half an ounce. The Englifh pound and penny Chap. contain at prefent about a third only; the Scots pound and penny about a thirty-fixth; and the French pound and penny about a fixty-fixth part of their original value. By means of thofe operations the princes and fovereign ftates which performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a smaller quantity of filver than would otherwife have been requifite. It was indeed in appearance only; for their creditors were really defrauded of a part of what was due to them. All other debtors in the ftate were allowed the fame privilege, and might pay with the fame nominal fum of the new and debafed coin whatever they had borrowed in the old. Such operations, therefore, have always proved favourable to the debtor, and ruinous to the creditor, and have fometimes produced a greater and more univerfal revolution in the fortunes of private perfons, than could have been occafioned by a very great public calamity.

It is in this manner that money has become in all civilized nations the univerfal instrument of commerce, by the intervention of which goods of all kinds are bought and fold, or exchanged for one another.

What are the rules which men naturally obferve in exchanging them either for money or for one another, I fhall now proceed to examine. Thefe rules determine what may be called the relative or exchangeable value of goods.

ft

The word Value, it is to be.observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "value in use;" the other, " value '* in exchange." The things which have the greatest value in use have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the con. trary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.

In order to investigate the principles which regulate the exchangeable value of commodities, I shall endeavour to shew,

First, what is the real measure of this. ex. changeable value; or, wherein consists the real price of all commodities.

Secondly, what are the different parts of which this real price is composed or made up.

And, lastly, what are the different circumstances which sometimes raise some or all os these different parts of price above, and sometimes sink them below their natural or ordinary rate; or, what are the causes which sometimes hinder the market price, that is, the actual price of commodities, from coinciding exactly withwhat may be called their natural price.

4 I shall

I shall endeavour to explain, as fully and Chap. distinctly as I can, those three subjects in the IVthree following chapters, for which I must very earnestly entreat both the patience and attention of the reader t his patience in order to examine a detail which may perhaps in some places appear unnecessarily tedious; and his attention in order to understand what may, perhaps, after the fullest explication which I am capable of giving of it, appear still in some degree obscure. I am always willing to run some hazard of being tedious in order to be sure that I am perspicuous; and after taking the utmost pains that I can to be perspicuous, some obscurity may still appear to remain upon a subject in its own nature extremely abstracted.

CHAP. V.

Of the real and nominal Price os Commodities, or of their Price in Labour, and their Price in Money.

EVERY man is rich or poor according to C H A P, the degree in which he can afford to enjoy vthe necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man's own labour can supply him. The far greater part of them he must derive from the labour of other

people,

y

BOOK people, and he muft be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the perfon who poffeffes it, and who means not to use or confume it himfelf, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchafe or command. Labour, therefore, is the real meafure of the exchangeable value of all commodities.

The real price of every thing, what every thing really cofts to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to difpofe of it or exchange it for fomething elfe, is the toil and trouble which it can fave to himfelf, and which it can impofe upon other people. What is bought with money or with goods is purchafed by labour, as much as what we acquire by the toil of our own body. That money or thofe goods indeed fave us this toil. They contain the value of a certain quantity of labour which we exchange for what is fuppofed at the time to contain the value of an equal quantity. Labour was the fire price, the original purchafe-money that was paid for all things. It was not by gold or by filver, but by labour, that all the wealth of the world was originally purchafed; and its value, to thofe who poffefs it, and who want to exchange it for fome new productions, is precifely equal to the quantity of labour which it can enable them to purchafe or command.

Wealth

Wealth, as Mr. Hobbes says, is power. But ChAP. the person who either acquires, or succeeds to x 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 pofsession of that fortune does not necessarily convey to him either. The power which that possession immediately artd directly 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 fame 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.

But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to ascertain the proportion between two different quantities of labour. The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account. 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