Adam Smith has very clearly explained in what manner the progress of wealth and improvement tends to raise the price of cattle, poultry, the materials of clothing and lodging, the most useful minerals, etc., etc. compared with corn; but he has not entered into the explanation of the natural causes which tend to determine the price of corn.  He has left the reader, indeed, to conclude, that he considers the price of corn as determined only by the state of the mines which at the time supply the circulating medium of the commercial world.  But this is a cause obviously inadequate to account for the actual differences in the price of grain, observable in countries at no great distance from each other, and at nearly the same distance from the mines.

I entirely agree with him, that it is of great use to inquire into the causes of high price; as, from the result of such inquiry, it may turn out, that the very circumstance of which we complain, may be the necessary consequence and the most certain sign of increasing wealth and prosperity.  But, of all inquiries of this kind, none surely can be so important, or so generally interesting, as an inquiry into the causes which affect the price of corn, and which occasion the differences in this price, so observable in different countries.

I have no hesitation in stating that, independently of irregularities in the currency of a country,(13) and other temporary and accidental circumstances, the cause of the high comparative money price of corn is its high comparative real price, or the greater quantity of capital and labour which must be employed to produce it:  and that the reason why the real price of corn is higher and continually rising in countries which are already rich, and still advancing in prosperity and population, is to be found in the necessity of resorting constantly to poorer land — to machines which require a greater expenditure to work them — and which consequently occasion each fresh addition to the raw produce of the country to be purchased at a greater cost — in short, it is to be found in the important truth that corn, in a progressive country, is sold at the price necessary to yield the actual supply; and that, as this supply becomes more and more difficult, the price rises in proportion.(14)

The price of corn, as determined by these causes, will of course be greatly modified by other circumstances; by direct and indirect taxation; by improvements in the modes of cultivation; by the saving of labour on the land; and particularly by the importations of foreign corn.  The latter cause, indeed, may do away, in a considerable degree, the usual effects of great wealth on the price of corn; and this wealth will then show itself in a different form.