5。Wehaveconsidered，ontheonehand，themannerinwhich
　　thedistributionoftheproduceintorent，profits，andwages，is
　　affectedbytheordinaryincreaseofpopulationandcapital，and
　　ontheother，howitisaffectedbyimprovementsinproduction，
　　andmoreespeciallyinagriculture。Wehavefoundthattheformer
　　causelowersprofits，andraisesrentandthecostoflabour:
　　whilethetendencyofagriculturalimprovementsistodiminish
　　rent;andallimprovementswhichcheapenanyarticleofthe
　　labourer’sconsumption，tendtodiminishthecostoflabourand
　　toraiseprofits。Thetendencyofeachcauseinitsseparate
　　statebeingthusascertained，itiseasytodeterminethe
　　tendencyoftheactualcourseofthings，inwhichthetwo
　　movementsaregoingonsimultaneously，capitalandpopulation
　　increasingwithtolerablesteadiness，whileimprovementsin
　　agriculturearemadefromtimetotime，andtheknowledgeand
　　practiceofimprovedmethodsbecomediffusedgraduallythrough
　　thecommunity。
　　Thehabitsandrequirementsofthelabouringclassesbeing
　　given（whichdeterminetheirrealwages），rents，profits，and
　　moneywagesatanygiventime，aretheresultofthecomposition
　　oftheserivalforces。Ifduringanyperiodagricultural
　　improvementadvancesfasterthanpopulation，rentandmoneywages
　　duringthatperiodwilltenddownward，andprofitsupward。If
　　populationadvancesmorerapidlythanagriculturalimprovement，
　　eitherthelabourerswillsubmittoareductioninthequantity
　　orqualityoftheirfood，orifnot，rentandmoneywageswill
　　progressivelyrise，andprofitswillfall。
　　Agriculturalskillandknowledgeareofslowgrowth，and
　　stillslowerdiffusion。Inventionsanddiscoveries，too，occur
　　onlyoccasionally，whiletheincreaseofpopulationandcapital
　　arecontinuousagencies。Itthereforeseldomhappensthat
　　improvement，evenduringashorttime，hassomuchthestartof
　　populationandcapitalasactuallytolowerrent，orraisethe
　　rateofprofits。Therearemanycountriesinwhichthegrowthof
　　populationandcapitalisnotrapid，butintheseagricultural
　　improvementislessactivestill。Populationalmosteverywhere
　　treadscloseontheheelsofagriculturalimprovement，and
　　effacesitseffectsasfastastheyareproduced。
　　Thereasonwhyagriculturalimprovementseldomlowersrent，
　　isthatitseldomcheapensfood，butonlypreventsitfrom
　　growingdearer;andseldom，ifever，throwslandsoutof
　　cultivation，butonlyenablesworseandworselandtobetakenin
　　forthesupplyofanincreasingdemand。Whatissometimescalled
　　thenaturalstateofacountrywhichisbuthalfcultivated，
　　namely，thatthelandishighlyproductive，andfoodobtainedin
　　greatabundancebylittlelabour，isonlytrueofunoccupied
　　countriescolonizedbyacivilizedpeople。IntheUnitedStates
　　theworstlandincultivationisofahighquality（except
　　sometimesintheimmediatevicinityofmarketsormeansof
　　conveyance，whereabadqualityiscompensatedbyagood
　　situation）;andevenifnofurtherimprovementsweremadein
　　agricultureorlocomotion，cultivationwouldhavemanystepsyet
　　todescend，beforetheincreaseofpopulationandcapitalwould
　　bebroughttoastand;butinEuropefivehundredyearsago，
　　thoughsothinlypeopledincomparisontothepresentpopulation，
　　itisprobablethattheworstlandundertheploughwas，fromthe
　　rudestateofagriculture，quiteasunproductiveastheworst
　　landnowcultivated;andthatcultivationhadapproachedasnear
　　totheultimatelimitofprofitabletillage，inthosetimesasin
　　thepresent。Whattheagriculturalimprovementssincemadehave
　　reallydoneis，byincreasingthecapacityofproductionofland
　　ingeneral，toenabletillagetoextenddownwardstoamuchworse
　　naturalqualityoflandthantheworstwhichatthattimewould
　　haveadmittedofcultivationbyacapitalistforprofit;thus
　　renderingamuchgreaterincreaseofcapitalandpopulation
　　possible，andremovingalwaysalittleandalittlefurtheroff，
　　thebarrierwhichrestrainsthem;populationmeanwhilealways
　　pressingsohardagainstthebarrier，thatthereisneverany
　　visiblemarginleftforittoseize，everyinchofgroundmade
　　vacantforitbyimprovementbeingatoncefilledupbyits
　　advancingcolumns。Agriculturalimprovementmaythusbe
　　consideredtobenotsomuchacounterforceconflictingwith
　　increaseofpopulation，asapartialrelaxationofthebonds
　　whichconfinethatincrease。
　　Theeffectsproducedonthedivisionoftheproducebyan
　　increaseofproduction，underthejointinfluenceofincreaseof
　　populationandcapitalandimprovementsofagriculture，arevery
　　differentfromthosededucedfromthehypotheticalcases
　　previouslydiscussed。Inparticular，theeffectonrentismost
　　materiallydifferent。Weremarkedthat—whileagreat
　　agriculturalimprovementmadesuddenlyanduniversallywouldin
　　thefirstinstanceinevitablylowerrent—suchimprovements
　　enablerent，intheprogressofsociety，torisegraduallytoa
　　muchhigherlimitthanitcouldotherwiseattain，sincethey
　　enableamuchlowerqualityoflandtobeultimatelycultivated。
　　Butinthecasewearenowsupposing，whichnearlycorrespondsto
　　theusualcourseofthings，thisultimateeffectbecomesthe
　　immediateeffect。Supposecultivationtohavereached，oralmost
　　reached，theutmostlimitpermittedbythestateofthe
　　industrialarts，andrent，therefore，tohaveattainednearlythe
　　highestpointtowhichitcanbecarriedbytheprogressof
　　populationandcapital，withtheexistingamountofskilland
　　knowledge。Ifagreatagriculturalimprovementweresuddenly
　　introduced，itmightthrowbackrentforaconsiderablespace，
　　leavingittoregainitslostgroundbytheprogressof
　　populationandcapital，andafterwardstogoonfurther。But，
　　takingplace，assuchimprovementalwaysdoes，verygradually，it
　　causesnoretrogrademovementofeitherrentorcultivation;it
　　merelyenablestheonetogoonrising，andtheotherextending，
　　longaftertheymustotherwisehavestopped。Itwoulddothis
