Wages and Profits in Different Uses of Labor and Capital

The whole of the advantages and disadvantages of the different employments of labour and stock, must, in the same neighbourhood, be either perfectly equal, or continually tending to equality. If, in the same neighbourhood, there was any employment evidently either more or less advantageous than the rest, so many people would crowd into it in the one case, and so many would desert it in the other, that its advantages would soon return to the level of other employments. This, at least, would be the case in a society where things were left to follow their natural course, where there was perfect liberty, and where every man was perfectly free both to choose what occupation he thought proper, and to change it as often as he thought proper. Every man’s interest would prompt him to seek the advantageous, and to shun the disadvantageous employment.

In the same area, the overall advantages and disadvantages of different uses of labor and capital must be equal, or constantly moving toward equality. Suppose one occupation in the same area were clearly more advantageous than others. So many people would flock to it that its advantages would soon fall to the level of other occupations. If an occupation were clearly less advantageous, so many people would leave it that its advantages would soon rise to the same level. At least, this would happen in a society where things were left to follow their natural course. There would have to be complete freedom, and everyone would have to be free to choose any occupation and change it whenever they wished. Each person’s self-interest would lead them to seek advantageous work and avoid disadvantageous work.

Pecuniary wages and profit, indeed, are everywhere in Europe extremely different, according to the different employments of labour and stock. But this difference arises, partly from certain circumstances in the employments themselves, which, either really, or at least in the imagination of men, make up for a small pecuniary gain in some, and counterbalance a great one in others, and partly from the policy of Europe, which nowhere leaves things at perfect liberty.

Throughout Europe, wages and profits differ greatly depending on how labor and capital are employed. But this difference partly arises from features of the occupations themselves. These features, either in reality or at least in people’s minds, make up for low pay in some occupations and offset high pay in others. The difference also partly arises from European policies, which nowhere leave people completely free.

The particular consideration of those circumstances, and of that policy, will divide this Chapter into two parts.

A detailed examination of those circumstances and that policy will divide this chapter into two parts.

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 counterbalance 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.

As far as I have observed, five main factors make up for low pay in some occupations and offset high pay in others. First, the work itself may be pleasant or unpleasant. Second, learning the work may be easy and cheap, or difficult and expensive. Third, the work may be steady or irregular. Fourth, workers may be entrusted with little or great responsibility. Fifth, success may be likely or unlikely.

First, the wages of labour vary with the ease or hardship, the cleanliness or dirtiness, the honourableness or dishonourableness, of the employment. Thus in most places, take the year round, a journeyman tailor earns less than a journeyman weaver. His work is much easier. A journeyman weaver earns less than a journeyman smith. His work is not always easier, but it is much cleanlier. A journeyman blacksmith, though an artificer, seldom earns so much in twelve hours, as a collier, who is only a labourer, does in eight. His work is not quite so dirty, is less dangerous, and is carried on in day-light, and above ground. Honour makes a great part of the reward of all honourable professions. In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to shew by and by. Disgrace has the contrary effect. The trade of a butcher is a brutal and an odious business; but it is in most places more profitable than the greater part of common trades. The most detestable of all employments, that of public executioner, is, in proportion to the quantity of work done, better paid than any common trade whatever.

First, wages vary according to how easy or hard, clean or dirty, honorable or dishonorable the work is. For example, in most places, a journeyman tailor earns less over a year than a journeyman weaver. The tailor’s work is much easier. A journeyman weaver earns less than a journeyman blacksmith. The weaver’s work is not always easier, but it is much cleaner. A journeyman blacksmith is a skilled worker, while a coal miner is only a laborer. Yet the blacksmith seldom earns as much in twelve hours as the miner does in eight. The blacksmith’s work is not quite so dirty, is less dangerous, and is done in daylight and above ground. Honor makes up a large part of the reward in all honorable professions. In terms of money, they are generally underpaid, all things considered, as I will try to show later. Disgrace has the opposite effect. Butchering is a brutal and hateful business. Yet in most places it is more profitable than most common trades. The most detestable job of all is that of public executioner. In proportion to the amount of work done, it pays better than any common trade.

Hunting and fishing, the most important employments of mankind in the rude state of society, become, in its advanced state, their most agreeable amusements, and they pursue for pleasure what they once followed from necessity. In the advanced state of society, therefore, they are all very poor people who follow as a trade, what other people pursue as a pastime. Fishermen have been so since the time of Theocritus. {See Idyllium xxi.}. A poacher is everywhere a very poor man in Great Britain. In countries where the rigour of the law suffers no poachers, the licensed hunter is not in a much better condition. The natural taste for those employments makes more people follow them, than can live comfortably by them; and the produce of their labour, in proportion to its quantity, comes always too cheap to market, to afford any thing but the most scanty subsistence to the labourers.

Hunting and fishing are the most important occupations in an early stage of society. In an advanced society, they become the most enjoyable pastimes. People pursue for pleasure what they once pursued out of necessity. In an advanced society, therefore, all who make a living from these activities are very poor. They work at what others pursue as a pastime. Fishermen have been poor since the time of Theocritus. {See Idyllium xxi.}. Everywhere in Great Britain, a poacher is a very poor man. In countries where strict laws allow no poaching, the licensed hunter is not much better off. People’s natural taste for hunting and fishing draws more of them to these occupations than can live comfortably by them. As a result, what their labor produces always comes to market too cheaply, relative to its quantity, to provide the workers with anything more than the barest living.

Disagreeableness and disgrace affect the profits of stock in the same manner as the wages of labour. The keeper of an inn or tavern, who is never master of his own house, and who is exposed to the brutality of every drunkard, exercises neither a very agreeable nor a very creditable business. But there is scarce any common trade in which a small stock yields so great a profit.

Unpleasantness and disgrace affect profits on invested capital just as they affect wages. An inn or tavern keeper is never in control of their own establishment. They are exposed to the brutality of every drunkard. The business is neither very pleasant nor very respectable. But hardly any common trade yields such a large profit from a small investment.

Secondly, the wages of labour vary with the easiness and cheapness, or the difficulty and expense, of learning the business.

Second, wages vary depending on how easy and cheap, or difficult and expensive, it is to learn the job.

When any expensive machine is erected, the extraordinary work to be performed by it before it is worn out, it must be expected, will replace the capital laid out upon it, with at least the ordinary profits. A man educated at the expense of much labour and time to any of those employments which require extraordinary dexterity and skill, may be compared to one of those expensive machines. The work which he learns to perform, it must be expected, over and above the usual wages of common labour, will replace to him the whole expense of his education, with at least the ordinary profits of an equally valuable capital. It must do this too in a reasonable time, regard being had to the very uncertain duration of human life, in the same manner as to the more certain duration of the machine.

When an expensive machine is installed, its special work is expected to repay its cost before it wears out. That return should include at least the usual profit. A person trained at the cost of much time and effort for a job requiring exceptional skill may be compared to such a machine. The work the person learns to do should pay more than the usual wages for ordinary labor. The extra earnings should repay the entire cost of training, with at least the usual profit on an equally valuable investment. This return must also come within a reasonable time, taking into account the very uncertain length of human life, just as the more certain lifespan of a machine must be considered.

The difference between the wages of skilled labour and those of common labour, is founded upon this principle.

The difference between wages for skilled and common labor is based on this principle.

The policy of Europe considers the labour of all mechanics, artificers, and manufacturers, as skilled labour; and that of all country labourers as common labour. It seems to suppose that of the former to be of a more nice and delicate nature than that of the latter. It is so perhaps in some cases; but in the greater part it is quite otherwise, as I shall endeavour to shew by and by. The laws and customs of Europe, therefore, in order to qualify any person for exercising the one species of labour, impose the necessity of an apprenticeship, though with different degrees of rigour in different places. They leave the other free and open to every body. During the continuance of the apprenticeship, the whole labour of the apprentice belongs to his master. In the meantime he must, in many cases, be maintained by his parents or relations, and, in almost all cases, must be clothed by them. Some money, too, is commonly given to the master for teaching him his trade. They who cannot give money, give time, or become bound for more than the usual number of years; a consideration which, though it is not always advantageous to the master, on account of the usual idleness of apprentices, is always disadvantageous to the apprentice. In country labour, on the contrary, the labourer, while he is employed about the easier, learns the more difficult parts of his business, and his own labour maintains him through all the different stages of his employment. It is reasonable, therefore, that in Europe the wages of mechanics, artificers, and manufacturers, should be somewhat higher than those of common labourers. They are so accordingly, and their superior gains make them, in most places, be considered as a superior rank of people. This superiority, however, is generally very small: the daily or weekly earnings of journeymen in the more common sorts of manufactures, such as those of plain linen and woollen cloth, computed at an average, are, in most places, very little more than the day-wages of common labourers. Their employment, indeed, is more steady and uniform, and the superiority of their earnings, taking the whole year together, may be somewhat greater. It seems evidently, however, to be no greater than what is sufficient to compensate the superior expense of their education. Education in the ingenious arts, and in the liberal professions, is still more tedious and expensive. The pecuniary recompence, therefore, of painters and sculptors, of lawyers and physicians, ought to be much more liberal; and it is so accordingly.

European policy regards the work of all mechanics, craftspeople, and manufacturers as skilled labor. It regards the work of all rural laborers as unskilled labor. It seems to assume that the former work requires more precision and delicacy than the latter. Perhaps it does in some cases. But in most cases, the opposite is true, as I shall try to show later. To qualify a person for skilled work, European laws and customs therefore require an apprenticeship. This requirement is enforced with different degrees of strictness in different places. Rural labor, however, is open to everyone. Throughout an apprenticeship, all the apprentice’s work belongs to the master. During that time, the apprentice must often be supported by his parents or relatives. In almost all cases, they must provide his clothing. The master is also usually paid to teach him the trade. Those who cannot pay give their time instead, agreeing to serve more than the usual number of years. This is not always advantageous to the master, since apprentices are usually idle. But it is always disadvantageous to the apprentice. In rural labor, by contrast, a worker learns the harder parts of the job while doing the easier ones. His own work supports him at every stage of his employment. It is therefore reasonable that the wages of mechanics, craftspeople, and manufacturers should be somewhat higher than those of unskilled laborers in Europe. Their wages are indeed higher. In most places, their greater earnings cause them to be regarded as a higher class of people. This advantage, however, is generally very small. In most places, journeymen in common trades, such as making plain linen and woolen cloth, earn very little more per day or week, on average, than unskilled laborers earn per day. Their employment is steadier and more regular, however. So their advantage in earnings over a whole year may be somewhat greater. Still, it is evidently no more than enough to compensate for the greater expense of their training. Training in the fine arts and the learned professions takes even longer and costs more. Painters, sculptors, lawyers, and physicians should therefore be paid much more, and they are.

The profits of stock seem to be very little affected by the easiness or difficulty of learning the trade in which it is employed. All the different ways in which stock is commonly employed in great towns seem, in reality, to be almost equally easy and equally difficult to learn. One branch, either of foreign or domestic trade, cannot well be a much more intricate business than another.

Profits from capital seem to be affected very little by how easy or difficult a trade is to learn. In large towns, all the common ways of using capital seem almost equally easy or difficult to learn. One branch of foreign or domestic trade can hardly be much more complicated than another.

Thirdly, the wages of labour in different occupations vary with the constancy or inconstancy of employment.

Third, wages vary across occupations depending on how steady the work is.

Employment is much more constant in some trades than in others. In the greater part of manufactures, a journeyman maybe pretty sure of employment almost every day in the year that he is able to work. A mason or bricklayer, on the contrary, can work neither in hard frost nor in foul weather, and his employment at all other times depends upon the occasional calls of his customers. He is liable, in consequence, to be frequently without any. What he earns, therefore, while he is employed, must not only maintain him while he is idle, but make him some compensation for those anxious and desponding moments which the thought of so precarious a situation must sometimes occasion. Where the computed earnings of the greater part of manufacturers, accordingly, are nearly upon a level with the day-wages of common labourers, those of masons and bricklayers are generally from one-half more to double those wages. Where common labourers earn four or five shillings a-week, masons and bricklayers frequently earn seven and eight; where the former earn six, the latter often earn nine and ten; and where the former earn nine and ten, as in London, the latter commonly earn fifteen and eighteen. No species of skilled labour, however, seems more easy to learn than that of masons and bricklayers. Chairmen in London, during the summer season, are said sometimes to be employed as bricklayers. The high wages of those workmen, therefore, are not so much the recompence of their skill, as the compensation for the inconstancy of their employment.

Employment is much more steady in some trades than in others. In most manufacturing trades, a journeyman can be fairly sure of work almost every day he is able to work. A mason or bricklayer, by contrast, cannot work in hard frost or bad weather. At other times, his work depends on customers calling on him when they need him. As a result, he is often without work. His earnings while employed must therefore support him when he is idle. They must also compensate him for the anxious and despondent moments that such an uncertain situation must sometimes cause. The estimated earnings of most manufacturing workers are nearly equal to the daily wages of common laborers. Masons and bricklayers, however, generally earn from one-half more to twice those wages. Where common laborers earn four or five shillings a week, masons and bricklayers frequently earn seven or eight. Where laborers earn six, masons and bricklayers often earn nine or ten. Where laborers earn nine or ten, as in London, masons and bricklayers commonly earn fifteen or eighteen. Yet no kind of skilled labor seems easier to learn than masonry and bricklaying. London chairmen, who carry people in sedan chairs, are said sometimes to work as bricklayers during the summer. Their high wages, then, are less a reward for their skill than compensation for their unsteady employment.

A house-carpenter seems to exercise rather a nicer and a more ingenious trade than a mason. In most places, however, for it is not universally so, his day-wages are somewhat lower. His employment, though it depends much, does not depend so entirely upon the occasional calls of his customers; and it is not liable to be interrupted by the weather.

A house carpenter seems to practice a more precise and skillful trade than a mason. Yet in most places, though not everywhere, a carpenter’s daily wages are somewhat lower. His work depends heavily on customers calling on him, but not as entirely as a mason’s work does. Nor is his work likely to be interrupted by the weather.

When the trades which generally afford constant employment, happen in a particular place not to do so, the wages of the workmen always rise a good deal above their ordinary proportion to those of common labour. In London, almost all journeymen artificers are liable to be called upon and dismissed by their masters from day to day, and from week to week, in the same manner as day-labourers in other places. The lowest order of artificers, journeymen tailors, accordingly, earn their half-a-crown a-day, though eighteen pence may be reckoned the wages of common labour. In small towns and country villages, the wages of journeymen tailors frequently scarce equal those of common labour; but in London they are often many weeks without employment, particularly during the summer.

When trades that usually provide steady work do not do so in a particular place, wages rise considerably. They rise above their usual level relative to the wages of common laborers. In London, almost all skilled workers employed by a master can be hired and dismissed from day to day or week to week. This is much like the situation of day laborers elsewhere. Journeyman tailors, the lowest rank of skilled workers, therefore earn half a crown a day, although common laborers’ wages may be reckoned at eighteen pence. In small towns and country villages, journeyman tailors often earn scarcely as much as common laborers. But in London, they are often without work for many weeks, especially during the summer.

When the inconstancy of employment is combined with the hardship, disagreeableness, and dirtiness of the work, it sometimes raises the wages of the most common labour above those of the most skilful artificers. A collier working by the piece is supposed, at Newcastle, to earn commonly about double, and, in many parts of Scotland, about three times, the wages of common labour. His high wages arise altogether from the hardship, disagreeableness, and dirtiness of his work. His employment may, upon most occasions, be as constant as he pleases. The coal-heavers in London exercise a trade which, in hardship, dirtiness, and disagreeableness, almost equals that of colliers; and, from the unavoidable irregularity in the arrivals of coal-ships, the employment of the greater part of them is necessarily very inconstant. If colliers, therefore, commonly earn double and triple the wages of common labour, it ought not to seem unreasonable that coal-heavers should sometimes earn four and five times those wages. In the inquiry made into their condition a few years ago, it was found that, at the rate at which they were then paid, they could earn from six to ten shillings a-day. Six shillings are about four times the wages of common labour in London; and, in every particular trade, the lowest common earnings may always be considered as those of the far greater number. How extravagant soever those earnings may appear, if they were more than sufficient to compensate all the disagreeable circumstances of the business, there would soon be so great a number of competitors, as, in a trade which has no exclusive privilege, would quickly reduce them to a lower rate.

When work is irregular as well as hard, unpleasant, and dirty, it can raise the wages of ordinary workers above those of the most skilled craftspeople. A coal miner paid by the amount he produces is said to earn about twice an ordinary worker’s wages in Newcastle. In many parts of Scotland, he is said to earn about three times as much. His high wages are entirely due to the hardship, unpleasantness, and dirtiness of his work. Most of the time, he can work as regularly as he wishes. London coal-heavers have a trade almost as hard, dirty, and unpleasant as coal mining. And because coal ships arrive at unavoidably irregular intervals, most coal-heavers necessarily have very irregular work. If coal miners usually earn double or triple the wages of ordinary workers, it should not seem unreasonable that coal-heavers sometimes earn four or five times as much. An inquiry into their condition a few years ago found that coal-heavers could earn six to ten shillings a day at their pay rates at the time. Six shillings is about four times the wages of an ordinary worker in London. And in every trade, the lowest usual earnings can always be taken as those of the great majority of workers. However excessive those earnings may seem, they might be more than enough to compensate for all the unpleasant conditions of the work. If so, so many competitors would soon enter the trade that wages would quickly fall. The trade has no exclusive privilege to prevent this.

The constancy or inconstancy of employment cannot affect the ordinary profits of stock in any particular trade. Whether the stock is or is not constantly employed, depends, not upon the trade, but the trader.

How steady employment is cannot affect the usual profits from capital in any particular trade. Whether capital is constantly used depends on the trader, not the trade.

