In that early and rude state of society which 
precedes both the accumulation of stock and 
the appropriation of land, the proportion between 
the quantities of labour necessary for 
acquiring different objects, seems to be the 
only circumstance which can afford any rule 
for exchanging them for one another. If 
among a nation of hunters, for example, it 
usually costs twice the labour to kill a beaver 
which it does to kill a deer, one beaver should 
naturally exchange for or be worth two deer
It is natural that what is usually the produce 
of two days or two hours labour, should be 
worth double of what is usually the produce 
of one day's or one hour's labour
If the one species of labour should be more 
severe than the other, some allowance will naturally 
be made for this superior hardship
and the produce of one hour's labour in the 
one way may frequently exchange for that of 
two hour's labour in the other. 
Or if the one species of labour requires an 
uncommon degree of dexterity and ingenuity
the esteem which men have for such talents, 
will naturally give a value to their produce
superior to what would be due to the time 
employed about it. Such talents can seldom 
be acquired but in consequence of long application
and the superior value of their produce 
may frequently be no more than a reasonable 
compensation for the time and labour 
which must be spent in acquiring them. In 
the advanced state of society, allowances of 
this kind, for superior hardship and superior 
skill, are commonly made in the wages of labour
and something of the same kind must 
probably have taken place in its earliest and 
rudest period
In this state of things, the whole produce 
of labour belongs to the labourer; and the 
quantity of labour commonly employed in acquiring 
or producing any commodity, is the 
only circumstance which can regulate the 
quantity of labour which it ought commonly 
to purchase, command, or exchange for. 
As soon as stock has accumulated in the 
hands of particular persons, some of them will 
naturally employ it in setting to work industrious 
people, whom they will supply with materials 
and subsistence, in order to make a 
profit by the sale of their work, or by what 
their labour adds to the value of the materials
In exchanging the complete manufacture 
either for money, for labour, or for other 
goods, over and above what may be sufficient 
to pay the price of the materials, and the 
wages of the workmen, something must be 
given for the profits of the undertaker of the 
work, who hazards his stock in this adventure. 
The value which the workmen add to the materials
therefore, resolves itself in this case 
into two parts of which the one pays their 
wages, the other the profits of their employer 
upon the whole stock of materials and wages 
which he advanced. He could have no interest 
to employ them, unless he expected from 
the sale of their work something more than 
what was sufficient to replace his stock to 
him; and he could have no interest to employ 
a great stock rather than a small one, unless 
his profits were to bear some proportion to 
the extent of his stock
The profits of stock, it may perhaps be 
thought, are only a different name for the 
wages of a particular sort of labour, the labour 
of inspection and direction. They are, 
however, altogether different, are regulated 
by quite different principles, and bear no proportion 
to the quantity, the hardship, or the 
ingenuity of this supposed labour of inspection 
and direction. They are regulated altogether 
by the value of the stock employed
and are greater or smaller in proportion to the 
extent of this stock. Let us suppose, for example, 
that in some particular place, where 
the common annual profits of manufacturing 
stock are ten per cent. there are two different 
manufactures, in each of which twenty workmen 
are employed, at the rate of fifteen 
pounds a year each, or at the expense of three 
hundred a-year in each manufactory. Let 
us suppose, too, that the coarse materials 
annually wrought up in the one cost only 
seven hundred pounds, while the finer materials 
in the other cost seven thousand. The 
capital annually employed in the one will, in 
this case, amount only to one thousand 
pounds; whereas that employed in the other 
will amount to seven thousand three hundred 
pounds. At the rate of ten per cent. therefore, 
the undertaker of the one will expect
yearly profit of about one hundred pounds 
only; while that of the other will expect 
about seven hundred and thirty pounds. But 
though their profits are so very different, their 
labour of inspection and direction may be 
either altogether or very nearly the same. In 
many great works, almost the whole labour 
of this kind is committed to some principal 
clerk. His wages properly express the value 
of this labour of inspection and direction
Though in settling them some regard is had 
commonly, not only to his labour and skill
but to the trust which is reposed in him, yet 
they never bear any regular proportion to the 
capital of which he oversees the management; 
and the owner of this capital, though he is 
thus discharged of almost all labour, still expects 
that his profit should bear a regular proportion 
to his capital. In the price of commodities
therefore, the profits of stock constitute