　　evenwithoutthenecessityofresortingtoaworsequalityof
　　land;simplybyenablingthelandsalreadyincultivationto
　　yieldagreaterproduce，withnoincreaseoftheproportional
　　cost。Ifbyimprovementsofagricultureallthelandsin
　　cultivationcouldbemade，evenwithdoublelabourandcapital，
　　toyieldadoubleproduce，（supposingthatinthemeantime
　　populationincreasedsoastorequirethisdoublequantity）all
　　rentswouldbedoubled。
　　Toillustratethepoint，letusreverttothenumerical
　　exampleinaformerpage。Threequalitiesoflandyield
　　respectivelylOO，8o，and60bushelstothesameoutlayonthe
　　sameextentofsurface。IfNo。1couldbemadetoyield200，No。
　　2，160，andNo。3，120bushels，atonlydoubletheexpense，and
　　thereforewithoutanyincreaseofthecostofproduction，andif
　　thepopulation，havingdoubled，requiredallthisincreased
　　quantity，therentofNo。1wouldbe80bushelsinsteadof40，
　　andofNo。2，40insteadof20，whilethepriceandvalueper
　　bushelwouldbethesameasbefore:sothatcornrentandmoney
　　rentwouldbothbedoubled。Ineednotpointoutthedifference
　　betweenthisresult，andwhatwehaveshownwouldtakeplaceif
　　therewereanimprovementinproductionwithouttheaccompaniment
　　ofanincreaseddemandforfood。
　　Agriculturalimprovement，then，isalwaysultimately，andin
　　themannerinwhichitgenerallytakesplacealsoimmediately，
　　beneficialtothelandlord。Wemayadd，thatwhenittakesplace
　　inthatmanner，itisbeneficialtonooneelse。Whenthedemand
　　forproducefullykeepspacewiththeincreasedcapacityof
　　production，foodisnotcheapened;thelabourersarenot，even
　　temporarily，benefited;thecostoflabourisnotdiminished，nor
　　profitsraised。Thereisagreateraggregateproduction，a
　　greaterproducedividedamongthelabourers，andalargergross
　　profit;butthewagesbeingsharedamongalargerpopulation，and
　　theprofitsspreadoveralargercapital，nolabourerisbetter
　　off，nordoesanycapitalistderivefromthesameamountof
　　capitalalargerincome。
　　Theresultofthislonginvestigationmaybesummedupas
　　follows。Theeconomicalprogressofasocietyconstitutedof
　　landlords，capitalists，andlabourers，tendstotheprogressive
　　enrichmentofthelandlordclass;whilethecostofthe
　　labourer’ssubsistencetendsonthewholetoincrease，and
　　profitstofall。Agriculturalimprovementsareacounteracting
　　forcetothetwolasteffects;butthefirst，thoughacaseis
　　conceivableinwhichitwouldbetemporarilychecked，is
　　ultimatelyinahighdegreepromotedbythoseimprovements;and
　　theincreaseofpopulationtendstotransferallthebenefits
　　derivedfromagriculturalimprovementtothelandlordsalone。
　　Whatotherconsequences，inadditiontothese，orinmodification
　　ofthem，arisefromtheindustrialprogressofasocietythus
　　constituted，Ishallendeavourtoshowinthesucceedingchapter。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book4
　　Chapter4
　　OftheTendencyofProfitstoaMinimum
　　1。Thetendencyofprofitstofallassocietyadvances，which
　　hasbeenbroughttonoticeintheprecedingchapter，wasearly
　　recognizedbywritersonindustryandcommerce;butthelaws
　　whichgovernprofitsnotbeingthenunderstood，thephenomenon
　　wasascribedtoawrongcause。AdamSmithconsideredprofitsto
　　bedeterminedbywhathecalledthecompetitionofcapital;and
　　concludedthatwhencapitalincreased，thiscompetitionmust
　　likewiseincrease，andprofitsmustfall。Itisnotquitecertain
　　whatsortofcompetitionAdamSmithhadhereinview。Hiswords
　　inthechapteronProfitsofStock（1*）are，’Whenthestocksof
　　manyrichmerchantsareturnedintothesametrade，theirmutual
　　competitionnaturallytendstoloweritsprofits;andwhenthere
　　isalikeincreaseofstockinallthedifferenttradescarried
　　oninthesamesociety，thesamecompetitionmustproducethe
　　sameeffectinthemall。’Thispassagewouldleadustoinfer
　　that，inAdamSmith’sopinion，themannerinwhichthe
　　competitionofcapitallowersprofitsisbyloweringprices;that
　　beingusuallythemodeinwhichanincreasedinvestmentof
　　capitalinanyparticulartrade，lowerstheprofitsofthat
　　trade。Butifthiswashismeaning，heoverlookedthe
　　circumstance，thatthefallofprice，whichifconfinedtoone
　　commodityreallydoeslowertheprofitsoftheproducer，ceases
　　tohavethateffectassoonasitextendstoallcommodities;
　　because，whenallthingshavefallen，nothinghasreallyfallen，
　　exceptnominally;andevencomputedinmoney，theexpensesof
　　everyproducerhavediminishedasmuchashisreturns。Unless
　　indeedlabourbetheonecommoditywhichhasnotfalleninmoney
　　price，whenallotherthingshave:ifso，whathasreallytaken
　　placeisariseofwages;anditisthat，andnotthefallof
　　prices，whichhasloweredtheprofitsofcapital。Thereis
　　anotherthingwhichescapedthenoticeofAdamSmith;thatthe
　　supposeduniversalfallofprices，throughincreasedcompetition
　　ofcapitals，isathingwhichcannottakeplace。Pricesarenot
　　determinedbythecompetitionofthesellersonly，butalsoby
　　thatofthebuyers;bydemandaswellassupply。Thedemandwhich
　　affectsmoneypricesconsistsofallthemoneyinthehandsof
　　thecommunity，destinedtobelaidoutincommodities;andas
　　longastheproportionofthistothecommoditiesisnot
　　diminished，thereisnofallofgeneralprices。Now，howsoever
　　capitalmayincrease，andgiverisetoanincreasedproductionof
　　commodities，afullshareofthecapitalwillbedrawntothe
　　businessofproducingorimportingmoney，andthequantityof
　　moneywillbeaugmentedinanequalratiowiththequantityof
　　commodities。Forifthiswerenotthecase，andifmoney，
　　therefore，were，asthetheorysupposes，perpetuallyacquiring
　　increasedpurchasingpower，thosewhoproducedorimportedit
　　wouldobtainconstantlyincreasingprofits;andthiscouldnot
　　happenwithoutattractinglabourandcapitaltothatoccupation
　　fromotheremployments。Ifageneralfallofprices，and
