Of The Different Employments Of Capitals





Though all capitals are destined for the maintenance of productive

labour only, yet the quantity of that labour which equal capitals

are capable of putting into motion, varies extremely according to the

diversity of their employment; as does likewise the value which that

employment adds to the annual produce of the land and labour of the

country.



A capital may be employed in four different ways; either, first, in

procuring the rude produce annually required for the use and consumption

of the society; or, secondly, in manufacturing and preparing that rude

produce for immediate use and consumption; or, thirdly in transporting

either the rude or manufactured produce from the places where they

abound to those where they are wanted; or, lastly, in dividing

particular portions of either into such small parcels as suit the

occasional demands of those who want them. In the first way are employed

the capitals of all those who undertake improvement or cultivation

of lands, mines, or fisheries; in the second, those of all master

manufacturers; in the third, those of all wholesale merchants; and in

the fourth, those of all retailers. It is difficult to conceive that

a capital should be employed in any way which may not be classed under

some one or other of those four.



Each of those four methods of employing a capital is essentially

necessary, either to the existence or extension of the other three, or

to the general conveniency of the society.



Unless a capital was employed in furnishing rude produce to a certain

degree of abundance, neither manufactures nor trade of any kind could

exist.



Unless a capital was employed in manufacturing that part of the rude

produce which requires a good deal of preparation before it can be fit

for use and consumption, it either would never be produced, because

there could be no demand for it; or if it was produced spontaneously, it

would be of no value in exchange, and could add nothing to the wealth of

the society.



Unless a capital was employed in transporting either the rude or

manufactured produce from the places where it abounds to those where it

is wanted, no more of either could be produced than was necessary

for the consumption of the neighbourhood. The capital of the merchant

exchanges the surplus produce of one place for that of another, and thus

encourages the industry, and increases the enjoyments of both.



Unless a capital was employed in breaking and dividing certain portions

either of the rude or manufactured produce into such small parcels as

suit the occasional demands of those who want them, every man would be

obliged to purchase a greater quantity of the goods he wanted than his

immediate occasions required. If there was no such trade as a butcher,

for example, every man would be obliged to purchase a whole ox or a

whole sheep at a time. This would generally be inconvenient to the rich,

and much more so to the poor. If a poor workman was obliged to purchase

a month's or six months' provisions at a time, a great part of the stock

which he employs as a capital in the instruments of his trade, or in

the furniture of his shop, and which yields him a revenue, he would

be forced to place in that part of his stock which is reserved for

immediate consumption, and which yields him no revenue. Nothing can

be more convenient for such a person than to be able to purchase his

subsistence from day to day, or even from hour to hour, as he wants it.

He is thereby enabled to employ almost his whole stock as a capital. He

is thus enabled to furnish work to a greater value; and the profit which

he makes by it in this way much more than compensates the additional

price which the profit of the retailer imposes upon the goods. The

prejudices of some political writers against shopkeepers and tradesmen

are altogether without foundation. So far is it from being necessary

either to tax them, or to restrict their numbers, that they can never be

multiplied so as to hurt the public, though they may so as to hurt one

another. The quantity of grocery goods, for example, which can be sold

in a particular town, is limited by the demand of that town and its

neighbourhood. The capital, therefore, which can be employed in the

grocery trade, cannot exceed what is sufficient to purchase that

quantity. If this capital is divided between two different grocers,

their competition will tend to make both of them sell cheaper than if

it were in the hands of one only; and if it were divided among twenty,

their competition would be just so much the greater, and the chance of

their combining together, in order to raise the price, just so much the

less. Their competition might, perhaps, ruin some of themselves; but to

take care of this, is the business of the parties concerned, and it

may safely be trusted to their discretion. It can never hurt either

the consumer or the producer; on the contrary, it must tend to make the

retailers both sell cheaper and buy dearer, than if the whole trade was

monopolized by one or two persons. Some of them, perhaps, may sometimes

decoy a weak customer to buy what he has no occasion for. This evil,

however, is of too little importance to deserve the public attention,

nor would it necessarily be prevented by restricting their numbers. It

is not the multitude of alehouses, to give the must suspicious example,

that occasions a general disposition to drunkenness among the common

people; but that disposition, arising from other causes, necessarily

gives employment to a multitude of alehouses.



