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Introduction To Stock Theory
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Of The Accumulation Of Capital Or Of Productive And Unproductive Labour








There is one sort of labour which adds to the value of the subject upon
which it is bestowed; there is another which has no such effect. The
former as it produces a value, may be called productive, the latter,
unproductive labour. {Some French authors of great learning and
ingenuity have used those words in a different sense. In the last
chapter of the fourth book, I shall endeavour to shew that their sense
is an improper one.} Thus the labour of a manufacturer adds generally
to the value of the materials which he works upon, that of his own
maintenance, and of his master's profit. The labour of a menial servant,
on the contrary, adds to the value of nothing. Though the manufacturer
has his wages advanced to him by his master, he in reality costs him
no expense, the value of those wages being generally restored, together
with a profit, in the improved value of the subject upon which his
labour is bestowed. But the maintenance of a menial servant never is
restored. A man grows rich by employing a multitude of manufacturers; he
grows poor by maintaining a multitude or menial servants. The labour of
the latter, however, has its value, and deserves its reward as well
as that of the former. But the labour of the manufacturer fixes and
realizes itself in some particular subject or vendible commodity, which
lasts for some time at least after that labour is past. It is, as
it were, a certain quantity of labour stocked and stored up, to be
employed, if necessary, upon some other occasion. That subject, or,
what is the same thing, the price of that subject, can afterwards, if
necessary, put into motion a quantity of labour equal to that which
had originally produced it. The labour of the menial servant, on the
contrary, does not fix or realize itself in any particular subject or
vendible commodity. His services generally perish in the very instant of
their performance, and seldom leave any trace of value behind them, for
which an equal quantity of service could afterwards be procured.

The labour of some of the most respectable orders in the society is,
like that of menial servants, unproductive of any value, and does not
fix or realize itself in any permanent subject, or vendible commodity,
which endures after that labour is past, and for which an equal quantity
of labour could afterwards be procured. The sovereign, for example, with
all the officers both of justice and war who serve under him, the whole
army and navy, are unproductive labourers. They are the servants of
the public, and are maintained by a part of the annual produce of the
industry of other people. Their service, how honourable, how useful, or
how necessary soever, produces nothing for which an equal quantity
of service can afterwards be procured. The protection, security, and
defence, of the commonwealth, the effect of their labour this year,
will not purchase its protection, security, and defence, for the year
to come. In the same class must be ranked, some both of the gravest and
most important, and some of the most frivolous professions; churchmen,
lawyers, physicians, men of letters of all kinds; players, buffoons,
musicians, opera-singers, opera-dancers, etc. The labour of the meanest
of these has a certain value, regulated by the very same principles
which regulate that of every other sort of labour; and that of the
noblest and most useful, produces nothing which could afterwards
purchase or procure an equal quantity of labour. Like the declamation of
the actor, the harangue of the orator, or the tune of the musician, the
work of all of them perishes in the very instant of its production.

Both productive and unproductive labourers, and those who do not labour
at all, are all equally maintained by the annual produce of the land
and labour of the country. This produce, how great soever, can never
be infinite, but must have certain limits. According, therefore, as
a smaller or greater proportion of it is in any one year employed in
maintaining unproductive hands, the more in the one case, and the
less in the other, will remain for the productive, and the next year's
produce will be greater or smaller accordingly; the whole annual
produce, if we except the spontaneous productions of the earth, being
the effect of productive labour.

Though the whole annual produce of the land and labour of every country
is no doubt ultimately destined for supplying the consumption of its
inhabitants, and for procuring a revenue to them; yet when it first
comes either from the ground, or from the hands of the productive
labourers, it naturally divides itself into two parts. One of them, and
frequently the largest, is, in the first place, destined for replacing
a capital, or for renewing the provisions, materials, and finished work,
which had been withdrawn from a capital; the other for constituting a
revenue either to the owner of this capital, as the profit of his stock,
or to some other person, as the rent of his land. Thus, of the produce
of land, one part replaces the capital of the farmer; the other pays his
profit and the rent of the landlord; and thus constitutes a revenue both
to the owner of this capital, as the profits of his stock, and to
some other person as the rent of his land. Of the produce of a great
manufactory, in the same manner, one part, and that always the largest,
replaces the capital of the undertaker of the work; the other pays his
profit, and thus constitutes a revenue to the owner of this capital.

That part of the annual produce of the land and labour of any country
which replaces a capital, never is immediately employed to maintain any
but productive hands. It pays the wages of productive labour only. That
which is immediately destined for constituting a revenue, either as
profit or as rent, may maintain indifferently either productive or
unproductive hands.

