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

to which the assumption of Dr Smith's
proposition would inevitably lead.
If we suppose, that the real price of corn is unchangeable, or not
capable of experiencing a relative increase or decrease of value,
compared with labour and other commodities, it will follow, that
agriculture is at once excluded from the operation of that principle, so
beautifully explained and illustrated by Dr Smith, by which capital
flows from one employment to another, according to the various and
necessarily fluctuating wants of society. It will follow, that the growth
of corn has, at all times, and in all countries, proceeded 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