　　increasedvalueofmoney，werereallytooccur，itcouldonlybe
　　asaconsequenceofincreasedcostofproduction，fromthe
　　gradualexhaustionofthemines。
　　Itisnottenable，therefore，intheory，thattheincreaseof
　　capitalproduces，ortendstoproduce，ageneraldeclineofmoney
　　prices。Neitherisittrue，thatanygeneraldeclineofprices，
　　ascapitalincreased，hasmanifesteditselfinfact。Theonly
　　thingsobservedtofallinpricewiththeprogressofsociety，
　　arethoseinwhichtherehavebeenimprovementsinproduction，
　　greaterthanhavetakenplaceintheproductionoftheprecious
　　metals;asforexample，allspunandwovenfabrics。Otherthings，
　　again，insteadoffalling，haveriseninprice，becausetheir
　　costofproduction，comparedwiththatofgoldandsilver，has
　　increased。Amongtheseareallkindsoffood，comparisonbeing
　　madewithamuchearlierperiodofhistory。Thedoctrine，
　　therefore，thatcompetitionofcapitallowersprofitsbylowering
　　prices，isincorrectinfact，aswellasunsoundinprinciple。
　　ButitisnotcertainthatAdamSmithreallyheldthat
　　doctrine;forhislanguageonthesubjectiswaveringand
　　unsteady，denotingtheabsenceofadefiniteandwell—digested
　　opinion。Occasionallyheseemstothinkthatthemodeinwhich
　　thecompetitionofcapitallowersprofits，isbyraisingwages。
　　Andwhenspeakingoftherateofprofitinnewcolonies，heseems
　　ontheveryvergeofgraspingthecompletetheoryofthesubject。
　　’Asthecolonyincreases，theprofitsofstockgradually
　　diminish。Whenthemostfertileandbestsituatedlandshavebeen
　　alloccupied，lessprofitcanbemadebythecultivatorsofwhat
　　isinferiorbothinsoilandsituation。’HadAdamSmithmeditated
　　longeronthesubject，andsystematizedhisviewofitby
　　harmonizingwitheachotherthevariousglimpseswhichhecaught
　　ofitfromdifferentpoints，hewouldhaveperceivedthatthis
　　lastisthetruecauseofthefallofprofitsusuallyconsequent
　　uponincreaseofcapital。
　　2。MrWakefield，inhisCommentaryonAdamSmith，andhis
　　importantwritingsonColonization，takesamuchclearerviewof
　　thesubject，andarrives，throughasubstantiallycorrectseries
　　ofdeductions，atpracticalconclusionswhichappeartomejust
　　andimportant;butheisnotequallyhappyinincorporatinghis
　　valuablespeculationswiththeresultsofpreviousthought，and
　　reconcilingthemwithothertruths。SomeofthetheoriesofDr
　　Chalmers，inhischapter’OntheIncreaseandLimitsofCapital’，
　　andthetwochapterswhichfollowit，coincideintheirtendency
　　andspiritwiththoseofMrWakefield;butDrChalmers’ideas，
　　thoughdelivered，asishiscustom，withamostattractive
　　semblanceofclearness，arereallyonthissubjectmuchmore
　　confusedthaneventhoseofAdamSmith，andmoredecidedly
　　infectedwiththeoftenrefutednotionthatthecompetitionof
　　capitallowersgeneralprices;thesubjectofMoneyapparently
　　nothavingbeenincludedamongthepartsofPoliticalEconomy
　　whichthisacuteandvigorouswriterhadcarefullystudied。
　　MrWakefield’sexplanationofthefallofprofitsisbriefly
　　this。Productionislimitednotsolelybythequantityofcapital
　　andoflabour，butalsobytheextentofthe’fieldof
　　employment’。Thefieldofemploymentforcapitalistwofold;the
　　landofthecountry，andthecapacityofforeignmarketstotake
　　itsmanufacturedcommodities。Onalimitedextentofland，onlya
　　limitedquantityofcapitalcanfindemploymentataprofit。As
　　thequantityofcapitalapproachesthislimit，profitfalls;when
　　thelimitisattained，profitisannihilated;andcanonlybe
　　restoredthroughanextensionofthefieldofemployment，either
　　bytheacquisitionoffertileland，orbyopeningnewmarketsin
　　foreigncountries，fromwhichfoodandmaterialscanbepurchased
　　withtheproductsofdomesticcapital。Thesepropositionsare，in
　　myopinion，substantiallytrue;and，eventothephraseologyin
　　whichtheyareexpressed，consideredasadaptedtopopularand
　　practicalratherthanscientificuses，Ihavenothingtoobject。
　　TheerrorwhichseemstomeimputabletoMrWakefieldisthatof
　　supposinghisdoctrinestobeincontradictiontotheprinciples
　　ofthebestschoolofprecedingpoliticaleconomists，insteadof
　　being，astheyreallyare，corollariesfromthoseprinciples;
　　thoughcorollarieswhich，perhaps，wouldnotalwayshavebeen
　　admittedbythosepoliticaleconomiststhemselves。
　　ThemostscientifictreatmentofthesubjectwhichIhavemet
　　with，isinanessayontheeffectsofMachinery，publishedin
　　theWestminsterReviewforJanuary1826，byMrWilliamEllis;（2*）
　　whichwasdoubtlessunknowntoMrWakefield，butwhichhad
　　precededhim，thoughbyadifferentpath，inseveralofhis
　　leadingconclusions。Thisessayexcitedlittlenotice，partly
　　frombeingpublishedanonymouslyinaperiodical，andpartly
　　becauseitwasmuchinadvanceofthestateofpoliticaleconomy
　　atthetime。InMrEllis’sviewofthesubject，thequestionsand
　　difficultiesraisedbyMrWakefield’sspeculationsandbythose
　　ofDrChalmers，findasolutionconsistentwiththeprinciplesof
　　politicaleconomylaiddowninthepresenttreatise。
　　3。Thereisateverytimeandplacesomeparticularrateof
　　profit，whichisthelowestthatwillinducethepeopleofthat
　　countryandtimetoaccumulatesavings，andtoemploythose
　　savingsproductively。Thisminimumrateofprofitvaries
　　accordingtocircumstances。Itdependsontwoelements。Oneis，
　　thestrengthoftheeffectivedesireofaccumulation;the
　　comparativeestimatemadebythepeopleofthatplaceandera，of
　　futureinterestswhenweighedagainstpresent。Thiselement
　　chieflyaffectstheinclinationtosave。Theotherelement，which
　　affectsnotsomuchthewillingnesstosaveasthedispositionto
　　employsavingsproductively，isthedegreeofsecurityofcapital
　　engagedinindustrialoperations。Astateofgeneralinsecurity，
　　nodoubtaffectsalsothedispositiontosave。Ahoardmaybea
　　sourceofadditionaldangertoitsreputedpossessor。Butasit