Whatever part of his stock a man employs as a capital, he always expects
it to be replaced to him with a profit. He employs it, therefore,
in maintaining productive hands only; and after having served in the
function of a capital to him, it constitutes a revenue to them. Whenever
he employs any part of it in maintaining unproductive hands of any kind,
that part is from that moment withdrawn from his capital, and placed in
his stock reserved for immediate consumption.

Unproductive labourers, and those who do not labour at all, are all
maintained by revenue; either, first, by that part of the annual
produce which is originally destined for constituting a revenue to some
particular persons, either as the rent of land, or as the profits of
stock; or, secondly, by that part which, though originally destined for
replacing a capital, and for maintaining productive labourers only, yet
when it comes into their hands, whatever part of it is over and
above their necessary subsistence, may be employed in maintaining
indifferently either productive or unproductive hands. Thus, not only
the great landlord or the rich merchant, but even the common workman,
if his wages are considerable, may maintain a menial servant; or he may
sometimes go to a play or a puppet-show, and so contribute his share
towards maintaining one set of unproductive labourers; or he may pay
some taxes, and thus help to maintain another set, more honourable and
useful, indeed, but equally unproductive. No part of the annual produce,
however, which had been originally destined to replace a capital, is
ever directed towards maintaining unproductive hands, till after it has
put into motion its full complement of productive labour, or all that it
could put into motion in the way in which it was employed. The workman
must have earned his wages by work done, before he can employ any part
of them in this manner. That part, too, is generally but a small one. It
is his spare revenue only, of which productive labourers have seldom
a great deal. They generally have some, however; and in the payment of
taxes, the greatness of their number may compensate, in some measure,
the smallness of their contribution. The rent of land and the profits
of stock are everywhere, therefore, the principal sources from which
unproductive hands derive their subsistence. These are the two sorts
of revenue of which the owners have generally most to spare. They might
both maintain indifferently, either productive or unproductive hands.
They seem, however, to have some predilection for the latter. The
expense of a great lord feeds generally more idle than industrious
people. The rich merchant, though with his capital he maintains
industrious people only, yet by his expense, that is, by the employment
of his revenue, he feeds commonly the very same sort as the great lord.

The proportion, therefore, between the productive and unproductive
hands, depends very much in every country upon the proportion between
that part of the annual produce, which, as soon as it comes either from
the ground, or from the hands of the productive labourers, is destined
for replacing a capital, and that which is destined for constituting a
revenue, either as rent or as profit. This proportion is very different
in rich from what it is in poor countries.

Thus, at present, in the opulent countries of Europe, a very large,
frequently the largest, portion of the produce of the land, is destined
for replacing the capital of the rich and independent farmer; the other
for paying his profits, and the rent of the landlord. But anciently,
during the prevalency of the feudal government, a very small portion
of the produce was sufficient to replace the capital employed in
cultivation. It consisted commonly in a few wretched cattle, maintained
altogether by the spontaneous produce of uncultivated land, and which
might, therefore, be considered as a part of that spontaneous produce.
It generally, too, belonged to the landlord, and was by him advanced to
the occupiers of the land. All the rest of the produce properly belonged
to him too, either as rent for his land, or as profit upon this paltry
capital. The occupiers of land were generally bond-men, whose persons
and effects were equally his property. Those who were not bond-men were
tenants at will; and though the rent which they paid was often nominally
little more than a quit-rent, it really amounted to the whole produce
of the land. Their lord could at all times command their labour in
peace and their service in war. Though they lived at a distance from his
house, they were equally dependent upon him as his retainers who lived
in it. But the whole produce of the land undoubtedly belongs to him, who
can dispose of the labour and service of all those whom it maintains. In
the present state of Europe, the share of the landlord seldom exceeds a
third, sometimes not a fourth part of the whole produce of the land.
The rent of land, however, in all the improved parts of the country, has
been tripled and quadrupled since those ancient times; and this third
or fourth part of the annual produce is, it seems, three or four times
greater than the whole had been before. In the progress of improvement,
rent, though it increases in proportion to the extent, diminishes in
proportion to the produce of the land.

In the opulent countries of Europe, great capitals are at present
employed in trade and manufactures. In the ancient state, the little
trade that was stirring, and the few homely and coarse manufactures that
were carried on, required but very small capitals. These, however, must
have yielded very large profits. The rate of interest was nowhere less
than ten per cent. and their profits must have been sufficient to afford
this great interest. At present, the rate of interest, in the improved
parts of Europe, is nowhere higher than six per cent.; and in some of
the most improved, it is so low as four, three, and two per cent. Though
that part of the revenue of the inhabitants which is derived from the
profits of stock, is always much greater in rich than in poor countries,
it is because the stock is much greater; in proportion to the stock, the
profits are generally much less.

