（2。iii。31）Itisequallyeasy，inthismodeofexpressionasintheformer，totranslatethe

language

ofsharesintothatofpercentage。Theamountoftheproduce，oritsexchangeablevalue，maybe

greater，ormaybeless，thantheamountofcapitalemployed。Ifthecapitalisallcirculating

capital，andconsumedintheprocessofproduction，andif，asinordinarylanguage，wesuppose

wagestobeincluded，theproduceisgreaterthanthecapital，bytheamountoftheprofits。Letus

supposethatthecapitalis500l。，andprofits10percent；thevalueoftheproduceis550l。；letus

supposethatofthisthecapitalistpays275l。inwages；inotherwords，thatthelabourers’shareis

50percent；itfollows，thattheshareofthecapitalistis50percentalso；but50percentof550l。

isagreateramountthan50percentofhiscapital，whichisonly500l。Thisisequalto55per

centuponhiscapital。Andwhenhehasdeductedfromhisshare，whatisnecessarytoreplacethe

portionofhiscapital，otherwiseconsumedthaninthepaymentofwages，viz。500l。—275l。=

225l。，hehas50l。remaining，or10percentuponhiscapital。

（2。iii。32）Letusnexttakethecaseinwhichthecapital500l。，asbefore，isallfixedcapital，

none

ofit，exceptingwhatisadvancedaswages，consumed；thatthisissmall，viz。25l。；andthatthe

valueofthecommodityis75l。；ofthis，25l。，or1/3istheshareofthelabourer；50l。，or2/3，is

theshareofthecapitalist；butthis，though66—1/2percentupontheproduct，isbut10percent

uponthecapital。

（2。iii。33）Thereisamodeofviewingthegrossreturntothecapitalist，whichhasatendency

to

simplifyourlanguage，and，sofar，hasagreatadvantagetorecommendit。Thecaseoffixedand

ofcirculatingcapitalmaybetreatedasthesame，bymerelyconsideringthefixedcapitalasa

product，whichisregularlyconsumedandreplaced，byeverycourseofproductiveoperations。

Thecapital，notconsumed，maybealwaystaken，asanadditionalcommodity，theresultofthe

productiveprocess。

（2。iii。34）Accordingtothissupposition，theshareofthecapitalistisalwaysequaltothe

wholeor

hiscapital，togetherwithitsprofits。

（2。iii。35）Wemayconsidercapitalintwosenses；first，asincluding；next，asexcluding，

wages。

（2。iii。36）Inthefirstcase，letussupposeacapital，of500l。，ofwhich100l。ispaidinwages，

to

produceacommodityworth550l。Theshareofthecapitalistis450l。orsomewhatmorethan

four—fifths，whilethatofthelabourersissomuchlessthanone—fifthandtheprofitofstock，after

replacingcapital，is10percent。

（2。iii。37）Letussuppose，inthesecondcase，acapitalor400l。，butexclusiveofwages。This

capitalisemployed，andthenecessarylabourersmaintainthemselveswithoutwages，andtake，

astheirremuneration，theirshareofthecommoditywhenproduced。Thecommodityisworth

550l。；andofthat100l。fallstotheshareofthelabourers。Therateofprofitsisthesameas

before，andtheproportionsarethesameasbefore，onlywiththiscorrection，thatintheformer

casethelabourerssustainedadiscountor10percentupontheirshareonaccountofanticipated

paymentTherealsharesinbothcasesarefour—fifthstothecapitalist，andone—fifthtothe

workmen。

（2。iii。38）Itissufficientlyevidentthat，solongasthecapitalandthelabourremainthesame，

and

thesharesremainthesame，solong，inMr。Ricardo’ssenseofthewordvalue，willthesame

valueaccruetoeach，whetherthequantityofproducetheyreceivebegreaterorless。

（2。iii。39）Thatthecapital，andthelabour，shouldremainthesame，isasnecessarya

condition，as

thatthesharesshouldremainthesame；forifeitherisincreasedordiminished，thevalueofthe

product，inMr。Ricardo’ssenseofthewordvalue，isalsoincreasedordiminished。

（2。iii。40）Thequantityofproducebeingsupposedthesame，wemayillustratethesubjectby

the

followingcases。

（2。iii。41）1。Letussupposethatbothcapitalandlabourarediminished，andinequal

proportions。

Thisispreciselythesamewiththecaseinwhichtheproductivepowersoflabourandcapitalare

increased；asitcomestothesamething，whetheryouhavethesameproducefromalesscostof

production，oragreaterproducefromthesamecostofproduction。Thiscase，therefore，hasbeen

alreadyconsidered。

（2。iii。42）2。Letussuppose，thatthecapitalisdiminished，thelabournot。Thisalsoisacase

of

diminishedcostofproduction。If，fortheproduceof550yardsofcloth，whichwasatfirst

effectedbyacapitalof400yardsandaportionoflabourwhichwaspaidbyafifthofthe

produce，onlyacapitalof200yardsshouldberequired，butthesamequantityofimmediate

labour；thatthelabourersmayhavethesameshareasbefore，itisnecessarythattheyshould

haveagreateraliquotpart。Suppose，beforethatincreaseofproductivepowerwhichissupposed

inthiscase，whenacapitalof400yardswasrequiredforaproduceof550，andwhenthewages

ofthequantityoflabourappliedwas110yards，thatanothercommodityhadbeenproducedby

thesamequantityorlabour，butbyacapitalof200yards。Thevalueofthiscommoditywould

havebeen330yards，equaltothecapitalwithitsprofitsandthewages。Ofthisthelabourers

wouldhavereceived110yards，orone—third。Thisisthesameproportiontoacapitalof200

yards，asone—fifthistoacapitalof400yards。Ifthelabourcontributedone—fifthtotheproduct

of550yards，whenaidedbyacapitalof400yards，itcontributesone—third，inthenewly

supposedcase，whenaidedbyacapitalof200yards。One—thirdof550is1831/3；leavingtothe

capitalist366—2/3，oraprofituponhiscapitalof83—1/3percent。Accordingtotheexplanation，

whichwehavealreadygivenandrepeated，thereishereanadditionalproducetoeach，byreason

oftheincreaseofproductivepower；and，also，whichisonlythesamethinginotherwords，an

augmentedvalueinexchange。ButinMr。Ricardo’ssenseofthewordvalue，thereisonlythe

samevaluetoeach，solongastheproportionsremainunchanged。

（2。iii。43）ThecaseswhichIhavethusputforillustration，arecasesinwhichtheproductive

powersoflabourandcapitalareaugmented；butasthesamereasoningsapply，mutatismutandis，