　　mayalsobeapowerfulmeansofavertingdangers，theeffectsin
　　thisrespectmayperhapsbelookeduponasbalanced。Butin
　　employinganyfundswhichapersonmaypossessascapitalonhis
　　ownaccount，orinlendingittootherstobesoemployed，there
　　isalwayssomeadditionalrisk，overandabovethatincurredby
　　keepingitidleinhisowncustody。Thisextrariskisgreatin
　　proportionasthegeneralstateofsocietyisinsecure:itmaybe
　　equivalenttotwenty，thirty，orfiftypercent，ortonomore
　　thanoneortwo;something，however，itmustalwaysbe:andfor
　　this，theexpectationofprofitmustbesufficienttocompensate。
　　Therewouldbeadequatemotivesforacertainamountof
　　saving，evenifcapitalyieldednoprofit。Therewouldbean
　　inducementtolaybyingoodtimesaprovisionforbad;to
　　reservesomethingforsicknessandinfirmity，orasameansof
　　leisureandindependenceinthelatterpartoflife，orahelpto
　　childrenintheoutsetofit。Savings，however，whichhaveonly
　　theseendsinview，havenotmuchtendencytoincreasetheamount
　　ofcapitalpermanentlyinexistence。Thesemotivesonlyprompt
　　personstosaveatoneperiodoflifewhattheypurposeto
　　consumeatanother，orwhatwillbeconsumedbytheirchildren
　　beforetheycancompletelyprovideforthemselves。Thesavingsby
　　whichanadditionismadetothenationalcapital，usually
　　emanatefromthedesireofpersonstoimprovewhatistermed
　　theirconditioninlife，ortomakeaprovisionforchildrenor
　　others，independentoftheirexertions。Now，tothestrengthof
　　theseinclinationsitmakesaverymaterialdifferencehowmuch
　　ofthedesiredobjectcanbeeffectedbyagivenamountand
　　durationofself—denial;whichagaindependsontherateof
　　profit。Andthereisineverycountrysomerateofprofit，below
　　whichpersonsingeneralwillnotfindsufficientmotivetosave
　　forthemerepurposeofgrowingricher，orofleavingothers
　　betteroffthanthemselves。Anyaccumulation，therefore，bywhich
　　thegeneralcapitalisincreased，requiresasitsnecessary
　　conditionacertainrateofprofit;aratewhichanaverage
　　personwilldeemtobeanequivalentforabstinence，withthe
　　additionofasufficientinsuranceagainstrisk。Therearealways
　　somepersonsinwhomtheeffectivedesireofaccumulationis
　　abovetheaverage，andtowhomlessthanthisrateofprofitisa
　　sufficientinducementtosave;butthesemerelystepintothe
　　placeofotherswhosetasteforexpenseandindulgenceisbeyond
　　theaverage，andwho，insteadofsaving，perhapsevendissipate
　　whattheyhavereceived。
　　Ihavealreadyobservedthatthisminimumrateofprofit，
　　lessthanwhichisnotconsistentwiththefurtherincreaseof
　　capital，islowerinsomestatesofsocietythaninothers;andI
　　mayadd，thatthekindofsocialprogresscharacteristicofour
　　presentcivilizationtendstodiminishit。Inthefirstplace，
　　oneoftheacknowledgedeffectsofthatprogressisanincrease
　　ofgeneralsecurity。Destructionbywars，andspoliationby
　　privateorpublicviolence，arelessandlesstobeapprehended;
　　andtheimprovementswhichmaybelookedforineducationandin
　　theadministrationofjustice，or，intheirdefault，increased
　　regardforopinion，affordagrowingprotectionagainstfraudand
　　recklessmismanagement。Therisksattendingtheinvestmentof
　　savingsinproductiveemploymentrequire，therefore，asmaller
　　rateofprofittocompensateforthemthanwasrequiredacentury
　　ago，andwillhereafterrequirelessthanatpresent。Inthe
　　secondplace，itisalsooneoftheconsequencesofcivilization
　　thatmankindbecomelesstheslavesofthemoment，andmore
　　habituatedtocarrytheirdesiresandpurposesforwardintoa
　　distantfuture。Thisincreaseofprovidenceisanaturalresult
　　oftheincreasedassurancewithwhichfuturitycanbelooked
　　forwardto;andis，besides，favouredbymostoftheinfluences
　　whichanindustriallifeexercisesoverthepassionsand
　　inclinationsofhumannature。Inproportionaslifehasfewer
　　vicissitudes，ashabitsbecomemorefixed，andgreatprizesare
　　lessandlesstobehopedforbyanyothermeansthanlong
　　perseverance，mankindbecomemorewillingtosacrificepresent
　　indulgenceforfutureobjects。Thisincreasedcapacityof
　　forethoughtandself—controlmayassuredlyfindotherthingsto
　　exerciseitselfuponthanincreaseofriches，andsome
　　considerationsconnectedwiththistopicwillshortlybetouched
　　upon。Thepresentkindofsocialprogress，however，decidedly
　　tends，thoughnotperhapstoincreasethedesireofaccumulation，
　　yettoweakentheobstaclestoit，andtodiminishtheamountof
　　profitwhichpeopleabsolutelyrequireasaninducementtosave
　　andaccumulate。Forthesetworeasons，diminutionofriskand
　　increaseofprovidence，aprofitorinterestofthreeorfourper
　　centisassufficientamotivetotheincreaseofcapitalin
　　Englandatthepresentday，asthirtyorfortypercentinthe
　　BurmeseEmpire，orinEnglandatthetimeofKingJohn。In
　　Hollandduringthelastcenturyareturnoftwopercent，on
　　governmentsecurity，wasconsistentwithanundiminished，ifnot
　　withanincreasingcapital。Butthoughtheminimumrateofprofit
　　isthusliabletovary，andthoughtospecifyexactlywhatitis
　　wouldatanygiventimebeimpossible，suchaminimumalways
　　exists;andwhetheritbehighorlow，whenonceitisreached，
　　nofurtherincreaseofcapitalcanforthepresenttakeplace。
　　Thecountryhasthenattainedwhatisknowntopolitical
　　economistsunderthenameofthestationarystate。
　　4。Wenowarriveatthefundamentalpropositionwhichthis
　　chapterisintendedtoinculcate。Whenacountryhaslong
　　possessedalargeproduction，andalargenetincometomake
　　savingsfrom，andwhen，therefore，themeanshavelongexistedof
　　makingagreatannualadditiontocapital;（thecountrynot
　　having，likeAmerica，alargereserveoffertilelandstill
　　unused;）itisoneofthecharacteristicsofsuchacountry，that
　　therateofprofitishabituallywithin，asitwere，ahand’s
　　breadthoftheminimum，andthecountrythereforeonthevery
