ships only to one or two harbours. The mandarines where Chinese officials according to the Apple dictionary. In every different branch, the oppression of the poor must establish the monopoly of the rich, who by engrossing the whole trade to themselves, will be able to make very large profits. Twelve per cent. Accordingly is said to be the common interest of money in China, and the ordinary profits of stock must be sufficient to afford this large interest...Among the barbarous nations who over-ran the western provinces of the Roman empire, the performance of contracts was left for many ages to the faith of the contracting parties. (25) The courts of justice of their kings seldom intermeddled (sic) in it. The high rate of interest which took place in those ancient times may perhaps be partly accounted for from this cause.

When the law prohibits interest altogether, it does not prevent it. May people must borrow, and nobody will lend without such a consideration for the use of their money as is suitable, not only to what can be made use of it, but to the difficulty and danger of evading the law. The high rate of interest among all Mahometan (sic) nations is accounted for Mr. Montesquieu, not from their poverty, but partly from this (26) and partly from the difficulty of recovering the money. (27)'

27 [Esprit des lois, liv xxii., ch. 19, “L'usure augmente dans les pays mahométans a proportion de la sévérité de la défense: le prêteur s'indemnise du péril de la contravention. Dans ces pays d'Orient, la plupart des hommes n'ont rien d'assuré, il n'y a presque point de rapport entre la possession actuelle d'une somme et l'espérance de la ravoir après l'avoir prêtée: l'usure y augmente done a proportion du péril de l'insolvabilité.”]

'The lowest ordinary rate of profit must always be something more than what is sufficient to compensate the occasional losses to which every employment of stock is exposed. It is this surplus only which is neat or clear profit. What is called gross profit comprehends frequently, not only this surplus, but what is retained for compensating such extraordinary losses. The interest which the borrower can afford to pay is in proportion to the clear profit only.

The lowest ordinary rate of interest must, in the same manner, be something more than sufficient to compensate the occasional losses to which lending, even with tolerable prudence, is exposed. Were it not more, charity or friendship could be the only motives for lending.

In a country which had acquired its full complement of riches, where in every particular branch of business there was the greatest quantity of stock that could be employed in it, 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 people to live upon the interest of their money. All people of small or middling fortunes would be obliged to superintend themselves the employment of their own stock. It would be necessary that almost every man should be a man of business, or engage in some sort of trade. The province of Holland seems to be approaching near to this state. It is there unfashionable not to be a man of business. (28)'

28 [Joshua Gee, Trade and Navigation of Great Britain Considered, 1729, p. 128, notices the fact of the Dutch being all engaged in trade and ascribes it to the deficiency of valuable land.]

Smith explains the effect of compound profits on the price of goods. If different parts of a product come from different manufacturers the profits of those manufacturers will be included in the price of the finished product.

CHAPTER X: OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK (1)

PART I: INEQUALITIES ARISING FROM THE NATURE OF THE EMPLOYMENTS THEMSELVES

'The five following are the principal circumstances which, so far as I have been able to observe, make up for a small pecuniary gain in some employments, and counter-balance a great one in others: first, the agreeableness or disagreeableness of the employments themselves; secondly, the easiness and cheapness, or the difficulty and expense of learning them; thirdly, the constancy or inconstancy of employment in them; fourthly, the small or great trust which must be reposed in those who exercise them; and fifthly, the probability or improbability of success in them.'

'The five circumstances above mentioned, though they occasion considerable inequalities on the wages of labour and profits of stock, occasion none in the whole of the advantages, real or imaginary, of the different employments of either...In order however, that this equality may take place in the whole of their advantages or disadvantages, three things are requisite even where there is the most perfect freedom. First, the employment must be well known and long established in the neighbourhood; secondly, they must be in their ordinary, or what may be called their natural state; and thirdly, they must be the sole or principal employments of those who occupy them.'

'In all the different employments of stock, the ordinary rate of profit varies more or less with the certainty or uncertainty of the returns. These are in general less uncertain in the inland than in the foreign trade, and on some branches of the foreign trade than in others; in the trade to North America, for example, than in that to Jamaica. The ordinary rate of profit always rises more or less with risk. It does not, however, seem to rise in proportion to it, or so as to compensate it completely. Bankruptcies are most frequent in the most hazardous trades. The most hazardous of all trades, that of a smuggler, though when the adventure succeeds it is likewise the most profitable, is the infallible road to bankruptcy.'

'..a deception arising from our not always distinguishing what ought to be considered as wages, from what ought to be considered as profit.(23) Apothecaries...His reward, therefor, ought to be suitable to his skill and his trust, and it arises generally from the price at which he sells his drugs...Though he should sell them, therefore, for three or four hundred, or at a thousand per cent profit, this may frequently be no more than the reasonable wages of his labour charged, in the only way in which he can charge them, upon the price of his drugs. The greater part of the apparent profit is real wages disguised in the garb of profit.'