The persons whose capitals are employed in any of those four ways, are

themselves productive labourers. Their labour, when properly directed,

fixes and realizes itself in the subject or vendible commodity upon

which it is bestowed, and generally adds to its price the value at least

of their own maintenance and consumption. The profits of the farmer, of

the manufacturer, of the merchant, and retailer, are all drawn from the

price of the goods which the two first produce, and the two last buy and

sell. Equal capitals, however, employed in each of those four different

ways, will immediately put into motion very different quantities of

productive labour; and augment, too, in very different proportions, the

value of the annual produce of the land and labour of the society to

which they belong.



The capital of the retailer replaces, together with its profits, that

of the merchant of whom he purchases goods, and thereby enables him

to continue his business. The retailer himself is the only productive

labourer whom it immediately employs. In his profit consists the whole

value which its employment adds to the annual produce of the land and

labour of the society.



The capital of the wholesale merchant replaces, together with their

profits, the capital's of the farmers and manufacturers of whom he

purchases the rude and manufactured produce which he deals in, and

thereby enables them to continue their respective trades. It is by this

service chiefly that he contributes indirectly to support the productive

labour of the society, and to increase the value of its annual produce.

His capital employs, too, the sailors and carriers who transport his

goods from one place to another; and it augments the price of those

goods by the value, not only of his profits, but of their wages. This is

all the productive labour which it immediately puts into motion, and all

the value which it immediately adds to the annual produce. Its operation

in both these respects is a good deal superior to that of the capital of

the retailer.



Part of the capital of the master manufacturer is employed as a fixed

capital in the instruments of his trade, and replaces, together with its

profits, that of some other artificer of whom he purchases them. Part

of his circulating capital is employed in purchasing materials, and

replaces, with their profits, the capitals of the farmers and miners

of whom he purchases them. But a great part of it is always, either

annually, or in a much shorter period, distributed among the different

workmen whom he employs. It augments the value of those materials by

their wages, and by their masters' profits upon the whole stock of

wages, materials, and instruments of trade employed in the business.

It puts immediately into motion, therefore, a much greater quantity of

productive labour, and adds a much greater value to the annual produce

of the land and labour of the society, than an equal capital in the

hands of any wholesale merchant.



No equal capital puts into motion a greater quantity of productive

labour than that of the farmer. Not only his labouring servants, but his

labouring cattle, are productive labourers. In agriculture, too, Nature

labours along with man; and though her labour costs no expense, its

produce has its value, as well as that of the most expensive workmen.

The most important operations of agriculture seem intended, not so much

to increase, though they do that too, as to direct the fertility of

Nature towards the production of the plants most profitable to man.

A field overgrown with briars and brambles, may frequently produce as

great a quantity of vegetables as the best cultivated vineyard or corn

field. Planting and tillage frequently regulate more than they animate

the active fertility of Nature; and after all their labour, a great

part of the work always remains to be done by her. The labourers and

labouring cattle, therefore, employed in agriculture, not only occasion,

like the workmen in manufactures, the reproduction of a value equal to

their own consumption, or to the capital which employs them, together

with its owner's profits, but of a much greater value. Over and above

the capital of the farmer, and all its profits, they regularly

occasion the reproduction of the rent of the landlord. This rent may be

considered as the produce of those powers of Nature, the use of which

the landlord lends to the farmer. It is greater or smaller, according

to the supposed extent of those powers, or, in other words, according to

the supposed natural or improved fertility of the land. It is the work

of Nature which remains, after deducting or compensating every thing

which can be regarded as the work of man. It is seldom less than a

fourth, and frequently more than a third, of the whole produce. No

equal quantity of productive labour employed in manufactures, can ever

occasion so great reproduction. In them Nature does nothing; man does

all; and the reproduction must always be in proportion to the strength

of the agents that occasion it. The capital employed in agriculture,

therefore, not only puts into motion a greater quantity of productive

labour than any equal capital employed in manufactures; but in

proportion, too, to the quantity of productive labour which it employs,

it adds a much greater value to the annual produce of the land

and labour of the country, to the real wealth and revenue of its

inhabitants. Of all the ways in which a capital can be employed, it is

by far the most advantageous to society.



