Page:The wealth of nations, volume 1.djvu/39

 man upon the land is the original source of all wealth, since food is the first necessity of man, but then erroneously argues, as a physiocrat, that only the land produces wealth.

"The husbandman is the only one whose industry produces more than the wages of his labor. He, therefore, is the only source of all wealth" (§ 7).

He shows clearly how wages are reduced to the limit of subsistence by competition, and, like Petty and Smith, only just misses arriving at the conception of economic rent. Turgot writes (§ 12): "Every piece of ground is not equally fertile; two men with the same extent of land may reap a very different harvest; this is the second source of inequality."

He has a correct conception of exchange value. "Commerce gives to all merchandise a current value with respect to any other merchandise; from which it follows that all merchandise is the equivalent for a certain quantity of any other merchandise, and may be looked on as a pledge to represent it. Every merchandise therefore may serve as a scale or common measure, by which to compare the value of any other." Then he goes on to show that all money is merchandise and why it is that the most precious metals are most fitted to serve as money. He also has sound notions of the sources and function of capital. The work is very clear and succinct, and had, no doubt, a powerful influence, as one of its immediate precursors, on the "Wealth of Nations."

In England, Tucker, Hume, and Stewart may all be regarded as leading up to Adam Smith. Sir James Stewart, indeed, in his comprehensive but confused "Inquiry into the Principles of Political Economy" (1767), sees dimly many of the truths which Smith clearly expressed only