　　vergeofthestationarystate。BythisIdonotmeanthatthis
　　stateislikely，inanyofthegreatcountriesofEurope，tobe
　　soonactuallyreached，orthatcapitaldoesnotstillyielda
　　profitconsiderablygreaterthanwhatisbarelysufficientto
　　inducethepeopleofthosecountriestosaveandaccumulate。My
　　meaningis，thatitwouldrequirebutashorttimetoreduce
　　profitstotheminimum，ifcapitalcontinuedtoincreaseatits
　　presentrate，andnocircumstanceshavingatendencytoraisethe
　　rateofprofitoccurredinthemeantime。Theexpansionofcapital
　　wouldsoonreachitsultimateboundary，iftheboundaryitself
　　didnotcontinuallyopenandleavemorespace。
　　InEngland，theordinaryrateofinterestongovernment
　　securities，inwhichtheriskisnexttonothing，maybe
　　estimatedatalittlemorethanthreepercent:inallother
　　investments，therefore，theinterestorprofitcalculatedupon
　　（exclusivelyofwhatisproperlyaremunerationfortalentor
　　exertion）mustbeasmuchmorethanthisamount，asisequivalent
　　tothedegreeofrisktowhichthecapitalisthoughttobe
　　exposed。LetussupposethatinEnglandevensosmallanet
　　profitasonepercent，exclusiveofinsuranceagainstrisk，
　　wouldconstituteasufficientinducementtosave，butthatless
　　thanthiswouldnotbeasufficientinducement。Inowsay，that
　　themerecontinuanceofthepresentannualincreaseofcapital，
　　ifnocircumstanceoccurredtocounteractitseffect，would
　　sufficeinasmallnumberofyearstoreducetherateofnet
　　profittoonepercent。
　　Tofulfiltheconditionsofthehypothesis，wemustsuppose
　　anentirecessationoftheexportationofcapitalforforeign
　　investment。Nomorecapitalsentabroadforrailwaysorloans;no
　　moreemigrantstakingcapitalwiththem，tothecolonies，orto
　　othercountries;nofreshadvancesmade，orcreditsgiven，by
　　bankersormerchantstotheirforeigncorrespondents。Wemust
　　alsoassumethattherearenofreshloansforunproductive
　　expenditure，bythegovernment，oronmortgage，orotherwise;and
　　noneofthewasteofcapitalwhichnowtakesplacebythefailure
　　ofundertaking，whichpeoplearetemptedtoengageinbythehope
　　ofabetterincomethancanbeobtainedinsafepathsatthe
　　presenthabituallylowrateofprofit。Wemustsupposetheentire
　　savingsofthecommunitytobeannuallyinvestedinreally
　　productiveemploymentwithinthecountryitself;andnonew
　　channelsopenedbyindustrialinventions，orbyamoreextensive
　　substitutionofthebestknownprocessesforinferiorones。
　　Fewpersonswouldhesitatetosay，thattherewouldbegreat
　　difficultyinfindingremunerativeemploymenteveryyearforso
　　muchnewcapital，andmostwouldconcludethattherewouldbe
　　whatusedtobetermedageneralglut;thatcommoditieswouldbe
　　produced，andremainunsold，orbesoldonlyataloss。Butthe
　　fullexaminationwhichwehavealreadygiventothis
　　question，（3*）hasshownthatthisisnotthemodeinwhichthe
　　inconveniencewouldbeexperienced。Thedifficultywouldnot
　　consistinanywantofamarket。Ifthenewcapitalwereduly
　　sharedamongmanyvarietiesofemployment，itwouldraiseupa
　　demandforitsownproduce，andtherewouldbenocausewhyany
　　partofthatproduceshouldremainlongeronhandthanformerly。
　　Whatwouldreallybe，notmerelydifficult，butimpossible，would
　　betoemploythiscapitalwithoutsubmittingtoarapidreduction
　　oftherateofprofit。
　　Ascapitalincreased，populationeitherwouldalsoincrease，
　　oritwouldnot。Ifitdidnot，wageswouldrise，andagreater
　　capitalwouldbedistributedinwagesamongthesamenumberof
　　labourers。Therebeingnomorelabourthanbefore，andno
　　improvementstorenderthelabourmoreefficient，therewouldnot
　　beanyincreaseoftheproduce;andasthecapital，however
　　largelyincreased，wouldonlyobtainthesamegrossreturn，the
　　wholesavingsofeachyearwouldbeexactlysomuchsubtracted
　　fromtheprofitsofthenextandofeveryfollowingyear。Itis
　　hardlynecessarytosaythatinsuchcircumstancesprofitswould
　　verysoonfalltothepointatwhichfurtherincreaseofcapital
　　wouldcease。Anaugmentationofcapital，muchmorerapidthan
　　thatofpopulation，mustsoonreachitsextremelimit，unless
　　accompaniedbyincreasedefficiencyoflabour（throughinventions
　　anddiscoveries，orimprovedmentalandphysicaleducation），or
　　unlesssomeoftheidlepeople，oroftheunproductivelabourers，
　　becameproductive。
　　Ifpopulationdidincreasewiththeincreaseofcapital，and
　　inproportiontoit，thefallofprofitswouldstillbe
　　inevitable。Increasedpopulationimpliesincreaseddemandfor
　　agriculturalproduce。Intheabsenceofindustrialimprovements，
　　thisdemandcanonlybesuppliedatanincreasedcostof
　　production，eitherbycultivatingworseland，orbyamore
　　elaborateandcostlycultivationofthelandalreadyunder
　　tillage。Thecostofthelabourer’ssubsistenceistherefore
　　increased;andunlessthelabourersubmitstoadeteriorationof
　　hiscondition，profitsmustfall。InanoldcountrylikeEngland，
　　if，inadditiontosupposingallimprovementindomestic
　　agriculturesuspended，wesupposethatthereisnoincreased
　　productioninforeigncountriesfortheEnglishmarket，thefall
　　ofprofitswouldbeveryrapid。Ifboththeseavenuestoan
　　increasedsupplyoffoodwereclosed，andpopulationcontinuedto
　　increase，asitissaidtodo，attherateofathousandaday，
　　allwastelandwhichadmitsofcultivationintheexistingstate
　　ofknowledgewouldsoonbecultivated，andthecostofproduction
　　andpriceoffoodwouldbesoincreased，that，ifthelabourers
　　receivedtheincreasedmoneywagesnecessarytocompensatefor
　　theirincreasedexpenses，profitswouldverysoonreachthe
　　minimum。Thefallofprofitswouldberetardedifmoneywagesdid
　　notrise，orroseinalessdegree;butthemarginwhichcanbe
　　gainedbyadeteriorationofthelabourers’conditionisavery
　　narrowone:ingeneraltheycannotbearmuchreduction;whenthey
　　can，theyhavealsoahigherstandardofnecessaryrequirements，