The capitals employed in the agriculture and in the retail trade of any

society, must always reside within that society. Their employment is

confined almost to a precise spot, to the farm, and to the shop of the

retailer. They must generally, too, though there are some exceptions to

this, belong to resident members of the society.



The capital of a wholesale merchant, on the contrary, seems to have no

fixed or necessary residence anywhere, but may wander about from place

to place, according as it can either buy cheap or sell dear.



The capital of the manufacturer must, no doubt, reside where the

manufacture is carried on; but where this shall be, is not always

necessarily determined. It may frequently be at a great distance,

both from the place where the materials grow, and from that where the

complete manufacture is consumed. Lyons is very distant, both from the

places which afford the materials of its manufactures, and from those

which consume them. The people of fashion in Sicily are clothed in silks

made in other countries, from the materials which their own produces.

Part of the wool of Spain is manufactured in Great Britain, and some

part of that cloth is afterwards sent back to Spain.



Whether the merchant whose capital exports the surplus produce of any

society, be a native or a foreigner, is of very little importance. If he

is a foreigner, the number of their productive labourers is necessarily

less than if he had been a native, by one man only; and the value of

their annual produce, by the profits of that one man. The sailors or

carriers whom he employs, may still belong indifferently either to his

country, or to their country, or to some third country, in the same

manner as if he had been a native. The capital of a foreigner gives

a value to their surplus produce equally with that of a native, by

exchanging it for something for which there is a demand at home. It

as effectually replaces the capital of the person who produces that

surplus, and as effectually enables him to continue his business, the

service by which the capital of a wholesale merchant chiefly contributes

to support the productive labour, and to augment the value of the annual

produce of the society to which he belongs.



It is of more consequence that the capital of the manufacturer should

reside within the country. It necessarily puts into motion a greater

quantity of productive labour, and adds a greater value to the annual

produce of the land and labour of the society. It may, however, be

very useful to the country, though it should not reside within it. The

capitals of the British manufacturers who work up the flax and hemp

annually imported from the coasts of the Baltic, are surely very useful

to the countries which produce them. Those materials are a part of

the surplus produce of those countries, which, unless it was annually

exchanged for something which is in demand here, would be of no value,

and would soon cease to be produced. The merchants who export it,

replace the capitals of the people who produce it, and thereby encourage

them to continue the production; and the British manufacturers replace

the capitals of those merchants.



A particular country, in the same manner as a particular person, may

frequently not have capital sufficient both to improve and cultivate

all its lands, to manufacture and prepare their whole rude produce for

immediate use and consumption, and to transport the surplus part either

of the rude or manufactured produce to those distant markets, where it

can be exchanged for something for which there is a demand at home. The

inhabitants of many different parts of Great Britain have not capital

sufficient to improve and cultivate all their lands. The wool of the

southern counties of Scotland is, a great part of it, after a long land

carriage through very bad roads, manufactured in Yorkshire, for want of

a capital to manufacture it at home. There are many little manufacturing

towns in Great Britain, of which the inhabitants have not capital

sufficient to transport the produce of their own industry to those

distant markets where there is demand and consumption for it. If there

are any merchants among them, they are, properly, only the agents of

wealthier merchants who reside in some of the great commercial cities.



When the capital of any country is not sufficient for all those

three purposes, in proportion as a greater share of it is employed in

agriculture, the greater will be the quantity of productive labour which

it puts into motion within the country; as will likewise be the value

which its employment adds to the annual produce of the land and labour

of the society. After agriculture, the capital employed in manufactures

puts into motion the greatest quantity of productive labour, and adds

the greatest value to the annual produce. That which is employed in the

trade of exportation has the least effect of any of the three.



The country, indeed, which has not capital sufficient for all those

three purposes, has not arrived at that degree of opulence for which it

seems naturally destined. To attempt, however, prematurely, and with an

insufficient capital, to do all the three, is certainly not the shortest

way for a society, no more than it would be for an individual, to

acquire a sufficient one. The capital of all the individuals of a nation

has its limits, in the same manner as that of a single individual, and

is capable of executing only certain purposes. The capital of all the

individuals of a nation is increased in the same manner as that of a

single individual, by their continually accumulating and adding to it

whatever they save out of their revenue. It is likely to increase the

fastest, therefore, when it is employed in the way that affords the

greatest revenue to all the inhabitants or the country, as they will

thus be enabled to make the greatest savings. But the revenue of all the

inhabitants of the country is necessarily in proportion to the value of

the annual produce of their land and labour.



