(3。xvii。9)Itseems,therefore,tobefullyestablished,thatthebusinessofproductionand
exchange,iflefttochooseitsownchannels,issuretochoosethose,whicharemost
advantageoustothecommunity。Itissuretochoosethosechannels,inwhichthecommodities,
whichthecommunitydesirestoobtain,areobtainedwiththesmallestcost。Toobtainthe
commodities,whichmandesires,andtoobtainthemwiththesmallestcost,isthewholeofthe
goodwhichthebusinessofproductionandexchange,consideredsimplyassuch,iscalculatedto
yield。Inwhateverdegree,therefore,thebusinessofproductionandexchangeisforcedoutofthe
channelsintowhichitwouldgoofitsownaccord,tothatdegreetheadvantagesarisingfrom
productionandexchangearesacrificed;or,atanyrate,postponedtosomethingelse。Ifthereis
anycase,inwhichtheyoughttobepostponedtosomethingelse,thatisaquestionofpolitics,
andnotofpoliticaleconomy。
(3。xvii。10)Thereisnosubject,uponwhichthepolicyoftherestrictiveandprohibitive
system
hasbeenmaintainedwithgreaterobstinacy,andwithagreaterquantityofsophistry,thanthatof
thetradeincorn。Therecan,however,benodoubt,thatcornneverwillbeimported,unless
whenitcanbeobtainedfromabroadwithasmallerquantityoflabourthanitcanbeproduced
withathome。Allthegood,therefore,whichisobtainedfromtheimportationofanycommodity,
capableofbeingproducedathome,isobtainedfromtheimportationofcorn。Whyshouldthat
advantagewhich,inthecaseofcorn,owingtothediversitiesofsoilandextentofpopulation,is
liabletobemuchgreaterthaninthecaseofanyothercommodity,bedeniedtothecommunity?
(3。xvii。11)Thereasons,uponwhichtheadvocatesforarestrictionofthecorntradechiefly
supportthemselves,aretwo;neitherisofanyvalue。
(3。xvii。12)Thefirstis,thatunlessthenationderiveitscornfromitsownsoil,itmay,bythe
enmityofitsneighbours,bedeprivedofitsforeignsupply,andreducedtothegreatestdistress。
Thisargumentimpliesanignorancebothofhistory,andofprinciple:Ofhistory,because,in
pointoffact,thosecountrieswhichhavedependedthemostuponforeigncountriesfortheir
supplyofcorn,haveenjoyedbeyondallothercountries,theadvantageofasteadyandinvariable
marketforgrain:Ofprinciple,becauseitfollowsunavoidably,ifwhat,inonecountryisa
favourable,isinothercountriesanunfavourableseason,thatobtainingagreatpartofitssupply
fromvariouscountriesisthebestsecurityanationcanhaveagainsttheextensiveanddistressing
fluctuationswhichthevarietyofseasonsiscalculatedtoproduce。Noristhepolicyinvolvedin
thisargumentbetterthanthepoliticaleconomy。Itsacrificesarealgood,toescapethechanceof
achimericalevil:anevilsomuchthelesstobeapprehended,thatthecountry,fromwhich
anotherderivesitssupplyofcorn,isscarcelylessdependantuponthatothercountryforaventto
itsproduce,thanthepurchasingcountryisforitssupply。Itwillnotbepretended,thataglutof
corn,inanycountry,fromthelossofagreatmarket,withthatdeclensionofprice,thatruinof
thefarmers,andthatdepressionofrents,whichareitsunavoidableconsequences,isan
immaterialevil。
(3。xvii。13)Thesecondreason,uponwhichtheadvocatesofthecornmonopolysupport
themselves,is,that,ifthemerchantsandmanufacturersenjoyincertaincasesthemonopolyof
thehomesupply,thefarmersandlandlordsaresubjecttoinjustice,whenasimilarmonopolyis
notbostoweduponthem。Inthefirstplace,itmaybeobserved,that,ifthisargumentisgoodfor
thegrowersofcorn,itisgoodforeveryotherspeciesofproducerswhatsoever;if,becauseatax
isimposedupontheimportationofwoollens,ataxoughttobeimposedupontheimportationof
corn,ataxoughtalsotobeimposedupontheimportationofeverything,whichthecountrycan