　　andwillnot。Onthewhole，therefore，wemayassumethatinsuch
　　acountryasEngland，ifthepresentannualamountofsavings
　　weretocontinue，withoutanyofthecounteractingcircumstances
　　whichnowkeepincheckthenaturalinfluenceofthosesavingsin
　　reducingprofit，therateofprofitwouldspeedilyattainthe
　　minimum，andallfurtheraccumulationofcapitalwouldforthe
　　presentcease。
　　5。What，then，arethesecounteractingcircumstances，which，
　　intheexistingstateofthings，maintainatolerablyequal
　　struggleagainstthedownwardtendencyofprofits，andprevent
　　thegreatannualsavingswhichtakeplaceinthiscountry，from
　　depressingtherateofprofitmuchnearertothatlowestpointto
　　whichitisalwaystending，andwhich，lefttoitself，itwould
　　sopromptlyattain？Theresistingagenciesareofseveralkinds。
　　Firstamongthem，wemaynoticeonewhichissosimpleandso
　　conspicuous，thatsomepoliticaleconomists，especiallyM。de
　　SismondiandDrChalmers，haveattendedtoitalmosttothe
　　exclusion。ofallothers。Thisis，thewasteofcapitalin
　　periodsofover。tradingandrashspeculation，andinthe
　　commercialrevulsionsbywhichsuchtimesarealwaysfollowed。It
　　istruethatagreatpartofwhatislostatsuchperiodsisnot
　　destroyed，butmerelytransferred，likeagambler’slosses，to
　　moresuccessfulspeculators。Butevenofthesemeretransfers，a
　　largeportionisalwaystoforeigners，bythehastypurchaseof
　　unusualquantitiesofforeigngoodsatadvancedprices。Andmuch
　　alsoisabsolutelywasted。Minesareopened，railwaysorbridges
　　made，andmanyotherworksofuncertainprofitcommenced，andin
　　theseenterprisesmuchcapitalissunkwhichyieldseitherno
　　return，ornoneadequatetotheoutlay。Factoriesarebuiltand
　　machineryerectedbeyondwhatthemarketrequires，orcankeepin
　　employment。Eveniftheyarekeptinemployment，thecapitalis
　　nolesssunk;ithasbeenconvertedfromcirculatingintofixed
　　capital，andhasceasedtohaveanyinfluenceonwagesor
　　profits。Besidesthis，thereisagreatunproductiveconsumption
　　ofcapital，duringthestagnationwhichfollowsaperiodof
　　generalovertrading。Establishmentsareshutup，orkeptworking
　　withoutanyprofit，handsaredischarged，andnumbersofpersons
　　inallranks，beingdeprivedoftheirincome，andthrownfor
　　supportontheirsavings，findthemselves，afterthecrisishas
　　passedaway，inaconditionofmoreorlessimpoverishment。Such
　　aretheeffectsofacommercialrevulsion:andthatsuch
　　revulsionsarealmostperiodical，isaconsequenceofthevery
　　tendencyofprofitswhichweareconsidering。Bythetimeafew
　　yearshavepassedoverwithoutacrisis，somuchadditional
　　capitalhasbeenaccumulated，thatitisnolongerpossibleto
　　investitattheaccustomedprofit:allpublicsecuritiesriseto
　　ahighprice，therateofinterestonthebestmercantile
　　securityfallsverylow，andthecomplaintisgeneralamong
　　personsinbusinessthatnomoneyistobemade。Doesnotthis
　　demonstratehowspeedilyprofitwouldbeattheminimum，andthe
　　stationaryconditionofcapitalwouldbeattained，ifthese
　　accumulationswentonwithoutanycounteractingprinciple？But
　　thediminishedscaleofallsafegains，inclinespersonstogive
　　areadyeartoanyprojectswhichholdout，thoughattheriskof
　　loss，thehopeofahigherrateofprofit;andspeculations
　　ensue，which，withthesubsequentrevulsions，destroy，or
　　transfertoforeigners，aconsiderableamountofcapital，produce
　　atemporaryriseofinterestandprofit，makeroomforfresh
　　accumulations，andthesameroundisrecommenced。
　　This，doubtless，isoneconsiderablecausewhicharrests
　　profitsintheirdescenttotheminimum，bysweepingawayfrom
　　timetotimeapartoftheaccumulatedmassbywhichtheyare
　　forceddown。Butthisisnot，asmightbeinferredfromthe
　　languageofsomewriters，theprincipalcause。Ifitwere，the
　　capitalofthecountrywouldnotincrease;butinEnglanditdoes
　　increasegreatlyandrapidly。Thisisshownbytheincreasing
　　productivenessofalmostalltaxes，bythecontinualgrowthof
　　allthesignsofnationalwealth，andbytherapidincreaseof
　　population，whiletheconditionofthelabourersiscertainlynot
　　declining，butonthewholeimproving。Thesethingsprovethat
　　eachcommercialrevulsion，howeverdisastrous，isveryfarfrom
　　destroyingallthecapitalwhichhasbeenaddedtothe
　　accumulationsofthecountrysincethelastrevulsionpreceding
　　it，andthat，invariably，roomiseitherfoundormadeforthe
　　profitableemploymentofaperpetuallyincreasingcapital，
　　consistentlywithnotforcingdownprofitstoalowerrate。
　　6。Thisbringsustothesecondofthecounter。agencies，
　　namely，improvementsinproduction。Theseevidentlyhavethe
　　effectofextendingwhatMrWakefieldtermsthefieldof
　　employment，thatis，theyenableagreateramountofcapitalto
　　beaccumulatedandemployedwithoutdepressingtherateof
　　profit:providedalwaysthattheydonotraise，toaproportional
　　extent，thehabitsandrequirementsofthelabourer。Ifthe
　　labouringclassgainthefulladvantageoftheincreased
　　cheapness，inotherwords，ifmoneywagesdonotfall，profits
　　arenotraised，northeirfallretarded。Butifthelabourers
　　peopleuptotheimprovementintheircondition，andsorelapse
　　totheirpreviousstate，profitswillrise。Allinventionswhich
　　cheapenanyofthethingsconsumedbythelabourers，unlesstheir
　　requirementsareraisedinanequivalentdegree，intimelower
　　moneywages:andbydoingso，enableagreatercapitaltobe
　　accumulatedandemployed，beforeprofitsfallbacktowhatthey
　　werepreviously。
　　Improvementswhichonlyaffectthingsconsumedexclusivelyby
　　thericherclasses，donotoperatepreciselyinthesamemanner。
　　Thecheapeningoflaceorvelvethasnoeffectindiminishingthe
　　costoflabour;andnomodecanbepointedoutinwhichitcan
　　raisetherateofprofit，soastomakeroomforalargercapital
　　beforetheminimumisattained。It，however，producesaneffect
　　whichisvirtuallyequivalent;itlowers，ortendstolower，the