It has been the principal cause of the rapid progress of our American

colonies towards wealth and greatness, that almost their whole capitals

have hitherto been employed in agriculture. They have no manufactures,

those household and coarser manufactures excepted, which necessarily

accompany the progress of agriculture, and which are the work of the

women and children in every private family. The greater part, both of

the exportation and coasting trade of America, is carried on by the

capitals of merchants who reside in Great Britain. Even the stores and

warehouses from which goods are retailed in some provinces, particularly

in Virginia and Maryland, belong many of them to merchants who reside

in the mother country, and afford one of the few instances of the retail

trade of a society being carried on by the capitals of those who are not

resident members of it. Were the Americans, either by combination, or

by any other sort of violence, to stop the importation of European

manufactures, and, by thus giving a monopoly to such of their own

countrymen as could manufacture the like goods, divert any considerable

part of their capital into this employment, they would retard, instead

of accelerating, the further increase in the value of their annual

produce, and would obstruct, instead of promoting, the progress of their

country towards real wealth and greatness. This would be still more

the case, were they to attempt, in the same manner, to monopolize to

themselves their whole exportation trade.



The course of human prosperity, indeed, seems scarce ever to have been

of so long continuance as to unable any great country to acquire capital

sufficient for all those three purposes; unless, perhaps, we give credit

to the wonderful accounts of the wealth and cultivation of China, of

those of ancient Egypt, and of the ancient state of Indostan. Even those

three countries, the wealthiest, according to all accounts, that

ever were in the world, are chiefly renowned for their superiority in

agriculture and manufactures. They do not appear to have been eminent

for foreign trade. The ancient Egyptians had a superstitious antipathy

to the sea; a superstition nearly of the same kind prevails among the

Indians; and the Chinese have never excelled in foreign commerce. The

greater part of the surplus produce of all those three countries seems

to have been always exported by foreigners, who gave in exchange for it

something else, for which they found a demand there, frequently gold and

silver.



It is thus that the same capital will in any country put into motion a

greater or smaller quantity of productive labour, and add a greater or

smaller value to the annual produce of its land and labour, according

to the different proportions in which it is employed in agriculture,

manufactures, and wholesale trade. The difference, too, is very great,

according to the different sorts of wholesale trade in which any part of

it is employed.



All wholesale trade, all buying in order to sell again by wholesale,

maybe reduced to three different sorts: the home trade, the foreign

trade of consumption, and the carrying trade. The home trade is employed

in purchasing in one part of the same country, and selling in another,

the produce of the industry of that country. It comprehends both the

inland and the coasting trade. The foreign trade of consumption is

employed in purchasing foreign goods for home consumption. The carrying

trade is employed in transacting the commerce of foreign countries, or

in carrying the surplus produce of one to another.



The capital which is employed in purchasing in one part of the country,

in order to sell in another, the produce of the industry of that

country, generally replaces, by every such operation, two distinct

capitals, that had both been employed in the agriculture or manufactures

of that country, and thereby enables them to continue that employment.

When it sends out from the residence of the merchant a certain value of

commodities, it generally brings hack in return at least an equal value

of other commodities. When both are the produce of domestic industry,

it necessarily replaces, by every such operation, two distinct capitals,

which had both been employed in supporting productive labour, and

thereby enables them to continue that support. The capital which

sends Scotch manufactures to London, and brings back English corn

and manufactures to Edinburgh, necessarily replaces, by every such

operation, two British capitals, which had both been employed in the

agriculture or manufactures of Great Britain.



The capital employed in purchasing foreign goods for home consumption,

when this purchase is made with the produce of domestic industry,

replaces, too, by every such operation, two distinct capitals; but one

of them only is employed in supporting domestic industry. The capital

which sends British goods to Portugal, and brings back Portuguese goods

to Great Britain, replaces, by every such operation, only one British

capital. The other is a Portuguese one. Though the returns, therefore,

of the foreign trade of consumption, should be as quick as those of the

home trade, the capital employed in it will give but one half of the

encouragement to the industry or productive labour of the country.



