136 ADAM SMITH. 



2. Labour is the measure of the exchangeable value of 

 all commodities, because the possession of all is governed 

 by labour; and in the case of exchanging one against 

 another, the produce of the labour by which both 

 were obtained is mutually given and received. But 

 it is easier to compare two commodities with each other 

 than either of them with labour as their common measure ; 

 not to mention that it is not easy to compare the differ- 

 ent kinds of labour, as hard and easy working, skilful 

 and unskilful, with one another. Hence, prices are gene- 

 rally estimated by the proportion which the commodities 

 bear to one another. Labour is thus estimated as well 

 as other commodities, in commodities, and its natural 

 wages are the whole of its produce. But as each labourer 

 seeks for employment, and as each employer is desirous 

 of giving as little for labour as he can, therefore the com- 

 petition of workmen for work enables the employer to 

 obtain it at much less than the whole produce. When 

 there is a superabundance of workmen and more hands 

 than are wanted, the competition of workmen lowers their 

 wages. When there is a scarcity of workmen and more 

 work than hands to do it, the competition of employers 

 raises wages. But, in all cases, except where a man 

 labours for himself, less than the produce of the labour is 

 paid to reward it, and the difference belongs to the 

 employers. 



It is most material to observe, first, that there is a ten- 

 dency in the competition of workmen to lower their 

 wages ; secondly, that there is a point below which wages 

 cannot descend. Both these positions are founded on this : 

 that the labourers are, generally speaking, persons wholly 

 dependent on their labour. Therefore, in the first place, 