That part of the annual produce, therefore, which, as soon as it comes
either from the ground, or from the hands of the productive labourers,
is destined for replacing a capital, is not only much greater in rich
than in poor countries, but bears a much greater proportion to that
which is immediately destined for constituting a revenue either as
rent or as profit. The funds destined for the maintenance of productive
labour are not only much greater in the former than in the latter,
but bear a much greater proportion to those which, though they may
be employed to maintain either productive or unproductive hands, have
generally a predilection for the latter.

The proportion between those different funds necessarily determines in
every country the general character of the inhabitants as to industry or
idleness. We are more industrious than our forefathers, because, in the
present times, the funds destined for the maintenance of industry are
much greater in proportion to those which are likely to be employed in
the maintenance of idleness, than they were two or three centuries
ago. Our ancestors were idle for want of a sufficient encouragement to
industry. It is better, says the proverb, to play for nothing, than
to work for nothing. In mercantile and manufacturing towns, where the
inferior ranks of people are chiefly maintained by the employment of
capital, they are in general industrious, sober, and thriving; as
in many English, and in most Dutch towns. In those towns which are
principally supported by the constant or occasional residence of a
court, and in which the inferior ranks of people are chiefly maintained
by the spending of revenue, they are in general idle, dissolute, and
poor; as at Rome, Versailles, Compeigne, and Fontainbleau. If you except
Rouen and Bourdeaux, there is little trade or industry in any of the
parliament towns of France; and the inferior ranks of people, being
chiefly maintained by the expense of the members of the courts of
justice, and of those who come to plead before them, are in general idle
and poor. The great trade of Rouen and Bourdeaux seems to be altogether
the effect of their situation. Rouen is necessarily the entrepot of
almost all the goods which are brought either from foreign countries, or
from the maritime provinces of France, for the consumption of the great
city of Paris. Bourdeaux is, in the same manner, the entrepot of the
wines which grow upon the banks of the Garronne, and of the rivers which
run into it, one of the richest wine countries in the world, and which
seems to produce the wine fittest for exportation, or best suited to
the taste of foreign nations. Such advantageous situations necessarily
attract a great capital by the great employment which they afford it;
and the employment of this capital is the cause of the industry of those
two cities. In the other parliament towns of France, very little more
capital seems to be employed than what is necessary for supplying their
own consumption; that is, little more than the smallest capital which
can be employed in them. The same thing may be said of Paris, Madrid,
and Vienna. Of those three cities, Paris is by far the most industrious,
but Paris itself is the principal market of all the manufactures
established at Paris, and its own consumption is the principal object of
all the trade which it carries on. London, Lisbon, and Copenhagen, are,
perhaps, the only three cities in Europe, which are both the constant
residence of a court, and can at the same time be considered as trading
cities, or as cities which trade not only for their own consumption, but
for that of other cities and countries. The situation of all the three
is extremely advantageous, and naturally fits them to be the entrepots
of a great part of the goods destined for the consumption of distant
places. In a city where a great revenue is spent, to employ with
advantage a capital for any other purpose than for supplying the
consumption of that city, is probably more difficult than in one in
which the inferior ranks of people have no other maintenance but what
they derive from the employment of such a capital. The idleness of the
greater part of the people who are maintained by the expense of
revenue, corrupts, it is probable, the industry of those who ought to
be maintained by the employment of capital, and renders it less
advantageous to employ a capital there than in other places. There was
little trade or industry in Edinburgh before the Union. When the Scotch
parliament was no longer to be assembled in it, when it ceased to be the
necessary residence of the principal nobility and gentry of Scotland, it
became a city of some trade and industry. It still continues, however,
to be the residence of the principal courts of justice in Scotland,
of the boards of customs and excise, etc. A considerable revenue,
therefore, still continues to be spent in it. In trade and industry,
it is much inferior to Glasgow, of which the inhabitants are chiefly
maintained by the employment of capital. The inhabitants of a large
village, it has sometimes been observed, after having made considerable
progress in manufactures, have become idle and poor, in consequence of a
great lord's having taken up his residence in their neighbourhood.