Fourthly, the wages of labour vary according to the small or great trust which must be reposed in the workmen.

Fourthly, wages vary according to how much trust workers must be given.

The wages of goldsmiths and jewellers are everywhere superior to those of many other workmen, not only of equal, but of much superior ingenuity, on account of the precious materials with which they are entrusted. We trust our health to the physician, our fortune, and sometimes our life and reputation, to the lawyer and attorney. Such confidence could not safely be reposed in people of a very mean or low condition. Their reward must be such, therefore, as may give them that rank in the society which so important a trust requires. The long time and the great expense which must be laid out in their education, when combined with this circumstance, necessarily enhance still further the price of their labour.

Goldsmiths and jewellers everywhere earn more than many other workers, even those who are equally or much more skilled. This is because they are entrusted with precious materials. We trust physicians with our health. We trust lawyers and attorneys with our fortunes, and sometimes with our lives and reputations. Such trust could not safely be placed in people of very low social standing. Their pay must therefore give them the social rank that such important trust requires. Their education also takes a long time and costs a great deal. Combined with the trust placed in them, this necessarily raises the price of their work still further.

When a person employs only his own stock in trade, there is no trust; and the credit which he may get from other people, depends, not upon the nature of the trade, but upon their opinion of his fortune, probity and prudence. The different rates of profit, therefore, in the different branches of trade, cannot arise from the different degrees of trust reposed in the traders.

When a person uses only their own capital in trade, no one else has to trust them with money. Any credit they may get from others depends not on the nature of the trade, but on others' opinion of their wealth, honesty, and good judgment. Therefore, differences in profit rates among trades cannot arise from differences in the trust placed in traders.

Fifthly, the wages of labour in different employments vary according to the probability or improbability of success in them.

Fifth, wages in different jobs vary according to the likelihood of success in them.

The probability that any particular person shall ever be qualified for the employments to which he is educated, is very different in different occupations. In the greatest part of mechanic trades success is almost certain; but very uncertain in the liberal professions. Put your son apprentice to a shoemaker, there is little doubt of his learning to make a pair of shoes; but send him to study the law, it as at least twenty to one if he ever makes such proficiency as will enable him to live by the business. In a perfectly fair lottery, those who draw the prizes ought to gain all that is lost by those who draw the blanks. In a profession, where twenty fail for one that succeeds, that one ought to gain all that should have been gained by the unsuccessful twenty. The counsellor at law, who, perhaps, at near forty years of age, begins to make something by his profession, ought to receive the retribution, not only of his own so tedious and expensive education, but of that of more than twenty others, who are never likely to make any thing by it. How extravagant soever the fees of counsellors at law may sometimes appear, their real retribution is never equal to this. Compute, in any particular place, what is likely to be annually gained, and what is likely to be annually spent, by all the different workmen in any common trade, such as that of shoemakers or weavers, and you will find that the former sum will generally exceed the latter. But make the same computation with regard to all the counsellors and students of law, in all the different Inns of Court, and you will find that their annual gains bear but a very small proportion to their annual expense, even though you rate the former as high, and the latter as low, as can well be done. The lottery of the law, therefore, is very far from being a perfectly fair lottery; and that as well as many other liberal and honourable professions, is, in point of pecuniary gain, evidently under-recompensed.

The chances that a person will ever qualify for the work they are trained to do vary greatly between occupations. In most skilled trades, success is almost certain. But in the learned professions, it is very uncertain. If you apprentice your son to a shoemaker, there is little doubt he will learn to make shoes. But if you send him to study law, the odds are at least twenty to one against his becoming skilled enough to earn a living from it. In a perfectly fair lottery, those who draw the prizes should gain everything lost by those who draw blanks. In a profession where twenty people fail for every one who succeeds, that one should gain everything the unsuccessful twenty would have earned. A lawyer may begin to earn something from his profession when he is nearly forty. He should be paid enough to cover not only his own long and expensive education, but also that of more than twenty others. Those others are never likely to earn anything from their legal education. However excessive lawyers’ fees may sometimes seem, their actual earnings never amount to that much. Take any place and calculate what all the workers in a common trade, such as shoemakers or weavers, probably earn each year. Then calculate what they probably spend each year. You will find that their total earnings generally exceed their total expenses. But make the same calculation for all the lawyers and law students in the various Inns of Court. You will find that their annual earnings are only a very small fraction of their annual expenses. This is true even if you estimate their earnings as high and their expenses as low as reasonably possible. The lottery of the law, therefore, is very far from perfectly fair. And law, like many other learned and honorable professions, is clearly underpaid in terms of financial gain.

Those professions keep their level, however, with other occupations; and, notwithstanding these discouragements, all the most generous and liberal spirits are eager to crowd into them. Two different causes contribute to recommend them. First, the desire of the reputation which attends upon superior excellence in any of them; and, secondly, the natural confidence which every man has, more or less, not only in his own abilities, but in his own good fortune.

These professions, however, hold their own against other occupations. Despite these discouragements, all the most generous and open-minded people are eager to enter them. Two things make these professions attractive. First, there is the desire for the reputation that comes with outstanding achievement in any of them. Second, everyone has some natural confidence in their own abilities and good fortune.

To excel in any profession, in which but few arrive at mediocrity, is the most decisive mark of what is called genius, or superior talents. The public admiration which attends upon such distinguished abilities makes always a part of their reward; a greater or smaller, in proportion as it is higher or lower in degree. It makes a considerable part of that reward in the profession of physic; a still greater, perhaps, in that of law; in poetry and philosophy it makes almost the whole.

To excel in a profession where few reach even average ability is the clearest sign of genius or superior talent. Public admiration for such outstanding abilities is always part of their reward. The greater the admiration, the greater its share of the reward. It makes up a considerable part of the reward in medicine, and perhaps an even greater part in law. In poetry and philosophy, it makes up almost the whole reward.

There are some very agreeable and beautiful talents, of which the possession commands a certain sort of admiration, but of which the exercise, for the sake of gain, is considered, whether from reason or prejudice, as a sort of public prostitution. The pecuniary recompence, therefore, of those who exercise them in this manner, must be sufficient, not only to pay for the time, labour, and expense of acquiring the talents, but for the discredit which attends the employment of them as the means of subsistence. The exorbitant rewards of players, opera-singers, opera-dancers, etc. are founded upon those two principles; the rarity and beauty of the talents, and the discredit of employing them in this manner. It seems absurd at first sight, that we should despise their persons, and yet reward their talents with the most profuse liberality. While we do the one, however, we must of necessity do the other, Should the public opinion or prejudice ever alter with regard to such occupations, their pecuniary recompence would quickly diminish. More people would apply to them, and the competition would quickly reduce the price of their labour. Such talents, though far from being common, are by no means so rare as imagined. Many people possess them in great perfection, who disdain to make this use of them; and many more are capable of acquiring them, if any thing could be made honourably by them.

Some very pleasing and beautiful talents bring a certain kind of admiration to those who possess them. But using these talents for money is considered a kind of public prostitution, whether through reason or prejudice. Those who use their talents this way must therefore be paid enough to cover more than the time, labor, and expense of acquiring them. They must also be compensated for the disgrace of using those talents to earn a living. The enormous rewards of actors, opera singers, opera dancers, and others rest on these two principles. Their talents are rare and beautiful, and using them this way brings disgrace. At first, it seems absurd that we should despise these people yet reward their talents so lavishly. But as long as we do the first, we must necessarily do the second. If public opinion or prejudice about such occupations ever changed, their pay would quickly fall. More people would enter these occupations, and competition would quickly reduce the price of their labor. Such talents are far from common, but they are by no means as rare as people imagine. Many people have these talents to a high degree but disdain to use them this way. Many more could acquire them if they could earn money from them honorably.

The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. Their absurd presumption in their own good fortune has been less taken notice of. It is, however, if possible, still more universal. There is no man living, who, when in tolerable health and spirits, has not some share of it. The chance of gain is by every man more or less over-valued, and the chance of loss is by most men under-valued, and by scarce any man, who is in tolerable health and spirits, valued more than it is worth.

Most people have an excessive opinion of their own abilities. Philosophers and moralists of every age have noted this ancient failing. Their absurd confidence in their own good fortune has attracted less notice. Yet it is, if possible, even more universal. Everyone in reasonably good health and spirits has some measure of it. Everyone overestimates the chance of gain to some degree, and most people underestimate the chance of loss. Hardly anyone in reasonably good health and spirits overestimates the chance of loss.

That the chance of gain is naturally overvalued, we may learn from the universal success of lotteries. The world neither ever saw, nor ever will see, a perfectly fair lottery, or one in which the whole gain compensated the whole loss; because the undertaker could make nothing by it. In the state lotteries, the tickets are really not worth the price which is paid by the original subscribers, and yet commonly sell in the market for twenty, thirty, and sometimes forty per cent. advance. The vain hopes of gaining some of the great prizes is the sole cause of this demand. The soberest people scarce look upon it as a folly to pay a small sum for the chance of gaining ten or twenty thousand pounds, though they know that even that small sum is perhaps twenty or thirty per cent. more than the chance is worth. In a lottery in which no prize exceeded twenty pounds, though in other respects it approached much nearer to a perfectly fair one than the common state lotteries, there would not be the same demand for tickets. In order to have a better chance for some of the great prizes, some people purchase several tickets; and others, small shares in a still greater number. There is not, however, a more certain proposition in mathematics, than that the more tickets you adventure upon, the more likely you are to be a loser. Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets, the nearer you approach to this certainty.

The universal success of lotteries shows that people naturally overvalue the chance of gain. There has never been, and never will be, a perfectly fair lottery. In a perfectly fair lottery, the total winnings would equal the total losses. But the organizer could make nothing from such a lottery. In state lotteries, tickets are not really worth the price paid by the original buyers. Yet they commonly sell on the market for 20, 30, and sometimes 40 percent more. The sole cause of this demand is the vain hope of winning one of the great prizes. Even the most sensible people hardly think it foolish to pay a small sum for a chance to win ten or twenty thousand pounds. Yet they know that even this small sum is perhaps 20 or 30 percent more than the chance is worth. Suppose no prize in a lottery exceeded twenty pounds. There would not be the same demand for its tickets, even if the lottery were otherwise much fairer than ordinary state lotteries. To improve their chance of winning a great prize, some people buy several tickets. Others buy small shares in a still greater number of tickets. Yet nothing in mathematics is more certain than this: the more tickets you buy, the more likely you are to lose. Buy all the tickets in a lottery, and you are certain to lose. The more tickets you buy, the closer you come to that certainty.

That the chance of loss is frequently undervalued, and scarce ever valued more than it is worth, we may learn from the very moderate profit of insurers. In order to make insurance, either from fire or sea-risk, a trade at all, the common premium must be sufficient to compensate the common losses, to pay the expense of management, and to afford such a profit as might have been drawn from an equal capital employed in any common trade. The person who pays no more than this, evidently pays no more than the real value of the risk, or the lowest price at which he can reasonably expect to insure it. But though many people have made a little money by insurance, very few have made a great fortune; and, from this consideration alone, it seems evident enough that the ordinary balance of profit and loss is not more advantageous in this than in other common trades, by which so many people make fortunes. Moderate, however, as the premium of insurance commonly is, many people despise the risk too much to care to pay it. Taking the whole kingdom at an average, nineteen houses in twenty, or rather, perhaps, ninety-nine in a hundred, are not insured from fire. Sea-risk is more alarming to the greater part of people; and the proportion of ships insured to those not insured is much greater. Many sail, however, at all seasons, and even in time of war, without any insurance. This may sometimes, perhaps, be done without any imprudence. When a great company, or even a great merchant, has twenty or thirty ships at sea, they may, as it were, insure one another. The premium saved up on them all may more than compensate such losses as they are likely to meet with in the common course of chances. The neglect of insurance upon shipping, however, in the same manner as upon houses, is, in most cases, the effect of no such nice calculation, but of mere thoughtless rashness, and presumptuous contempt of the risk.

The modest profits of insurers show that people often underestimate the chance of loss and almost never overestimate it. To make fire or marine insurance a viable business, the usual premium must cover ordinary losses and management costs. It must also provide a profit equal to what the same capital could earn in any ordinary trade. Anyone who pays no more than this clearly pays no more than the true value of the risk. It is the lowest price at which they can reasonably expect to insure against it. Many people have made a little money from insurance, but very few have made a great fortune. This alone makes it clear enough that the usual balance of profit and loss is no better than in other ordinary trades. Yet many people make fortunes in those other trades. Even so, though insurance premiums are usually modest, many people think so little of the risk that they will not pay them. Across the kingdom, on average, nineteen houses in twenty are not insured against fire. Perhaps the figure is closer to ninety-nine in a hundred. Most people find the risk at sea more alarming, and a much greater proportion of ships are insured. Many ships, however, sail without insurance in every season, even during war. This may sometimes be done without any recklessness. When a large company or even a wealthy merchant has twenty or thirty ships at sea, the ships can, in effect, insure one another. The premiums saved on all of them may more than make up for the losses they are likely to suffer in the ordinary course of events. In most cases, however, people neglect to insure ships, just as they neglect to insure houses, for no such carefully calculated reason. They do so out of sheer thoughtless recklessness and an overconfident disregard for the risk.

The contempt of risk, and the presumptuous hope of success, are in no period of life more active than at the age at which young people choose their professions. How little the fear of misfortune is then capable of balancing the hope of good luck, appears still more evidently in the readiness of the common people to enlist as soldiers, or to go to sea, than in the eagerness of those of better fashion to enter into what are called the liberal professions.

At no time in life are people more likely to dismiss risk and be overconfident of success than when they choose their professions. At that age, the fear of misfortune does little to counter the hope of good luck. This is even clearer in the readiness of ordinary people to enlist as soldiers or go to sea than in the eagerness of people of higher social standing to enter what are called the liberal professions.

What a common soldier may lose is obvious enough. Without regarding the danger, however, young volunteers never enlist so readily as at the beginning of a new war; and though they have scarce any chance of preferment, they figure to themselves, in their youthful fancies, a thousand occasions of acquiring honour and distinction which never occur. These romantic hopes make the whole price of their blood. Their pay is less than that of common labourers, and, in actual service, their fatigues are much greater.

What an ordinary soldier may lose is obvious enough. Yet young volunteers ignore the danger and enlist most readily at the beginning of a new war. Though they have hardly any chance of promotion, their youthful imaginations picture countless chances to win honor and distinction. These chances never come. Such romantic hopes are the whole price of their blood. Their pay is less than that of ordinary laborers, and their hardships in active service are much greater.

The lottery of the sea is not altogether so disadvantageous as that of the army. The son of a creditable labourer or artificer may frequently go to sea with his father’s consent; but if he enlists as a soldier, it is always without it. Other people see some chance of his making something by the one trade; nobody but himself sees any of his making any thing by the other. The great admiral is less the object of public admiration than the great general; and the highest success in the sea service promises a less brilliant fortune and reputation than equal success in the land. The same difference runs through all the inferior degrees of preferment in both. By the rules of precedency, a captain in the navy ranks with a colonel in the army; but he does not rank with him in the common estimation. As the great prizes in the lottery are less, the smaller ones must be more numerous. Common sailors, therefore, more frequently get some fortune and preferment than common soldiers; and the hope of those prizes is what principally recommends the trade. Though their skill and dexterity are much superior to that of almost any artificers; and though their whole life is one continual scene of hardship and danger; yet for all this dexterity and skill, for all those hardships and dangers, while they remain in the condition of common sailors, they receive scarce any other recompence but the pleasure of exercising the one and of surmounting the other. Their wages are not greater than those of common labourers at the port which regulates the rate of seamen’s wages. As they are continually going from port to port, the monthly pay of those who sail from all the different ports of Great Britain, is more nearly upon a level than that of any other workmen in those different places; and the rate of the port to and from which the greatest number sail, that is, the port of London, regulates that of all the rest. At London, the wages of the greater part of the different classes of workmen are about double those of the same classes at Edinburgh. But the sailors who sail from the port of London, seldom earn above three or four shillings a month more than those who sail from the port of Leith, and the difference is frequently not so great. In time of peace, and in the merchant-service, the London price is from a guinea to about seven-and-twenty shillings the calendar month. A common labourer in London, at the rate of nine or ten shillings a week, may earn in the calendar month from forty to five-and-forty shillings. The sailor, indeed, over and above his pay, is supplied with provisions. Their value, however, may not perhaps always exceed the difference between his pay and that of the common labourer; and though it sometimes should, the excess will not be clear gain to the sailor, because he cannot share it with his wife and family, whom he must maintain out of his wages at home.

The lottery of life at sea is not quite as unfavorable as the lottery of the army. The son of a respectable laborer or craftsman can often go to sea with his father’s consent. But if he enlists as a soldier, he always does so without it. Other people see some chance that he might make something of himself at sea. But only he sees any chance of doing so in the army. A great admiral is less admired by the public than a great general. The highest success in naval service promises less brilliant wealth and fame than equal success on land. The same difference applies to all the lower ranks of promotion in both services. By the rules of precedence, a navy captain ranks with an army colonel. But people do not regard him as the colonel’s equal. Since the lottery’s great prizes are smaller, its smaller prizes must be more numerous. Ordinary sailors, therefore, gain some wealth and promotion more often than ordinary soldiers. The hope of these prizes is the main attraction of the trade. Sailors’ skill and dexterity are far greater than those of almost any craftsman. Their whole life, moreover, is a continuous scene of hardship and danger. Yet as long as they remain ordinary sailors, they receive hardly any other reward for these things. Their reward is the pleasure of exercising their skill and overcoming the hardships and dangers. Their wages are no higher than those of ordinary laborers at the port that sets the rate for sailors’ wages. Sailors are constantly traveling from port to port. As a result, their monthly pay varies less among Great Britain’s ports than that of any other workers. The rate at the port with the most sailors coming and going sets the rate for all the others. That port is London. In London, most classes of workers earn about twice as much as their counterparts in Edinburgh. But sailors sailing from London seldom earn more than three or four shillings a month above those sailing from Leith. Often the difference is smaller. In peacetime, the London rate for merchant sailors is between a guinea and about twenty-seven shillings a calendar month. An ordinary laborer in London earns nine or ten shillings a week. This amounts to forty to forty-five shillings a calendar month. Sailors, of course, receive food in addition to their pay. But its value may not always exceed the difference between their pay and an ordinary laborer’s. Even when it does, the extra value is not a clear gain for a sailor. He cannot share it with his wife and family, whom he must support at home out of his wages.

