for, when he says, that "were he
(the labourer) indeed reduced to a bare allowance of necessaries, he
would then suffer no further abatement of his wages, as he could not on
such conditions continue his race?" Suppose the circumstances of the
country to be such, that the lowest labourers are not only called upon
to continue their race, but to increase it; their wages would have been
regulated accordingly. Can they multiply, if a tax takes from them a
part of their wages, and reduces them to bare necessaries?

It is undoubtedly true, that a taxed commodity will not rise in
proportion to the tax, if the demand for it will diminish, and if the
quantity cannot be reduced. If metallic money were in general use, its
value would not for a considerable time be increased by a tax, in
proportion to the amount of the tax, because at a higher price, the
demand would be diminished, and the quantity would not be diminished;
and unquestionably the same cause frequently influences the wages of
labour, the number of labourers cannot be rapidly increased or
diminished in proportion to the increase or diminution of the fund,
which is to employ them; but in the case supposed, there is no necessary
diminution of demand for labour, and if diminished, the demand does not
abate in proportion to the tax. Mr. Buchanan forgets that the fund
raised by the tax is employed by Government in maintaining labourers,
unproductive indeed, but still labourers. If labour were not to rise
when wages are taxed, there would be a great increase in the competition
for labour, because the owners of capital, who would have nothing to pay
towards such a tax, would have the same funds for imploying labour;
whilst the Government who received the tax would have an additional
fund for the same purpose. Government and the people thus become
competitors, and the consequence of their competition is a rise in the
price of labour. The same number of men only will be employed, but they
will be employed at additional wages.

If the tax had been laid at once on the people, their fund for the
maintenance of labour would have been diminished in the very same degree
that the fund of Government for that purpose had been increased; and
therefore there would have been no rise in wages; for though there would
be the same demand, there would not be the same competition. If when the
tax were levied, Government at once exported the produce of it as a
subsidy to a foreign state, and if