　　minimumitself。Inthefirstplace，increasedcheapnessof
　　articlesofconsumptionpromotestheinclinationtosave，by
　　affordingtoallconsumersasurpluswhichtheymaylayby，
　　consistentlywiththeiraccustomedmannerofliving;andunless
　　theywerepreviouslysufferingactualhardships，itwillrequire
　　littleself—denialtosavesomepartatleastofthissurplus。In
　　thenextplace，whateverenablespeopletoliveequallywellona
　　smallerincome，inclinesthemtolaybycapitalforalowerrate
　　ofprofit。Ifpeoplecanliveonanindependenceof500l。ayear
　　inthesamemannerastheyformerlycouldononeof1000l。，some
　　personswillbeinducedtosaveinhopesoftheone，whowould
　　havebeendeterredbythemoreremoteprospectoftheother。All
　　improvements，therefore，intheproductionofalmostany
　　commodity，tendinsomedegreetowidentheintervalwhichhasto
　　bepassedbeforearrivingatthestationarystate:butthis
　　effectbelongsinamuchgreaterdegreetotheimprovementswhich
　　affectthearticlesconsumedbythelabourer，sincetheseconduce
　　toitintwoways;theyinducepeopletoaccumulateforalower
　　profit，andtheyalsoraisetherateofprofititself。
　　7。Equivalentineffecttoimprovementsinproduction，isthe
　　acquisitionofanynewpowerofobtainingcheapcommoditiesfrom
　　foreigncountries。Ifnecessariesarecheapened，whethertheyare
　　sobyimprovementsathomeorimportationfromabroad，isexactly
　　thesamethingtowagesandprofits。Unlessthelabourerobtains，
　　andbyanimprovementofhishabitualstandard，keeps，thewhole
　　benefit，thecostoflabourislowered，andtherateofprofit
　　raised。Aslongasfoodcancontinuetobeimportedforan
　　increasingpopulationwithoutanydiminutionofcheapness，so
　　longthedeclensionofprofitsthroughtheincreaseofpopulation
　　andcapitalisarrested，andaccumulationmaygoonwithout
　　makingtherateofprofitdrawnearertotheminimum。Andonthis
　　grounditisbelievedbysome，thattherepealofthecornlaws
　　hasopenedtothiscountryalongeraofrapidincreaseof
　　capitalwithanundiminishedrateofprofit。
　　Beforeinquiringwhetherthisexpectationisreasonable，one
　　remarkmustbemade，whichismuchatvariancewithcommonly
　　receivednotions。Foreigntradedoesnotnecessarilyin。crease
　　thefieldofemploymentforcapital。Itisnotthemereopening
　　ofamarketforacountry’sproductions，thattendstoraisethe
　　rateofprofits。Ifnothingwereobtainedinexchangeforthose
　　productionsbuttheluxuriesoftherich，theexpensesofno
　　capitalistwouldbediminished;profitswouldnotbeatall
　　raised，norroommadefortheaccumulationofmorecapital
　　withoutsubmittingtoareductionofprofits:andifthe
　　attainmentofthestationarystatewereatallretarded，itwould
　　onlybebecausethediminishedcostatwhichacertaindegreeof
　　luxurycouldbeenjoyed，mightinducepeople，inthatprospect，
　　tomakefreshsavingsforalowerprofitthantheyformerlywere
　　willingtodo。Whenforeigntrademakesroomformorecapitalat
　　thesameprofit，itisbyenablingthenecessariesoflife，or
　　thehabitualarticlesofthelabourer’sconsumption，tobe
　　obtainedatsmallercost。Itmaydothisintwoways;bythe
　　importationeitherofthosecommoditiesthemselves，orofthe
　　meansandappliancesforproducingthem。Cheapironhas，ina
　　certainmeasure，thesameeffectonprofitsandthecostof
　　labourascheapcorn，becausecheapironmakescheaptoolsfor
　　agricultureandcheapmachineryforclothing。Butaforeigntrade
　　whichneitherdirectly，norbyanyindirectconsequence，
　　increasesthecheapnessofanythingconsumedbythelabourers，
　　doesnot，anymorethananinventionordiscoveryinthelike
　　case，tendtoraiseprofitsorretardtheirfall;itmerely
　　substitutestheproductionofgoodsforforeignmarkets，inthe
　　roomofthehomeproductionofluxuries，leavingtheemployment
　　forcapitalneithergreaternorlessthanbefore。Itistrue，
　　thatthereisscarcelyanyexporttradewhich，inacountrythat
　　alreadyimportsnecessariesormaterials，comeswithinthese
　　conditions:foreveryincreaseofexportsenablesthecountryto
　　obtainallitsimportsoncheapertermsthanbefore。
　　Acountrywhich，asisnowthecasewithEngland，admitsfood
　　ofallkinds，andallnecessariesandthematerialsof
　　necessaries，tobefreelyimportedfromallpartsoftheworld，
　　nolongerdependsonthefertilityofherownsoiltokeepupher
　　rateofprofits，butonthesoilofthewholeworld。Itremains
　　toconsiderhowfarthisresourcecanbecountedupon，formaking
　　headduringaverylongperiodagainstthetendencyofprofitsto
　　declineascapitalincreases。
　　Itmust，ofcourse，besupposedthatwiththeincreaseof
　　capital，populationalsoincreases;forifitdidnot，the
　　consequentriseofwageswouldbringdownprofits，inspiteof
　　anycheapnessoffood。SupposethenthatthepopulationofGreat
　　Britaingoesonincreasingatitspresentrate，anddemandsevery
　　yearasupplyofimportedfoodconsiderablybeyondthatofthe
　　yearpreceding。Thisannualincreaseinthefooddemandedfrom
　　theexportingcountries，canonlybeobtainedeitherbygreat
　　improvementsintheiragriculture，orbytheapplicationofa
　　greatadditionalcapitaltothegrowthoffood。Theformeris
　　likelytobeaveryslowprocess，fromtherudenessandignorance
　　oftheagriculturalclassesinthefood—exportingcountriesof
　　Europe，whiletheBritishcoloniesandtheUnitedStatesare
　　alreadyinpossessionofmostoftheimprovementsyetmade，so
　　farassuitabletotheircircumstances。Thereremainsasa
　　resource，theextensionofcultivation。Andonthisitistobe
　　remarked，thatthecapitalbywhichanysuchextensioncantake
　　place，ismostlystilltobecreated。InPoland，Russia，Hungary，
　　Spain，theincreaseofcapitalisextremelyslow。InAmericait
　　israpid，butnotmorerapidthanthepopulation。Theprincipal
　　fundatpresentavailableforsupplyingthiscountrywitha
　　yearlyincreasingimportationoffood，isthatportionofthe
　　annualsavingsofAmericawhichhasheretoforebeenappliedto