The dangers and hair-breadth escapes of a life of adventures, instead of disheartening young people, seem frequently to recommend a trade to them. A tender mother, among the inferior ranks of people, is often afraid to send her son to school at a sea-port town, lest the sight of the ships, and the conversation and adventures of the sailors, should entice him to go to sea. The distant prospect of hazards, from which we can hope to extricate ourselves by courage and address, is not disagreeable to us, and does not raise the wages of labour in any employment. It is otherwise with those in which courage and address can be of no avail. In trades which are known to be very unwholesome, the wages of labour are always remarkably high. Unwholesomeness is a species of disagreeableness, and its effects upon the wages of labour are to be ranked under that general head.

The dangers and narrow escapes of an adventurous life often attract young people to a trade rather than discourage them. A loving mother among the lower classes is often afraid to send her son to school in a port town. She fears that the sight of ships and the sailors’ conversations and adventures might tempt him to go to sea. We do not mind the distant prospect of dangers we can hope to escape through courage and skill. Such dangers do not raise wages in any occupation. But the case is different when courage and skill are no use. In trades known to be very harmful to health, wages are always remarkably high. Harm to health is one kind of unpleasantness, and its effects on wages should be classed under that general heading.

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 in some branches of 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 the 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. The presumptuous hope of success seems to act here as upon all other occasions, and to entice so many adventurers into those hazardous trades, that their competition reduces the profit below what is sufficient to compensate the risk. To compensate it completely, the common returns ought, over and above the ordinary profits of stock, not only to make up for all occasional losses, but to afford a surplus profit to the adventurers, of the same nature with the profit of insurers. But if the common returns were sufficient for all this, bankruptcies would not be more frequent in these than in other trades.

In every use of capital, the usual rate of profit varies according to how certain the returns are. Returns are generally more certain in domestic trade than in foreign trade. They are also more certain in some branches of foreign trade than in others. For example, returns from trade with North America are more certain than returns from trade with Jamaica. The usual rate of profit always rises to some degree with the risk. But it does not seem to rise in proportion to the risk or fully compensate for it. Bankruptcies are most frequent in the most hazardous trades. Smuggling is the most hazardous trade of all. Though it is also the most profitable when a venture succeeds, it is a sure road to bankruptcy. Here, as everywhere else, overconfident hopes of success seem to influence people. These hopes entice so many adventurers into hazardous trades that their competition reduces profits below what would compensate for the risk. To compensate fully for the risk, the usual returns must cover more than the ordinary profits on capital. They must make up for all occasional losses and also give the adventurers an extra profit, like that earned by insurers. But if the usual returns were enough to cover all this, bankruptcies would not be more frequent in hazardous trades than in others.

Of the five circumstances, therefore, which vary the wages of labour, two only affect the profits of stock; the agreeableness or disagreeableness of the business, and the risk or security with which it is attended. In point of agreeableness or disagreeableness, there is little or no difference in the far greater part of the different employments of stock, but a great deal in those of labour; and the ordinary profit of stock, though it rises with the risk, does not always seem to rise in proportion to it. It should follow from all this, that, in the same society or neighbourhood, the average and ordinary rates of profit in the different employments of stock should be more nearly upon a level than the pecuniary wages of the different sorts of labour.

Of the five factors that affect wages, only two affect the profits on capital. These are how pleasant or unpleasant the business is and how risky or secure it is. Most uses of capital differ little, if at all, in how pleasant or unpleasant they are. Different kinds of work, however, differ greatly in this respect. And although the usual profit on capital rises with the risk, it does not always seem to rise proportionately. It should follow, then, that average and usual profit rates across different uses of capital are relatively similar within a society or neighborhood. They should be more similar than the money wages paid for different kinds of work.

They are so accordingly. The difference between the earnings of a common labourer and those of a well employed lawyer or physician, is evidently much greater than that between the ordinary profits in any two different branches of trade. The apparent difference, besides, in the profits of different trades, is generally a deception arising from our not always distinguishing what ought to be considered as wages, from what ought to be considered as profit.

And so they are. The difference between the earnings of an ordinary worker and a successful lawyer or doctor is clearly much greater than the difference between the usual profits of any two trades. Besides, the apparent difference in profits between trades is generally misleading. It arises because we do not always distinguish what should count as wages from what should count as profit.

Apothecaries’ profit is become a bye-word, denoting something uncommonly extravagant. This great apparent profit, however, is frequently no more than the reasonable wages of labour. The skill of an apothecary is a much nicer and more delicate matter than that of any artificer whatever; and the trust which is reposed in him is of much greater importance. He is the physician of the poor in all cases, and of the rich when the distress or danger is not very great. His reward, therefore, ought to be suitable to his skill and his trust; and it arises generally from the price at which he sells his drugs. But the whole drugs which the best employed apothecary in a large market-town, will sell in a year, may not perhaps cost him above thirty or forty pounds. 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.

Apothecaries’ profits have become a byword for something extraordinarily excessive. Yet this great apparent profit is often no more than reasonable pay for their work. An apothecary’s skill is much more precise and delicate than that of any craftsman. The trust placed in him is also much more important. He is the doctor for the poor in all cases. He also treats the rich when their illness or danger is not very great. His pay should therefore reflect his skill and the trust placed in him. It generally comes from the price he charges for his drugs. But even the busiest apothecary in a large market town may spend no more than thirty or forty pounds on all the drugs he sells in a year. So even if he sells them for three or four hundred pounds, or at a thousand percent profit, this may often be no more than reasonable pay for his work. He adds that pay to the price of his drugs, the only way he can charge for it. Most of the apparent profit is really pay for his work, disguised as profit.

In a small sea-port town, a little grocer will make forty or fifty per cent. upon a stock of a single hundred pounds, while a considerable wholesale merchant in the same place will scarce make eight or ten per cent. upon a stock of ten thousand. The trade of the grocer may be necessary for the conveniency of the inhabitants, and the narrowness of the market may not admit the employment of a larger capital in the business. The man, however, must not only live by his trade, but live by it suitably to the qualifications which it requires. Besides possessing a little capital, he must be able to read, write, and account and must be a tolerable judge, too, of perhaps fifty or sixty different sorts of goods, their prices, qualities, and the markets where they are to be had cheapest. He must have all the knowledge, in short, that is necessary for a great merchant, which nothing hinders him from becoming but the want of a sufficient capital. Thirty or forty pounds a year cannot be considered as too great a recompence for the labour of a person so accomplished. Deduct this from the seemingly great profits of his capital, and little more will remain, perhaps, than the ordinary profits of stock. The greater part of the apparent profit is, in this case too, real wages.

In a small seaport town, a small grocer may earn 40 or 50 percent on a stock of just £100. A substantial wholesale merchant in the same town will scarcely earn 8 or 10 percent on a stock of £10,000. The grocer’s business may be necessary for the convenience of the residents. The market may also be too small to allow a larger investment in the business. Yet the grocer must not only make a living from his trade. He must also make a living suited to the skills it requires. Besides having a little capital, he must be able to read, write, and keep accounts. He must also be a reasonably good judge of perhaps 50 or 60 kinds of goods. He must know their prices and qualities, and where to buy them most cheaply. In short, he must have all the knowledge a great merchant needs. Only a lack of sufficient capital prevents him from becoming one. Thirty or forty pounds a year cannot be considered excessive pay for the labor of such a skilled person. Deduct this amount from the seemingly large profits on his capital, and perhaps little more than the ordinary profit on capital will remain. Here too, most of the apparent profit is really wages.

The difference between the apparent profit of the retail and that of the wholesale trade, is much less in the capital than in small towns and country villages. Where ten thousand pounds can be employed in the grocery trade, the wages of the grocer’s labour must be a very trifling addition to the real profits of so great a stock. The apparent profits of the wealthy retailer, therefore, are there more nearly upon a level with those of the wholesale merchant. It is upon this account that goods sold by retail are generally as cheap, and frequently much cheaper, in the capital than in small towns and country villages. Grocery goods, for example, are generally much cheaper; bread and butchers’ meat frequently as cheap. It costs no more to bring grocery goods to the great town than to the country village; but it costs a great deal more to bring corn and cattle, as the greater part of them must be brought from a much greater distance. The prime cost of grocery goods, therefore, being the same in both places, they are cheapest where the least profit is charged upon them. The prime cost of bread and butchers’ meat is greater in the great town than in the country village; and though the profit is less, therefore they are not always cheaper there, but often equally cheap. In such articles as bread and butchers’ meat, the same cause which diminishes apparent profit, increases prime cost. The extent of the market, by giving employment to greater stocks, diminishes apparent profit; but by requiring supplies from a greater distance, it increases prime cost. This diminution of the one and increase of the other, seem, in most cases, nearly to counterbalance one another; which is probably the reason that, though the prices of corn and cattle are commonly very different in different parts of the kingdom, those of bread and butchers’ meat are generally very nearly the same through the greater part of it.

The difference between apparent retail and wholesale profits is much smaller in the capital than in small towns and villages. A grocer there may employ £10,000 in the business. The wages for the grocer’s labor would add very little to the real profits on such a large capital. The apparent profits of a wealthy retailer are therefore closer to those of a wholesale merchant. For this reason, retail goods are generally as cheap in the capital as in small towns and villages, and often cheaper. Groceries, for example, are generally much cheaper. Bread and meat are often just as cheap. It costs no more to bring groceries to the capital than to a village. But it costs much more to bring grain and cattle there, since most must come from much farther away. The original cost of groceries is therefore the same in both places. So groceries are cheapest where the smallest profit is charged on them. The original cost of bread and meat is greater in the capital than in a village. Although the profit is lower in the capital, bread and meat are not always cheaper there. But they are often just as cheap. For bread and meat, the same cause that reduces apparent profit also increases the original cost. A large market provides opportunities to employ more capital, reducing apparent profit. But it also requires supplies from farther away, increasing the original cost. In most cases, the lower profit and higher cost seem almost to balance each other out. This probably explains why bread and meat prices are generally much the same across most of the kingdom. They are much the same even though grain and cattle prices commonly differ greatly from one part of the kingdom to another.

Though the profits of stock, both in the wholesale and retail trade, are generally less in the capital than in small towns and country villages, yet great fortunes are frequently acquired from small beginnings in the former, and scarce ever in the latter. In small towns and country villages, on account of the narrowness of the market, trade cannot always be extended as stock extends. In such places, therefore, though the rate of a particular person’s profits may be very high, the sum or amount of them can never be very great, nor consequently that of his annual accumulation. In great towns, on the contrary, trade can be extended as stock increases, and the credit of a frugal and thriving man increases much faster than his stock. His trade is extended in proportion to the amount of both; and the sum or amount of his profits is in proportion to the extent of his trade, and his annual accumulation in proportion to the amount of his profits. It seldom happens, however, that great fortunes are made, even in great towns, by any one regular, established, and well-known branch of business, but in consequence of a long life of industry, frugality, and attention. Sudden fortunes, indeed, are sometimes made in such places, by what is called the trade of speculation. The speculative merchant exercises no one regular, established, or well-known branch of business. He is a corn merchant this year, and a wine merchant the next, and a sugar, tobacco, or tea merchant the year after. He enters into every trade, when he foresees that it is likely to be more than commonly profitable, and he quits it when he foresees that its profits are likely to return to the level of other trades. His profits and losses, therefore, can bear no regular proportion to those of any one established and well-known branch of business. A bold adventurer may sometimes acquire a considerable fortune by two or three successful speculations, but is just as likely to lose one by two or three unsuccessful ones. This trade can be carried on nowhere but in great towns. It is only in places of the most extensive commerce and correspondence that the intelligence requisite for it can be had.

Profits on invested capital are generally lower in the capital than in small towns and villages, in both wholesale and retail trade. Yet people in the capital often make great fortunes from small beginnings. People in small towns and villages scarcely ever do. Because their markets are small, merchants there cannot always expand their trade as their capital grows. So although a person’s rate of profit may be very high, the total profit can never be very great. Nor, therefore, can the amount saved each year. In great towns, by contrast, merchants can expand their trade as their capital grows. A frugal and successful man’s credit grows much faster than his capital. His trade expands in proportion to the amount of his capital and credit combined. His total profits grow in proportion to the size of his trade, and his yearly savings in proportion to his profits. Even in great towns, however, people rarely make great fortunes in a single regular, established, and well-known line of business. When they do, it is usually through a lifetime of hard work, thrift, and careful attention. But people in great towns sometimes make sudden fortunes through what is called speculative trading. A speculative merchant follows no single regular, established, or well-known line of business. He may be a grain merchant this year, a wine merchant the next, and a sugar, tobacco, or tea merchant the year after. He enters any trade when he expects it to be unusually profitable. He leaves it when he expects its profits to return to the level of other trades. His profits and losses therefore bear no regular proportion to those of any single established and well-known line of business. A bold speculator may sometimes make a considerable fortune through two or three successful speculations. But he is just as likely to lose a fortune through two or three unsuccessful ones. This kind of trading can be carried on only in great towns. Only places with the most extensive commerce and correspondence provide the information it requires.

The five circumstances above mentioned, though they occasion considerable inequalities in the wages of labour and profits of stock, occasion none in the whole of the advantages and disadvantages, real or imaginary, of the different employments of either. The nature of those circumstances is such, that they make up for a small pecuniary gain in some, and counterbalance a great one in others.

The five circumstances mentioned above cause considerable differences in wages and profits from capital. But they cause no differences in the overall advantages and disadvantages, real or imagined, of the different uses of labor or capital. These circumstances make up for low financial gains in some uses and offset high gains in others.

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 employments 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.

However, three conditions are necessary for jobs to be equal in their overall advantages and disadvantages, even with perfect freedom. First, the jobs must be well known and long established in the area. Second, they must be in their ordinary, or natural, state. Third, they must be the only or main jobs of the people who do them.

First, this equality can take place only in those employments which are well known, and have been long established in the neighbourhood.

First, this equality can occur only in jobs that are well known and have long been established in the local area.

Where all other circumstances are equal, wages are generally higher in new than in old trades. When a projector attempts to establish a new manufacture, he must at first entice his workmen from other employments, by higher wages than they can either earn in their own trades, or than the nature of his work would otherwise require; and a considerable time must pass away before he can venture to reduce them to the common level. Manufactures for which the demand arises altogether from fashion and fancy, are continually changing, and seldom last long enough to be considered as old established manufactures. Those, on the contrary, for which the demand arises chiefly from use or necessity, are less liable to change, and the same form or fabric may continue in demand for whole centuries together. The wages of labour, therefore, are likely to be higher in manufactures of the former, than in those of the latter kind. Birmingham deals chiefly in manufactures of the former kind; Sheffield in those of the latter; and the wages of labour in those two different places are said to be suitable to this difference in the nature of their manufactures.

All else being equal, wages are generally higher in new trades than in old ones. When someone tries to establish a new manufacturing business, they must first attract workers from other jobs. They must offer higher wages than workers can earn in their own trades, or than the new work would otherwise require. A considerable time must pass before the business owner can risk reducing wages to the usual level. Manufactured goods demanded entirely because of fashion and taste are constantly changing. The businesses that make them seldom last long enough to be considered well established. By contrast, goods demanded chiefly because they are useful or necessary are less likely to change. The same design or material may remain in demand for centuries. Wages are therefore likely to be higher in businesses making goods of the first kind than in those making the second. Birmingham mainly makes goods of the first kind, while Sheffield mainly makes goods of the second. Wages in the two places are said to reflect this difference in what they manufacture.

The establishment of any new manufacture, of any new branch of commerce, or of any new practice in agriculture, is always a speculation from which the projector promises himself extraordinary profits. These profits sometimes are very great, and sometimes, more frequently, perhaps, they are quite otherwise; but, in general, they bear no regular proportion to those of other old trades in the neighbourhood. If the project succeeds, they are commonly at first very high. When the trade or practice becomes thoroughly established and well known, the competition reduces them to the level of other trades.

Starting a new manufacturing business, a new branch of commerce, or a new farming practice is always a gamble. The person who starts it expects extraordinary profits. Sometimes these profits are very great. Perhaps more often, they are not. But in general, they bear no consistent relation to profits from established trades in the area. If the venture succeeds, profits are usually very high at first. Once the trade or practice is well established and widely known, competition brings profits down to the level of other trades.

Secondly, this equality in the whole of the advantages and disadvantages of the different employments of labour and stock, can take place only in the ordinary, or what may be called the natural state of those employments.

Secondly, the advantages and disadvantages of different uses of labor and capital can balance out only under ordinary conditions. These conditions may be called the natural state of those uses.

The demand for almost every different species of labour is sometimes greater, and sometimes less than usual. In the one case, the advantages of the employment rise above, in the other they fall below the common level. The demand for country labour is greater at hay-time and harvest than during the greater part of the year; and wages rise with the demand. In time of war, when forty or fifty thousand sailors are forced from the merchant service into that of the king, the demand for sailors to merchant ships necessarily rises with their scarcity; and their wages, upon such occasions, commonly rise from a guinea and seven-and-twenty shillings to forty shillings and three pounds a-month. In a decaying manufacture, on the contrary, many workmen, rather than quit their own trade, are contented with smaller wages than would otherwise be suitable to the nature of their employment.