tothecasesinwhichtheproductivepowersarediminished，itisdeemedunnecessarytolengthen

thisanalysisbyadducingthem。

（2。iii。44）Itmayherebeusefultothelearnertolookback，andascertainthenumberand

importanceofthestepswhichhehasadvanced。Hehasdiscovered，whatarethelaws，according

towhichthosecommodities，whichformtherichesofnations，areproduced；andwhatarethe

laws，accordingtowhich，whenproduced，theyaredistributed。

（2。iii。45）Hehasseenthattherearetwoinstrumentsofproduction；oneprimary，theother

secondary：thatlabouristheprimaryinstrumentofproduction，andthat，abstractedfromthose

aidswhichitderivesfromcapital，itsproductivepowersareaugmentedchieflybylimitingthe

numberofeachman’sproductiveoperations；inotherwords，bywhathasbeencalledthe

divisionoflabour：thatcapitalissecondarytolabour，notonlybecauseitissubsequentinorder

oftime，butbecauseitowesitsexistencetolabour；becausethefirstcapitalistheresultofpure

labour，andbecausethatwhichissubsequentlytheresultoflabourandcapitalcombined，may

thenceberesolvedintolabour，theultimateprincipleofallproduction。

（2。iii。46）Thelearnerhasnowalsoseen，that，whatisproduced，bytheoperationsoflabour

and

capital，dividesitself，inthefirstinstance，intothreeportions；therentofland；thewagesof

labour；andtheprofitsofstock。Tillthelawswerediscovered，whichdeterminetheboundaries

oftheseseveralportions，thatwhichgoesasrent，thatwhichgoesasprofits，andthatwhichgoes

aswages，almostalltheconclusionsofPoliticalEconomywerevagueanduncertain。Ithasbeen

seen，thatrentissomethingwhichmaybeconsideredindependentofthegeneralresultorthe

productivepowersoflabourandcapital；thatitistheresultofapeculiardefectoftheearth，

whichdoesnotcontinuetoyielditsproduceinequalabundancetosuccessiveportionsof

capital；andthatitistheexcessofwhatisyieldedtothemoreproductiveportions，abovewhatis

equaltotheproduceoftheleastproductiveportionofcapitalemployedupontheland。Afterthe

limitswerethusfixedofthisoneofthethreeportions，intowhichtheproduceofindustry

dividesitself，whenceitappearedthatwhatmayberegardedasthegenuineeffectoflabourand

capitalinco—operationislefttobedividedbetweenthelabourerandthecapitalist；itwaseasy

forthelearnertosee，that，inrespecttoproportions，aswhatfelltotheshareoftheonewas

increased，whatwenttotheshareoftheotherwasdiminished，andthatinthissense，wagesand

profitsdependononeanother；thatinrespect，however，tothequantityofproducewhichthese

sharesmaycontain，theproductivepoweroftheinstrumentsofproductionisthedetermining

cause。

Chapter3。InterchangeSectionI。NatureoftheAdvantageDerivedfromthe

InterchangeofCommodities，andthePrincipalAgentsEmployedinit。

（3。i。1）Whentwomenhavemorethantheyneed；one，forexample，offood；another，of

cloth；

whilethefirstdesiresmoreofcloththanhepossesses，thesecondmoreoffood；itisagreat

accommodationtoboth，iftheycanperformanexchangeofapartofthefoodoftheonefora

partoftheclothoftheother；andsoinothercases。

（3。i。2）Inperformingexchanges，therearetwosetsofpersons，theinterventionofwhomisof

greatadvantage：thefirstareCarriers，thesecondMerchants。

（3。i。3）Whenthedivisionanddistributionoflabourhasbeencarriedtoanyconsiderable

extent，

goodsareproducedatsome，oftenataveryconsiderable，distancefromtheplacewheretheyare

wantedforconsumption。Itisnecessarythattheyshouldbeconveyedfromtheoneplacetothe

other。Carriersareoftwosorts：CarriersbyLand，andCarriersbyWater。Forthebusinessof

carriage，bothcapitalandlabourarerequired。Incarriagebyland，thewaggonsorcarts，the

horsesorothercattle，andthemaintenancebothofthemandofthenecessarynumberofmen；in

carriagebywater，theships，andthemaintenanceofthemenwhonavigatethem，constitutethe

capitalrequired。

（3。i。4）Toprocurearticles，asmenhaveoccasiontoconsumethem，itwouldbevery

inconvenienttorepair，ineachinstance，totherespectivemanufacturersandproducers，whomay

oftenliveataveryconsiderabledistancefromoneanother。Greattroubleissavedtoconsumers，

whentheyfindassembledinoneplacethewhole，oranyconsiderableportion，ofthearticles

whichtheyuse。Thisconveniencegivesrisetotheclassofmerchants，whobuyfromthe

manufacturers，andkeepreadyforuse，allthosearticlesforwhichtheyexpectaprofitablesale。

（3。i。5）Insmalltowns，whereoneorafewmerchantscansupplythewantsofallthe

population，

theshoporstoreofonemerchantcontainsarticlesofall，ormostofthekinds，ingeneral

demand。Inplaceswherethepopulationislarge，insteadofagreatnumberofshops，each

dealinginalmostallkindsofarticles，itisfoundmoreconvenienttodividethearticlesinto

classes，andthateachshopshouldconfineitselftoaparticularclass：one，forexample，tohats，

anothertohosiery；onetoglass，anothertoiron；andsoon。

SectionII。WhatDeterminestheQuantityinWhich

CommoditiesExchangeforOneAnother（3。ii。1）Whenacertainquantityofonecommodityisexchangedforacertainquantityof

another

commodity；acertainquantityofcloth，forexample，foracertainquantityofcorn；thereis

somethingwhichdeterminestheowneroftheclothtoacceptforitsuchandsuchaquantityof

corn；and，inlikemanner，theownerofthecorntoacceptsuchandsuchaquantityofcloth。

（3。ii。2）Thisis，evidently，theprincipleofdemandandsupply，inthefirstinstance。Ifagreat

quantityofcorncomestomarkettobeexchangedforcloth，andonlyasmallquantityofclothto

beexchangedforcorn，agreatquantityofcornwillbegivenforasmallquantityofcloth。Ifthe

quantityofcloth，whichthuscomestomarket，isincreased，withoutanyincreaseinthequantity