PART II: INEQUALITIES OCCASIONED BY THE POLICY OF EUROPE

'Such are the inequalities in the whole of the advantages and disadvantages of the different employments of labour and stock, which the defect of any of the three requisites above-mentioned must occasion, even where there is the most perfect liberty. But the policy of Europe, by not leaving things at perfect liberty, occasions other inequalities of much greater importance.'

'Seven years seem anciently to have been, all over Europe, the usual term established for the duration of apprenticeships in the greater part of the incorporated trades. All such incorporations were anciently called universities; which indeed is the proper Latin name for any incorporation whatever. The university of smiths, the university of taylors, &c. are expressions which we commonly meet with in the old charters of ancient towns. (32)

'[32 “In Italy a mestiere or company of artisans and tradesman was sometimes styled an ars or universitas...The company of mercers of Rome are styled universitas merciariorum, and the company of bakers there universitas pistorum,”-Madox, Firma Burgi, 1726, p.32]'

'The property which every man has in his own labour, as it is the original foundation of all other property, (39) so it is the most sacred and inviolable.'

Own: This can be disputed because perhaps Intellectual Creations (IC©) which settles because of natural law and the Father of God thought and Mother of God thought is closer to the origin of other property than labour.

'In China and Indostan accordingly both the rank and the wages of country labourers are said to be superior to those of the greater part of artificers and manufacturers. They would probably be so everywhere, if corporation laws and the corporation spirit did not prevent it.'

Self: The above quote could be an indication between the different cultures and the perceptions with regard to creativities at the different cultures.

'A single man, indeed, who is healthy and industrious, may sometimes reside by sufferance without one; but a man with a wife and family who should attempt to do so, would in most parishes be sure of being removed, and if the single man should afterwards marry, he would generally be removed likewise.'

'There is scarce a poor man in England of forty years of age, I will venture to say, who has not in some part of his life felt himself most cruelly oppressed by this ill-contrived law of settlements.'

'..: for if all persons in the same kind of work were to receive equal wages, there would be no emulation, and no room left for industry or ingenuity."(88)'

'(88) History of the Poor Laws, p. 130, loosely quoted. After "limitation" the passage runs, "as thereby it leaves no room for industry or ingenuity; for if all persons in the same kind of work were to receive equal wages there would be no emulation."'

CHAPTER XI: OF THE RENT OF LAND

PART I OF THE PRODUCE OF LAND WHICH ALWAYS AFFORDS RENT

' In the judgement of those ancient improvers, the produce of a kitchen garden had, it seems, been little more than sufficient to pay the extraordinary culture and the expense of watering; for in countries so near the sun, it was thought proper, in those times as in the present, to have the command of a stream of water, which could be conducted to every bed in the garden. '

' The cultivation of tobacco has upon this account been most absurdly prohibited through the greater part of Europe (21), which necessarily gives a sort of monopoly to the countries where it is allowed; and as Virginia and Maryland produce the greatest quantity of it, they share largely, though with some competitors, in the advantage of this monopoly. '

' (21) [Tobacco growing in England, Ireland, and the Channel Islands was prohibited by 12 Car. II., c.34, the preamble of which alleges that the lords and commons have considered “of how great concern and importance it is that the colonies and plantations of this kingdom in America be defended, maintained and kept up, and that all due and possible encouragement be given unto them, and that not only in regard great and considerable dominions and countries have been thereby gained and added to the imperial crown of this realm, but for that the strength and welfare of this kingdom do very much depend upon them in regard of the employment of a very considerable part of its shipping and seamen, and of the vent of very great quantities of its native commodities . . . And in regard it is found by experience that the tobacco planted in these parts are not so good and wholesome for the takers thereof, and that by the planting thereof Your Majesty is deprived of a considerable part of your revenue.” The prohibition was extended to Scotland by 22 Geo. III., c. 73.] '

PART II OF THE PRODUCE OF LAND WHICH SOMETIMES DOES, AND SOMETIMES DOES NOT, AFFORD RENT

PART III OF THE VARIATIONS IN THE PROPORTION BETWEEN THE RESPECTIVE VALUES OF THAT SORT OF PRODUCE WHICH ALWAYS AFFORDS RENT, AND OF THAT WHICH SOMETIMES DOES AND SOMETIMES DOES NOT AFFORD RENT

