Page:An Essay of the Impolicy of a Bounty on the Exportation of Grain (1804).djvu/40

Rh fore, is wanted in that proportion to carry on every manufacture, and the reasonable profit upon this additional capital must be added to the price of the manufactured commodity. Every one of the three constituent parts of the price of all manufactured commodities receives then an increase by every increase in the price of corn; and thus the price of all manufactured commodities must rise in a much greater proportion than the price of corn. The price therefore of labour, and of every thing which is the produce of land and labour, every exchangeable commodity which the country products, is altogether determined by the price of corn.

Nothing then can be more incontrovertible than the proposition of Smith, that “the real effect of the bounty is not so much to raise the real value of corn, as to degrade the real value of silver; or to make an equal quantity of it exchange for a smaller quantity, not only of corn, but of all other commodities.”

Two conclusions, therefore, evidently follow;

The first is, that no ability whatever is by the bounty procured to the farmer of increasing the quantity of corn to be raised. “Though in consequence of the bounty,” says Smith, “the farmer should be enabled to sell his corn for four shillings the bushel instead of three and sixpence, and to pay his landlord a money rent proportionable to this rise in the money price of his produce; yet, if in consequence of this rise in the