ofcorn，thequantityofcornwhichisexchangedforagivenquantityofclothwillbe

proportionallydiminished。

（3。ii。3）Thisanswer，however，doesnotresolvethewholeofthequestion。Thequantityin

which

commoditiesexchangeforoneanotherdependsupontheproportionofsupplytodemand。Itis

evidentlythereforenecessarytoascertainuponwhatthatproportiondepends。Whatarethelaws

accordingtowhichsupplyisfurnishedtodemand，isoneofthemostimportantinquiriesin

PoliticalEconomy。

（3。ii。4）Demandcreates，andthelossofdemandannihilates，supply。Whenanincreased

demand

arisesforanycommodity，anincreaseofsupply，ifthesupplyiscapableofincrease，follows，as

aregulareffect。Ifthedemandforanycommodityaltogetherceases，thecommodityisnolonger

produced。

（3。ii。5）Theconnexionhere，orcausesandeffects，iseasilyexplained。Ifcornisbroughtto

market，thecostofbringingithasbeensomuch。Ifclothisbroughttomarket，thecostof

bringingithasbeensomuch。Forthebenefitofsimplicity，thenumberofcommoditiesinthe

marketisheresupposedtobetwo：itisofnoconsequence，withregardtotheresult，whether

theyareunderstoodtobefewormany。

（3。ii。6）Thecostofbringingthecorntomarkethasbeeneitherequaltothatofbringingthe

cloth，

orunequal。Ifithasbeenequal，thereisnomotive，tothosewhobringtheclothorthecorn，for

alteringthequantityofeither。Theycannotobtainmoreofthecommoditywhichtheyreceivein

exchange，bytransferringtheirlabourtoitsproduction。Ifthecosthasbeenunequal，there

immediatelyarisesamotiveforalteringtheproportions。Supposethatthecostofbringing，the

wholeofthecornhasbeengreaterthanthatofbringingthewholeofthecloth；andthatthe

wholeoftheoneisexchangedagainstthewholeoftheother，eitheratonce，orinparts：the

personswhobroughttheclothhaveinthatcasepossessedthemselvesofaquantityofcornat

lesscost，thanthatatwhichitwasbroughttomarket，bythosewhoproducedit；those，onthe

otherhand，whobroughtthecornhavepossessedthemselvesofaquantityofcloth，atagreater

costthanthatatwhichitcanbemadeandbroughttomarket。

（3。ii。7）Heremotivesarise，todiminishthequantityofcorn，andincreasethequantityof

cloth；

becausethemenwhohavebeenproducingcorn，andpurchasingcloth，canobtainmorecloth，by

transferringtheirmeansofproductionfromtheonetotheother。Assoon，again，asnomore

clothcanbeobtainedbyapplyingthesameamountofmeanstotheproductionofcloth，thanby

applyingthemtocorn，andexchangingitforcloth，allmotivetoalterthequantityoftheoneas

comparedwiththatoftheotherisatanend。Nothingistobegainedbyproducingcornrather

thancloth，orclothratherthancorn。Thecostofproductiononbothsidesisequal。

（3。ii。8）Itthusappearsthattherelativevalueofcommodities，orinotherwords，thequantity

of

onewhichexchangesforagivenquantityofanother，dependsupondemandandsupply，inthe

firstinstance；butuponcostofproduction，ultimately；andhence，inaccuratelanguage，upon

costofproduction，entirely。Anincreaseordiminutionofdemandorsupply，maytemporarily

increaseordiminish，beyondthepointofproductivecost，thequantityofonecommoditywhich

exchangesforagivenquantityofanother；butthelawofcompetition，whereveritisnot

obstructed，tendsinvariablytobringittothatpoint，andtokeepitthere。

（3。ii。9）Costofproduction，then，regulatestheexchangeablevalueofcommodities。Butcost

of

productionisitselfinvolvedinsomeobscurity。

（3。ii。10）Twoinstrumentsarecommonlycombinedinproduction；LabourandCapital。

（3。ii。11）Itfollows，eitherthatcostofproductionconsistsinlabourandcapitalcombined；or

that

oneofthesemayberesolvedintotheother。Ifoneofthemcanberesolvedintotheother，it

followsthatcostofproductiondoesnotconsistinbothcombined。

（3。ii。12）Theopinion，whichissuggestedbyfirstappearances，undoubtedlyis，thatcostof

productionconsistsincapitalalone。Thecapitalistpaysthewagesofhislabourer，buystheraw

material，andexpectsthatwhathehasexpendedshallbereturnedtohim，intheprice，withthe

ordinaryprofitsuponthewholeofthecapitalemployed。Fromthisviewofthesubject，itwould

appear，thatcostofproductionconsistsexclusivelyintheportionofcapitalexpended，together

withtheprofitsuponthewholeofthecapitalemployedineffectingtheproduction。

（3。ii。13）Itiseasy，however，tosee，thatinthetermcapital，thusunderstood，anambiguity，

and

henceafallacy，isinvolved。Whenwesaythatcapitalandlabour，thetwoinstrumentsof

production，belongtotwoclassesofpersons；wemeanthatthelabourershavecontributedso

muchtotheproduction，andthecapitalistssomuch；andthatthecommodity，whenproduced，

belongsincertainproportionstoboth。Itmaysohappen，however，thatoneofthesepartieshas

purchasedtheshareoftheother，beforetheproductioniscompleted。Inthatcase，thewholeof

thecommoditybelongstothepartywhohaspurchasedtheshareoftheother。Inpointoffact，it

doeshappen，thatthecapitalist，asoftenasheemployslabourers，bythepaymentofwages，

purchasestheshareofthelabourers。Whenthelabourersreceivewagesfortheirlabour，without

waitingtobepaidbyashareofthecommodityproduced，itisevidentthattheyselltheirtitleto

thatshare。Thecapitalististhentheowner，notofthecapitalonly，butofthelabouralso。Ifwhat

ispaidaswagesisincluded，asitcommonlyis，inthetermcapital，itisabsurdtotalkoflabour

separatelyfromcapital。Thewordcapital，asthusemployed，includeslabourandcapitalboth。To

say，therefore，thattheexchangeablevalueofcommoditiesisdeterminedbycapital，understood

inthissense，istosaythatitisdeterminedbylabourandcapitalcombined。This，however，is

returningtothepointfromwhichwesetout。Itisnugatorytoincludelabourinthedefinitionof

thewordcapital，andthentosaythat，capitalwithoutlabour，determinesexchangeablevalue。If