The proportion between capital and revenue, therefore, seems everywhere
to regulate the proportion between industry and idleness Wherever
capital predominates, industry prevails; wherever revenue, idleness.
Every increase or diminution of capital, therefore, naturally tends
to increase or diminish the real quantity of industry, the number of
productive hands, and consequently the exchangeable value of the annual
produce of the land and labour of the country, the real wealth and
revenue of all its inhabitants.

Capitals are increased by parsimony, and diminished by prodigality and
misconduct.

Whatever a person saves from his revenue he adds to his capital,
and either employs it himself in maintaining an additional number of
productive hands, or enables some other person to do so, by lending
it to him for an interest, that is, for a share of the profits. As the
capital of an individual can be increased only by what he saves from his
annual revenue or his annual gains, so the capital of a society, which
is the same with that of all the individuals who compose it, can be
increased only in the same manner.

Parsimony, and not industry, is the immediate cause of the increase
of capital. Industry, indeed, provides the subject which parsimony
accumulates; but whatever industry might acquire, if parsimony did not
save and store up, the capital would never be the greater.

Parsimony, by increasing the fund which is destined for the maintenance
of productive hands, tends to increase the number of those hands whose
labour adds to the value of the subject upon winch it is bestowed.
It tends, therefore, to increase the exchangeable value of the annual
produce of the land and labour of the country. It puts into motion an
additional quantity of industry, which gives an additional value to the
annual produce.

What is annually saved, is as regularly consumed as what is annually
spent, and nearly in the same time too: but it is consumed by a
different set of people. That portion of his revenue which a rich man
annually spends, is, in most cases, consumed by idle guests and menial
servants, who leave nothing behind them in return for their consumption.
That portion which he annually saves, as, for the sake of the profit,
it is immediately employed as a capital, is consumed in the same manner,
and nearly in the same time too, but by a different set of people: by
labourers, manufacturers, and artificers, who reproduce, with a profit,
the value of their annual consumption. His revenue, we shall suppose,
is paid him in money. Had he spent the whole, the food, clothing,
and lodging, which the whole could have purchased, would have been
distributed among the former set of people. By saving a part of it,
as that part is, for the sake of the profit, immediately employed as a
capital, either by himself or by some other person, the food, clothing,
and lodging, which may be purchased with it, are necessarily reserved
for the latter. The consumption is the same, but the consumers are
different.

By what a frugal man annually saves, he not only affords maintenance to
an additional number of productive hands, for that of the ensuing year,
but like the founder of a public work-house he establishes, as it were,
a perpetual fund for the maintenance of an equal number in all times to
come. The perpetual allotment and destination of this fund, indeed, is
not always guarded by any positive law, by any trust-right or deed of
mortmain. It is always guarded, however, by a very powerful principle,
the plain and evident interest of every individual to whom any share of
it shall ever belong. No part of it can ever afterwards be employed to
maintain any but productive hands, without an evident loss to the person
who thus perverts it from its proper destination.

The prodigal perverts it in this manner: By not confining his expense
within his income, he encroaches upon his capital. Like him who perverts
the revenues of some pious foundation to profane purposes, he pays
the wages of idleness with those funds which the frugality of his
forefathers had, as it were, consecrated to the maintenance of industry.
By diminishing the funds destined for the employment of productive
labour, he necessarily diminishes, so far as it depends upon him, the
quantity of that labour which adds a value to the subject upon which it
is bestowed, and, consequently, the value of the annual produce of the
land and labour of the whole country, the real wealth and revenue of
its inhabitants. If the prodigality of some were not compensated by the
frugality of others, the conduct of every prodigal, by feeding the
idle with the bread of the industrious, would tend not only to beggar
himself, but to impoverish his country.

Though the expense of the prodigal should be altogether in home made,
and no part of it in foreign commodities, its effect upon the productive
funds of the society would still be the same. Every year there would
still be a certain quantity of food and clothing, which ought to have
maintained productive, employed in maintaining unproductive hands. Every
year, therefore, there would still be some diminution in what would
otherwise have been the value of the annual produce of the land and
labour of the country.

This expense, it may be said, indeed, not being in foreign goods, and
not occasioning any exportation of gold and silver, the same quantity of
money would remain in the country as before. But if the quantity of
food and clothing which were thus consumed by unproductive, had been
distributed among productive hands, they would have reproduced, together
with a profit, the full value of their consumption. The same quantity
of money would, in this case, equally have remained in the country,
and there would, besides, have been a reproduction of an equal value of
consumable goods. There would have been two values instead of one.