DIGRESSION CONCERNING THE VARIATIONS IN THE VALUE OF SILVER DURING THE COURSE OF THE FOUR LAST CENTURIES

' In 1350, being the 25^th of Edward III, was enacted what is called, The statute of labourers.(51) In the preamble it complains much of the insolence of servants, who endeavoured to raise their wages upon their masters. (52) It therefore ordains, that all servants and labourers should for the future be contented with the same wages and liveries (liveries in those times signified, not only cloaths (sic), but provisions) which they had been accustomed to receive in the 20^th year of the king, and the four proceeding years, (53) that upon this account their livery wheat should no-where be estimated higher than ten-pence a bushel and that it should always be in the option of the master to deliver them either the wheat or the money. '

' Labour, it must be remembered, is the ultimate price which is paid for every thing, and in countries where labour is equally well rewarded, the money price of labour will be in proportion to that of the subsistence of the labourer. '

In the times of Adam Smith the ultimate measure of money was labour. Smith considered profits, as inclusive of profits, but he refers to labour as the ' ultimate price . . for everything '. He did not consider intequity and therefore did not split profits into network capital and intequity.

' China is a much richer country than any part of Europe, and the difference between the price of subsistence in China and in Europe is very great. Rice in China is much cheaper than wheat is any-where in Europe. '

VARIATIONS IN THE PROPORTION BETWEEN THE RESPECTIVE VALUES OF GOLD AND SILVER

' A commodity may be said to be dear or cheap, not only according to the absolute greatness or smallness of its usual price, but according as that price is more or less above the lowest for which it is possible to bring it to market for any considerable time together. This lowest price is that which barely replaces, with a moderate profit, the stock which must be employed in bringing the commodity thihter. It is the price which affords nothing to the landlord, of which rent makes not any component part, but which resolves itself altogether into wages and profit. But, in the present state of the Spanish market, gold is certainly somewhat nearer to this lowest price than silver. The tax of the King of Spain upon gold is only one-twentieth part of the standard metal, or five percent.; whereas his tax upon silver amounts to one-tenth part of it, or to ten percent. '

Possible: The intequity return of gold mining was lower than that of silver or higher?

GROUNDS OF THE SUSPICION THAT THE VALUE OF SILVER STILL CONTINUES TO DECREASE

DIFFERENT EFFECTS OF THE PROGRESS OF IMPROVEMENT UPON THREE DIFFERENT SORTS OF RUDE PRODUCE

' In increasing the quantity of the different minerals and metals which are drawn from the bowels of the earth, that of the more precious ones particularly, the efficacy of human industry seems not to be limited, but to be altogether uncertain. '

' The discovery of new mines, however, as the old ones come to be gradually exhausted, is a matter of the greatest uncertainty, and such as no human skill or industry can ensure. '

Above on pages 321 and 319 Smith referred to intequity as efficacy that is uncertain. Probably a geologist will not agree today ' . . no human skill or industry can ensure . . ' the discovery of new mines and the efficient extraction of minerals from soils.

' A shilling might in the one case represent no more labour than a penny does at present; and a penny in the other might represent as much as a shilling does now. '

Smith opined labour value to stay constant from time to time. He did not account for intequity because as intequity rises the value of labour per hour rises. I could be argued that when intequity rises it is more difficult to work together because then there are more opinions which oppose one another. Then division of duties becomes more important and the knowledge to keep certain people apart and to employ certain people together to form cohesive units are relevant.

' I shall only observe at present, that the high value of the precious metal can be no proof of the poverty or barbarism of any particular country at the time when it took place. It is a proof only of the barrenness of the mines which happened at that time to supply the commercial world. A poor country, as it cannot afford to buy more, so it can as little afford to pay dearer for gold and silver than a rich one; and the value of those metals, therefore, is not likely to be higher in the former than in the latter. In China, a country much richer than any part of Europe, the value of the precious metals is much higher than in any part of Europe. As the wealth of Europe, indeed, has increased greatly since the discovery of the mines of America, so the value of gold and silver has gradually diminished. This diminution of their value, however, has not been owing to the increase of the real wealth of Europe, of the annual produce of its land and labour, but to the accidental discovery of more abundant mines than any that were known before. The increase of the quantity of gold and silver in Europe, and the increase of its manufactures and agriculture, are two events which, though they have happened nearly about the same time, yet have arisen from very different causes, and have scarce any natural connection with one another. The one has arisen from a mere accident, in which neither prudence nor policy either had or could have any share: The other from the fall of the feudal system, and from the establishment of a government which afforded to industry the only encouragement which it requires, some tolerable security that it shall enjoy the fruits of its own labour. Poland, where the feudal system still continues to take place, is at this day as beggarly a country as it was before the discovery of America. '

The above reference confirms my thoughts that salaries and labour; to enjoy the fruits of one's own labour was a significant issue during the 18^th century revolutions.