capitalisunderstoodinasensewhichdoesnotincludethepurchasemoneyoflabour，andhence

thelabouritself，itisobviousthatcapitaldoesnotregulatetheexchangeablevalueof

commodities。

（3。ii。14）Iflabourwerethesoleinstrumentofproduction，andcapitalnotrequired，the

produce

ofoneday’slabourinonecommoditywouldexchangeagainsttheproduceofoneday’slabourin

anothercommodity。Intherudestateofsociety，ifthehunterandthefishermandesiredtovary

theirfood，theonebyaportionofgame，theotherbyaportionoffish，theaveragequantity

whichtheytookinadaywouldformthestandardofexchange。Ifitdidnot，oneofthetwo

wouldbeplacedinamoreunfavourablesituationthanhisneighbour，withperfectpower，which

hewouldofcourseemploy，topassfromtheonesituationtotheother。

（3。ii。15）Inestimatingequalquantitiesoflabour，anallowancewould，ofcourse，beincluded

for

differentdegreesofhardnessandskill。Iftheproductsofeachoftwodays’labourofequal

hardnessandskillexchangedforoneanother，theproductofaday’slabour，whichwaseither

harder，orrequiredagreaterdegreeofskill，wouldexchangeforsomethingmore。

（3。ii。16）Allcapitalconsistsreallyincommodities。Thecapitalofthefarmerisnotthe

money

whichhemaybeworth，becausethathecannotapplytoproduction。Hiscapitalconsistsinhis

implementsandstock。

（3。ii。17）Asallcapitalconsistsincommodities，itfollows，ofcourse，thatthefirstcapital

must

havebeentheresultofpurelabour。Thefirstcommoditiescouldnotbemadebyany

commoditiesexistingbeforethem。

（3。ii。18）Butifthefirstcommodities，andofcoursethefirstcapital，weretheresultof’pure

labour，thevalueofthiscapital，thequantityofothercommoditiesforwhichitwouldexchange，

musthavebeenestimatedbylabour。Thisisanimmediateconsequenceofthepropositionwhich

wehavejustestablished，thatwherelabourwasthesoleinstrumentofproduction，exchangeable

valuewasdeterminedbythequantityoflabourwhichtheproductionofthecommodityrequired。

（3。ii。19）Ifthisbeestablished，itisanecessaryconsequence，thattheexchangeablevalueof

all

commoditiesisdeterminedbyquantityoflabour。

（3。ii。20）Thefirstcapital，ashasjustbeenseen，beingtheresultofpurelabour，bearsavalue

in

proportiontothatlabour。Thiscapitalconcursinproduction。Anditiscontendedthatassoonas

capitalconcursinproduction，thevalueofthecommodityproducedisdeterminedbythevalue

ofthecapital。Butthevalueofthatcapitalitself，wehavejustobserved，isdeterminedbylabour。

Tosay，therefore，thatthevalueofaproductisdeterminedbythevalueofthecapital，isofno

use，whenyouhavetogobeyondthevalueofthecapital，andask，whatitisbywhichthatvalue

isitselfdetermined。Tosaythatthevalueoftheproductisdeterminedbythevalueofthe

capital，butthevalueofthecapitalisdeterminedbythequantityoflabour，istosaythatthe

valueoftheproductisdeterminedbythequantityoflabour。

（3。ii。21）Itthusundeniablyappears，thatnotonlythevalueofthefirstcapital，but，byequal

necessity，thatofthecommoditieswhichareproducedbythefirstcapital，isdeterminedby

quantityoflabour。Capitalofthesecondstagemustconsistinthecommoditieswhichare

producedbythatofthefirststage。Itmust，therefore，beestimatedbythequantityoflabour。The

samereasoningappliestoitineverysubsequentstage。Thevalueofthefirstcapitalwas

regulatedbyquantityoflabour：thevalueofthatwhichwasproducedbythefirstcapitalwas

regulatedbythevalueofthefirst：that，however，wasvaluedbylabour：thelast，therefore，is

valuedbylabour；andsoon，withoutend，asoftenassuccessiveproductionsmaybesupposedto

bemade。But，ifthevalueofallcapitalmustbedeterminedbylabour，itfollows，uponall

suppositions，thatthevalueofallcommoditiesmustbedeterminedbylabour。

（3。ii。22）Tosay，indeed，thatthevalueofcommoditiesdependsuponcapital，impliesoneof

the

mostobviousofallabsurdities。Capitaliscommodities。Ifthevalueofcommodities，then，

dependsuponthevalueofcapital，itdependsuponthevalueofcommodities；valueinshort

dependsuponvalue。Thisisnotanexpositionofvalue。Itisanattemptclearlyandcompletely

abortive。

（3。ii。23）Itthusappears，thatquantityoflabour，inthelastresort，determinestheproportion

in

whichcommoditiesexchangeforoneanother。

（3。ii。24）Thereisonephenomenonwhichisbroughttocontroverttheseconclusions，and

which

itis，therefore，necessarytoexplain。

（3。ii。25）Itissaidthattheexchangeablevalueofcommoditiesisaffectedbytime，without

the

interventionoflabour；because，whenprofitsofstockmustbeincluded，somuchmustbeadded

foreveryportionoftimewhichtheproductionofonecommodityrequiresbeyondthatof

another。Forexample，ifthesamequantityoflabourhasproducedinthesameseasonacaskof

wine，and20sacksofflour，theywillexchangeagainstoneanotherattheendoftheseason：but

iftheownerofthewineplacesthewineinhiscellar，andkeepsitforacoupleofyears，itwillbe

worthmorethanthe20sacksofflour，becausetheprofitsofstockforthetwoyearsmustbe

addedtotheoriginalprice。Hereisanadditionofvalue，buthereitisaffirmed，therehasbeenno

newapplicationoflabour；quantityoflabour，therefore，isnottheprinciplebywhich

exchangeablevalueisregulated。

（3。ii。26）Thisobjectionisfoundeduponamisapprehensionwithrespecttothenatureof

profits。

Profitsare，inreality，themeasureofquantityoflabour；andtheonlymeasureofquantityof

labourtowhich，inthecaseofcapital，wecanresort。Thiscanbeestablishedbyrigidanalysis。