Demand for almost every kind of labor is sometimes higher and sometimes lower than usual. When demand is higher, the benefits of the work rise above the usual level. When demand is lower, they fall below it. Demand for farm labor is greater during haymaking and harvest than during most of the year, and wages rise with demand. In wartime, forty or fifty thousand sailors are forced from merchant service into the king’s service. Their scarcity necessarily increases the demand for sailors on merchant ships. On such occasions, their wages commonly rise from a guinea or twenty-seven shillings to forty shillings or three pounds a month. In a declining industry, by contrast, many workers prefer to accept lower wages rather than leave their trade. These wages are lower than would otherwise be suitable for their work.

The profits of stock vary with the price of the commodities in which it is employed. As the price of any commodity rises above the ordinary or average rate, the profits of at least some part of the stock that is employed in bringing it to market, rise above their proper level, and as it falls they sink below it. All commodities are more or less liable to variations of price, but some are much more so than others. In all commodities which are produced by human industry, the quantity of industry annually employed is necessarily regulated by the annual demand, in such a manner that the average annual produce may, as nearly as possible, be equal to the average annual consumption. In some employments, it has already been observed, the same quantity of industry will always produce the same, or very nearly the same quantity of commodities. In the linen or woollen manufactures, for example, the same number of hands will annually work up very nearly the same quantity of linen and woollen cloth. The variations in the market price of such commodities, therefore, can arise only from some accidental variation in the demand. A public mourning raises the price of black cloth. But as the demand for most sorts of plain linen and woollen cloth is pretty uniform, so is likewise the price. But there are other employments in which the same quantity of industry will not always produce the same quantity of commodities. The same quantity of industry, for example, will, in different years, produce very different quantities of corn, wine, hops, sugar, tobacco, etc. The price of such commodities, therefore, varies not only with the variations of demand, but with the much greater and more frequent variations of quantity, and is consequently extremely fluctuating; but the profit of some of the dealers must necessarily fluctuate with the price of the commodities. The operations of the speculative merchant are principally employed about such commodities. He endeavours to buy them up when he foresees that their price is likely to rise, and to sell them when it is likely to fall.

Profits on capital vary with the prices of the goods in which it is invested. When the price of a good rises above its usual or average level, profits rise above their normal level too. This affects at least some of the capital used to bring the good to market. When the price falls, those profits fall below their normal level. The prices of all goods can change, but some change much more than others. For all goods produced by human labor, the amount of labor used each year is necessarily governed by annual demand. This ensures that average annual production comes as close as possible to average annual consumption. As already noted, in some industries the same amount of labor will always produce the same, or nearly the same, quantity of goods. In linen and wool manufacturing, for example, the same number of workers will produce nearly the same quantity of cloth each year. Changes in the market price of such goods can therefore arise only from an unexpected change in demand. A period of public mourning raises the price of black cloth. But demand for most kinds of plain linen and wool cloth is fairly steady, and so is their price. In other industries, however, the same amount of labor will not always produce the same quantity of goods. For example, the same amount of labor will produce very different quantities of grain, wine, hops, sugar, tobacco, and other goods in different years. The prices of these goods therefore vary not only with changes in demand, but also with changes in quantity. These changes in quantity are much greater and more frequent, so prices fluctuate greatly. The profits of some dealers must also fluctuate with the prices of the goods. Speculative merchants deal mainly in such goods. They try to buy them when they expect prices to rise and sell them when they expect prices to fall.

Thirdly, this equality in the whole of the advantages and disadvantages of the different employments of labour and stock, can take place only in such as are the sole or principal employments of those who occupy them.

Thirdly, the overall advantages and disadvantages of different uses of labor and capital can be equal only under one condition. Each must be the sole or main occupation of the people engaged in it.

When a person derives his subsistence from one employment, which does not occupy the greater part of his time, in the intervals of his leisure he is often willing to work at another for less wages than would otherwise suit the nature of the employment.

A person may earn a living from a job that does not take up most of their time. In their spare time, they are often willing to do another job for less pay than it would otherwise warrant.

There still subsists, in many parts of Scotland, a set of people called cottars or cottagers, though they were more frequent some years ago than they are now. They are a sort of out-servants of the landlords and farmers. The usual reward which they receive from their master is a house, a small garden for pot-herbs, as much grass as will feed a cow, and, perhaps, an acre or two of bad arable land. When their master has occasion for their labour, he gives them, besides, two pecks of oatmeal a-week, worth about sixteen pence sterling. During a great part of the year, he has little or no occasion for their labour, and the cultivation of their own little possession is not sufficient to occupy the time which is left at their own disposal. When such occupiers were more numerous than they are at present, they are said to have been willing to give their spare time for a very small recompence to any body, and to have wrought for less wages than other labourers. In ancient times, they seem to have been common all over Europe. In countries ill cultivated, and worse inhabited, the greater part of landlords and farmers could not otherwise provide themselves with the extraordinary number of hands which country labour requires at certain seasons. The daily or weekly recompence which such labourers occasionally received from their masters, was evidently not the whole price of their labour. Their small tenement made a considerable part of it. This daily or weekly recompence, however, seems to have been considered as the whole of it, by many writers who have collected the prices of labour and provisions in ancient times, and who have taken pleasure in representing both as wonderfully low.

In many parts of Scotland, there are still people called cottars or cottagers, though they were more common some years ago. They are a kind of outside servant to landlords and farmers. Their master usually pays them with a house, a small vegetable garden, and enough grazing land to feed a cow. He may also give them an acre or two of poor farmland. When their master needs their labor, he also gives them two pecks of oatmeal a week, worth about sixteen pence sterling. For much of the year, he has little or no need for their labor. Nor does working their own small holding fill the time they have to themselves. When there were more cottars than there are now, they are said to have been willing to work for anyone for very little pay in their spare time. They are also said to have worked for lower wages than other laborers. In ancient times, cottars seem to have been common throughout Europe. In countries where the land was poorly cultivated and settlement was even sparser, most landlords and farmers had no other way to find the extra workers that farm work requires at certain seasons. The daily or weekly pay these laborers sometimes received from their masters was clearly not their full compensation. Their small holding made up a considerable part of it. Yet many writers who have collected the prices of labor and provisions in ancient times seem to have treated this pay as their full compensation. These writers have taken pleasure in describing both wages and prices as astonishingly low.

The produce of such labour comes frequently cheaper to market than would otherwise be suitable to its nature. Stockings, in many parts of Scotland, are knit much cheaper than they can anywhere be wrought upon the loom. They are the work of servants and labourers who derive the principal part of their subsistence from some other employment. More than a thousand pair of Shetland stockings are annually imported into Leith, of which the price is from fivepence to seven-pence a pair. At Lerwick, the small capital of the Shetland islands, tenpence a-day, I have been assured, is a common price of common labour. In the same islands, they knit worsted stockings to the value of a guinea a pair and upwards.

The products of such labor often reach the market at a lower price than their nature would otherwise suggest. In many parts of Scotland, stockings are knitted much more cheaply than they can be made on a loom anywhere. They are made by servants and laborers who earn most of their living from other work. More than a thousand pairs of Shetland stockings are imported into Leith each year. They cost fivepence to sevenpence a pair. I have been assured that in Lerwick, the small capital of the Shetland islands, ordinary labor commonly costs tenpence a day. In the same islands, people knit worsted stockings worth a guinea a pair or more.

The spinning of linen yarn is carried on in Scotland nearly in the same way as the knitting of stockings, by servants, who are chiefly hired for other purposes. They earn but a very scanty subsistence, who endeavour to get their livelihood by either of those trades. In most parts of Scotland, she is a good spinner who can earn twentypence a-week.

In Scotland, linen yarn is spun much like stockings are knitted, by servants hired mainly for other work. People who try to make a living from either trade earn barely enough to survive. In most parts of Scotland, a woman is considered a good spinner if she can earn twenty pence a week.

In opulent countries, the market is generally so extensive, that any one trade is sufficient to employ the whole labour and stock of those who occupy it. Instances of people living by one employment, and, at the same time, deriving some little advantage from another, occur chiefly in poor countries. The following instance, however, of something of the same kind, is to be found in the capital of a very rich one. There is no city in Europe, I believe, in which house-rent is dearer than in London, and yet I know no capital in which a furnished apartment can be hired so cheap. Lodging is not only much cheaper in London than in Paris; it is much cheaper than in Edinburgh, of the same degree of goodness; and, what may seem extraordinary, the dearness of house-rent is the cause of the cheapness of lodging. The dearness of house-rent in London arises, not only from those causes which render it dear in all great capitals, the dearness of labour, the dearness of all the materials of building, which must generally be brought from a great distance, and, above all, the dearness of ground-rent, every landlord acting the part of a monopolist, and frequently exacting a higher rent for a single acre of bad land in a town, than can be had for a hundred of the best in the country; but it arises in part from the peculiar manners and customs of the people, which oblige every master of a family to hire a whole house from top to bottom. A dwelling-house in England means every thing that is contained under the same roof. In France, Scotland, and many other parts of Europe, it frequently means no more than a single storey. A tradesman in London is obliged to hire a whole house in that part of the town where his customers live. His shop is upon the ground floor, and he and his family sleep in the garret; and he endeavours to pay a part of his house-rent by letting the two middle storeys to lodgers. He expects to maintain his family by his trade, and not by his lodgers. Whereas at Paris and Edinburgh, people who let lodgings have commonly no other means of subsistence; and the price of the lodging must pay, not only the rent of the house, but the whole expense of the family.

In wealthy countries, the market is usually large enough for one trade to occupy all the labor and capital of those engaged in it. People who make a living from one occupation while gaining a little from another are found chiefly in poor countries. Something of the same kind, however, can be found in the capital of a very rich country. I believe house rents are higher in London than in any other European city. Yet I know no capital where a furnished apartment can be rented so cheaply. Lodgings in London are much cheaper than lodgings of the same quality in Paris or even Edinburgh. What may seem extraordinary is that high house rents cause lodgings to be cheap. London's high house rents arise partly from the causes that make rents high in all great capitals. Labor and building materials are expensive. The materials generally have to be brought from a great distance. Above all, land rent is expensive. Every landlord acts as a monopolist, often demanding more rent for one acre of poor land in town than for a hundred acres of the best land in the country. But London's high house rents also arise partly from the people's particular manners and customs. These oblige every head of a family to rent a whole house from top to bottom. In England, a dwelling house means everything under one roof. In France, Scotland, and many other parts of Europe, it often means only one floor. A London tradesman must rent a whole house in the part of town where his customers live. His shop is on the ground floor, and he and his family sleep in the attic. He tries to pay part of his house rent by renting the two middle floors to lodgers. He expects to support his family through his trade, not through his lodgers. In Paris and Edinburgh, however, people who rent out lodgings usually have no other means of support. The price of the lodging must therefore cover not only the rent of the house, but all the family's expenses.

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.

These are the inequalities in the overall advantages and disadvantages of different uses of labor and capital. A lack of any of the three conditions mentioned above must cause these inequalities, even where there is perfect freedom. But European policy does not leave things entirely free. It causes other, much greater inequalities.

It does this chiefly in the three following ways. First, by restraining the competition in some employments to a smaller number than would otherwise be disposed to enter into them; secondly, by increasing it in others beyond what it naturally would be; and, thirdly, by obstructing the free circulation of labour and stock, both from employment to employment, and from place to place.

It does this mainly in three ways. First, it limits competition in some occupations, keeping out people who would otherwise enter them. Second, it increases competition in other occupations beyond what it would naturally be. Third, it restricts the free movement of labor and capital between occupations and between places.

First, The policy of Europe occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock, by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them.

First, European policy creates a major inequality in the overall advantages and disadvantages of different uses of labor and capital. It does this by limiting competition in some occupations to fewer people than might otherwise be willing to enter them.

The exclusive privileges of corporations are the principal means it makes use of for this purpose.

It mainly uses the exclusive privileges of corporations for this purpose.

The exclusive privilege of an incorporated trade necessarily restrains the competition, in the town where it is established, to those who are free of the trade. To have served an apprenticeship in the town, under a master properly qualified, is commonly the necessary requisite for obtaining this freedom. The bye-laws of the corporation regulate sometimes the number of apprentices which any master is allowed to have, and almost always the number of years which each apprentice is obliged to serve. The intention of both regulations is to restrain the competition to a much smaller number than might otherwise be disposed to enter into the trade. The limitation of the number of apprentices restrains it directly. A long term of apprenticeship restrains it more indirectly, but as effectually, by increasing the expense of education.

The exclusive rights of an incorporated trade necessarily limit competition in the town where it is established. Only those who have the right to practice the trade may compete. To gain this right, a person usually must have completed an apprenticeship in the town under a properly qualified master. The corporation's bylaws sometimes limit the number of apprentices a master may have. They also almost always set the number of years each apprentice must serve. Both rules are intended to limit competition to far fewer people than might otherwise be willing to enter the trade. Limiting the number of apprentices restricts competition directly. A long apprenticeship restricts competition more indirectly, but just as effectively, by making training more expensive.

In Sheffield, no master cutler can have more than one apprentice at a time, by a bye-law of the corporation. In Norfolk and Norwich, no master weaver can have more than two apprentices, under pain of forfeiting five pounds a-month to the king. No master hatter can have more than two apprentices anywhere in England, or in the English plantations, under pain of forfeiting; five pounds a-month, half to the king, and half to him who shall sue in any court of record. Both these regulations, though they have been confirmed by a public law of the kingdom, are evidently dictated by the same corporation-spirit which enacted the bye-law of Sheffield. The silk-weavers in London had scarce been incorporated a year, when they enacted a bye-law, restraining any master from having more than two apprentices at a time. It required a particular act of parliament to rescind this bye-law.

In Sheffield, a corporation bylaw limits master cutlers to one apprentice at a time. In Norfolk and Norwich, master weavers can have no more than two apprentices. Those who break this rule must pay the king five pounds a month. No master hatter can have more than two apprentices anywhere in England or the English plantations. Those who break this rule must pay five pounds a month. Half goes to the king, and half to the person who sues in a court of record. Both these rules have been confirmed by a public law of the kingdom. Yet they clearly come from the same corporation spirit that produced the Sheffield bylaw. The London silk weavers had barely been incorporated for a year when they passed a bylaw. It barred any master from having more than two apprentices at a time. A special act of Parliament was needed to repeal this bylaw.

Seven years seem anciently to have been, all over Europe, the usual term established for the duration of apprenticeships in the greater part of 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 tailors, etc. are expressions which we commonly meet with in the old charters of ancient towns. When those particular incorporations, which are now peculiarly called universities, were first established, the term of years which it was necessary to study, in order to obtain the degree of master of arts, appears evidently to have been copied from the term of apprenticeship in common trades, of which the incorporations were much more ancient. As to have wrought seven years under a master properly qualified, was necessary, in order to entitle any person to become a master, and to have himself apprentices in a common trade; so to have studied seven years under a master properly qualified, was necessary to entitle him to become a master, teacher, or doctor (words anciently synonymous), in the liberal arts, and to have scholars or apprentices (words likewise originally synonymous) to study under him.

In the past, seven years seems to have been the usual length of apprenticeship throughout Europe in most incorporated trades. All such trade associations were once called universities. Indeed, university is the proper Latin name for any association of this kind. In the old charters of ancient towns, we often find references to the university of smiths, the university of tailors, and so on. When the associations now known specifically as universities were first established, they required years of study for a master of arts degree. This period of study was evidently copied from the term of apprenticeship in ordinary trades. The associations of those trades were much older. To become a master in an ordinary trade and take on apprentices, a person had to work for seven years under a properly qualified master. Similarly, to become a master, teacher, or doctor in the liberal arts, a person had to study for seven years under a properly qualified master. Master, teacher, and doctor were once synonymous. Once qualified, the new master could have scholars or apprentices study under him. Scholar and apprentice were also originally synonymous.

By the 5th of Elizabeth, commonly called the Statute of Apprenticeship, it was enacted, that no person should, for the future, exercise any trade, craft, or mystery, at that time exercised in England, unless he had previously served to it an apprenticeship of seven years at least; and what before had been the bye-law of many particular corporations, became in England the general and public law of all trades carried on in market towns. For though the words of the statute are very general, and seem plainly to include the whole kingdom, by interpretation its operation has been limited to market towns; it having been held that, in country villages, a person may exercise several different trades, though he has not served a seven years apprenticeship to each, they being necessary for the conveniency of the inhabitants, and the number of people frequently not being sufficient to supply each with a particular set of hands. By a strict interpretation of the words, too, the operation of this statute has been limited to those trades which were established in England before the 5th of Elizabeth, and has never been extended to such as have been introduced since that time. This limitation has given occasion to several distinctions, which, considered as rules of police, appear as foolish as can well be imagined. It has been adjudged, for example, that a coach-maker can neither himself make nor employ journeymen to make his coach-wheels, but must buy them of a master wheel-wright; this latter trade having been exercised in England before the 5th of Elizabeth. But a wheel-wright, though he has never served an apprenticeship to a coachmaker, may either himself make or employ journeymen to make coaches; the trade of a coachmaker not being within the statute, because not exercised in England at the time when it was made. The manufactures of Manchester, Birmingham, and Wolverhampton, are many of them, upon this account, not within the statute, not having been exercised in England before the 5th of Elizabeth.

