Observations on the Effects of the Corn Laws, and of a Rise or Fall in the Price of Corn on the Agr | Page 6

with a uniform unvarying pace, occasioned only by the equable increase of agricultural capital, and can never have been accelerated, or retarded, by variations of demand. It will follow, that if a country happened to be either overstocked or understocked with corn, no motive of interest could exist for withdrawing capital from agriculture, in the one case, or adding to it in the other, and thus restoring the equilibrium between its different kinds of produce. But these consequences, which would incontestably follow from the doctrine, that the price of corn immediately and entirely regulates the prices of labour and of all other commodities, are so directly contrary to all experience, that the doctrine itself cannot possibly be true; and we may be assured, that, whatever influence the price of corn may have upon other commodities, it is neither so immediate nor so complete, as to make this kind of produce an exception to all others.
That no such exception exists with regard to corn, is implied in all the general reasonings of the Wealth of nations. Dr Smith evidently felt this; and wherever, in consequence, he does not shift the question from the exchangeable value of corn to its physical properties, he speaks with an unusual want of precision, and qualifies his positions by the expressions much, and in any considerable degree. But it should be recollected, that, with these qualifications, the argument is brought forward expressly for the purpose of showing, that the rise of price, acknowledged to be occasioned by a bounty, on its first establishment, is nominal and not real. Now, what is meant to be distinctly asserted here is, that a rise of price occasioned by a bounty upon the exportation or restrictions upon the importation of corn, cannot be less real than a rise of price to the same amount, occasioned by a course of bad seasons, an increase of population, the rapid progress of commercial wealth, or any other natural cause; and that, if Dr Smith's argument, with its qualifications, be valid for the purpose for which it is advanced, it applies equally to an increased price occasioned by a natural demand.
Let us suppose, for instance, an increase in the demand and the price of corn, occasioned by an unusually prosperous state of our manufactures and foreign commerce; a fact which has frequently come within our own experience. According to the principles of supply and demand, and the general principles of the Wealth of nations, such an increase in the price of corn would give a decided stimulus to agriculture; and a more than usual quantity of capital would be laid out upon the land, as appears obviously to have been the case in this country during the last twenty years. According to the peculiar argument of Dr Smith, however, no such stimulus could have been given to agriculture. The rise in the price of corn would have been immediately followed by a proportionate rise in the price of labour and of all other commodities; and, though the farmer and landlord might have obtained, on an average, seventy five shillings a quarter for their corn, instead of sixty, yet the farmer would not have been enabled to cultivate better, nor the landlord to live better. And thus it would appear, that agriculture is beyond the operation of that principle, which distributes the capital of a nation according to the varying profits of stock in different employments; and that no increase of price can, at any time or in any country, materially accelerate the growth of corn, or determine a greater quantity of capital to agriculture.
The experience of every person, who sees what is going forward on the land, and the feelings and conduct both of farmers and landlords, abundantly contradict this reasoning.
Dr Smith was evidently led into this train of argument, from his habit of considering labour as the standard measure of value, and corn as the measure of labour. But, that corn is a very inaccurate measure of labour, the history of our own country will amply demonstrate; where labour, compared with corn, will be found to have experienced very great and striking variations, not only from year to year, but from century to century; and for ten, twenty, and thirty years together;(1*) and that neither labour nor any other commodity can be an accurate measure of real value in exchange, is now considered as one of the most incontrovertible doctrines of political economy, and indeed follows, as a necessary consequence, from the very definition of value in exchange. But to allow that corn regulates the prices of all commodities, is at once to erect it into a standard measure of real value in exchange; and we must either deny the truth of Dr Smith's argument, or acknowledge, that what seems to be quite