　　increasingthemanufacturingestablishmentsoftheUnitedStates，
　　andwhichfreetradeincornmaypossiblydivertfromthat
　　purposetogrowingfoodforourmarket。Thislimitedsourceof
　　supply，unlessgreatimprovementstakeplaceinagriculture，
　　cannotbeexpectedtokeeppacewiththegrowingdemandofso
　　rapidlyincreasingapopulationasthatofGreatBritain;andif
　　ourpopulationandcapitalcontinuetoincreasewiththeir
　　presentrapidity，theonlymodeinwhichfoodcancontinuetobe
　　suppliedcheaplytotheone，isbysendingtheotherabroadto
　　produceit。
　　8。Thisbringsustothelastofthecounter—forceswhich
　　checkthedownwardtendencyofprofits，inacountrywhose
　　capitalincreasesfasterthanthatofitsneighbours，andwhose
　　profitsarethereforenearertotheminimum。Thisis，the
　　perpetualoverflowofcapitalintocoloniesorforeigncountries，
　　toseekhigherprofitsthancanbeobtainedathome。Ibelieve
　　thistohavebeenformanyyearsoneoftheprincipalcausesby
　　whichthedeclineofprofitsinEnglandhasbeenarrested。Ithas
　　atwofoldoperation。Inthefirstplace，itdoeswhatafire，or
　　aninundation，oracommercialcrisiswouldhavedone:itcarries
　　offapartoftheincreaseofcapitalfromwhichthereductionof
　　profitsproceeds。Secondly，thecapitalsocarriedoffisnot
　　lost，butischieflyemployedeitherinfoundingcolonies，which
　　becomelargeexportersofcheapagriculturalproduce，orin
　　extendingandperhapsimprovingtheagricultureofolder
　　communities。ItistotheemigrationofEnglishcapital，thatwe
　　havechieflytolookforkeepingupasupplyofcheapfoodand
　　cheapmaterialsofclothing，proportionaltotheincreaseofour
　　population;thusenablinganincreasingcapitaltofind
　　employmentinthecountry，withoutreductionofprofit，in
　　producingmanufacturedarticleswithwhichtopayforthissupply
　　ofrawproduce。Thus，theexportationofcapitalisanagentof
　　greatefficacyinextendingthefieldofemploymentforthat
　　whichremains:anditmaybesaidtrulythat，uptoacertain
　　point，themorecapitalwesendaway，themoreweshallpossess
　　andbeabletoretainathome。
　　Incountrieswhicharefurtheradvancedinindustryand
　　population，andhavethereforealowerrateofprofit，than
　　others，thereisalways，longbeforetheactualminimumis
　　reached，apracticalminimum，viz。whenprofitshavefallento
　　muchbelowwhattheyareelsewhere，that，weretheytofall
　　lower，allfurtheraccumulationswouldgoabroad。Inthepresent
　　stateoftheindustryoftheworld，whenthereisoccasion，in
　　anyrichandimprovingcountry，totaketheminimumofprofitsat
　　allintoconsiderationforpracticalpurposes，itisonlythis
　　practicalminimumthatneedsbeconsidered。Aslongasthereare
　　oldcountrieswherecapitalincreasesveryrapidly，andnew
　　countrieswhereprofitisstillhigh，profitsintheold
　　countrieswillnotsinktotheratewhichwouldputastopto
　　accumulation;thefallisstoppedatthepointwhichsends
　　capitalabroad。Itisonly，however，byimprovementsin
　　production，andevenintheproductionofthingsconsumedby
　　labourers，thatthecapitalofacountrylikeEnglandis
　　preventedfromspeedilyreachingthatdegreeoflownessof
　　profit，whichwouldcauseallfurthersavingstobesenttofind
　　employmentinthecolonies，orinforeigncountries。
　　NOTES:
　　1。WealthofNations，Bk。I，Ch。9。
　　2。Nowsomuchbetterknownthroughhisapostolicexertions，by
　　pen，purse，andperson，fortheimprovementofpopulareducation，
　　andespeciallyfortheintroductionintoitoftheelementsof
　　practicalPoliticalEconomy。
　　3。Bkiii，Ch。XIV。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book4
　　Chapter5
　　ConsequencesoftheTendencyofProfitstoaMinimum
　　1。Thetheoryoftheeffectofaccumulationonprofits，laid
　　downintheprecedingchapter，materiallyaltersmanyofthe
　　practicalconclusionswhichmightotherwisebesupposedtofollow
　　fromthegeneralprinciplesofPoliticalEconomy，andwhichwere，
　　indeed，longadmittedastruebythehighestauthoritiesonthe
　　subject。
　　Itmustgreatlyabate，orrather，altogetherdestroy，in
　　countrieswhereprofitsarelow，theimmenseimportancewhich
　　usedtobeattachedbypoliticaleconomiststotheeffectswhich
　　aneventorameasureofgovernmentmighthaveinaddingtoor
　　subtractingfromthecapitalofthecountry。Wehavenowseen
　　thatthelownessofprofitsisaproofthatthespiritof
　　accumulationissoactive，andthattheincreaseofcapitalhas
　　proceededatsorapidarate，astooutstripthetwo
　　counter—agencies，improvementsinproduction，andincreased
　　supplyofcheapnecessariesfromabroad:andthatunlessa
　　considerableportionoftheannualincreaseofcapitalwere
　　eitherperiodicallydestroyed，orexportedforforeign
　　investment，thecountrywouldspeedilyattainthepointatwhich
　　furtheraccumulationwouldcease，oratleastspontaneously
　　slacken，soasnolongertooverpassthemarchofinventionin
　　theartswhichproducethenecessariesoflife。Insuchastate
　　ofthingsasthis，asuddenadditiontothecapitalofthe
　　country，unaccompaniedbyanyincreaseofproductivepower，would
　　bebutoftransitoryduration;sincebydepressingprofitsand
　　interest，itwouldeitherdiminishbyacorrespondingamountthe
　　savingswhichwouldbemadefromincomeintheyearortwo
　　following，oritwouldcauseanequivalentamounttobesent
　　abroad，ortobewastedinrashspeculations。Neither，onthe
　　otherhand，wouldasuddenabstractionofcapital，unlessof
　　inordinateamount，haveanyrealeffectinimpoverishingthe
　　country。Afterafewmonthsoryears，therewouldexistinthe
　　countryjustasmuchcapitalasifnonehadbeentakenaway。The
　　abstraction，byraisingprofitsandinterest，wouldgiveafresh
　　stimulustotheaccumulativeprinciple，whichwouldspeedilyfill
　　upthevacuum。Probably，indeed，theonlyeffectthatwould
　　ensue，wouldbethatforsometimeafterwardslesscapitalwould
　　beexported，andlessthrownawayinhazardousspeculation。