A law passed in the fifth year of Elizabeth’s reign was commonly called the Statute of Apprenticeship. It declared that no one could practice any trade or craft then practiced in England without first serving an apprenticeship of at least seven years. What had been a bylaw of many individual corporations thus became public law for all trades in England’s market towns. Although the statute’s wording is very broad and seems plainly to cover the whole kingdom, its application has been limited by interpretation to market towns. The courts have held that a person in a country village may practice several trades without serving a seven-year apprenticeship in each. These trades are necessary for the convenience of the inhabitants. The population is also often too small to provide a separate set of workers for each trade. A strict interpretation of the statute’s wording has also limited its application to trades established in England before the fifth year of Elizabeth’s reign. It has never been extended to trades introduced since then. This limitation has led to several distinctions that, as rules of public regulation, seem as foolish as can well be imagined. For example, the courts have ruled that a coachmaker may neither make coach wheels himself nor employ journeymen to make them. He must buy them from a master wheelwright, because wheelwrights practiced their trade in England before the fifth year of Elizabeth’s reign. But a wheelwright who has never served an apprenticeship to a coachmaker may make coaches himself or employ journeymen to make them. The coachmaking trade is not covered by the statute because it was not practiced in England when the statute was made. For the same reason, many of the manufactures of Manchester, Birmingham, and Wolverhampton are not covered by the statute. They were not practiced in England before the fifth year of Elizabeth’s reign.

In France, the duration of apprenticeships is different in different towns and in different trades. In Paris, five years is the term required in a great number; but, before any person can be qualified to exercise the trade as a master, he must, in many of them, serve five years more as a journeyman. During this latter term, he is called the companion of his master, and the term itself is called his companionship.

In France, apprenticeships vary in length from one town and trade to another. In Paris, many trades require five years. But in many of them, a person must serve another five years as a journeyman before qualifying as a master. During those five years, the journeyman is called his master's companion. The period itself is called his companionship.

In Scotland, there is no general law which regulates universally the duration of apprenticeships. The term is different in different corporations. Where it is long, a part of it may generally be redeemed by paying a small fine. In most towns, too, a very small fine is sufficient to purchase the freedom of any corporation. The weavers of linen and hempen cloth, the principal manufactures of the country, as well as all other artificers subservient to them, wheel-makers, reel-makers, etc. may exercise their trades in any town-corporate without paying any fine. In all towns-corporate, all persons are free to sell butchers’ meat upon any lawful day of the week. Three years is, in Scotland, a common term of apprenticeship, even in some very nice trades; and, in general, I know of no country in Europe, in which corporation laws are so little oppressive.

In Scotland, no general law sets the length of apprenticeships everywhere. The term differs among guilds. Where the term is long, an apprentice can generally shorten it by paying a small fine. In most towns, a very small fine is also enough to buy membership in any guild. Linen and hemp cloth are Scotland’s principal manufactured goods. Weavers of these fabrics may work in any incorporated town without paying a fine. The same is true of all other craftspeople who support them, such as wheel-makers and reel-makers. In all incorporated towns, anyone may sell meat on any lawful day of the week. In Scotland, three years is a common term of apprenticeship, even in some highly skilled trades. In general, I know of no country in Europe where guild laws are so little oppressive.

The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbour, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty, both of the workman, and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper. To judge whether he is fit to be employed, may surely be trusted to the discretion of the employers, whose interest it so much concerns. The affected anxiety of the lawgiver, lest they should employ an improper person, is evidently as impertinent as it is oppressive.

Each person's ownership of their own labor is the original foundation of all other property. It is also the most sacred and inviolable. A poor man's inheritance is the strength and skill of his hands. He should be free to use them as he sees fit, as long as he does not harm his neighbor. To prevent him from doing so plainly violates this most sacred property. It clearly infringes on the rightful freedom of both the worker and those who might want to employ him. It prevents the worker from doing the work he chooses. It also prevents others from employing whom they choose. Surely employers can be trusted to judge whether a worker is fit for the job. After all, they have a strong interest in making that judgment. The lawmaker's show of concern that they might hire the wrong person is clearly as meddlesome as it is oppressive.

The institution of long apprenticeships can give no security that insufficient workmanship shall not frequently be exposed to public sale. When this is done, it is generally the effect of fraud, and not of inability; and the longest apprenticeship can give no security against fraud. Quite different regulations are necessary to prevent this abuse. The sterling mark upon plate, and the stamps upon linen and woollen cloth, give the purchaser much greater security than any statute of apprenticeship. He generally looks at these, but never thinks it worth while to enquire whether the workman had served a seven years apprenticeship.

Long apprenticeships cannot prevent poorly made goods from being sold to the public. This generally happens because of fraud, not lack of skill. Even the longest apprenticeship cannot prevent fraud. Quite different rules are needed to prevent this abuse. The sterling mark on silverware and the stamps on linen and wool cloth give buyers much greater protection than any apprenticeship law. Buyers generally look for these marks, but never think it worth asking whether the worker served a seven-year apprenticeship.

The institution of long apprenticeships has no tendency to form young people to industry. A journeyman who works by the piece is likely to be industrious, because he derives a benefit from every exertion of his industry. An apprentice is likely to be idle, and almost always is so, because he has no immediate interest to be otherwise. In the inferior employments, the sweets of labour consist altogether in the recompence of labour. They who are soonest in a condition to enjoy the sweets of it, are likely soonest to conceive a relish for it, and to acquire the early habit of industry. A young man naturally conceives an aversion to labour, when for a long time he receives no benefit from it. The boys who are put out apprentices from public charities are generally bound for more than the usual number of years, and they generally turn out very idle and worthless.

Long apprenticeships do not help young people develop habits of hard work. A journeyman paid by the piece is likely to work hard because he benefits from every effort he makes. An apprentice is likely to be idle, and almost always is, because he has no immediate reason to work hard. In lower occupations, the pleasure of work comes entirely from its reward. Those who can enjoy that reward earliest are likely to develop a taste for work and a habit of working hard earliest. A young man naturally comes to dislike work when he receives no benefit from it for a long time. Boys placed in apprenticeships by public charities are generally bound for longer than usual. They generally turn out to be very idle and worthless.

Apprenticeships were altogether unknown to the ancients. The reciprocal duties of master and apprentice make a considerable article in every modern code. The Roman law is perfectly silent with regard to them. I know no Greek or Latin word (I might venture, I believe, to assert that there is none) which expresses the idea we now annex to the word apprentice, a servant bound to work at a particular trade for the benefit of a master, during a term of years, upon condition that the master shall teach him that trade.

Apprenticeships were completely unknown to the ancients. The duties masters and apprentices owe each other form a significant part of every modern law code. Roman law says nothing about them. I know of no Greek or Latin word that expresses what we now mean by apprentice. I believe I could even venture to say that there is none. An apprentice is a servant bound to work at a particular trade for a master's benefit for a set number of years, on condition that the master teaches the servant the trade.

Long apprenticeships are altogether unnecessary. The arts, which are much superior to common trades, such as those of making clocks and watches, contain no such mystery as to require a long course of instruction. The first invention of such beautiful machines, indeed, and even that of some of the instruments employed in making them, must no doubt have been the work of deep thought and long time, and may justly be considered as among the happiest efforts of human ingenuity. But when both have been fairly invented, and are well understood, to explain to any young man, in the completest manner, how to apply the instruments, and how to construct the machines, cannot well require more than the lessons of a few weeks; perhaps those of a few days might be sufficient. In the common mechanic trades, those of a few days might certainly be sufficient. The dexterity of hand, indeed, even in common trades, cannot be acquired without much practice and experience. But a young man would practice with much more diligence and attention, if from the beginning he wrought as a journeyman, being paid in proportion to the little work which he could execute, and paying in his turn for the materials which he might sometimes spoil through awkwardness and inexperience. His education would generally in this way be more effectual, and always less tedious and expensive. The master, indeed, would be a loser. He would lose all the wages of the apprentice, which he now saves, for seven years together. In the end, perhaps, the apprentice himself would be a loser. In a trade so easily learnt he would have more competitors, and his wages, when he came to be a complete workman, would be much less than at present. The same increase of competition would reduce the profits of the masters, as well as the wages of workmen. The trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.

Long apprenticeships are entirely unnecessary. Even crafts far more advanced than ordinary trades, such as clockmaking and watchmaking, contain no secrets that require years of instruction. The first invention of these beautiful machines must have required deep thought and much time. The same is true even of some of the tools used to make them. These inventions can rightly be counted among the finest achievements of human ingenuity. But once the machines and tools have been invented and are well understood, a few weeks of lessons should be enough to explain their use and construction fully to any young man. Perhaps a few days would be enough. For ordinary mechanical trades, a few days would certainly be enough. Even in ordinary trades, manual skill can be acquired only through much practice and experience. But a young man would practice more diligently and carefully if he worked as a journeyman from the start. He would be paid according to the small amount of work he could do. In turn, he would pay for any materials he sometimes spoiled through clumsiness and inexperience. His training would generally be more effective this way, and it would always be less tedious and expensive. The master, however, would lose out. He would lose all the wages he now saves by employing an apprentice for seven years. In the end, perhaps the apprentice himself would lose out. In a trade so easily learned, he would have more competitors. His wages, once he became a fully trained worker, would be much lower than they are now. The same increase in competition would reduce masters' profits as well as workers' wages. The trades, the crafts, and their secrets would all lose out. But the public would gain, because the work of all craftsmen would reach the market much more cheaply.

It is to prevent this reduction of price, and consequently of wages and profit, by restraining that free competition which would most certainly occasion it, that all corporations, and the greater part of corporation laws have been established. In order to erect a corporation, no other authority in ancient times was requisite, in many parts of Europe, but that of the town-corporate in which it was established. In England, indeed, a charter from the king was likewise necessary. But this prerogative of the crown seems to have been reserved rather for extorting money from the subject, than for the defence of the common liberty against such oppressive monopolies. Upon paying a fine to the king, the charter seems generally to have been readily granted; and when any particular class of artificers or traders thought proper to act as a corporation, without a charter, such adulterine guilds, as they were called, were not always disfranchised upon that account, but obliged to fine annually to the king, for permission to exercise their usurped privileges {See Madox Firma Burgi p. 26 etc.}. The immediate inspection of all corporations, and of the bye-laws which they might think proper to enact for their own government, belonged to the town-corporate in which they were established; and whatever discipline was exercised over them, proceeded commonly, not from the king, but from that greater incorporation of which those subordinate ones were only parts or members.

All corporations and most corporation laws were established to prevent this fall in prices, and therefore in wages and profits. They did so by restricting the free competition that would most certainly have caused it. In ancient times, in many parts of Europe, establishing a corporation required only the authority of the town corporation where it was established. In England, a charter from the king was also necessary. But this royal prerogative seems to have been reserved for extorting money from subjects, rather than defending public liberty against such oppressive monopolies. A charter seems generally to have been readily granted upon payment of a fine to the king. Sometimes a particular class of craftsmen or traders chose to act as a corporation without a charter. These unchartered guilds, known as adulterine guilds, were not always deprived of their rights for that reason. Instead, they were required to pay an annual fine to the king for permission to exercise their usurped privileges {See Madox Firma Burgi p. 26 etc.}. The town corporation where each corporation was established was responsible for directly overseeing it and any bylaws it chose to enact for its own governance. Any discipline imposed on these corporations usually came not from the king, but from the larger corporation of which they were subordinate parts or members.

The government of towns-corporate was altogether in the hands of traders and artificers, and it was the manifest interest of every particular class of them, to prevent the market from being overstocked, as they commonly express it, with their own particular species of industry; which is in reality to keep it always understocked. Each class was eager to establish regulations proper for this purpose, and, provided it was allowed to do so, was willing to consent that every other class should do the same. In consequence of such regulations, indeed, each class was obliged to buy the goods they had occasion for from every other within the town, somewhat dearer than they otherwise might have done. But, in recompence, they were enabled to sell their own just as much dearer; so that, so far it was as broad as long, as they say; and in the dealings of the different classes within the town with one another, none of them were losers by these regulations. But in their dealings with the country they were all great gainers; and in these latter dealings consist the whole trade which supports and enriches every town.

The government of incorporated towns was entirely in the hands of merchants and craftspeople. Each group clearly had an interest in preventing the market from being overstocked, as they usually put it, with workers in its own trade. In reality, this meant keeping the market permanently undersupplied. Each group was eager to establish regulations for that purpose. As long as it was allowed to do so, it was willing to let every other group do the same. These regulations did force each group to pay somewhat more for the goods it needed from other groups in town. But in return, each group could sell its own goods for just as much more. So, as the saying goes, it all evened out. In their dealings with one another within the town, none of the groups lost out because of these regulations. But in their dealings with the countryside, they all gained a great deal. These dealings make up all the trade that supports and enriches every town.

Every town draws its whole subsistence, and all the materials of its industry, from the: country. It pays for these chiefly in two ways. First, by sending back to the country a part of those materials wrought up and manufactured; in which case, their price is augmented by the wages of the workmen, and the profits of their masters or immediate employers; secondly, by sending to it a part both of the rude and manufactured produce, either of other countries, or of distant parts of the same country, imported into the town; in which case, too, the original price of those goods is augmented by the wages of the carriers or sailors, and by the profits of the merchants who employ them. In what is gained upon the first of those branches of commerce, consists the advantage which the town makes by its manufactures; in what is gained upon the second, the advantage of its inland and foreign trade. The wages of the workmen, and the profits of their different employers, make up the whole of what is gained upon both. Whatever regulations, therefore, tend to increase those wages and profits beyond what they otherwise: would be, tend to enable the town to purchase, with a smaller quantity of its labour, the produce of a greater quantity of the labour of the country. They give the traders and artificers in the town an advantage over the landlords, farmers, and labourers, in the country, and break down that natural equality which would otherwise take place in the commerce which is carried on between them. The whole annual produce of the labour of the society is annually divided between those two different sets of people. By means of those regulations, a greater share of it is given to the inhabitants of the town than would otherwise fall to them, and a less to those of the country.

Every town gets all its food and all the materials for its industry from the countryside. It pays for them chiefly in two ways. First, it sends some of those materials back to the countryside as manufactured goods. Their price has increased by the amount of the workers’ wages and the profits of their masters or immediate employers. Second, the town sends back some of the raw and manufactured goods it has imported. These goods come from other countries or distant parts of the same country. Their original price has also increased by the carriers’ or sailors’ wages and the profits of the merchants who employ them. What the town gains from the first branch of trade is its advantage from manufacturing. What it gains from the second is its advantage from domestic and foreign trade. The workers’ wages and their various employers’ profits make up everything gained from both branches. Regulations may therefore raise those wages and profits above what they would otherwise be. Such regulations allow the town to buy the produce of more of the countryside’s labour with less of its own labour. They give town traders and craftspeople an advantage over country landlords, farmers, and labourers. They also break down the natural equality that would otherwise exist in trade between them. Each year, the entire annual produce of society’s labour is divided between these two groups. Because of these regulations, town residents receive a greater share than they otherwise would, and country residents receive less.

The price which the town really pays for the provisions and materials annually imported into it, is the quantity of manufactures and other goods annually exported from it. The dearer the latter are sold, the cheaper the former are bought. The industry of the town becomes more, and that of the country less advantageous.

The town pays for the food and materials it imports each year with the manufactured goods and other products it exports. The higher the price of those exports, the cheaper the imports are to buy. Industry in the town becomes more profitable, while industry in the country becomes less profitable.

That the industry which is carried on in towns is, everywhere in Europe, more advantageous than that which is carried on in the country, without entering into any very nice computations, we may satisfy ourselves by one very simple and obvious observation. In every country of Europe, we find at least a hundred people who have acquired great fortunes, from small beginnings, by trade and manufactures, the industry which properly belongs to towns, for one who has done so by that which properly belongs to the country, the raising of rude produce by the improvement and cultivation of land. Industry, therefore, must be better rewarded, the wages of labour and the profits of stock must evidently be greater, in the one situation than in the other. But stock and labour naturally seek the most advantageous employment. They naturally, therefore, resort as much as they can to the town, and desert the country.

A simple observation shows that work in towns is more profitable than work in the country everywhere in Europe. We need not make any very precise calculations to see this. In every European country, at least a hundred people have made great fortunes from small beginnings through trade and manufacturing. These are the kinds of work that properly belong to towns. For every hundred who have done this, only one has made a fortune through work that properly belongs to the country. That work is the production of raw materials by improving and cultivating land. Work must therefore be better rewarded in towns than in the country. Wages and profits on capital must clearly be greater in towns. But capital and labor naturally seek the most profitable use. They therefore move to towns as much as they can and leave the country.

The inhabitants of a town being collected into one place, can easily combine together. The most insignificant trades carried on in towns have, accordingly, in some place or other, been incorporated; and even where they have never been incorporated, yet the corporation-spirit, the jealousy of strangers, the aversion to take apprentices, or to communicate the secret of their trade, generally prevail in them, and often teach them, by voluntary associations and agreements, to prevent that free competition which they cannot prohibit by bye-laws. The trades which employ but a small number of hands, run most easily into such combinations. Half-a-dozen wool-combers, perhaps, are necessary to keep a thousand spinners and weavers at work. By combining not to take apprentices, they can not only engross the employment, but reduce the whole manufacture into a sort of slavery to themselves, and raise the price of their labour much above what is due to the nature of their work.

Because townspeople live close together, they can easily join forces. Accordingly, even the most insignificant town trades have formed official guilds in one place or another. And even where they have never formed guilds, the guild spirit generally prevails. These trades are generally suspicious of outsiders, reluctant to take apprentices, and unwilling to share trade secrets. They often use voluntary associations and agreements to prevent the free competition they cannot prohibit through bylaws. Trades that employ only a few workers form such combinations most easily. Perhaps half a dozen wool-combers are needed to keep a thousand spinners and weavers at work. By agreeing not to take apprentices, they can monopolize the work. They can also reduce the whole industry to a kind of slavery to themselves. And they can raise the price of their labor far above what the nature of their work warrants.