（3。ii。27）Iftwocommoditiesareproduced，abaleofsilk，forexample，forimmediate

consumption，andamachine，whichisanarticleoffixedcapital；itiscertain，thatifthebaleof

silkandthemachinewereproducedbythesamequantityoflabour，andinthesametime，they

wouldexactlyexchangeforoneanother：quantityoflabourwouldclearlybetheregulatorof

theirvalue。

（3。ii。28）Butsupposethattheownerofthemachine，insteadofsellingit，isdisposedtouse

it，for

thesakeoftheprofitswhichitbrings；whatistherealcharacterandnatureofhisaction？Instead

ofreceivingthepriceofhismachineallatonce，hetakesadeferredpayment，somuchper

annum：hereceives，infact，anannuity，inlieuofthecapitalsum；anannuity，fixedbythe

competitionofthemarket，andwhichisthereforeanexactequivalentforthecapitalsum。

Whatevertheproportionwhichthecapitalsumbearstotheannuity，whetheritbetenyears’

purchase，ortwentyyears’purchase，suchaproportioniseachyear’sannuityoftheoriginalvalue

ofthemachine。Theconclusion，therefore，isincontrovertible：astheexchangeablevalueofthe

machine，haditbeensoldassoonasmade，wouldhavebeenthepracticalmeasureofthe

quantityoflabouremployedinmakingit，one—tenthorone—twentiethofthatvaluemeasuresalso

atenthoratwentiethofthequantityoflabour。

（3。ii。29）Ifapieceofmachinery，whichhascost100days’labour，isappliedinmakinga

commodity，andiswornoutinthemakingofit；andif100days’purelabourareemployedin

makinganothercommodity；theproduceofthemachine，andtheproduceofthelabour，

supposingnoadjustmentnecessaryfordifferenceoftime，willexchangeagainstoneanother。

（3。ii。30）Makenowadifferentsupposition：thatthemachineisanarticleoffixedcapital，

andnot

wornout，andletustracetheconsequences。Itwascorrectlysupposed，intheformercase，that

100days’labourwereexpendedbywearingoutthemachine；but100days’labourhavenotbeen

expendedinthesecond，becausethemachineisnotwornout。Somelabour，however，hasbeen

expended，because100days’labourinamasshasbeenapplied。Howmuchofitshallwesayhas

beenexpended？Wehaveanexactmeasureofitintheequivalentwhichispaid。Iftheequivalent

whichwasobtainedwhenthemachinewaswornout，wasameasureof100days’labour，

whateverproportionofsuchequivalentisreceivedasayear’suseofthemachinewhennotworn

out，mustrepresentacorrespondingproportionofthelabourexpendeduponthemachine。

（3。ii。31）CapitalisallowedtobecorrectlydescribedunderthetitleofhoardedLabour。A

portion

ofcapitalproducedby100days’labour，is100days’hoardedlabour。Butthewholeofthe100

days’hoardedlabourisnotexpended，whenthearticleconstitutingthecapitalisnotwornout。A

partisexpended，andwhatpart？Ofthiswehavenodirect，wehaveonlyanindirectmeasure。If

capital，paidforbyanannuity，ispaidforattherateof10percent，one—tenthoftheboarded

labourmaybecorrectlyconsideredasexpendedinoneyear。

（3。ii。32）Theinstancewhichiscommonlyadducedasexemplifyingthesupposedfactofan

increaseofvaluewithoutincreaseoflabour，isthatofwine。Wineacquiresagreatervalueby

beingmerelydepositedinthecellarsofthemerchant。

（3。ii。33）Buttheywhowouldadvancethis，asananswertotheantecedentreasoning，donot

perceivetheforceoftheirownobjection。Theirdoctrineis，thatexchangeablevalueisregulated

bycostofproduction。Costofproductionistheoutlaynecessaryforcompletingtheproduct。

Whenthewinewasputintothecellar，itwasworthsomuch，accordingtothecapitalexpended

initsproduction。Whenitisplacedinthecellar，nomorecapitalisemployeduponit，norany

morelabour；andyetitacquiresanadditionalvalue。Thequestion，whyitacquiresmorevalue，

whenthereisnotmorecapital，isjustasdifficult，aswhyitacquiresmorevalue，whenthereis

notmorelabour。

（3。ii。34）Itisnosolutiontosay，thatprofitsmustbepaid；becausethisonlybringsustothe

question，whymustprofitsbepaid？Tothisthereisnoanswerbutone，thattheyarethe

remunerationforlabour；labournotappliedimmediatelytothecommodityinquestion，but

appliedtoitthroughthemediumofothercommodities，theproduceoflabour。Thusamanhasa

machine，theproduceof100days’labour。Inapplyingit，theownerundoubtedlyapplieslabour，

thoughinasecondarysense，byapplyingthatwhichcouldnot—havebeenhadbutthroughthe

mediumoflabour。Thismachine，letussuppose，iscalculatedtolastexactly10years。Onetenth

ofthefruitsof100days’labouristhusexpendedeveryyear；whichisthesamethingintheview

ofcostandvalue，assayingthat10days’labourhavebeenexpended。Theowneristobepaidfor

the100days’labourwhichthemachinecostshim，attherateofsomuchperannum，thatis，by

anannuityfortenyears，equivalenttotheoriginalvalueofthemachine。Itthusappearsthat

profitsaresimplyremunerationforlabour。Theymay，indeed，withoutdoinganyviolenceto

language，hardlyevenbyametaphor，bedenominatedwages：thewagesofthatlabourwhichis

applied，notimmediatelybythehand，butmediately，bytheinstrumentswhichthehandhas

produced。Andifyoumaymeasuretheamountofimmediatelabourbytheamountofwages，

youmaymeasuretheamountofsecondarylabourbythatofthereturntothecapitalist。We

surelyhavenotoccasiontoadd，thatifthisbethegeneralaccountofprofits，whichseems

undeniable，itisapplicabletoallparticularcases，tothatofwineinthecellar，aswellastoevery

other。Supposethat100menmakeamachineinoneday，thatanother100menemploythis

machinethenextday，andwearitout；thefirst100men，andthesecond100men，willdividethe

produceequallybetweenthem。Theshareofthefirst100menispaymentforcapital，nodoubt，

butitisalso，mostobviously，paymentforlabourtoo；andinwhateverdegreelabouris

productive，thatis，yieldsmorethanisconsumedineffectingtheproduct，tothatdegreean

advantageisaffordedbeyondthereplacingofthecapitalconsumed，andconstitutesprofit。

（3。ii。35）Thereturnwhichismadetocapitalemployedupontheland，isthatwhich

determines

therateofannualprofitfromallotheremploymentsofcapital；and，ofcourse，forthatwhichis