But the returns of the foreign trade of consumption are very seldom

so quick as those of the home trade. The returns of the home trade

generally come in before the end of the year, and sometimes three or

four times in the year. The returns of the foreign trade of consumption

seldom come in before the end of the year, and sometimes not till after

two or three years. A capital, therefore, employed in the home trade,

will sometimes make twelve operations, or be sent out and returned

twelve times, before a capital employed in the foreign trade of

consumption has made one. If the capitals are equal, therefore, the one

will give four-and-twenty times more encouragement and support to the

industry of the country than the other.



The foreign goods for home consumption may sometimes be purchased, not

with the produce of domestic industry but with some other foreign goods.

These last, however, must have been purchased, either immediately with

the produce of domestic industry, or with something else that had been

purchased with it; for, the case of war and conquest excepted, foreign

goods can never be acquired, but in exchange for something that had been

produced at home, either immediately, or after two or more different

exchanges. The effects, therefore, of a capital employed in such a

round-about foreign trade of consumption, are, in every respect, the

same as those of one employed in the most direct trade of the same kind,

except that the final returns are likely to be still more distant,

as they must depend upon the returns of two or three distinct foreign

trades. If the hemp and flax of Riga are purchased with the tobacco

of Virginia, which had been purchased with British manufactures, the

merchant must wait for the returns of two distinct foreign trades,

before he can employ the same capital in repurchasing a like quantity of

British manufactures. If the tobacco of Virginia had been purchased, not

with British manufactures, but with the sugar and rum of Jamaica, which

had been purchased with those manufactures, he must wait for the returns

of three. If those two or three distinct foreign trades should happen

to be carried on by two or three distinct merchants, of whom the second

buys the goods imported by the first, and the third buys those imported

by the second, in order to export them again, each merchant, indeed,

will, in this case, receive the returns of his own capital more quickly;

but the final returns of the whole capital employed in the trade will be

just as slow as ever. Whether the whole capital employed in such a round

about trade belong to one merchant or to three, can make no difference

with regard to the country, though it may with regard to the particular

merchants. Three times a greater capital must in both cases be employed,

in order to exchange a certain value of British manufactures for a

certain quantity of flax and hemp, than would have been necessary, had

the manufactures and the flax and hemp been directly exchanged for one

another. The whole capital employed, therefore, in such a round-about

foreign trade of consumption, will generally give less encouragement and

support to the productive labour of the country, than an equal capital

employed in a more direct trade of the same kind.



Whatever be the foreign commodity with which the foreign goods for home

consumption are purchased, it can occasion no essential difference,

either in the nature of the trade, or in the encouragement and support

which it can give to the productive labour of the country from which

it is carried on. If they are purchased with the gold of Brazil, for

example, or with the silver of Peru, this gold and silver, like the

tobacco of Virginia, must have been purchased with something that

either was the produce of the industry of the country, or that had been

purchased with something else that was so. So far, therefore, as the

productive labour of the country is concerned, the foreign trade of

consumption, which is carried on by means of gold and silver, has

all the advantages and all the inconveniencies of any other equally

round-about foreign trade of consumption; and will replace, just as

fast, or just as slow, the capital which is immediately employed in

supporting that productive labour. It seems even to have one advantage

over any other equally round-about foreign trade. The transportation of

those metals from one place to another, on account of their small bulk

and great value, is less expensive than that of almost any other foreign

goods of equal value. Their freight is much less, and their insurance

not greater; and no goods, besides, are less liable to suffer by the

carriage. An equal quantity of foreign goods, therefore, may frequently

be purchased with a smaller quantity of the produce of domestic

industry, by the intervention of gold and silver, than by that of any

other foreign goods. The demand of the country may frequently, in this

manner, be supplied more completely, and at a smaller expense, than

in any other. Whether, by the continual exportation of those metals, a

trade of this kind is likely to impoverish the country from which it is

carried on in any other way, I shall have occasion to examine at great

length hereafter.