' Though the feudal system has been abolished in Spain and Portugal, it has not been succeeded by a much better. '

' The same quantity of silver, it may, perhaps, be said, will in the present times, even according to the account which has been here given, purchase a much smaller quantity of several sorts of provisions than it would have done during some part of the last century; and to ascertain whether this change be owing to a rise in the value of those goods, or the fall in the value of silver, is only to establish a vain and useless distinction, which can be of no sort of service to the man who has only a certain quantity of silver to go to market with, or certain fixed revenue in money. I certainly do not pretend that the knowledge of this distinction will enable him to buy cheaper. It may not, however, upon that account be altogether useless. It may be of some use to the public by affording an easy proof of the prosperous condition of the country. If the rise in the price of some sorts of the provisions be owing altogether to a fall in the value of silver, it is owing to a circumstance from which nothing can be inferred but the fertility of the American mines. The real wealth of the country, the annual produce of its land and labour, may, notwithstanding this circumstance, be either gradually advancing, as in most other parts of Europe. But if the rise in the price of some sorts of provisions be owing to a rise in the real value of the land which produces them, to its increased fertility; or, in consequence of more extended improvement and good cultivation, to its having been rendered fit for producing corn; it is owing to a circumstance which indicates in the clearest manner the prosperous and advancing state of the country. '

Above again Smith only refers to labour and land's produce with no reference to intequity. He refers indirectly to the quantity theory of money.

' If this rise in the price of some sorts of provisions be owing to a fall in the value of silver, their pecuniary reward, provided it was not too large before, ought certainly to be augmented in proportion to the extent of this fall. If it is not augmented, their real recompence (sic) will evidently be so much diminished. But if this rise of price is owing to the increased value in consequence of the improved fertility of the land which produces such provisions, it becomes a much nicer matter to judge either in what proportion any pecuniary reward ought to be augmented, or whether it ought to be augmented at all. '

In Smith's time he questioned to whom the additional value of intequity should go to. Above he distinguishes between the benefit for labour and the benefit for owning land. Does increased production accrue to the labourer or to the land owner was a question? Today the profits of increased production goes to landowners whether it is due to a changing climate or due to increased efficiency of labour. Labours are remunerated per hour normally. The qualitative differences of labour rates are distinguished through salary scales. Mainly based on knowledge acquired through formal studies. Within the salary scales little distinction is made due to intequities. Can be argued that distinctions are in fact made to oppose increased intequities and to motivate untequities. Honery testing should be used to increase intequities and decrease untequities in order to be more competitive. Impacts on networks versus creative individuals should be acknowledged when decisions are taken to compensate people.

' The consideration of these circumstances may perhaps in some manner explain to us why, in those ancient times, the real price of the coarse manufacture was, in proportion to that of the fine, so much lower than in the present times. '

Page 328 to 334 mentions the impacts of intequity without understanding it. Smith asks for example why the relative price of goods that use a lot of labour is lower in comparison to goods manufactured with machines. He argues that the goods that use a lot of labour should be relatively more expensive because of the labour content. He does not value the intequity value of the machines and the labour that went into the building of the machines and the mining of the metals that goes into the machines etc. The intequity value of the machines for example give labourers free time to do other activities for example play sports and practise art.

' 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 [own: total value], 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 employes that labour. A greater proportion of it must, consequently, belong to the landlord. '

It sounds as if Smith do not consider an increase in salaries due to greater efficiencies. Intequism argues that the origin of the greater efficiencies should be identified. If the origin is the landlord the additional income must go to the landlord. If it was one of the labourers who originated the improvement then the labourer should benefit from that contribution. Intequism argues that benefit originates due to intequities that settle at honest people, whether they are labourers or landlords.

' The whole annual produce of the land and labour of every country, or what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labour, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to 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. The interest of the first of those three great orders, it appears from what has been just now said, is strictly and inseparably connected with the general interest of the society. '

' The Second of the three portions into which the general stock of the society divides itself, is the fixed capital; of which the characteristic is, that it affords a revenue or profit without circulating or changing masters. . . Fourthly, of the acquired and useful abilities of all the inhabitants or members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. Those talents, as they make part of his fortune, so do they likewise of that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, thought it costs a certain expense, repays that expense with a profit. '

CHAPTER II: OF MONEY CONSIDERED AS A PARTICULAR BRANCH OF THE GENERAL STOCK OF THE SOCIETY, OR OF THE EXPENSE OF MAINTAINING THE NATIONAL CAPITAL

' The expense of maintaining the fixed capital in a great country, may very properly be compared to that of repairs in a private estate. '

The above Intequity expense is carried by the church normally and indirectly paid by the community with their contributions to the church. Also the education system via taxes.