The same quantity of money, besides, can not long remain in any country
in which the value of the annual produce diminishes. The sole use of
money is to circulate consumable goods. By means of it, provisions,
materials, and finished work, are bought and sold, and distributed to
their proper consumers. The quantity of money, therefore, which can be
annually employed in any country, must be determined by the value of
the consumable goods annually circulated within it. These must consist,
either in the immediate produce of the land and labour of the country
itself, or in something which had been purchased with some part of that
produce. Their value, therefore, must diminish as the value of that
produce diminishes, and along with it the quantity of money which can
be employed in circulating them. But the money which, by this annual
diminution of produce, is annually thrown out of domestic circulation,
will not be allowed to lie idle. The interest of whoever possesses it
requires that it should be employed; but having no employment at home,
it will, in spite of all laws and prohibitions, be sent abroad, and
employed in purchasing consumable goods, which may be of some use at
home. Its annual exportation will, in this manner, continue for some
time to add something to the annual consumption of the country beyond
the value of its own annual produce. What in the days of its prosperity
had been saved from that annual produce, and employed in purchasing
gold and silver, will contribute, for some little time, to support its
consumption in adversity. The exportation of gold and silver is, in this
case, not the cause, but the effect of its declension, and may even, for
some little time, alleviate the misery of that declension.

The quantity of money, on the contrary, must in every country naturally
increase as the value of the annual produce increases. The value of the
consumable goods annually circulated within the society being greater,
will require a greater quantity of money to circulate them. A part
of the increased produce, therefore, will naturally be employed in
purchasing, wherever it is to be had, the additional quantity of gold
and silver necessary for circulating the rest. The increase of those
metals will, in this case, be the effect, not the cause, of the public
prosperity. Gold and silver are purchased everywhere in the same manner.
The food, clothing, and lodging, the revenue and maintenance, of all
those whose labour or stock is employed in bringing them from the mine
to the market, is the price paid for them in Peru as well as in England.
The country which has this price to pay, will never belong without the
quantity of those metals which it has occasion for; and no country will
ever long retain a quantity which it has no occasion for.

Whatever, therefore, we may imagine the real wealth and revenue of a
country to consist in, whether in the value of the annual produce of its
land and labour, as plain reason seems to dictate, or in the quantity
of the precious metals which circulate within it, as vulgar prejudices
suppose; in either view of the matter, every prodigal appears to be a
public enemy, and every frugal man a public benefactor.

The effects of misconduct are often the same as those of prodigality.
Every injudicious and unsuccessful project in agriculture, mines,
fisheries, trade, or manufactures, tends in the same manner to diminish
the funds destined for the maintenance of productive labour. In every
such project, though the capital is consumed by productive hands only,
yet as, by the injudicious manner in which they are employed, they do
not reproduce the full value of their consumption, there must always be
some diminution in what would otherwise have been the productive funds
of the society.

It can seldom happen, indeed, that the circumstances of a great
nation can be much affected either by the prodigality or misconduct of
individuals; the profusion or imprudence of some being always more than
compensated by the frugality and good conduct of others.

With regard to profusion, the principle which prompts to expense is the
passion for present enjoyment; which, though sometimes violent and very
difficult to be restrained, is in general only momentary and occasional.
But the principle which prompts to save, is the desire of bettering
our condition; a desire which, though generally calm and dispassionate,
comes with us from the womb, and never leaves us till we go into the
grave. In the whole interval which separates those two moments, there is
scarce, perhaps, a single instance, in which any man is so perfectly and
completely satisfied with his situation, as to be without any wish of
alteration or improvement of any kind. An augmentation of fortune is the
means by which the greater part of men propose and wish to better their
condition. It is the means the most vulgar and the most obvious; and the
most likely way of augmenting their fortune, is to save and accumulate
some part of what they acquire, either regularly and annually, or upon
some extraordinary occasion. Though the principle of expense, therefore,
prevails in almost all men upon some occasions, and in some men upon
almost all occasions; yet in the greater part of men, taking the whole
course of their life at an average, the principle of frugality seems not
only to predominate, but to predominate very greatly.

With regard to misconduct, the number of prudent and successful
undertakings is everywhere much greater than that of injudicious
and unsuccessful ones. After all our complaints of the frequency of
bankruptcies, the unhappy men who fall into this misfortune, make but
a very small part of the whole number engaged in trade, and all other
sorts of business; not much more, perhaps, than one in a thousand.
Bankruptcy is, perhaps, the greatest and most humiliating calamity
which can befal an innocent man. The greater part of men, therefore, are
sufficiently careful to avoid it. Some, indeed, do not avoid it; as some
do not avoid the gallows.