produce;thecountryought,inshort,tohavenoforeigncommerce,exceptinthosearticles
alone,whichithasnotthemeansofproducing。
(3。xvii。14)Theargumentmoreoversupposes,thatanextraordinarygainisobtainedbythe
manufacturer,inconsequenceofhissupposedprotection;andthatacorrespondentevilis
sustainedbythecorngrower,unlessheisfavouredbyasimilartax。Theignoranceofprinciple
ispeculiarlyvisibleinthosesuppositions,inneitherofwhichisthereashadowoftruth。
(3。xvii。15)Themanwhoembarkshiscapitalinthewoollen,oranyothermanufacture,with
the
produceofwhichthatoftheforeignmanufacturersisnotallowedtocomeintocompetition,
doesnot,onthataccount,deriveagreaterprofitfromhiscapital。Hisprofitisnogreaterthan
thatofthemanwhosecapitalisembarkedintradesopentothecompetitionofalltheworld。All
thathappensis,thatagreaternumberofcapitalistsfindemploymentinthatbranchof
manufacture;thataportion,inshort,ofthecapitalistsofthecountryemploythemselvesin
producingthatparticularspeciesofmanufacture,whowouldotherwisebeemployedin
producingsomeotherspecies,probablyinproducingsomethingfortheforeignmarket,with
whichthatcommodity,ifimportedfromtheforeignmanufacturer,mightbebought。
(3。xvii。16)Asthemanwhohasembarkedhiscapitalinthetrade,whichiscalledprotected,
derivesnoadditionalprofitfromtheprotection;sothegrowerofcornsustainsnotanypeculiar
lossorinconvenience。Nothing,therefore,canbeconceivedmoregroundlessthanhisdemandof
acompensationonthataccount。Themarketforcornisnotdiminishedbecauseataxislaid
upontheimportationofwoollens;norwouldthatmarketbeenlargedifthetaxweretakenoff。
Hisbusiness,therefore,isnotintheleastdegreeaffectedbyit。
(3。xvii。17)Itwouldbeinconsistentwiththeplanofawork,confinedtotheexpositionof
general
principles,tolayopenallthefallacies,whichlurkintheargumentsforrestrainingthetradein
corn。Oneortwo,however,ofthesourcesofdeception,cannotbeleftaltogetherunnoticed。
(3。xvii。18)Thelandlordendeavourstorepresenthisowncase,andthatofthemanufacturer,
as
perfectlysimilar;though,inthecircumstanceswhichconcernthisargument,theyarenotonly
different,butopposite。Thelandlordalsoendeavourstomixuphisowncasewiththatofthe
farmer;anduponthesuccessofthatendeavouralmostalltheplausibilityofhispretensions
depends。Thatnopretensionsaremoreunfounded,maybeseenbyaveryshortprocessof
reasoning。Thefarmer,asaproducer,requires,likeeveryotherproducer,thatallhisoutgoings
bereturnedtohim,withthedueprofituponthecapitalwhichheemploys。Thesurplus,which
thelandyields,overandabovethisreturnandprofit,iswhathepaystohislandlord;andhis
interestisnotaffectedbythequantityofthatsurplus,whetheritbegreatorsmall。Hisinterest,
however,isverymuchaffectedbywages;because,inproportionaswagesarelow,hisprofits,
likeallotherprofits,arehigh。Wagescannotbelow,ifcornisdear。Theinterest,therefore,the
permanentinterest,oftheclassoffarmers,consists,inhavingcorncheap。Thisorthatindividual
intheclassmay,thatis,duringthecurrencyofalease,haveaninterestinhighprices;andthe
reasonoftheexceptionshowsthetruthofthegeneralrule。Theindividual,who,duringthe
currencyofalease,hasaninterestinhighprices,is,byhislease,converted,toacertainextent,
intoareceiverofrent。Duringthecontinuanceofhislease,ifpricesrise,hegets,notonlyhis
duereturnofprofitsasafarmer,butsomethingmore,namely,aportionofwhatistrulyrent,and
which,butforhislease,wouldhavegonetothelandlord。
(3。xvii。19)This,then,isthegranddistinction。Thereceiversofrentarebenefitedbyahigh
price
