s, the plenty of one
year from relieving the scarcity of another. Both in the years of plenty
and in years of scarcity, therefore, the bounty necessarily tends to
raise the money price of corn somewhat higher than it otherwise would be
in the home market."[37]

Adam Smith appears to have been fully aware, that the correctness of
his argument entirely depended on the fact, whether the increase "of the
money price of corn, by rendering that commodity more profitable to the
farmer, would not necessarily encourage its production."

"I answer," he says, "that this might be the case, if the effect of the
bounty was to raise the real price of corn, or to enable the farmer,
with an equal quantity of it, to maintain a greater number of labourers
in the same manner, whether liberal, moderate, or scanty, as other
labourers are commonly maintained in his neighbourhood."

If nothing were consumed by the labourer but corn, and if the portion
which he received, was the very lowest which his sustenance required,
there might be some ground for supposing that the quantity paid to the
labourer could, under no circumstances, be reduced,--but the money wages
of labour sometimes do not rise at all, and never rise in proportion to
the rise in the money price of corn, because corn, though an important
part, is only a part of the consumption of the labourer. If half his
wages were expended on corn, and the other half on soap, candles, fuel,
tea, sugar, clothing, &c., commodities on which no rise is supposed to
take place, it is evident that he would be quite as well paid with a
bushel and a half of wheat, when it was 16_s._ a bushel, as he was with
two bushels, when the price was 8_s._ per bushel; or with 24_s._ in
money, as he was before with 16_s._ His wages would rise only 50 per
cent. though corn rose 100 per cent., and, consequently, there would be
sufficient motive to divert more capital to the land, if profits on
other trades continued the same as before. But such a rise of wages
would also induce manufacturers to withdraw their capitals from
manufactures, to employ them on the land; for whilst the farmer
increased the price of his commodity 100 per cent., and his wages only
50 per cent., the manufacturer would be obliged also to raise wages 50
per cent., whilst he had no compensation whatever, in the rise of his
manufactured commodity, for this increased charge of production; capital
would consequently flow from manufactures to agricu