Observations on the Effects of the Corn Laws, and of a Rise or Fall in the Price of Corn on the Agr | Page 7

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 impossible is found to exist; and that a given
quantity of corn, notwithstanding the fluctuations to which its supply
and demand must be subject, and the fluctuations to which the supply
and demand of all the other commodities with which it is compared
must also be subject, will, on the average of a few years, at all times
and in all countries, purchase the same quantity of labour and of the
necessaries and conveniences of life.
There are two obvious truths in political economy, which have not

infrequently been the sources of error.
It is undoubtedly true, that corn might be just as successfully cultivated,
and as much capital might be laid out upon the land, at the price of
twenty shillings a quarter, as at the price of one hundred shillings,
provided that every commodity, both at home and abroad, were
precisely proportioned to the reduced scale. In the same manner as it is
strictly true, that the industry and capital of a nation would be exactly
the same (with the slight exception at least of plate), if, in every
exchange, both at home or abroad, one shilling only were used, where
five are used now.
But to infer, from these truths, that any natural or artificial causes,
which should raise or lower the values of corn or silver, might be
considered as matters of indifference, would be an error of the most
serious magnitude. Practically, no material change can take place in the
value of either, without producing both lasting and temporary effects,
which have a most powerful influence on the distribution of property,
and on the demand and supply of particular commodities. The
discovery of the mines of America, during the time that it raised the
price of corn between three and four times, did not nearly so much as
double the price of labour; and, while it permanently diminished the
power of all fixed incomes, it gave a prodigious increase of power to all
landlords and capitalists. In a similar manner, the fall in the price of
corn, from whatever cause it took place, which occurred towards the
middle of the last century, accompanied as it was by a rise, rather than
a fall in the price of labour, must have given a great relative check to
the employment of capital upon the land, and a great relative stimulus
to population; a state of things precisely calculated to produce the
reaction afterwards experienced, and to convert us from an exporting to
an importing nation.
It is by no means sufficient for Dr Smith's argument, that the price of
corn should determine the price of labour under precisely the same
circumstances of supply and demand. To make it applicable to his
purpose, he must show, in addition, that a natural or artificial rise in the
price of corn, or in the value of silver, will make no alteration in the

state of property, and in the supply and demand of corn and labour; a
position which experience uniformly contradicts.
Nothing then can be more evident both from theory and experience,
than that the price of corn does not immediately and generally regulate
the prices of labour and all other commodities; and that the real price of
corn is capable of varying for periods of sufficient length to give a
decided stimulus or discouragement to agriculture. It is, of course, only
to a temporary encouragement or discouragement, that any commodity,
where the competition is free, can be subjected. We may increase the
capital employed either upon the land or in the cotton manufacture, but
it is impossible permanently to raise the profits of farmers or particular
manufacturers above the level of other profits; and, after the influx of a
certain quantity of capital, they will necessarily be equalized. Corn, in
this respect, is subjected to the same laws as other commodities, and
the difference between them is by no means so great as stated by Dr
Smith.
In discussing therefore the present question, we must lay aside the
peculiar argument relating to the nature of corn; and allowing that it is
possible to encourage cultivation by corn laws, we must direct our chief
attention to the question of the