roduced by 100 men working one year upon
it with wages of 50_l._ each, and its price were 5000_l._, should those
wages rise to 55_l._ its price would be 5500_l._: but this cannot be the
case; less than 100 men are employed, or it could not be sold for
5000_l._; for out of the 5000_l._ must be paid the profits of the stock
which employed the men. Suppose then that only eighty-five men were
employed at an expense of 4250_l._ per annum, and that the 750_l._,
which the sale of the machine would produce over and above the wages
advanced to the men, constituted the profits of the engineer's stock.
When wages rose 10 per cent., he would be obliged to employ an
additional capital of 425_l._, and would therefore employ 4675_l._,
instead of 4250_l._, on which capital he would only get a profit of
325_l._ if he continued to sell his machine for 5000_l._; but this is
precisely the case of all manufacturers and capitalists; the rise of
wages affects them all. If therefore the maker of the machine should
raise the price of his machine in consequence of a rise of wages, an
unusual quantity of capital would be employed in the construction of
such machines, till their price afforded only the usual profits. The
manufacturer of hats, by the employment of the machine, if he sells his
hats for 8000_l._, is precisely in the same situation as before; he
employs no more capital, and obtains the same profits. The competition
of trade would not long allow this; for as capital would flow to the
most profitable employment, he would be obliged to lower the price of
hats, till his profits had sunk to the general level. Thus then is the
public benefited by machinery: these mute agents are always the produce
of much less labour than that which they displace, even when they are
of the same money value. Through their influence, an increase in the
price of provisions which raises wages, will affect fewer persons: it
will reach, as in the above instance, eighty-five men instead of a
hundred; and the saving which is the consequence, shews itself in the
reduced price of the commodity manufactured. Neither machines nor any
other commodities are raised in price, but all commodities which are
made by machines fall, and fall in proportion to their durability.

It appears, then, that in proportion to the quantity and the durability
of the fixed capital employed in any kind of production, the relative
prices of those commodities on which such capital is employed,