Great nations are never impoverished by private, though they sometimes
are by public prodigality and misconduct. The whole, or almost the
whole public revenue is, in most countries, employed in maintaining
unproductive hands. Such are the people who compose a numerous and
splendid court, a great ecclesiastical establishment, great fleets and
armies, who in time of peace produce nothing, and in time of war acquire
nothing which can compensate the expense of maintaining them, even while
the war lasts. Such people, as they themselves produce nothing, are
all maintained by the produce of other men's labour. When multiplied,
therefore, to an unnecessary number, they may in a particular year
consume so great a share of this produce, as not to leave a sufficiency
for maintaining the productive labourers, who should reproduce it next
year. The next year's produce, therefore, will be less than that of the
foregoing; and if the same disorder should continue, that of the third
year will be still less than that of the second. Those unproductive
hands who should be maintained by a part only of the spare revenue of
the people, may consume so great a share of their whole revenue, and
thereby oblige so great a number to encroach upon their capitals, upon
the funds destined for the maintenance of productive labour, that
all the frugality and good conduct of individuals may not be able to
compensate the waste and degradation of produce occasioned by this
violent and forced encroachment.

This frugality and good conduct, however, is, upon most occasions, it
appears from experience, sufficient to compensate, not only the private
prodigality and misconduct of individuals, but the public extravagance
of government. The uniform, constant, and uninterrupted effort of
every man to better his condition, the principle from which public
and national, as well as private opulence is originally derived, is
frequently powerful enough to maintain the natural progress of things
towards improvement, in spite both of the extravagance of government,
and of the greatest errors of administration. Like the unknown principle
of animal life, it frequently restores health and vigour to the
constitution, in spite not only of the disease, but of the absurd
prescriptions of the doctor.

The annual produce of the land and labour of any nation can be increased
in its value by no other means, but by increasing either the number of
its productive labourers, or the productive powers of those labourers
who had before been employed. The number of its productive labourers,
it is evident, can never be much increased, but in consequence of an
increase of capital, or of the funds destined for maintaining them. The
productive powers of the same number of labourers cannot be increased,
but in consequence either of some addition and improvement to those
machines and instruments which facilitate and abridge labour, or of
more proper division and distribution of employment. In either case,
an additional capital is almost always required. It is by means of an
additional capital only, that the undertaker of any work can either
provide his workmen with better machinery, or make a more proper
distribution of employment among them. When the work to be done consists
of a number of parts, to keep every man constantly employed in one way,
requires a much greater capital than where every man is occasionally
employed in every different part of the work. When we compare,
therefore, the state of a nation at two different periods, and find that
the annual produce of its land and labour is evidently greater at the
latter than at the former, that its lands are better cultivated, its
manufactures more numerous and more flourishing, and its trade more
extensive; we may be assured that its capital must have increased during
the interval between those two periods, and that more must have been
added to it by the good conduct of some, than had been taken from
it either by the private misconduct of others, or by the public
extravagance of government. But we shall find this to have been the case
of almost all nations, in all tolerably quiet and peaceable times,
even of those who have not enjoyed the most prudent and parsimonious
governments. To form a right judgment of it, indeed, we must compare the
state of the country at periods somewhat distant from one another.
The progress is frequently so gradual, that, at near periods, the
improvement is not only not sensible, but, from the declension either
of certain branches of industry, or of certain districts of the country,
things which sometimes happen, though the country in general is in great
prosperity, there frequently arises a suspicion, that the riches and
industry of the whole are decaying.

The annual produce of the land and labour of England, for example, is
certainly much greater than it was a little more than a century ago, at
the restoration of Charles II. Though at present few people, I believe,
doubt of this, yet during this period five years have seldom passed
away, in which some book or pamphlet has not been published, written,
too, with such abilities as to gain some authority with the public,
and pretending to demonstrate that the wealth of the nation was fast
declining; that the country was depopulated, agriculture neglected,
manufactures decaying, and trade undone. Nor have these publications
been all party pamphlets, the wretched offspring of falsehood and
venality. Many of them have been written by very candid and very
intelligent people, who wrote nothing but what they believed, and for no
other reason but because they believed it.

The annual produce of the land and labour of England, again, was
certainly much greater at the Restoration than we can suppose it to have
been about a hundred years before, at the accession of Elizabeth. At
this period, too, we have all reason to believe, the country was much
more advanced in improvement, than it had been about a century before,
towards the close of the dissensions between the houses of York and
Lancaster. Even then it was, probably, in a better condition than it had
been at the Norman conquest: and at the Norman conquest, than during
the confusion of the Saxon heptarchy. Even at this early period, it was
certainly a more improved country than at the invasion of Julius Caesar,
when its inhabitants were nearly in the same state with the savages in
North America.