The inhabitants of the country, dispersed in distant places, cannot easily combine together. They have not only never been incorporated, but the incorporation spirit never has prevailed among them. No apprenticeship has ever been thought necessary to qualify for husbandry, the great trade of the country. After what are called the fine arts, and the liberal professions, however, there is perhaps no trade which requires so great a variety of knowledge and experience. The innumerable volumes which have been written upon it in all languages, may satisfy us, that among the wisest and most learned nations, it has never been regarded as a matter very easily understood. And from all those volumes we shall in vain attempt to collect that knowledge of its various and complicated operations which is commonly possessed even by the common farmer; how contemptuously soever the very contemptible authors of some of them may sometimes affect to speak of him. There is scarce any common mechanic trade, on the contrary, of which all the operations may not be as completely and distinctly explained in a pamphlet of a very few pages, as it is possible for words illustrated by figures to explain them. In the history of the arts, now publishing by the French Academy of Sciences, several of them are actually explained in this manner. The direction of operations, besides, which must be varied with every change of the weather, as well as with many other accidents, requires much more judgment and discretion, than that of those which are always the same, or very nearly the same.

Country people live scattered in distant places and cannot easily join together. They have never formed corporations, and the spirit of forming them has never prevailed among them. No apprenticeship has ever been thought necessary to qualify someone for farming, the great trade of the countryside. Yet, apart from the fine arts and the liberal professions, perhaps no trade requires such varied knowledge and experience. Countless volumes have been written about farming in every language. They may convince us that the wisest and most learned nations have never regarded it as easily understood. Yet we would search all those volumes in vain for the knowledge of farming’s varied and complicated operations that even the ordinary farmer commonly possesses. Some truly contemptible authors of those volumes may sometimes pretend to speak of him with contempt. By contrast, nearly every common mechanical trade can be fully and clearly explained in a pamphlet of very few pages. Such a pamphlet can explain all its operations as fully as words and illustrations allow. Several trades are actually explained in this way in the history of the arts now being published by the French Academy of Sciences. Moreover, directing farm operations requires much more judgment and discretion than directing operations that are always the same, or nearly the same. Farm operations must change with every change in the weather and with many other unforeseen events.

Not only the art of the farmer, the general direction of the operations of husbandry, but many inferior branches of country labour require much more skill and experience than the greater part of mechanic trades. The man who works upon brass and iron, works with instruments, and upon materials of which the temper is always the same, or very nearly the same. But the man who ploughs the ground with a team of horses or oxen, works with instruments of which the health, strength, and temper, are very different upon different occasions. The condition of the materials which he works upon, too, is as variable as that of the instruments which he works with, and both require to be managed with much judgment and discretion. The common ploughman, though generally regarded as the pattern of stupidity and ignorance, is seldom defective in this judgment and discretion. He is less accustomed, indeed, to social intercourse, than the mechanic who lives in a town. His voice and language are more uncouth, and more difficult to be understood by those who are not used to them. His understanding, however, being accustomed to consider a greater variety of objects, is generally much superior to that of the other, whose whole attention, from morning till night, is commonly occupied in performing one or two very simple operations. How much the lower ranks of people in the country are really superior to those of the town, is well known to every man whom either business or curiosity has led to converse much with both. 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.

Not only farming itself and the general management of farm work, but also many lesser kinds of rural labor, require far more skill and experience than most trades. A worker in brass or iron uses tools and materials whose properties are always the same, or nearly so. But a man who plows with a team of horses or oxen works with animals whose health, strength, and temperament vary greatly. The condition of the ground he works is just as variable. Both the animals and the ground require careful judgment and discretion. The ordinary plowman is generally held up as a model of stupidity and ignorance. Yet he seldom lacks this judgment and discretion. The plowman is, indeed, less accustomed to social interaction than a tradesman who lives in town. His voice and language are rougher and harder to understand for those unfamiliar with them. But his mind is accustomed to considering a greater variety of things. His understanding is therefore generally much superior to that of the tradesman. The tradesman’s attention is usually occupied from morning to night with performing one or two very simple tasks. Anyone whose business or curiosity has led him to speak often with both groups knows how much superior the lower ranks of country people really are to those of the town. Accordingly, in China and Indostan, rural laborers are said to have both higher status and higher wages than most craftspeople and manufacturing workers. They would probably have both everywhere if guild laws and the guild spirit did not prevent it.

The superiority which the industry of the towns has everywhere in Europe over that of the country, is not altogether owing to corporations and corporation laws. It is supported by many other regulations. The high duties upon foreign manufactures, and upon all goods imported by alien merchants, all tend to the same purpose. Corporation laws enable the inhabitants of towns to raise their prices, without fearing to be undersold by the free competition of their own countrymen. Those other regulations secure them equally against that of foreigners. The enhancement of price occasioned by both is everywhere finally paid by the landlords, farmers, and labourers, of the country, who have seldom opposed the establishment of such monopolies. They have commonly neither inclination nor fitness to enter into combinations; and the clamour and sophistry of merchants and manufacturers easily persuade them, that the private interest of a part, and of a subordinate part, of the society, is the general interest of the whole.

Throughout Europe, town industry has an advantage over rural industry. This advantage is not due entirely to guilds and guild laws. Many other regulations support it. High duties on foreign manufactured goods and on all goods imported by foreign merchants serve the same purpose. Guild laws let town residents raise their prices without fear of being undercut by free competition from their own countrymen. The other regulations protect them equally from foreign competition. Landlords, farmers, and rural laborers ultimately pay the higher prices caused by both. Yet they have seldom opposed the creation of such monopolies. They usually have neither the desire nor the ability to organize together. Merchants and manufacturers make a loud and misleading case that easily persuades them. They are persuaded that the private interest of one part of society, and a subordinate part at that, is the general interest of the whole.

In Great Britain, the superiority of the industry of the towns over that of the country seems to have been greater formerly than in the present times. The wages of country labour approach nearer to those of manufacturing labour, and the profits of stock employed in agriculture to those of trading and manufacturing stock, than they are said to have done in the last century, or in the beginning of the present. This change may be regarded as the necessary, though very late consequence of the extraordinary encouragement given to the industry of the towns. The stocks accumulated in them come in time to be so great, that it can no longer be employed with the ancient profit in that species of industry which is peculiar to them. That industry has its limits like every other; and the increase of stock, by increasing the competition, necessarily reduces the profit. The lowering of profit in the town forces out stock to the country, where, by creating a new demand for country labour, it necessarily raises its wages. It then spreads itself, if I my say so, over the face of the land, and, by being employed in agriculture, is in part restored to the country, at the expense of which, in a great measure, it had originally been accumulated in the town. That everywhere in Europe the greatest improvements of the country have been owing to such over flowings of the stock originally accumulated in the towns, I shall endeavour to shew hereafter, and at the same time to demonstrate, that though some countries have, by this course, attained to a considerable degree of opulence, it is in itself necessarily slow, uncertain, liable to be disturbed and interrupted by innumerable accidents, and, in every respect, contrary to the order of nature and of reason. The interests, prejudices, laws, and customs, which have given occasion to it, I shall endeavour to explain as fully and distinctly as I can in the third and fourth books of this Inquiry.

In Great Britain, the towns’ industry seems to have been more superior to the countryside’s in the past than it is today. Rural wages are now closer to manufacturing wages. Profits on capital invested in agriculture are also closer to profits on capital invested in trade and manufacturing. The difference is said to have been greater in the last century and early in this one. This change may be seen as the necessary, though very late, consequence of the extraordinary encouragement given to urban industry. In time, so much capital accumulates in the towns that it can no longer earn its former profit in urban industries. Those industries have limits, like every other industry. As capital increases, so does competition, which necessarily reduces profit. Lower profits in the towns drive capital into the countryside. There it creates new demand for rural labour and necessarily raises wages. The capital then spreads, if I may say so, across the land. By being invested in agriculture, it is partly restored to the countryside. Much of that capital had originally been accumulated in the towns at the countryside’s expense. I shall later try to show that throughout Europe, the greatest improvements in the countryside have resulted from this overflow of capital originally accumulated in the towns. I shall also try to demonstrate that this process is necessarily slow and uncertain. It is liable to be disturbed and interrupted by countless accidents. In every respect, it runs contrary to the order of nature and reason, though some countries have become considerably wealthy through it. In the third and fourth books of this Inquiry, I shall try to explain as fully and clearly as I can the interests, prejudices, laws, and customs that gave rise to this process.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible, indeed, to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.

People in the same trade rarely meet, even for fun, without the conversation ending in a plot against the public or a scheme to raise prices. No law could prevent such meetings if it had to be enforceable and consistent with liberty and justice. But although the law cannot stop people in the same trade from meeting, it should do nothing to make such meetings easier, much less make them necessary.

A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.

A regulation requiring everyone in the same trade in a town to register their names and addresses publicly makes such meetings easier. It connects people who might never otherwise know one another. It also tells everyone in the trade where to find everyone else in it.

A regulation which enables those of the same trade to tax themselves, in order to provide for their poor, their sick, their widows and orphans, by giving them a common interest to manage, renders such assemblies necessary.

A regulation may allow people in the same trade to tax themselves to support their poor, sick, widows, and orphans. By giving them a shared interest to manage, such a regulation makes these assemblies necessary.

An incorporation not only renders them necessary, but makes the act of the majority binding upon the whole. In a free trade, an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. The majority of a corporation can enact a bye-law, with proper penalties, which will limit the competition more effectually and more durably than any voluntary combination whatever.

Incorporation not only makes them necessary, but also makes the majority’s decision binding on everyone. In a free trade, an effective agreement requires the unanimous consent of every trader. It can last only as long as every trader continues to agree. A majority of a corporation can pass a bylaw with appropriate penalties. Such a bylaw will limit competition more effectively and for longer than any voluntary agreement.

The pretence that corporations are necessary for the better government of the trade, is without any foundation. The real and effectual discipline which is exercised over a workman, is not that of his corporation, but that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence. An exclusive corporation necessarily weakens the force of this discipline. A particular set of workmen must then be employed, let them behave well or ill. It is upon this account that, in many large incorporated towns, no tolerable workmen are to be found, even in some of the most necessary trades. If you would have your work tolerably executed, it must be done in the suburbs, where the workmen, having no exclusive privilege, have nothing but their character to depend upon, and you must then smuggle it into the town as well as you can.

The claim that trade corporations are necessary to govern a trade better has no basis. The real and effective discipline over a worker comes from customers, not from the corporation. Fear of losing their business keeps the worker from cheating and corrects carelessness. An exclusive corporation necessarily weakens this discipline. Customers must then employ a particular group of workers, whether they behave well or badly. This is why many large incorporated towns have no adequate workers, even in some of the most essential trades. If you want your work done reasonably well, you must have it done in the suburbs. There, workers have no exclusive privilege and must depend entirely on their reputation. You must then smuggle the work into town as best you can.

It is in this manner that the policy of Europe, by restraining the competition in some employments to a smaller number than would otherwise be disposed to enter into them, occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock.

In this way, European policy limits competition in some occupations, allowing fewer people to enter them than otherwise would. This creates a very significant inequality in the overall advantages and disadvantages of different uses of labor and capital.

Secondly, the policy of Europe, by increasing the competition in some employments beyond what it naturally would be, occasions another inequality, of an opposite kind, in the whole of the advantages and disadvantages of the different employments of labour and stock.

Secondly, European policy increases competition in some occupations beyond what it would naturally be. This creates another inequality, of the opposite kind, in the overall advantages and disadvantages of different uses of labor and capital.

It has been considered as of so much importance that a proper number of young people should be educated for certain professions, that sometimes the public, and sometimes the piety of private founders, have established many pensions, scholarships, exhibitions, bursaries, etc. for this purpose, which draw many more people into those trades than could otherwise pretend to follow them. In all Christian countries, I believe, the education of the greater part of churchmen is paid for in this manner. Very few of them are educated altogether at their own expense. The long, tedious, and expensive education, therefore, of those who are, will not always procure them a suitable reward, the church being crowded with people, who, in order to get employment, are willing to accept of a much smaller recompence than what such an education would otherwise have entitled them to; and in this manner the competition of the poor takes away the reward of the rich. It would be indecent, no doubt, to compare either a curate or a chaplain with a journeyman in any common trade. The pay of a curate or chaplain, however, may very properly be considered as of the same nature with the wages of a journeyman. They are all three paid for their work according to the contract which they may happen to make with their respective superiors. Till after the middle of the fourteenth century, five merks, containing about as much silver as ten pounds of our present money, was in England the usual pay of a curate or a stipendiary parish priest, as we find it regulated by the decrees of several different national councils. At the same period, fourpence a-day, containing the same quantity of silver as a shilling of our present money, was declared to be the pay of a master mason; and threepence a-day, equal to ninepence of our present money, that of a journeyman mason. {See the Statute of Labourers, 25, Ed. III.} The wages of both these labourers, therefore, supposing them to have been constantly employed, were much superior to those of the curate. The wages of the master mason, supposing him to have been without employment one-third of the year, would have fully equalled them. By the 12th of Queen Anne, c. 12. it is declared, “That whereas, for want of sufficient maintenance and encouragement to curates, the cures have, in several places, been meanly supplied, the bishop is, therefore, empowered to appoint, by writing under his hand and seal, a sufficient certain stipend or allowance, not exceeding fifty, and not less than twenty pounds a-year”. Forty pounds a-year is reckoned at present very good pay for a curate; and, notwithstanding this act of parliament, there are many curacies under twenty pounds a-year. There are journeymen shoemakers in London who earn forty pounds a-year, and there is scarce an industrious workman of any kind in that metropolis who does not earn more than twenty. This last sum, indeed, does not exceed what is frequently earned by common labourers in many country parishes. Whenever the law has attempted to regulate the wages of workmen, it has always been rather to lower them than to raise them. But the law has, upon many occasions, attempted to raise the wages of curates, and, for the dignity of the church, to oblige the rectors of parishes to give them more than the wretched maintenance which they themselves might be willing to accept of. And, in both cases, the law seems to have been equally ineffectual, and has never either been able to raise the wages of curates, or to sink those of labourers to the degree that was intended; because it has never been able to hinder either the one from being willing to accept of less than the legal allowance, on account of the indigence of their situation and the multitude of their competitors, or the other from receiving more, on account of the contrary competition of those who expected to derive either profit or pleasure from employing them.

It has been thought very important to educate a suitable number of young people for certain professions. For this purpose, governments and religious private donors have established many pensions, scholarships, exhibitions, bursaries, and similar forms of support. These draw many more people into those professions than could otherwise hope to enter them. In all Christian countries, I believe, most clergymen have their education paid for in this way. Very few pay the entire cost themselves. Those who do pay for their own long, tedious, and expensive education will not always receive a suitable reward. The church is crowded with people willing to accept much less to find work. Otherwise, such an education would have entitled them to more. In this way, competition from the poor takes away the reward of the rich. It would no doubt be improper to compare a curate or chaplain with a journeyman in an ordinary trade. Their pay, however, may properly be regarded as being of the same kind as a journeyman’s wages. All three are paid for their work according to the contracts they happen to make with their respective superiors. Until after the middle of the fourteenth century, a curate or salaried parish priest in England usually received five merks. That sum contained about as much silver as ten pounds in our present money. We know this from the decrees of several national councils that regulated their pay. At the same time, a master mason’s pay was set at fourpence a day. This contained as much silver as a shilling in our present money. A journeyman mason’s pay was set at threepence a day, equal to ninepence in our present money. {See the Statute of Labourers, 25, Ed. III.} If both masons had been employed constantly, their wages would have been much higher than the curate’s pay. Even if the master mason had been unemployed for a third of the year, his wages would have equalled it. The 12th of Queen Anne, c. 12, declares: “Because curates have not received enough support and encouragement, parishes in several places have been poorly served. The bishop is therefore empowered to appoint a sufficient fixed salary or allowance in writing, under his hand and seal. The allowance must not exceed fifty pounds a year or be less than twenty pounds a year.” At present, forty pounds a year is considered very good pay for a curate. Despite this act of Parliament, many curacies pay less than twenty pounds a year. Some journeyman shoemakers in London earn forty pounds a year. There is hardly an industrious worker of any kind in that city who does not earn more than twenty. Indeed, twenty pounds is no more than common labourers often earn in many country parishes. Whenever the law has tried to regulate workers’ wages, it has always aimed to lower rather than raise them. But the law has often tried to raise curates’ pay. For the dignity of the church, it has tried to oblige parish rectors to pay curates more. Otherwise, the curates might be willing to accept a miserable income. In both cases, the law seems to have been equally ineffective. It has never raised curates’ pay or lowered labourers’ wages as much as intended. It has not been able to prevent curates from accepting less than the legal allowance. They are willing to do so because they are poor and have many competitors. Nor has the law been able to prevent labourers from receiving more. In their case, competition works the other way. Those who expect to gain profit or pleasure from employing them compete for their labour.

The great benefices and other ecclesiastical dignities support the honour of the church, notwithstanding the mean circumstances of some of its inferior members. The respect paid to the profession, too, makes some compensation even to them for the meanness of their pecuniary recompence. In England, and in all Roman catholic countries, the lottery of the church is in reality much more advantageous than is necessary. The example of the churches of Scotland, of Geneva, and of several other protestant churches, may satisfy us, that in so creditable a profession, in which education is so easily procured, the hopes of much more moderate benefices will draw a sufficient number of learned, decent, and respectable men into holy orders.

The church’s richest benefices and other high offices uphold its honor, despite the modest circumstances of some lower-ranking clergy. The respect given to the profession also partly compensates them for their poor pay. In England and all Roman Catholic countries, the church lottery offers much greater rewards than necessary. The churches of Scotland, Geneva, and several other Protestant churches may show us that more modest benefices offer enough hope. They will attract enough learned, decent, and respectable men to holy orders. The profession is so respected, and the required education so easily obtained.

