Adam Smith's Simplified Wealth of Nations, Book 1, Chapter 11n: Rent, Digression -- Effect of Improvement on the real value of natural produce that cannot be multiplied
Chapter 11n, Digression: The effect of improvement on real value of rude produce
Rude produce may be divided into three:
- The ones that human industry cannot multiply at all
The ones that human industry can multiply in proportion to the demand.
- Its real price may rise to any degree.
The ones that human industry can multiply in a limited or uncertain way.
- Its real price may rise to a certain boundary.
- Its real price may rise, stay the same, or even fall in the progress of improvement, according to the efforts of human industry.
First Sort -- The produce that cannot be multiplied
194 The first kind is the rude produce which human industry cannot multiply at all.
- Examples are:
- most rare birds and fishes,
- different sorts of game, and
- almost all wild-fowl and all birds of passage, etc.
- Nature produces them only in certain quantities.
- They are very perishable.
- It is impossible to accumulate together such produce of different seasons.
- Their demand increases with the increase in wealth and luxury.
- Their supply cannot increase beyond this increase of the demand.
- The quantity of such commodities remain the same while the competition to purchase them is continually increasing
- Their price may rise to any unlimited height.
- If the demand for woodcocks rose and its price increased to 20 guineas each, their supply cannot be increased.
- The Romans paid a high price for rare birds and fishes.
- These prices were the effect of the high value of such rarities and not the effects of the low value of silver.
- The real value of silver was higher at Rome then than at present.
- 3 sestertii, equal to 6 pence sterling, was the price for the modius or peck of the tithe wheat of Sicily.
- This price was probably below the average market price.
- The obligation to deliver wheat at this price was considered as a tax on the Sicilian farmers.
- When the Romans ordered more corn than the tithe of wheat amounted to, they were bound to pay for the surplus at the rate of 4 sestertii, or 8-pence sterling the peck.
- This was probably the average contract price of those times.
- It is equal to 252 pence the quarter.
- 336 pence the quarter was the ordinary contract price of English wheat.
- English wheat has inferior quality to Sicilian wheat.
- It sells for a lower price in Europe.
- The value of silver in those ancient times was 3:4 of today.
- Three ounces of silver then bought the same amount of labour and commodities which four ounces do presently.
- According to Pliny, Seius bought a white nightingale for the empress Agrippina at 6,000 sestertii or nominal 12,000 pence today.
- Asinius Celer purchased a surmullet at 8,000 sestertii, equal to nominal 16,000 pence today.
- The extravagance of those prices is about 1/3 less than it really was.
- Their real price was around 1/3 more than their nominal price relative to today.
- Seius gave for the nightingale the command of an amount of labour and subsistence equal to what 16,000 pence would buy today. [12,000 + (12,000/3)]
- Asinius Celer paid 21,333.33 pence, real value, for the surmullet. [16,000 + (16,000/3)]
- Those high prices were due to the abundance of labour and subsistence that the Romans had beyond what was necessary for their own use.
- They had less silver then than today.
Next: Chapter 11o, Digression, Second Sort of Produce (can be multiplied)