employedinmelioratingwineinawine—cellar。Thecaseofthewineinthecellarcoincides

exactlywiththatofamachinewornoutinayear，whichworksbyitselfwithoutadditional

labour。Thenewwine，whichisonemachine，isreplacedbyitsproduce，theoldwine，withthat

additionofvaluewhichcorrespondswiththereturntocapitalemployedupontheland；andthe

accountwhichistoberenderedoftheonereturn，isalsothetrueaccountoftheother。

SectionIII。EffectUponExchangeableValuesofaFluctuation

inWagesandProfits。

（3。iii。1）Instatingthatcommoditiesareproducedbytwoinstruments，LabourandCapital，of

whichthelastistheresultoflabourwe，ineffect，mean，thatcommoditiesareproducedbytwo

quantitiesoflabour，differentlycircumstanced；theone，immediate，orprimarylabour，that

whichisappliedatoncebythehandofthelabourer；theother，hoarded，orsecondarylabour，

thatwhichistheresultofformerlabour，andeitherisappliedinaidoftheimmediatelabour，or

isthesubjectmatteruponwhichitisbestowed。

（3。iii。2）Ofthesetwospeciesoflabour，twothingsaretobeobserved：First，thattheyarenot

alwayspaidaccordingtothesamerate；thatis，thepaymentoftheonedoesnotrisewhenthatof

theotherrises，orfallwhenthatoftheotherfalls：And，secondly，thattheydonotalways

contributetotheproductionofallcommoditiesinequalproportions。

（3。iii。3）Iftherewereanytwospeciesoflabour，thewagesofwhichdidnotriseandfallin

the

sameproportion，andwhich，contributingtotheproductionofallcommodities，didnot

contributetothemallinequaldegrees，thiscircumstance，oftheirnotcontributinginequal

degrees，wouldcreateadifferenceinexchangeablevalues，asoftenasanyfluctuationtookplace

intherateofwages。

（3。iii。4）Ifallcommoditieswereproducedbyaportionofskilled，andaportionofunskilled

labour，buttheratiowhichtheseportionsboretooneanotherweredifferentindifferent

commodities；andif，asoftenasthewagesofskilledlabourrose，thewagesofunskilledlabour

rosetwiceasmuch；itisveryobvious，that，uponariseofwages，thosecommodities，tothe

productionofwhichagreaterproportionofunskilledlabourwasapplied，wouldriseinvalueas

comparedwiththosetowhichalessproportionwasapplied。Itisalsoobvious，that，thoughthis

differenceintheratiosaccordingtowhichthewagesofthetwokindsoflabourhadaltered，and

intheproportionsinwhichtheywereappliedtotheproductionofdifferentcommodities，would，

uponariseorfallinwages，altertherelativevalueofthecommodities，itwoulddoso，without

intheleastdegreeaffectingthetruthoftheproposition，thatquantityoflabourdetermined

exchangeablevalues。

（3。iii。5）Thecaseispreciselythesamewhenweconsiderthatitisthetwospeciesoflabour，

calledprimaryandsecondary，whichareappliedindifferentproportions。

（3。iii。6）Threecaseswillconvenientlyexemplifythedifferentdegreesinwhichlabourand

capitalrespectivelycontributetoproduction。Thesearethetwoextremecases，andthemedium。

Thefirstisthatofcommoditieswhichareproducedbyimmediatelabouralonewithoutcapital；

thesecond，thatofcommoditiesproduced，onehalfbycapital，onehalfbyimmediatelabour；

thethird，thatofcommoditiesproducedbycapitalalonewithoutimmediatelabour。Thereare

perhapsnoactualcaseswhichperfectlycoincidewitheitheroftheextremes。Thereare，

however，caseswhichapproximatetoboth；andwhenthemostsimpleareillustratedas

examples，allowancecaneasilyandcorrectlybemadeforthedifferencesoftherest。

（3。iii。7）Iftwospeciesoflabourareemployedintheproductionofcommodities；andif，

when

thepaymentoftheonespeciesoflabourrises，thatoftheotherfalls；acommodity，inthe

productionofwhichagreaterproportionofthefirstspeciesoflabourisemployed，will，upona

riseinthepaymentofthatspeciesoflabour，riseinexchangeablevalue，ascomparedwitha

commodityinwhichlessisemployed。Thedegreehowever，inwhichitwillrise，willdepend

upontwocircumstances：first，uponthedegreeinwhichthepaymentoftheonespeciesoflabour

fallswhentheotherrises；and，secondly，uponthedegreeinwhichtheproportionofthelabour

ofthefirstkind，employedinitsproduction，exceedstheproportionofitwhichisemployedin

theproductionoftheothercommodity。

（3。iii。8）Thefirstquestionthen，is，inwhatdegree，whenwagesrise，doprofitsfall？Andthis

is

theonlygeneralquestion；forthedegreeinwhichthetwospeciesoflabourcombineinthe

productionofdifferentcommodities，dependsuponthecircumstancesofeachparticularcase。

（3。iii。9）Ifallcommoditiescorrespondedwiththefirstofthecases，assumedaboveas

examples，

andwhichwemay，forthesakeofabbreviation，designate，asNo。1，No。2，No。3；inother

words，ifallcommoditieswereproducedwhollybylabour，capitalbeingsolelyemployedinthe

paymentofwages；inthatcase，justasmuchaswagesoflabourrose，profitsofstockwouldfall。

（3。iii。10）Supposeacapitalof1000l。tobethusemployed，andprofitstobe10percent。，the

valueofthecommoditywouldbe1100l。，forthatwouldreplacethecapitalwithitsprofits。The

commoditymayberegardedasconsistingof1100parts，ofwhich1000wouldbelongtothe

labourers，and100tothecapitalist。Letwages，uponthis，besupposedtorise5percent。；inthat

case，itisevident，thatinsteadof100partsofthe1100，thecapitalistwouldreceiveonly50；his

profits，therefore，insteadof10wouldbeonly5percent。Insteadof1000l。Hewouldhaveto

pay1050l。inwages。Thecommoditywouldnotriseinvaluetoindemnifyhim，becausewehave

supposedthatallcommoditiesareinthesamesituation；itwould，therefore，beofthevalueof

1100l。，asbefore，ofwhich50l。alonewouldremainforhimself。

（3。iii。11）IfallcommoditiescorrespondedwiththecaseNo。2，profitswouldfallonlyhalfas

muchaswagesrose。Ifwesupposethat1000l。werepaidinwages，and1000l。employedin

fixedcapital；thatprofits，asbefore，were10percent。，andthisthewholeexpenditure；thevalue