In each of those periods, however, there was not only much private and
public profusion, many expensive and unnecessary wars, great perversion
of the annual produce from maintaining productive to maintain
unproductive hands; but sometimes, in the confusion of civil discord,
such absolute waste and destruction of stock, as might be supposed, not
only to retard, as it certainly did, the natural accumulation of riches,
but to have left the country, at the end of the period, poorer than at
the beginning. Thus, in the happiest and most fortunate period of them
all, that which has passed since the Restoration, how many disorders
and misfortunes have occurred, which, could they have been foreseen, not
only the impoverishment, but the total ruin of the country would have
been expected from them? The fire and the plague of London, the two
Dutch wars, the disorders of the revolution, the war in Ireland, the
four expensive French wars of 1688, 1701, 1742, and 1756, together with
the two rebellions of 1715 and 1745. In the course of the four French
wars, the nation has contracted more than £145,000,000 of debt, over and
above all the other extraordinary annual expense which they occasioned;
so that the whole cannot be computed at less than £200,000,000. So great
a share of the annual produce of the land and labour of the country,
has, since the Revolution, been employed upon different occasions, in
maintaining an extraordinary number of unproductive hands. But had not
those wars given this particular direction to so large a capital, the
greater part of it would naturally have been employed in maintaining
productive hands, whose labour would have replaced, with a profit, the
whole value of their consumption. The value of the annual produce of the
land and labour of the country would have been considerably increased by
it every year, and every years increase would have augmented still more
that of the following year. More houses would have been built, more
lands would have been improved, and those which had been improved before
would have been better cultivated; more manufactures would have been
established, and those which had been established before would have been
more extended; and to what height the real wealth and revenue of the
country might by this time have been raised, it is not perhaps very easy
even to imagine.

But though the profusion of government must undoubtedly have retarded
the natural progress of England towards wealth and improvement, it has
not been able to stop it. The annual produce of its land and labour
is undoubtedly much greater at present than it was either at the
Restoration or at the Revolution. The capital, therefore, annually
employed in cultivating this land, and in maintaining this labour,
must likewise be much greater. In the midst of all the exactions of
government, this capital has been silently and gradually accumulated
by the private frugality and good conduct of individuals, by their
universal, continual, and uninterrupted effort to better their own
condition. It is this effort, protected by law, and allowed by liberty
to exert itself in the manner that is most advantageous, which has
maintained the progress of England towards opulence and improvement in
almost all former times, and which, it is to be hoped, will do so in all
future times. England, however, as it has never been blessed with a
very parsimonious government, so parsimony has at no time been the
characteristic virtue of its inhabitants. It is the highest impertinence
and presumption, therefore, in kings and ministers to pretend to watch
over the economy of private people, and to restrain their expense,
either by sumptuary laws, or by prohibiting the importation of foreign
luxuries. They are themselves always, and without any exception, the
greatest spendthrifts in the society. Let them look well after their own
expense, and they may safely trust private people with theirs. If their
own extravagance does not ruin the state, that of the subject never
will.

As frugality increases, and prodigality diminishes, the public capital,
so the conduct of those whose expense just equals their revenue, without
either accumulating or encroaching, neither increases nor diminishes it.
Some modes of expense, however, seem to contribute more to the growth of
public opulence than others.

The revenue of an individual may be spent, either in things which
are consumed immediately, and in which one day's expense can neither
alleviate nor support that of another; or it may be spent in things mere
durable, which can therefore be accumulated, and in which every day's
expense may, as he chooses, either alleviate, or support and heighten,
the effect of that of the following day. A man of fortune, for example,
may either spend his revenue in a profuse and sumptuous table, and in
maintaining a great number of menial servants, and a multitude of
dogs and horses; or, contenting himself with a frugal table, and few
attendants, he may lay out the greater part of it in adorning his house
or his country villa, in useful or ornamental buildings, in useful or
ornamental furniture, in collecting books, statues, pictures; or in
things more frivolous, jewels, baubles, ingenious trinkets of different
kinds; or, what is most trifling of all, in amassing a great wardrobe of
fine clothes, like the favourite and minister of a great prince who died
a few years ago. Were two men of equal fortune to spend their revenue,
the one chiefly in the one way, the other in the other, the magnificence
of the person whose expense had been chiefly in durable commodities,
would be continually increasing, every day's expense contributing
something to support and heighten the effect of that of the following
day; that of the other, on the contrary, would be no greater at the end
of the period than at the beginning. The former too would, at the end of
the period, be the richer man of the two. He would have a stock of goods
of some kind or other, which, though it might not be worth all that
it cost, would always be worth something. No trace or vestige of the
expense of the latter would remain, and the effects of ten or twenty
years' profusion would be as completely annihilated as if they had never
existed.

