POLITICAL ECONOMY. 



consumer. The retail merchant could not import 

 from abroad in so small quantities as he wishes to 

 purchase, unless at proportionally great expense. 

 A wholesale merchant imports as much as will 

 supply a large number of retail merchants, and 

 with but little more trouble than would be re- 

 quired of one who only imported the small quan- 

 tity he needed for his own use. 



Conditions favourable to Exchange. 



The more rapidly exchanges are made, the 

 better it is for the merchant and for the community. 

 The better for the merchant, because he thus, 

 with the same capital, makes a greater number of 

 exchanges in a given time, and a greater annual 

 profit, though charging a smaller profit upon each 

 exchange. And it is better for the community, 

 because the less the profit he charges, the less is 

 the price they have to pay. 



The extent of commerce depends on many cir- 

 cumstances. 



1. 7^i? Intelligence of a People, There are 

 many pleasures within people's reach, if one only 

 knew of them, and how to get at them. News- 

 papers, travelling, and the other means by which 

 information is circulated, have a great influence in 

 stimulating people to improve their condition, 

 and to labour more industriously in furtherance 

 of that end. 



2. Productiveness of Industry. It is not enough 

 that a man be desirous to exchange ; he must have 

 something to offer in barter. If I desire a barrel 

 of flour ever so much, I cannot obtain it unless I 

 can offer to the flour-merchant something he will 

 accept in exchange for his flour. A rich man is 

 able to make a great many more exchanges in a 

 year than a poor man ; a labourer who earns high 

 wages can make many more exchanges in a year 

 than a labourer who earns but low wages. A 

 farmer buys many more articles of comfort in a 

 productive than in an unproductive season. A 

 wealthy country makes more exchanges, both 

 internal and external, than a poor country ; and 

 the same country in a period of success than in a 

 period of misfortune. 



3. Moral Character. No one who can help it 

 will have any dealings with a rogue, especially in 

 transactions on credit ; and when men fall into 

 roguery, and when property is insecure, exchanges 

 diminish. Laws help to make rogues like honest 

 men ; and when laws are just, and are well admin- 

 istered, exchanges are more abundant than when 

 they are unjust, partial, and unfairly administered. 

 But on the moral character of a people depend, 

 not only their personal honesty, but also the 

 soundness and efficiency of their laws. 



The same principles apply to our exchanges 

 with foreigners. If we treat them justly, and 

 allow them reasonable means of protecting and 

 enforcing their rights, they will come and exchange 

 their products for ours, in preference to going to 

 another country where they would be less favour- 

 ably treated ; and thus we procure, on the most 

 favourable terms, whatever we need from other 

 nations. An exclusive policy is as self-destructive 

 for nations as it is for individuals. 



V. DISTRIBUTION. 



Under this title are expounded the laws which 

 govern the distribution of commodities (or the 



price or exchangeable value of commodities) 

 among those wha contributed to their production. 

 Where each producer owns the land on which 

 the commodities he consumes are grown, owns 

 the floating capital and machinery requisite for 

 their production, and needs no labour but his own 

 in the process of production he is, of course, 

 entitled to the whole commodities so produced ; 

 and there is no distribution of them except to him- 

 self. But in the general case one man contributes 

 the use of land, another the use of capital, others 

 the various sorts of labour required ; and it be- 

 comes a problem to trace how much of the 

 ultimate price or exchangeable value of any com- 

 modity goes (or is distributed to) the landlord, 

 how much to the capitalist, how much to the 

 various sorts of labourers, who all contribute to 

 the production of that commodity, and in what 

 shape each draws his share. We are thus led to 

 the subjects of Wages, Rent, and Interest. 



WAGES. 



The exchangeable value of labour is not quite 

 synonymous with wages. Wages are the price of 

 labour, or its exchangeable value in money ; its 

 true exchangeable value is the aggregate of neces- 

 saries or comforts that that price will command 

 for the time money being merely the instrument 

 for exchanging the one with the other labour for 

 food, and house accommodation, and clothing. 



Of the Supply of Labour. 



The motive of the labourer is to obtain what he 

 needs or desires to consume. 



What are the necessaries of life on the consump- 

 tion of which a supply of labour depends 1 



1. Food, clothing, and shelter. 



2. A certain measure of luxury, which may be 

 deemed almost a necessary of life. 



3. Maintenance of one's children till their 

 strength and faculties mature. 



4. The power of saving something towards the 

 support of one's self and the inmates of one's 

 family, in sickness and old age. 



A labourer will, in general, share the last morsel 

 of bread with his wife and children, and by law he 

 is bound to do so ; and, though not with the same 

 efficiency, affection and law compel us to support 

 the sick and aged of our families. Hence the 

 maintenance of wife and children, and of the aged 

 and infirm, is part and parcel of the cost of main- 

 taining the labourer himself. 



In one sense, the cost of bringing up children 

 till they are able to maintain themselves by labour, 

 may be regarded, even in the case of unskilled 

 labour, as an expenditure of capital ; much more 

 so in the case of skilled labour. Skilled labour is 

 mostly the result of capital expended to acquire 

 special training in the industrial arts. The supply 

 of such labour is thus limited by the number of 

 families able to bestow the necessary training on 

 their children ; and the wage or remuneration of 

 skilled labour goes partly in repayment of the 

 capital expended in producing it. Many labourers, 

 from natural genius, train themselves, and rise to 

 skilled work without previous outlay of capital ; 

 but these form exceptions, not the rule. 



With fluctuations in demand for skilled labour, 

 the supply tends to increase or diminish. In- 

 creased remuneration tempts unskilled labourers 

 to train themselves for the various arts ; and a fall 



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