ofthecommoditywouldbe1200l。becausethatisthesumwhichwouldreplacethecapital

expendedandpaytheprofitsofthewhole。Inthiscasethecommoditymightbeconsideredas

dividedinto1200parts，ofwhich200wouldbelongtothecapitalist。Ifwagesrose5percent。，

andinsteadof1000l。aswages，hepaid1050l。hewouldstillretain150l。asprofits；inother

words，hewouldsustainareductionofonly2—1/2percent。

（3。iii。12）Thecasewouldbepreciselythesame，ifwesupposedthe1000l。ofcapital，which

is

notemployedinthepaymentofwages，tobeemployedinanyproportion，intheshapeof

circulatingcapitalconsumedinthecourseoftheproductiveprocess，andrequiringtobe

replaced。Thus，while1000l。wereemployedinthepaymentofwages，500l。mightbeemployed

asfixedcapitalindurablemachinery，500l。inrawmaterialandotherexpenses。Ifthiswerethe

stateoftheexpenditure，thevalueofthearticlewouldbe1700l。；beingtheamountofthe

capitaltobereplaced，and10percent。profitsuponthewhole。Ofthese1700parts，1000would

betheshareofthelabourers，thoughpaidinadvance，and700theshareofthecapitalist，200

beingprofits。If，now，wagesweretorise5percent。，1050oftheabove1700partswouldbethe

shareofthelabourers，and650onlywouldremaintothecapitalist，ofwhich，afterreplacinghis

500l。ofcirculatingcapital，150wouldremainasprofits；areductionof2—1/2percent。asbefore。

（3。iii。13）Ifallcommoditiescorrespondedwiththethirdcase，asnowageswouldbepaid，

profits

couldnotbeaffectedbytheriseofthem：anditisobvious，that，inproportionascommodities

maybesupposedtoapproachthatextreme，profitswouldbelessandlessaffectedbysucharise。

（3。iii。14）Ifwesuppose，whatismostprobable，that，intheactualstateofthings，asmany

cases

areontheonesideofthemediumasontheother，theresultwouldbe，inconsequenceofthe

mutualcompensationsthatwouldtakeplace，thatprofitswouldbereducedexactlyhalfasmuch

aswagesrose。

（3。iii。15）Thestepsmaybetracedasfollows：

（3。iii。16）Whenwagesrise，andprofitsfall，itisevidentthatallcommodities，madewitha

less

proportionoflabourtocapital，willfallinvalue，ascomparedwiththosewhicharemadewitha

greater。Thus，ifNo。1istakenasthestandard，thatinwhichcommoditiesareproducedwholly

bylabour；allcommoditiesbelongingtothatcasewillbesaidtoremainofthesamevalue；all

belongingtoanyoftheothercaseswillbesaidtofallinvalue。IfNo。2istakenasthestandard，

allcommoditiesappertainingtothatcasewillbesaidtoremainofthesamevalue；all，belonging

toanycasenearerthefirstextreme，willbesaidtoriseinvalue；all，toanynearerthelast

extreme，tofall。

（3。iii。17）Thosecapitalists，whoproducearticlesofcaseNo。1，sustain，whenwageshave

risen5

percent。，anadditionalcostof5percent。；buttheyexchangetheircommodityagainstother

commodities。IftheyexchangethemagainstthoseofcaseNo。2，wherethecapitalistshave

sustainedanadditionalcostofonly2—1/2percent。，theywillreceive2—1/2percent。additional

quantity。Thus，inobtaininggoods，producedunderthecircumstancesofcaseNo。2，theyobtain

acertaindegreeofcompensation，andsustain，bytheriseofwages，adisadvantageofonly2—1/2

percent。Inthisexchange，however，theresult，withrespecttothecapitalistswhoproducegoods

underthecircumstancesofcaseNo。2，isreversed。Theyhavealreadysustainedadisadvantage

of2—1/2percent。，intheproductionoftheirgoods，andaremadetosustainanotherdisadvantage

of2—1/2percent。inobtaining，byexchangethegoodsproducedunderthecircumstancesofcase

No。1。

（3。iii。18）Theresult，then，uponthewhole，is，thatallproducers，whopossessthemselves，

either

byproductionorexchange，ofgoodsproducedunderthecircumstancesofcaseNo。2，sustaina

disadvantageof2—1/2percent。；thosewhopossessthemselvesofgoodsincasesapproachingthe

firstextreme，sustainagreater；thoseincasesapproachingthelast，alessdisadvantage：that，if

thecasesontheonesideareequaltothoseontheother，alossofpercent。issustaineduponthe

whole；thatthis，accordingly，istheextenttowhich，inpractice，itmaybesupposedthatprofits

arereduced。

（3。iii。19）Fromtheseelementsitiseasytocomputetheeffectofariseofwagesuponprice。

All

commoditiesarecomparedwithmoney，orthepreciousmetals。Ifmoneybesupposedto

correspondwithcaseNo。2，ortobeproduced，whichisprobablynotfarfromthefact，byequal

proportionsoflabourandcapital；thenallcommodities，producedunderthesemedium

circumstances，arenotalteredinpricebyariseofwages；thosecommoditieswhichapproach

nearerthefirstextreme，oradmitagreaterproportionoflabourthancapitalintheirformation，

riseinprice：thosewhichapproachthesecond，thatis，haveagreaterportionofcapitalthan

labour，fall：and，upontheaggregateofcommoditiesoralltakentogether，thereisneitherfall

norrise。

（3。iii。20）Fromtheexplanations，hereafforded，itwillbeeasytoseewhatismeantbythe

term

"measureofvalue，"andwhereinitdiffersfromthatwhichwehavealreadyendeavouredto

explain，the"regulatorofvalue。"

（3。iii。21）Money，thatis，thepreciousmetalsincoin，servespracticallyasameasureof

value，as

isevidentfromwhathasimmediatelybeensaid。Acertainquantityofthepreciousmetalistaken

asaknownvalue，andthevalueofotherthingsismeasuredbythatvalue；onecommodityis

twice，anotherthricethevalueofsuchaportionofthemetal，andsoon。

（3。iii。22）Itisevident，however，thatthiscanremainanaccuratemeasureofvalue，onlyifit

remainsofthesamevalueitself。Ifacommodity，whichwastwicethevalueofanounceof

silver，becomesthreetimesitsvalue，wecanonlyknowwhatchangehastakenplaceinthevalue

ofthiscommodity，ifweknowthatourmeasureisunchanged。

（3。iii。23）Butthereisnocommoditytobetakenasameasureofvalue，whichisnotitself

liable

toalterationsinvalue，orinitspowerofpurchasing，fromachangeinthequantityoflabourand

capitalrequiredbothforitsownproduction，andthatofothercommodities，andalsofroma

changeinwagesandprofits。

（3。iii。24）Thealterationofvalue，arisingfromachangeinthequantityoflabourrequiredfor