In professions in which there are no benefices, such as law and physic, if an equal proportion of people were educated at the public expense, the competition would soon be so great as to sink very much their pecuniary reward. It might then not be worth any man’s while to educate his son to either of those professions at his own expense. They would be entirely abandoned to such as had been educated by those public charities, whose numbers and necessities would oblige them in general to content themselves with a very miserable recompence, to the entire degradation of the now respectable professions of law and physic.

In professions without benefices, such as law and medicine, suppose an equal proportion of people were educated at public expense. Competition would soon become so intense that earnings would fall sharply. It might then no longer be worthwhile for a man to pay to educate his son for either profession. Law and medicine would be left entirely to those educated through public charities. Their numbers and their need for work would generally force them to accept very poor pay. This would utterly degrade the now respectable professions of law and medicine.

That unprosperous race of men, commonly called men of letters, are pretty much in the situation which lawyers and physicians probably would be in, upon the foregoing supposition. In every part of Europe, the greater part of them have been educated for the church, but have been hindered by different reasons from entering into holy orders. They have generally, therefore, been educated at the public expense; and their numbers are everywhere so great, as commonly to reduce the price of their labour to a very paltry recompence.

That unsuccessful group of people known as men of letters are in much the same position as lawyers and physicians would probably be under the previous assumption. Throughout Europe, most men of letters have been educated for the church, but various reasons have prevented them from becoming clergy. Their education has therefore generally been paid for by the public. And everywhere there are so many men of letters that their work usually pays very little.

Before the invention of the art of printing, the only employment by which a man of letters could make any thing by his talents, was that of a public or private teacher, or by communicating to other people the curious and useful knowledge which he had acquired himself; and this is still surely a more honourable, a more useful, and, in general, even a more profitable employment than that other of writing for a bookseller, to which the art of printing has given occasion. The time and study, the genius, knowledge, and application requisite to qualify an eminent teacher of the sciences, are at least equal to what is necessary for the greatest practitioners in law and physic. But the usual reward of the eminent teacher bears no proportion to that of the lawyer or physician, because the trade of the one is crowded with indigent people, who have been brought up to it at the public expense; whereas those of the other two are encumbered with very few who have not been educated at their own. The usual recompence, however, of public and private teachers, small as it may appear, would undoubtedly be less than it is, if the competition of those yet more indigent men of letters, who write for bread, was not taken out of the market. Before the invention of the art of printing, a scholar and a beggar seem to have been terms very nearly synonymous. The different governors of the universities, before that time, appear to have often granted licences to their scholars to beg.

Before printing was invented, a scholar could earn money from his talents only by teaching, publicly or privately. He could share the interesting and useful knowledge he had acquired. Teaching is surely still a more honorable and useful occupation than writing for a bookseller, which printing made possible. In general, it is even more profitable. Becoming an eminent teacher of the sciences requires time, study, talent, knowledge, and dedication. These are at least equal to what the greatest lawyers and physicians need. But an eminent teacher’s usual pay is far less than a lawyer’s or physician’s. The teaching profession is crowded with poor people who were educated for it at public expense. Law and medicine, however, are burdened with very few people who did not pay for their own education. The usual pay of public and private teachers may seem small. But it would undoubtedly be even smaller if not for the work available to still poorer scholars who write to earn their bread. Without that work, they would compete for teaching jobs. Before printing was invented, a scholar and a beggar seem to have been nearly the same thing. University authorities at that time appear to have often given their scholars permission to beg.

In ancient times, before any charities of this kind had been established for the education of indigent people to the learned professions, the rewards of eminent teachers appear to have been much more considerable. Isocrates, in what is called his discourse against the sophists, reproaches the teachers of his own times with inconsistency. “They make the most magnificent promises to their scholars,” says he, “and undertake to teach them to be wise, to be happy, and to be just; and, in return for so important a service, they stipulate the paltry reward of four or five minae.” “They who teach wisdom,” continues he, “ought certainly to be wise themselves; but if any man were to sell such a bargain for such a price, he would be convicted of the most evident folly.” He certainly does not mean here to exaggerate the reward, and we may be assured that it was not less than he represents it. Four minae were equal to thirteen pounds six shillings and eightpence; five minae to sixteen pounds thirteen shillings and fourpence. Something not less than the largest of those two sums, therefore, must at that time have been usually paid to the most eminent teachers at Athens. Isocrates himself demanded ten minae, or £ 33:6:8 from each scholar. When he taught at Athens, he is said to have had a hundred scholars. I understand this to be the number whom he taught at one time, or who attended what we would call one course of lectures; a number which will not appear extraordinary from so great a city to so famous a teacher, who taught, too, what was at that time the most fashionable of all sciences, rhetoric. He must have made, therefore, by each course of lectures, a thousand minae, or £ 3335:6:8. A thousand minae, accordingly, is said by Plutarch, in another place, to have been his didactron, or usual price of teaching. Many other eminent teachers in those times appear to have acquired great fortunes. Georgias made a present to the temple of Delphi of his own statue in solid gold. We must not, I presume, suppose that it was as large as the life. His way of living, as well as that of Hippias and Protagoras, two other eminent teachers of those times, is represented by Plato as splendid, even to ostentation. Plato himself is said to have lived with a good deal of magnificence. Aristotle, after having been tutor to Alexander, and most munificently rewarded, as it is universally agreed, both by him and his father, Philip, thought it worth while, notwithstanding, to return to Athens, in order to resume the teaching of his school. Teachers of the sciences were probably in those times less common than they came to be in an age or two afterwards, when the competition had probably somewhat reduced both the price of their labour and the admiration for their persons. The most eminent of them, however, appear always to have enjoyed a degree of consideration much superior to any of the like profession in the present times. The Athenians sent Carneades the academic, and Diogenes the stoic, upon a solemn embassy to Rome; and though their city had then declined from its former grandeur, it was still an independent and considerable republic.

In ancient times, no charities had yet been established to educate poor people for the learned professions. The most distinguished teachers appear to have earned much greater rewards then. In his discourse against the sophists, Isocrates accuses the teachers of his own time of inconsistency. “They make the most magnificent promises to their students,” he says. “They promise to teach them to be wise, happy, and just. Yet in return for such an important service, they ask for the paltry reward of four or five minae.” “Those who teach wisdom,” he continues, “ought certainly to be wise themselves. But anyone who sold such a bargain for such a price would clearly be guilty of the greatest folly.” He certainly does not mean to exaggerate their reward. We can therefore be sure that it was no less than he says. Four minae were equal to thirteen pounds, six shillings, and eightpence. Five minae were equal to sixteen pounds, thirteen shillings, and fourpence. The most distinguished teachers in Athens must therefore usually have been paid at least the larger sum at that time. Isocrates himself charged each student ten minae, or £33:6:8. He is said to have had a hundred students when he taught in Athens. I take this to mean the number he taught at one time, or in what we would call one course of lectures. That number would not seem extraordinary for such a famous teacher in so great a city. He also taught rhetoric, the most fashionable of all subjects at the time. He must therefore have earned a thousand minae, or £3335:6:8, from each course of lectures. Accordingly, Plutarch says elsewhere that a thousand minae was his didactron, or usual fee for teaching. Many other distinguished teachers of those times appear to have acquired great fortunes. Georgias gave the temple of Delphi a statue of himself in solid gold. I presume we should not suppose that it was life-size. Plato describes his way of living as splendid, even ostentatious. He says the same of Hippias and Protagoras, two other distinguished teachers of the time. Plato himself is said to have lived with a good deal of magnificence. Aristotle had been Alexander’s tutor and, as everyone agrees, had been richly rewarded by both Alexander and his father, Philip. Nevertheless, he thought it worthwhile to return to Athens and resume teaching at his school. Teachers of the sciences were probably less common then than they became a generation or two later. Competition had probably reduced both the price of their work and the admiration they received. Even so, the most distinguished teachers appear always to have enjoyed much greater respect than anyone in the same profession today. The Athenians sent Carneades the academic and Diogenes the stoic on a formal embassy to Rome. Though Athens had declined from its former grandeur, it was still an independent and important republic.

Carneades, too, was a Babylonian by birth; and as there never was a people more jealous of admitting foreigners to public offices than the Athenians, their consideration for him must have been very great.

Carneades, too, was born in Babylon. No people were more reluctant than the Athenians to admit foreigners to public office. So their regard for him must have been very great.

This inequality is, upon the whole, perhaps rather advantageous than hurtful to the public. It may somewhat degrade the profession of a public teacher; but the cheapness of literary education is surely an advantage which greatly overbalances this trifling inconveniency. The public, too, might derive still greater benefit from it, if the constitution of those schools and colleges, in which education is carried on, was more reasonable than it is at present through the greater part of Europe.

On the whole, this inequality is perhaps more beneficial than harmful to the public. It may somewhat lower the status of teachers. But the low cost of literary education is surely an advantage that greatly outweighs this minor drawback. The public might benefit even more if schools and colleges were organized more reasonably than they currently are throughout most of Europe.

Thirdly, the policy of Europe, by obstructing the free circulation of labour and stock, both from employment to employment, and from place to place, occasions, in some cases, a very inconvenient inequality in the whole of the advantages and disadvantages of their different employments.

Thirdly, European policy restricts the free movement of labor and capital between occupations and places. In some cases, this causes a very inconvenient imbalance in the overall advantages and disadvantages of different occupations.

The statute of apprenticeship obstructs the free circulation of labour from one employment to another, even in the same place. The exclusive privileges of corporations obstruct it from one place to another, even in the same employment.

The apprenticeship law prevents workers from moving freely between jobs, even in the same place. The exclusive privileges of trade guilds prevent workers from moving freely between places, even in the same trade.

It frequently happens, that while high wages are given to the workmen in one manufacture, those in another are obliged to content themselves with bare subsistence. The one is in an advancing state, and has therefore a continual demand for new hands; the other is in a declining state, and the superabundance of hands is continually increasing. Those two manufactures may sometimes be in the same town, and sometimes in the same neighbourhood, without being able to lend the least assistance to one another. The statute of apprenticeship may oppose it in the one case, and both that and an exclusive corporation in the other. In many different manufactures, however, the operations are so much alike, that the workmen could easily change trades with one another, if those absurd laws did not hinder them. The arts of weaving plain linen and plain silk, for example, are almost entirely the same. That of weaving plain woollen is somewhat different; but the difference is so insignificant, that either a linen or a silk weaver might become a tolerable workman in a very few days. If any of those three capital manufactures, therefore, were decaying, the workmen might find a resource in one of the other two which was in a more prosperous condition; and their wages would neither rise too high in the thriving, nor sink too low in the decaying manufacture. The linen manufacture, indeed, is in England, by a particular statute, open to every body; but as it is not much cultivated through the greater part of the country, it can afford no general resource to the work men of other decaying manufactures, who, wherever the statute of apprenticeship takes place, have no other choice, but either to come upon the parish, or to work as common labourers; for which, by their habits, they are much worse qualified than for any sort of manufacture that bears any resemblance to their own. They generally, therefore, chuse to come upon the parish.

It often happens that workers in one industry earn high wages, while those in another must get by on bare subsistence. One industry is growing, so it constantly needs new workers. The other is declining, and its surplus of workers keeps growing. The two industries may be in the same town or neighbourhood, yet be unable to help each other at all. The apprenticeship law may prevent workers from changing trades in the same town. In the same neighbourhood, both that law and an exclusive trade corporation may prevent it. Yet the work is so similar in many industries that workers could easily change trades if those absurd laws did not prevent them. For example, weaving plain linen and weaving plain silk are almost exactly alike. Weaving plain wool is somewhat different, but the difference is insignificant. A linen or silk weaver could become a reasonably skilled wool weaver in a few days. If one of these three major industries were declining, its workers could find work in another that was more prosperous. Wages would then neither rise too high in the thriving industry nor fall too low in the declining one. In England, a special law does open the linen industry to everyone. But linen manufacturing is not widespread in most of the country. So it cannot provide a general source of work for people from other declining industries. Where the apprenticeship law applies, these workers have only two choices. They must either seek parish relief or work as common labourers. Their habits make them much less suited to common labour than to any kind of manufacturing that resembles their own. They therefore generally choose parish relief.

Whatever obstructs the free circulation of labour from one employment to another, obstructs that of stock likewise; the quantity of stock which can be employed in any branch of business depending very much upon that of the labour which can be employed in it. Corporation laws, however, give less obstruction to the free circulation of stock from one place to another, than to that of labour. It is everywhere much easier for a wealthy merchant to obtain the privilege of trading in a town-corporate, than for a poor artificer to obtain that of working in it.

Anything that prevents workers from moving freely between occupations also prevents capital from moving freely. The capital a business can use depends greatly on the labor available to it. However, town corporation laws do less to prevent capital from moving between places than they do to prevent workers from moving. Everywhere, a wealthy merchant can obtain permission to trade in an incorporated town much more easily than a poor craft worker can obtain permission to work there.

The obstruction which corporation laws give to the free circulation of labour is common, I believe, to every part of Europe. That which is given to it by the poor laws is, so far as I know, peculiar to England. It consists in the difficulty which a poor man finds in obtaining a settlement, or even in being allowed to exercise his industry in any parish but that to which he belongs. It is the labour of artificers and manufacturers only of which the free circulation is obstructed by corporation laws. The difficulty of obtaining settlements obstructs even that of common labour. It may be worth while to give some account of the rise, progress, and present state of this disorder, the greatest, perhaps, of any in the police of England.

I believe corporation laws restrict the free movement of workers throughout Europe. But as far as I know, only in England do the poor laws restrict it. A poor man finds it difficult to obtain a settlement, or legal residence, in any parish other than his own. He may not even be allowed to work there. Corporation laws restrict the free movement of artisans and manufacturers only. The difficulty of obtaining a settlement restricts even the movement of common laborers. It may be worth describing the origin, development, and present state of this disorder. It is perhaps the greatest disorder in the public administration of England.

When, by the destruction of monasteries, the poor had been deprived of the charity of those religious houses, after some other ineffectual attempts for their relief, it was enacted, by the 43d of Elizabeth, c. 2. that every parish should be bound to provide for its own poor, and that overseers of the poor should be annually appointed, who, with the church-wardens, should raise, by a parish rate, competent sums for this purpose.

The destruction of monasteries had deprived the poor of charity from those religious houses. After other attempts to relieve the poor failed, a law was passed in the 43rd year of Elizabeth, chapter 2. It required every parish to provide for its own poor and to appoint overseers of the poor each year. The overseers and churchwardens were to raise enough money for this purpose through a parish tax.

By this statute, the necessity of providing for their own poor was indispensably imposed upon every parish. Who were to be considered as the poor of each parish became, therefore, a question of some importance. This question, after some variation, was at last determined by the 13th and 14th of Charles II. when it was enacted, that forty days undisturbed residence should gain any person a settlement in any parish; but that within that time it should be lawful for two justices of the peace, upon complaint made by the church-wardens or overseers of the poor, to remove any new inhabitant to the parish where he was last legally settled; unless he either rented a tenement of ten pounds a-year, or could give such security for the discharge of the parish where he was then living, as those justices should judge sufficient.

This statute made every parish responsible for providing for its own poor. It therefore became important to decide who counted as the poor of each parish. After several changes, the question was finally settled by a law passed in the 13th and 14th years of Charles II’s reign. The law stated that anyone who lived undisturbed in a parish for forty days gained a legal settlement there. But within those forty days, the churchwardens or overseers of the poor could complain to two justices of the peace. The justices could then remove the new resident to the parish where that person was last legally settled. They could not do so if the person rented a property for ten pounds a year. Nor could they do so if the person gave enough security to satisfy the justices that the current parish would not have to provide support.

Some frauds, it is said, were committed in consequence of this statute; parish officers sometimes bribing their own poor to go clandestinely to another parish, and, by keeping themselves concealed for forty days, to gain a settlement there, to the discharge of that to which they properly belonged. It was enacted, therefore, by the 1st of James II. that the forty days undisturbed residence of any person necessary to gain a settlement, should be accounted only from the time of his delivering notice, in writing, of the place of his abode and the number of his family, to one of the church-wardens or overseers of the parish where he came to dwell.

Some frauds were reportedly committed as a result of this law. Parish officers sometimes bribed their own poor to go secretly to another parish. By staying hidden there for forty days, the poor could gain a legal settlement in the new parish. This would relieve their original parish of responsibility for them. Therefore, a law passed in the first year of James II changed when the required forty days of undisturbed residence began. The count would start only when a person gave written notice to a churchwarden or overseer of the new parish. The notice had to state where the person lived and how many people were in the family.

But parish officers, it seems, were not always more honest with regard to their own than they had been with regard to other parishes, and sometimes connived at such intrusions, receiving the notice, and taking no proper steps in consequence of it. As every person in a parish, therefore, was supposed to have an interest to prevent as much as possible their being burdened by such intruders, it was further enacted by the 3rd of William III. that the forty days residence should be accounted only from the publication of such notice in writing on Sunday in the church, immediately after divine service.

But parish officers, it seems, were not always more honest with their own parishes than with other parishes. They sometimes allowed such newcomers to settle, accepting their written notices without taking proper action. Everyone in a parish was therefore assumed to have an interest in preventing such newcomers from burdening the parish. A further law was passed in the third year of William III’s reign. It required the forty days of residence to be counted only from the publication of the written notice in church. The notice had to be published on a Sunday, immediately after the church service.

“After all,” says Doctor Burn, “this kind of settlement, by continuing forty days after publication of notice in writing, is very seldom obtained; and the design of the acts is not so much for gaining of settlements, as for the avoiding of them by persons coming into a parish clandestinely, for the giving of notice is only putting a force upon the parish to remove. But if a person’s situation is such, that it is doubtful whether he is actually removable or not, he shall, by giving of notice, compel the parish either to allow him a settlement uncontested, by suffering him to continue forty days, or by removing him to try the right.”

