almost all the industry is carried on for English uses; there is little production of anything except the staple commodities, and these are sent to England, not to be exchanged for things exported to the colony and consumed by its inhabitants, but to be sold in England for the benefit of the proprietors there. The trade with the West Indies is therefore hardly to be considered as external trade, but more resembles the traffic between town and country, and is amenable to the principles of the home trade. The rate of profit in the colonies will be regulated by English profits; the expectation of profit must be about the same as in England, with the addition of compensation for the disadvantages attending the more distant and hazardous employment; and after allowance is made for those disadvantages, the value and price of West India produce in the English market must be regulated, (or rather must have been regulated formerly,) like that of any English commodity, by the cost of production. For the last ten or twelve years this principle has been in abeyance; the price was first kept up beyond the ratio of the cost of production by deficient supplies, which could not, owing to deficiency of labor, be increased; and more recently the admission of foreign competition has introduced another element, and the West Indies are undersold, not so much because wages are higher than in Cuba and Brazil, as because they are higher than in England; for were they not so, Jamaica could sell her sugars at Cuban prices, and still obtain, though not a Cuban, an English rate of profit.

It is worth while also to notice another class of small, but in this case mostly independent communities, which have supported and enriched themselves almost without any productions of their own, (except ships and marine. equipments,) by a mere carrying trade, and commerce of entrepôt; by buying the produce of one country, to sell it at a profit in another. Such were Venice and the Hanse

Towns. The case of these communities is very simple. They made themselves and their capital the instruments, not of production, but of accomplishing exchanges between the productions of other countries. These exchanges were attended with an advantage to those countries—an increase of the aggregate returns to industry-part of which went to indemnify the agents, for the necessary expenses of transport, and another part to remunerate the use of their capital and mercantile skill. The countries themselves had not capital disposable for the operation. When the Venetians became the agents of the general commerce of Southern Europe, they had scarcely any competitors; the thing would not have been done at all without them, and there was really no limit to their profits except the limit to what the ignorant feudal nobility would give for the unknown luxuries then first presented to their sight. At a later period competition arose, and the profit of this operation, like that of others, became amenable to natural laws. The carrying trade was taken up by Holland, a country with productions of its own and a large accumulated capital. The other nations of Europe also had now capital to spare, and were capable of conducting their foreign trade for themselves; but Holland, having, from a variety of circumstances, a lower rate of profit at home, could afford to carry for other countries at a smaller advance on the original cost of the goods, than would have been required by their own capitalists; and Holland, therefore, engrossed the greatest part of the carrying trade of all those countries which did not keep it to themselves by navigation laws, constructed, like those of England, for the express purpose.

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CHAPTER XXVI.

OF DISTRIBUTION, AS AFFECTED BY EXCHANGE.

§ 1. We have now completed, as far as is compatible with the purposes and limits of this treatise, the exposition of the machinery through which the produce of a country is apportioned among the different classes of its inhabitants; which is no other than the machinery of Exchange, and has for the exponents of its operation, the laws of Value and of Price. We shall now avail ourselves of the light thus acquired, to cast a retrospective glance at the subject of Distribution. The division of the produce among the three classes, Laborers, Capitalists, and Landlords, when considered without any reference to Exchange, appeared to depend on certain general laws. It is fit that we should now consider whether these same laws still operate, when the distribution takes place through the complex mechanism of exchange and money; or whether the properties of the mechanism interfere with and modify the presiding principles.

The primary division of the produce of human exertion and frugality is, as we have seen, into three shares, wages, profits, and rent; and these shares are portioned out to the persons entitled to them, in the form of money, and by a process of exchange; or rather, the capitalist, with whom in the usual arrangements of society the produce remains, pays in money, to the other two sharers, the market value of their labor and land. If we examine on what the pecuniary value of labor, and the pecuniary value of the use of land, depend, we shall find that it is on the very same causes by which we found that wages and rent would

be regulated if there were no money and no exchange of commodities.

It is evident, in the first place, that the law of Wages is not affected by the existence or non-existence of Exchange or Money. Wages depend on the ratio between population and capital; and would do so if all the capital in the world were the property of one association, or if the capitalists among whom it is shared maintained each an establishment for the production of every article consumed in the community, exchange of commodities having no existence. As the ratio between capital and population, everywhere but in new colonies, depends on the strength of the checks by which the too rapid increase of population is restrained, it may be said, popularly speaking, that wages depend on the checks to population; that when the check is not death, by starvation or disease, wages depend on the prudence of the laboring people; and that wages in any country are habitually at the lowest rate, to which in that country the laborers will suffer them to be depressed rather than put a restraint upon multiplication.

What is here meant, however, by wages, is the laborer's real scale of comfort; the quantity he obtains of the things which nature or habit has made necessary or agreeable to him; wages in the sense in which they are of importance. to the receiver. In the sense in which they are of importance to the payer, they do not depend exclusively on such simple principles. Wages in the first sense, the wages on which the laborer's comfort depends, we shall call real wages, or wages in kind. Wages in the second sense, we may be permitted to call, for the present, money wages; assuming, as it is allowable to do, that money remains for the time an invariable standard, no alteration taking place in the conditions under which the circulating medium itself is produced or obtained. If money itself undergoes no variation in cost, the money price of labor is an exact

measure of the Cost of Labor, and may be made use of as a convenient symbol to express it.

The money wages of labor are a compound result of two elements; first, real wages, or wages in kind, or in other words, the quantity which the laborer obtains of the ordinary articles of consumption; and secondly, the money prices of those articles. In all old countries-all countries in which the increase of population is in any degree checked by the difficulty of obtaining subsistence-the habitual money price of labor is that which will just enable the laborers, one with another, to purchase the commodities without which they will not consent to continue the race. Their standard of comfort being given, (and by the standard of comfort in a laboring class, is meant that, rather than forego which, they will abstain from multiplication,) money wages depend on the money price, and therefore on the cost of production, of the various articles which the laborers habitually consume; because if their wages cannot procure them a given quantity of these, their increase will slacken and their wages rise. Of these articles, food and other agricultural produce are so much the principal, as to leave little influence to anything else.

It is at this point that we are enabled to invoke the aid of the principles which have been laid down in this Third Part. The cost of production of food and agricultural produce has been analyzed in a preceding chapter. It depends on the productiveness of the least fertile land, or of the least productively employed portion of capital, which the necessities of society have as yet put in requisition for agricultural purposes. The cost of production of the food grown in these least advantageous circumstances, determines, as we have seen, the exchange value and money price of the whole. In any given state, therefore, of the laborer's habits, his money wages depend on the productiveness of the least fertile land, or least productive agricultural capi