production，isthemostimportant；forifwecouldbesure，thatthecommoditychosenforour

measureofvaluewasitselfalwaysproducedunderthesamecircumstances，thatis，bythesame

quantityofimmediate，andthesamequantityofhoarded，labour，itwouldalwaysanswerthe

followingpurposes：1st，itwouldshow，byeveryalterationinitspowerofpurchasinga

commodityproducedbythesameproportionoflabourandcapital，thealterationwhichhad

takenplaceinthecostofproductionofthatcommodity，orinthatbywhichitsvalueis

regulated：and2dly，itmightbeaccommodatedbycalculationtothechangesinvalue，produced

bythealterationofwagesandprofits，inthecaseofcommoditiesnotproducedbythesame

proportionsoflabourandcapital。

（3。iii。25）Thus，ifgoldwereproducedunderthecircumstancesofcaseNo。1，bymere

labour，

pickedup，forexample，bythehand，fromthebedsofrivers，andalwaysinequalquantity，in

returnforanequalquantityoflabour，itwouldalwaysbeameasure，exactlyandimmediately，of

allcommoditiesproducedbypurelabour。Inthecase，however，ofariseofwages，andafallin

theprofitsofstock，goldwouldinthesecircumstancesriseascomparedwithcommodities

producedunderthecircumstancesofcaseNo。2，thoughnoalterationshouldhavetakenplacein

theamountofthelabourandcapitalrequiredfortheirproduction。Itisevident，therefore，thatin

thesecircumstances，gold，fluctuatinginvaluewitheveryfluctuationinthewagesoflabour，

wouldveryimperfectlyservethepurposesofameasureofvalue。Ifacontract，forexample，

weremade，topayanannuityofsomuchgoldfortwentyyears，itmightbe10percent。more，or

10percent。less，attheendofthatperiod，thanitwasatthebeginning。Oflabouritwouldallthe

timecommandexactlythesamequantity，butofallcommoditiesproducedbyaidofcapitalit

wouldcommandadifferentquantity，andthat，inproportiontothedegreeinwhichcapital，not

labour，wastheinstrumentoftheirproduction。

（3。iii。26）Thoughwecanbystrictanalysisdiscover，thatexchangeablevalueisproportioned

to

quantityoflabourexpendedinproduction，therearethreecircumstanceswhichpreventits

applicationasthemeasureofvalue。

（3。iii。27）Inthefirstplace，therearetwokindsoflabouremployedinproduction，andthe

degree

inwhichtheproduceissharedbetweenthemoftenvaries，andoccasionsaswehaveseen，a

correspondingvariationintheexchangeablevaluesof’commoditiesproducedbydifferent

proportionsofthesetwokindsoflabour。Inthenextplace，wehavenopracticalmeansof

ascertainingbeforehandtheexactquantityofhoardedlabourwhichgoestoproduction，since

theonlymeasurewehaveofitsquantityisthepricewhichitbrings。Inthethirdplace，labouris

notconstantinitsproductivepowers。Ifoneday’slabourproducedalwaysthesamequantityof

gold，butnotthesamequantityofcorn，orofcloth，theexchangeablevalueofgoldwouldalter

inrespecttocornandcloth。

（3。iii。28）Fromtheseexplanationsitalsoappears，thatnothingelsecanbeappliedasan

accurate

measureofvalue。

（3。iii。29）Everycommoditymaybeconsideredasproducedunderoneofthethreesetsof

circumstancesspecifiedabove。Ifwetakeasourmeasureacommodity，producedunderthe

circumstancesNo。1，thegold，forexample，pickedupbythehand，thiswillalwayspurchasethe

samequantityofpurelabour，andofsuchcommoditiesasareproducedbythesamequantityof

thatlabour；butitwillnotpurchasethesamequantityofcommoditieswhichcometoneedmore

orlessoflabour，northesamequantityoftheproduceofhoardedlabour，butlessofitin

proportionaswagesrise，moreaswagesfall。Couldwetakeasourmeasureacommodity

producedunderthecircumstancesNo。3，thatis，byhoardedlabouralone，itwouldalways

purchasethesamequantityoftheproduceofhoardedlabour，whennoalterationhadtakenplace

initsproductivepowers，butlessormoreoftheproduceofimmediatelabour，accordingas

profits，thewagesofhoardedlabour，roseorfell。Acommodity，producedunderthemedium

circumstances，answersthepurposebest；becausebyfarthegreaternumberofcommoditiesare

producedundercircumstancesmorenearlyapproachingtothemediumthananyoftheextremes。

Gold，therefore，whichisproducedinthesecircumstances，andwithlessvariationinthequantity

ofthetwokindsoflabourappliedtoitsproduction，thanalmostanyothercommodity，hasthis

recommendationamongothers，tobethemediumofexchange，thatitislessimperfectasa

measureofvaluethanalmostanyothercommodity，whichcouldbetaken。Suchaberrationsas

areobvious，andcapableofbeinginsomedegreeforeseen，practicalsagacitycorrectsbythe

properallowances。Thiscannotbedonewhengreatandunexpectedchangestakeplace；and

muchdisorderistheconsequence。

SectionIV。OccasionsonWhichitistheInterestofNationsto

ExchangeCommoditieswithOneAnother（3。iv。1）Wehavealreadyseen，thatthebenefits，derivedfromthedivisionandskilful

distribution

oflabour，formpartofthemotiveswhichgiverisetotheexchangeofcommodities。Menwill

notconfinethemselvestotheproductionofoneonlyofthevariousarticleswhichcontributeto

thewell—beingoftheindividual，unlesstheycan，byitsmeans，providethemselveswithothers。

（3。iv。2）Thereisanothercircumstance，whichveryobviouslyaffordsamotivetoexchange

commodities。Somecanbeproducedonlyinparticularplaces。Metals，coals，andvariousother

commoditiesofthegreatestimportance，aretheproductofcertainspots。Thesameisthecase

withsomevegetableproductions，towhicheverysoilandclimatearenotadapted。Certain

commodities，thoughnotconfinedtoparticularspots，canyetbemoreconvenientlyandcheaply

producedinsomeplacesthaninothers；commodities，forexample，whichrequireagreat

consumptionoffuel，inacoalcountry；commodities，themanufactureofwhichrequiresastrong

movingpower，whereasufficientfallofwatercanbeobtained；commoditieswhichrequirean

extraordinaryproportionofmanuallabour，whereprovisions，andconsequentlylabour，are

cheap。

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