, and
cloth; and therefore, even with the above increase of wages, his
situation would be comparatively worse. But it may be said that I have
been considering the effect of wages on price, on the supposition that
gold, or the metal from which money is made, is the produce of the
country in which wages varied; and that the consequences which I have
deduced agree little with the actual state of things, because gold is a
metal of foreign production. The circumstance however, of gold being a
foreign production, will not invalidate the truth of the argument,
because it may be shewn, that whether it were found at home, or were
imported from abroad, the effects ultimately and indeed immediately
would be the same.

When wages rise, it is generally because the increase of wealth and
capital have occasioned a new demand for labour, which will infallibly
be attended with an increased production of commodities. To circulate
these additional commodities, even at the same prices as before, more
money is required, more of this foreign commodity from which money is
made, and which can only be obtained by importation. Whenever a
commodity is required in greater abundance than before, its relative
value rises comparatively with those commodities with which its purchase
is made. If more hats were wanted, their price would rise, and more gold
would be given for them. If more gold were required, gold would rise,
and hats would fall in price, as a greater quantity of hats and of all
other things would then be necessary to purchase the same quantity of
gold. But in the case supposed, to say that commodities will rise,
because wages rise, is to affirm a positive contradiction; for we first
say that gold will rise in relative value in consequence of demand, and
secondly, that it will fall in relative value because prices will rise,
two effects which are totally incompatible with each other. To say that
commodities are raised in price, is the same thing as to say that money
is lowered in relative value; for it is by commodities that the relative
value of gold is estimated. If then all commodities rose in price, gold
could not come from abroad to purchase those dear commodities, but it
would go from home to be employed with advantage in purchasing the
comparatively cheaper foreign commodities. It appears then, that the
rise of wages will not raise the prices of commodities, whether the
metal from which money is made be produced at home or in a fo