That part of the capital of any country which is employed in the

carrying trade, is altogether withdrawn from supporting the productive

labour of that particular country, to support that of some foreign

countries. Though it may replace, by every operation, two distinct

capitals, yet neither of them belongs to that particular country. The

capital of the Dutch merchant, which carries the corn of Poland to

Portugal, and brings back the fruits and wines of Portugal to Poland,

replaces by every such operation two capitals, neither of which had been

employed in supporting the productive labour of Holland; but one of

them in supporting that of Poland, and the other that of Portugal.

The profits only return regularly to Holland, and constitute the whole

addition which this trade necessarily makes to the annual produce of the

land and labour of that country. When, indeed, the carrying trade of

any particular country is carried on with the ships and sailors of that

country, that part of the capital employed in it which pays the

freight is distributed among, and puts into motion, a certain number of

productive labourers of that country. Almost all nations that have had

any considerable share of the carrying trade have, in fact, carried it

on in this manner. The trade itself has probably derived its name from

it, the people of such countries being the carriers to other countries.

It does not, however, seem essential to the nature of the trade that it

should be so. A Dutch merchant may, for example, employ his capital in

transacting the commerce of Poland and Portugal, by carrying part of the

surplus produce of the one to the other, not in Dutch, but in British

bottoms. It maybe presumed, that he actually does so upon some

particular occasions. It is upon this account, however, that the

carrying trade has been supposed peculiarly advantageous to such a

country as Great Britain, of which the defence and security depend upon

the number of its sailors and shipping. But the same capital may

employ as many sailors and shipping, either in the foreign trade of

consumption, or even in the home trade, when carried on by coasting

vessels, as it could in the carrying trade. The number of sailors and

shipping which any particular capital can employ, does not depend upon

the nature of the trade, but partly upon the bulk of the goods, in

proportion to their value, and partly upon the distance of the ports

between which they are to be carried; chiefly upon the former of those

two circumstances. The coal trade from Newcastle to London, for example,

employs more shipping than all the carrying trade of England, though the

ports are at no great distance. To force, therefore, by extraordinary

encouragements, a larger share of the capital of any country into the

carrying trade, than what would naturally go to it, will not always

necessarily increase the shipping of that country.



The capital, therefore, employed in the home trade of any country,

will generally give encouragement and support to a greater quantity of

productive labour in that country, and increase the value of its annual

produce, more than an equal capital employed in the foreign trade of

consumption; and the capital employed in this latter trade has, in both

these respects, a still greater advantage over an equal capital employed

in the carrying trade. The riches, and so far as power depends upon

riches, the power of every country must always be in proportion to

the value of its annual produce, the fund from which all taxes must

ultimately be paid. But the great object of the political economy of

every country, is to increase the riches and power of that country. It

ought, therefore, to give no preference nor superior encouragement

to the foreign trade of consumption above the home trade, nor to the

carrying trade above either of the other two. It ought neither to force

nor to allure into either of those two channels a greater share of the

capital of the country, than what would naturally flow into them of its

own accord.



Each of those different branches of trade, however, is not only

advantageous, but necessary and unavoidable, when the course of things,

without any constraint or violence, naturally introduces it.



When the produce of any particular branch of industry exceeds what the

demand of the country requires, the surplus must be sent abroad, and

exchanged for something for which there is a demand at home. Without

such exportation, a part of the productive labour of the country must

cease, and the value of its annual produce diminish. The land and labour

of Great Britain produce generally more corn, woollens, and hardware,

than the demand of the home market requires. The surplus part of them,

therefore, must be sent abroad, and exchanged for something for which

there is a demand at home. It is only by means of such exportation, that

this surplus can acquired value sufficient to compensate the labour and

expense of producing it. The neighbourhood of the sea-coast, and the

banks of all navigable rivers, are advantageous situations for industry,

only because they facilitate the exportation and exchange of such

surplus produce for something else which is more in demand there.



When the foreign goods which are thus purchased with the surplus produce

of domestic industry exceed the demand of the home market, the surplus

part of them must be sent abroad again, and exchanged for something

more in demand at home. About 96,000 hogsheads of tobacco are annually

purchased in Virginia and Maryland with a part of the surplus produce

of British industry. But the demand of Great Britain does not require,

perhaps, more than 14,000. If the remaining 82,000, therefore, could not

be sent abroad, and exchanged for something more in demand at home, the

importation of them must cease immediately, and with it the productive

labour of all those inhabitants of Great Britain who are at present

employed in preparing the goods with which these 82,000 hogsheads are

annually purchased. Those goods, which are part of the produce of the

land and labour of Great Britain, having no market at home, and being

deprived of that which they had abroad, must cease to be produced. The

most round-about foreign trade of consumption, therefore, may, upon some

occasions, be as necessary for supporting the productive labour of the

country, and the value of its annual produce, as the most direct.