“After all,” says Doctor Burn, “this kind of settlement is very seldom obtained by staying forty days after giving written notice. The acts are intended less to help people gain settlements than to prevent people from gaining them by entering a parish secretly. Giving notice only forces the parish to remove the person. But a person’s situation may make it doubtful whether he can actually be removed. By giving notice, he can then force the parish to choose. It must either allow him to stay for forty days and gain a settlement without challenge, or remove him and have the right tested.”

This statute, therefore, rendered it almost impracticable for a poor man to gain a new settlement in the old way, by forty days inhabitancy. But that it might not appear to preclude altogether the common people of one parish from ever establishing themselves with security in another, it appointed four other ways by which a settlement might be gained without any notice delivered or published. The first was, by being taxed to parish rates and paying them; the second, by being elected into an annual parish office, and serving in it a year; the third, by serving an apprenticeship in the parish; the fourth, by being hired into service there for a year, and continuing in the same service during the whole of it. Nobody can gain a settlement by either of the two first ways, but by the public deed of the whole parish, who are too well aware of the consequences to adopt any new-comer, who has nothing but his labour to support him, either by taxing him to parish rates, or by electing him into a parish office.

The law therefore made it almost impossible for a poor man to gain a new settlement in the old way, by living in a parish for forty days. But the law was not meant to appear to bar ordinary people from one parish from ever settling securely in another. So it provided four other ways to gain a settlement without delivering or publishing any notice. The first was to be assessed for parish rates and pay them. The second was to be elected to an annual parish office and serve in it for a year. The third was to serve an apprenticeship in the parish. The fourth was to be hired for a year’s service there and remain in the same service for the whole year. Nobody can gain a settlement by either of the first two ways without a public act by the whole parish. The parish is too well aware of the consequences to admit a newcomer who has nothing but his labor to support him. It will neither assess him for parish rates nor elect him to a parish office.

No married man can well gain any settlement in either of the two last ways. An apprentice is scarce ever married; and it is expressly enacted, that no married servant shall gain any settlement by being hired for a year. The principal effect of introducing settlement by service, has been to put out in a great measure the old fashion of hiring for a year; which before had been so customary in England, that even at this day, if no particular term is agreed upon, the law intends that every servant is hired for a year. But masters are not always willing to give their servants a settlement by hiring them in this manner; and servants are not always willing to be so hired, because, as every last settlement discharges all the foregoing, they might thereby lose their original settlement in the places of their nativity, the habitation of their parents and relations.

A married man can hardly gain a legal settlement in either of the last two ways. An apprentice is rarely married, and the law expressly forbids a married servant from gaining settlement through a year’s employment. The main effect of allowing settlement through service has been to largely end the old practice of hiring servants for a year. Before then, the practice was so common in England that the law still assumes every servant is hired for a year if no other term is agreed upon. But masters are not always willing to give servants a settlement by hiring them for a year. Servants are not always willing to be hired that way either. Each new settlement cancels all previous ones, so servants might lose their original settlement in their birthplace, where their parents and relatives live.

No independent workman, it is evident, whether labourer or artificer, is likely to gain any new settlement, either by apprenticeship or by service. When such a person, therefore, carried his industry to a new parish, he was liable to be removed, how healthy and industrious soever, at the caprice of any churchwarden or overseer, unless he either rented a tenement of ten pounds a-year, a thing impossible for one who has nothing but his labour to live by, or could give such security for the discharge of the parish as two justices of the peace should judge sufficient.

Clearly, an independent worker, whether a laborer or a craftsman, is unlikely to gain a new legal settlement through apprenticeship or service. So when such a worker moved to a new parish to work, any churchwarden or overseer could have him removed on a whim, however healthy and hardworking he was. He could avoid removal only by renting a property for ten pounds a year or providing security that two justices of the peace judged sufficient to protect the parish from expense. Renting such a property was impossible for someone who had nothing but his labor to live on.

What security they shall require, indeed, is left altogether to their discretion; but they cannot well require less than thirty pounds, it having been enacted, that the purchase even of a freehold estate of less than thirty pounds value, shall not gain any person a settlement, as not being sufficient for the discharge of the parish. But this is a security which scarce any man who lives by labour can give; and much greater security is frequently demanded.

The amount of security they require is entirely up to them. But they can hardly require less than thirty pounds. A law states that buying a freehold estate worth less than thirty pounds cannot give anyone a right of settlement. Such an estate is not enough to relieve the parish of responsibility. But hardly anyone who lives by labor can provide security of thirty pounds, and much more is often demanded.

In order to restore, in some measure, that free circulation of labour which those different statutes had almost entirely taken away, the invention of certificates was fallen upon. By the 8th and 9th of William III. it was enacted that if any person should bring a certificate from the parish where he was last legally settled, subscribed by the church-wardens and overseers of the poor, and allowed by two justices of the peace, that every other parish should be obliged to receive him; that he should not be removable merely upon account of his being likely to become chargeable, but only upon his becoming actually chargeable; and that then the parish which granted the certificate should be obliged to pay the expense both of his maintenance and of his removal. And in order to give the most perfect security to the parish where such certificated man should come to reside, it was further enacted by the same statute, that he should gain no settlement there by any means whatever, except either by renting a tenement of ten pounds a-year, or by serving upon his own account in an annual parish office for one whole year; and consequently neither by notice nor by service, nor by apprenticeship, nor by paying parish rates. By the 12th of Queen Anne, too, stat. 1, c.18, it was further enacted, that neither the servants nor apprentices of such certificated man should gain any settlement in the parish where he resided under such certificate.

To restore some of the free movement of labor that these statutes had almost entirely taken away, certificates were introduced. A law passed in the 8th and 9th years of William III required every parish to receive anyone who brought such a certificate. The certificate had to come from the parish where the person was last legally settled. It had to be signed by the churchwardens and overseers of the poor and approved by two justices of the peace. The person could not be removed merely because he was likely to need poor relief. He could be removed only if he actually needed it. In that case, the parish that issued the certificate had to pay both for his maintenance and for his removal. The same law offered the receiving parish the greatest possible protection. A certificate holder could gain legal settlement there in only two ways. He could rent a dwelling for ten pounds a year, or serve on his own account in an annual parish office for one full year. He could not gain settlement by giving notice, by service, by apprenticeship, or by paying parish rates. A later law, passed in the 12th year of Queen Anne, statute 1, chapter 18, added another restriction. Neither the servants nor the apprentices of a certificate holder could gain settlement in the parish where he lived under the certificate.

How far this invention has restored that free circulation of labour, which the preceding statutes had almost entirely taken away, we may learn from the following very judicious observation of Doctor Burn. “It is obvious,” says he, “that there are divers good reasons for requiring certificates with persons coming to settle in any place; namely, that persons residing under them can gain no settlement, neither by apprenticeship, nor by service, nor by giving notice, nor by paying parish rates; that they can settle neither apprentices nor servants; that if they become chargeable, it is certainly known whither to remove them, and the parish shall be paid for the removal, and for their maintenance in the mean time; and that, if they fall sick, and cannot be removed, the parish which gave the certificate must maintain them; none of all which can be without a certificate. Which reasons will hold proportionably for parishes not granting certificates in ordinary cases; for it is far more than an equal chance, but that they will have the certificated persons again, and in a worse condition.” The moral of this observation seems to be, that certificates ought always to be required by the parish where any poor man comes to reside, and that they ought very seldom to be granted by that which he purposes to leave. “There is somewhat of hardship in this matter of certificates,” says the same very intelligent author, in his History of the Poor Laws, “by putting it in the power of a parish officer to imprison a man as it were for life, however inconvenient it may be for him to continue at that place where he has had the misfortune to acquire what is called a settlement, or whatever advantage he may propose himself by living elsewhere.”

We can learn how far this system has restored the free movement of labor from a very sound observation by Doctor Burn. Earlier laws had almost entirely taken that freedom away. “There are clearly several good reasons,” he says, “to require certificates from people who come to settle in a place. People living there under certificates cannot gain a legal settlement through apprenticeship, service, giving notice, or paying parish rates. They cannot establish a settlement for their apprentices or servants either. If they become dependent on parish support, the parish knows exactly where to send them. It will also be paid for sending them back and supporting them in the meantime. If they fall ill and cannot be sent back, the parish that issued the certificate must support them. None of these protections is possible without a certificate. For much the same reasons, parishes should not ordinarily grant certificates. The chances are much greater than even that the people given certificates will return, and in worse condition.” The lesson of this observation seems to be that a parish should always require a certificate when a poor man comes to live there. The parish he intends to leave should very rarely grant one. “There is some hardship in this matter of certificates,” says the same very intelligent author in his History of the Poor Laws. “A parish officer has the power to imprison a man, as it were, for life. This is true however inconvenient it may be for him to remain where he has had the misfortune to acquire what is called a settlement. It is also true whatever advantage he may hope to gain by living elsewhere.”

Though a certificate carries along with it no testimonial of good behaviour, and certifies nothing but that the person belongs to the parish to which he really does belong, it is altogether discretionary in the parish officers either to grant or to refuse it. A mandamus was once moved for, says Doctor Burn, to compel the church-wardens and overseers to sign a certificate; but the Court of King’s Bench rejected the motion as a very strange attempt.

A certificate says nothing about a person’s good behavior. It only certifies that the person belongs to the parish they actually belong to. Yet parish officers have complete discretion to grant or refuse one. Doctor Burn says that someone once applied for a mandamus to compel the churchwardens and overseers to sign a certificate. But the Court of King’s Bench rejected the application as a very strange attempt.

The very unequal price of labour which we frequently find in England, in places at no great distance from one another, is probably owing to the obstruction which the law of settlements gives to a poor man who would carry his industry from one parish to another without a certificate. 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. The scarcity of hands in one parish, therefore, cannot always be relieved by their superabundance in another, as it is constantly in Scotland, and I believe, in all other countries where there is no difficulty of settlement. In such countries, though wages may sometimes rise a little in the neighbourhood of a great town, or wherever else there is an extraordinary demand for labour, and sink gradually as the distance from such places increases, till they fall back to the common rate of the country; yet we never meet with those sudden and unaccountable differences in the wages of neighbouring places which we sometimes find in England, where it is often more difficult for a poor man to pass the artificial boundary of a parish, than an arm of the sea, or a ridge of high mountains, natural boundaries which sometimes separate very distinctly different rates of wages in other countries.

The very unequal wages often found in English places not far apart are probably due to the law of settlements. This law makes it difficult for a poor man to move from one parish to another for work without a certificate. A healthy, hardworking single man may sometimes be allowed to live in another parish without one. But in most parishes, a man with a wife and family who tried to do so would surely be removed. And if the single man later married, he too would generally be removed. A shortage of workers in one parish cannot always be relieved by a surplus in another. Such shortages are constantly relieved in this way in Scotland and, I believe, in all other countries where settlement presents no difficulty. In those countries, wages may sometimes rise a little near a large town or wherever else demand for labor is unusually high. They then fall gradually with distance from those places, until they return to the country's usual rate. Yet we never find the sudden and inexplicable differences in wages between neighboring places that sometimes occur in England. There, it is often harder for a poor man to cross the artificial boundary of a parish than to cross a stretch of sea or a high mountain ridge. In other countries, such natural boundaries sometimes separate places with very different wage rates.

To remove a man who has committed no misdemeanour, from the parish where he chooses to reside, is an evident violation of natural liberty and justice. The common people of England, however, so jealous of their liberty, but like the common people of most other countries, never rightly understanding wherein it consists, have now, for more than a century together, suffered themselves to be exposed to this oppression without a remedy. Though men of reflection, too, have sometimes complained of the law of settlements as a public grievance; yet it has never been the object of any general popular clamour, such as that against general warrants, an abusive practice undoubtedly, but such a one as was not likely to occasion any general oppression. 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.

To remove a man from the parish where he chooses to live, when he has committed no offense, clearly violates natural liberty and justice. The common people of England are very protective of their liberty. Yet, like the common people of most other countries, they have never properly understood what liberty consists of. For more than a century, they have allowed themselves to suffer this oppression without a remedy. Thoughtful people have sometimes complained that the law of settlements is a public grievance. Yet it has never caused a general public outcry like the one against general warrants. General warrants were undoubtedly an abuse, but they were unlikely to cause widespread oppression. I dare say there is hardly a poor man in England of forty who has not suffered cruelly under this badly designed law of settlements at some point in his life.

I shall conclude this long chapter with observing, that though anciently it was usual to rate wages, first by general laws extending over the whole kingdom, and afterwards by particular orders of the justices of peace in every particular county, both these practices have now gone entirely into disuse. “By the experience of above four hundred years,” says Doctor Burn, “it seems time to lay aside all endeavours to bring under strict regulations, what in its own nature seems incapable of minute limitation; 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.”

I will conclude this long chapter by noting that wages were once commonly set by laws covering the whole kingdom. Later, they were set by orders from justices of the peace in each county. Both practices have now fallen entirely out of use. “After more than four hundred years of experience,” says Doctor Burn, “it seems time to abandon all efforts to strictly regulate something that seems, by its nature, incapable of being limited in every detail. For if everyone doing the same kind of work received equal wages, there would be no competition and no room for industry or ingenuity.”

Particular acts of parliament, however, still attempt sometimes to regulate wages in particular trades, and in particular places. Thus the 8th of George III. prohibits, under heavy penalties, all master tailors in London, and five miles round it, from giving, and their workmen from accepting, more than two shillings and sevenpence halfpenny a-day, except in the case of a general mourning. Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters. Thus the law which obliges the masters in several different trades to pay their workmen in money, and not in goods, is quite just and equitable. It imposes no real hardship upon the masters. It only obliges them to pay that value in money, which they pretended to pay, but did not always really pay, in goods. This law is in favour of the workmen; but the 8th of George III. is in favour of the masters. When masters combine together, in order to reduce the wages of their workmen, they commonly enter into a private bond or agreement, not to give more than a certain wage, under a certain penalty. Were the workmen to enter into a contrary combination of the same kind, not to accept of a certain wage, under a certain penalty, the law would punish them very severely; and, if it dealt impartially, it would treat the masters in the same manner. But the 8th of George III. enforces by law that very regulation which masters sometimes attempt to establish by such combinations. The complaint of the workmen, that it puts the ablest and most industrious upon the same footing with an ordinary workman, seems perfectly well founded.

However, individual acts of Parliament still sometimes try to regulate wages in particular trades and places. For example, the 8th of George III sets a limit on tailors' wages in London and within five miles of it. It imposes heavy penalties on all master tailors who pay more than two shillings and sevenpence halfpenny a day. Their workers also face heavy penalties for accepting more, except during a period of general mourning. Whenever lawmakers try to settle disputes between masters and their workers, they always seek advice from the masters. Regulations that favor workers are therefore always just and fair. But regulations that favor masters are sometimes otherwise. For example, the law requiring masters in several trades to pay workers in money rather than goods is entirely just and fair. It imposes no real hardship on the masters. It only requires them to pay in money the value they claimed to pay in goods, but did not always actually pay. This law favors workers, but the 8th of George III favors masters. When masters join together to reduce their workers' wages, they commonly make a private agreement. They agree not to pay more than a certain wage and impose a penalty on anyone who does. Suppose workers made an opposing agreement of the same kind, with a penalty for accepting a certain wage. The law would punish them very severely. And if the law were applied impartially, it would treat the masters in the same way. But the 8th of George III gives legal force to the very rule that masters sometimes try to establish through such agreements. Workers complain that it puts the most capable and hardworking workers on the same footing as ordinary workers. Their complaint seems entirely justified.

In ancient times, too, it was usual to attempt to regulate the profits of merchants and other dealers, by regulating the price of provisions and ether goods. The assize of bread is, so far as I know, the only remnant of this ancient usage. Where there is an exclusive corporation, it may, perhaps, be proper to regulate the price of the first necessary of life; but, where there is none, the competition will regulate it much better than any assize. The method of fixing the assize of bread, established by the 31st of George II. could not be put in practice in Scotland, on account of a defect in the law, its execution depending upon the office of clerk of the market, which does not exist there. This defect was not remedied till the third of George III. The want of an assize occasioned no sensible inconveniency; and the establishment of one in the few places where it has yet taken place has produced no sensible advantage. In the greater part of the towns in Scotland, however, there is an incorporation of bakers, who claim exclusive privileges, though they are not very strictly guarded. The proportion between the different rates, both of wages and profit, in the different employments of labour and stock, seems not to be much affected, as has already been observed, by the riches or poverty, the advancing, stationary, or declining state of the society. Such revolutions in the public welfare, though they affect the general rates both of wages and profit, must, in the end, affect them equally in all different employments. The proportion between them, therefore, must remain the same, and cannot well be altered, at least for any considerable time, by any such revolutions.

In ancient times, people also tried to control the profits of merchants and other dealers by regulating prices for food and other goods. The assize of bread, a regulation of bread prices, is, as far as I know, the only remaining example of this old practice. Where a corporation has an exclusive right to sell bread, it may perhaps be proper to regulate the price of this most basic necessity. But where there is no such corporation, competition will regulate the price much better than any assize. The method of fixing the assize of bread established in the 31st year of George II could not be used in Scotland because of a defect in the law. Its enforcement depended on the office of clerk of the market, which does not exist there. This defect was not corrected until the third year of George III. The lack of an assize caused no noticeable inconvenience. And establishing one in the few places where it has so far been introduced has produced no noticeable benefit. In most Scottish towns, however, there is a bakers' corporation that claims exclusive privileges, though these are not very strictly protected. As already noted, the differences between wage rates and profit rates across occupations and investments seem to be little affected by a society's wealth or poverty. Nor do they seem much affected by whether a society is advancing, standing still, or declining. Such changes in public welfare do affect the general rates of wages and profits. But in the end, they must affect them equally across all occupations and investments. The relative rates must therefore remain the same. Such changes can hardly alter them, at least for any considerable time.