As the one mode of expense is more favourable than the other to the
opulence of an individual, so is it likewise to that of a nation. The
houses, the furniture, the clothing of the rich, in a little time,
become useful to the inferior and middling ranks of people. They are
able to purchase them when their superiors grow weary of them; and the
general accommodation of the whole people is thus gradually improved,
when this mode of expense becomes universal among men of fortune.
In countries which have long been rich, you will frequently find the
inferior ranks of people in possession both of houses and furniture
perfectly good and entire, but of which neither the one could have been
built, nor the other have been made for their use. What was formerly
a seat of the family of Seymour, is now an inn upon the Bath road. The
marriage-bed of James I. of Great Britain, which his queen brought
with her from Denmark, as a present fit for a sovereign to make to
a sovereign, was, a few years ago, the ornament of an alehouse at
Dunfermline. In some ancient cities, which either have been long
stationary, or have gone somewhat to decay, you will sometimes scarce
find a single house which could have been built for its present
inhabitants. If you go into those houses, too, you will frequently find
many excellent, though antiquated pieces of furniture, which are still
very fit for use, and which could as little have been made for them.
Noble palaces, magnificent villas, great collections of books, statues,
pictures, and other curiosities, are frequently both an ornament and an
honour, not only to the neighbourhood, but to the whole country to which
they belong. Versailles is an ornament and an honour to France, Stowe
and Wilton to England. Italy still continues to command some sort of
veneration, by the number of monuments of this kind which it possesses,
though the wealth which produced them has decayed, and though the genius
which planned them seems to be extinguished, perhaps from not having the
same employment.

The expense, too, which is laid out in durable commodities, is
favourable not only to accumulation, but to frugality. If a person
should at any time exceed in it, he can easily reform without exposing
himself to the censure of the public. To reduce very much the number
of his servants, to reform his table from great profusion to great
frugality, to lay down his equipage after he has once set it up, are
changes which cannot escape the observation of his neighbours, and which
are supposed to imply some acknowledgment of preceding bad conduct. Few,
therefore, of those who have once been so unfortunate as to launch
out too far into this sort of expense, have afterwards the courage to
reform, till ruin and bankruptcy oblige them. But if a person has, at
any time, been at too great an expense in building, in furniture, in
books, or pictures, no imprudence can be inferred from his changing
his conduct. These are things in which further expense is frequently
rendered unnecessary by former expense; and when a person stops short,
he appears to do so, not because he has exceeded his fortune, but
because he has satisfied his fancy.

The expense, besides, that is laid out in durable commodities, gives
maintenance, commonly, to a greater number of people than that which is
employed in the most profuse hospitality. Of two or three hundred weight
of provisions, which may sometimes be served up at a great festival, one
half, perhaps, is thrown to the dunghill, and there is always a great
deal wasted and abused. But if the expense of this entertainment had
been employed in setting to work masons, carpenters, upholsterers,
mechanics, etc. a quantity of provisions of equal value would have
been distributed among a still greater number of people, who would
have bought them in pennyworths and pound weights, and not have lost
or thrown away a single ounce of them. In the one way, besides, this
expense maintains productive, in the other unproductive hands. In the
one way, therefore, it increases, in the other it does not increase the
exchangeable value of the annual produce of the land and labour of the
country.

I would not, however, by all this, be understood to mean, that the one
species of expense always betokens a more liberal or generous spirit
than the other. When a man of fortune spends his revenue chiefly in
hospitality, he shares the greater part of it with his friends
and companions; but when he employs it in purchasing such durable
commodities, he often spends the whole upon his own person, and gives
nothing to any body without an equivalent. The latter species of
expense, therefore, especially when directed towards frivolous objects,
the little ornaments of dress and furniture, jewels, trinkets, gew-gaws,
frequently indicates, not only a trifling, but a base and selfish
disposition. All that I mean is, that the one sort of expense, as it
always occasions some accumulation of valuable commodities, as it is
more favourable to private frugality, and, consequently, to the increase
of the public capital, and as it maintains productive rather than
unproductive hands, conduces more than the other to the growth of public
opulence.





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