When the capital stock of any country is increased to such a degree that

it cannot be all employed in supplying the consumption, and supporting

the productive labour of that particular country, the surplus part of it

naturally disgorges itself into the carrying trade, and is employed in

performing the same offices to other countries. The carrying trade is

the natural effect and symptom of great national wealth; but it does

not seem to be the natural cause of it. Those statesmen who have been

disposed to favour it with particular encouragement, seem to have

mistaken the effect and symptom for the cause. Holland, in proportion

to the extent of the land and the number of it's inhabitants, by far

the richest country in Europe, has accordingly the greatest share of the

carrying trade of Europe. England, perhaps the second richest country of

Europe, is likewise supposed to have a considerable share in it; though

what commonly passes for the carrying trade of England will frequently,

perhaps, be found to be no more than a round-about foreign trade of

consumption. Such are, in a great measure, the trades which carry

the goods of the East and West Indies and of America to the different

European markets. Those goods are generally purchased, either

immediately with the produce of British industry, or with something else

which had been purchased with that produce, and the final returns of

those trades are generally used or consumed in Great Britain. The trade

which is carried on in British bottoms between the different ports of

the Mediterranean, and some trade of the same kind carried on by British

merchants between the different ports of India, make, perhaps, the

principal branches of what is properly the carrying trade of Great

Britain.



The extent of the home trade, and of the capital which can be employed

in it, is necessarily limited by the value of the surplus produce of all

those distant places within the country which have occasion to exchange

their respective productions with one another; that of the foreign

trade of consumption, by the value of the surplus produce of the whole

country, and of what can be purchased with it; that of the carrying

trade, by the value of the surplus produce of all the different

countries in the world. Its possible extent, therefore, is in a manner

infinite in comparison of that of the other two, and is capable of

absorbing the greatest capitals.



The consideration of his own private profit is the sole motive which

determines the owner of any capital to employ it either in agriculture,

in manufactures, or in some particular branch of the wholesale or retail

trade. The different quantities of productive labour which it may put

into motion, and the different values which it may add to the annual

produce of the land and labour of the society, according as it is

employed in one or other of those different ways, never enter into

his thoughts. In countries, therefore, where agriculture is the most

profitable of all employments, and farming and improving the most direct

roads to a splendid fortune, the capitals of individuals will naturally

be employed in the manner most advantageous to the whole society. The

profits of agriculture, however, seem to have no superiority over those

of other employments in any part of Europe. Projectors, indeed, in every

corner of it, have, within these few years, amused the public with most

magnificent accounts of the profits to be made by the cultivation and

improvement of land. Without entering into any particular discussion of

their calculations, a very simple observation may satisfy us that the

result of them must be false. We see, every day, the most splendid

fortunes, that have been acquired in the course of a single life, by

trade and manufactures, frequently from a very small capital, sometimes

from no capital. A single instance of such a fortune, acquired by

agriculture in the same time, and from such a capital, has not, perhaps,

occurred in Europe, during the course of the present century. In all

the great countries of Europe, however, much good land still remains

uncultivated; and the greater part of what is cultivated, is far from

being improved to the degree of which it is capable. Agriculture,

therefore, is almost everywhere capable of absorbing a much greater

capital than has ever yet been employed in it. What circumstances in the

policy of Europe have given the trades which are carried on in towns so

great an advantage over that which is carried on in the country, that

private persons frequently find it more for their advantage to employ

their capitals in the most distant carrying trades of Asia and America

than in the improvement and cultivation of the most fertile fields in

their own neighbourhood, I shall endeavour to explain at full length in

the two following books.





Of The Component Part Of The Price Of Commodities Of The Discouragement Of Agriculture In The Ancient State Of Europe After The Fall Of The Roman Empire facebooktwittergoogle_plusredditpinterestlinkedinmail

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