ofcorn;theproducersofcorn,assucharenotbenefitedbyit,butthereverse。Thecaseofthe
farmercorrespondswiththatofthemanufacturer,notwiththatofthelandlord。Thefarmerisa
producerandcapitalist;themanufacturerisaproducerandcapitalist;andtheyhaveboth
receivedallthatbelongstothem,whentheircapitalisreplacedwithitsprofits。Thelandlordis
notaproducer,noracapitalist。Heistheownerofcertainproductivepowersinthesoil;andall
whichthesoilproducesbelongstohim,afterpayingthecapitalwhichisnecessarytoputthose
productivepowersinoperation。Itthusappearsthatthecaseofthelandlordispeculiar;thata
highpriceofcornisprofitabletohim,because,thehighertheprice,thesmalleraportionofthe
producewillsufficetoreplace,withitsprofits,thecapitalofthefarmer;andalltherestbelongs
tohimself。Tothefarmer,however,andtoalltherestofthecommunity,itisanevil,bothasit
tendstodiminishprofits,andasitenhancesthechargetoconsumers。
SectionXVIII。Colonies(3。xviii。1)Amongtheexpedientswhichhavebeenmadeuseof,toforceintoparticular
channels
agreaterquantityofthemeansofproduction,thanwouldhaveflowedintothemoftheirown
accord;coloniesareasubjectofsufficientimportancetorequireaparticularconsideration。
(3。xviii。2)Theonlypointofcolonialpolicy,whichitisherenecessarytoconsider,isthatof
tradewiththecolonies。Andthequestionis,whetheranypeculiaradvantagemaybederived
fromit。
(3。xviii。3)Withrespecttocolonies,aswithrespecttoforeigncountries,thepropositionwill,
doubtless,beadmitted,that,whateveradvantageisderivedfromtradingwiththem,consistsin
whatisreceivedfromthem,notinwhatissent;becausethat,ifnotfollowedbyareturn,would
bealtogetherloss。
(3。xviii。4)Thereturnfromthemiseithermoneyorcommodities。Thereaderisbythistime
fully
awarethatacountryderivesnoadvantagefromreceivingmoney,morethanfromreceivingany
otherspeciesofcommodity。Itisalsoplainthatwherethecolonyhasnotminesoftheprecious
metal,itcannot,underthemonopolyofthemothercountry,havemoney,oranythingelse,
besideitsownproductions,tosend。
(3。xviii。5)Itisneedlesstoconsiderthecaseorfreetradewithacolony,becausethatfalls
under
thecaseortradewithanyforeigncountry。
(3。xviii。6)Themonopoly,whichamothercountrymayreservetoherself,ofthetradewith
her
colonies,isoftwosorts。
(3。xviii。7)Firstofall,shemaytradewithhercolonies,bymeansofanexclusivecompany。
In
thiscase,thecolonyhasnopurchaser,towhomsheisallowedtosellanything,butthe
exclusivecompany;andnootherseller,fromwhomsheisallowedtobuyanything。The
company,therefore,canmakeherbuy,asdearasitpleases,thegoodswhichthemothercountry
sendstoher,andsell,ascheapasitpleases,thegoodswhichshesendstothemothercountry。In
otherwords,thecolonymay,inthesecircumstances,beobligedtogivefortheproduceofa
certainquantityofthelabourofthemothercountry,amuchgreaterquantityofgoodsthanthe
mothercountrycouldobtain,withthesamequantity,fromanyothercountry,orfromthecolony
inastateoffreedom。
(3。xviii。8)Thecasesofatradeinthesecircumstancesaretwo:thefirst,wherethecolony
receivesfromthemothercountry,luxuries,comforts:theother,whereshereceivesnecessaries;
eitherthenecessariesoflife,orthenecessariesofindustry,asiron,&;c。
(3。xviii。9)Inthatcase,inwhichthecolonyreceivesluxuriesandcomfortsonlyfromthe
mother
country,thereisalimittothedegreeinwhichthemothercountryisenabledtoprofitbythe
labourofthecolony。Thecolonymaydeclinereceivingsuchluxuriesorcomforts,ifobligedto
sacrificeforthemtoogreataquantityoftheproduceofherlabour,andmaythinkitbetterto
employthatgreatproportionofherlabour,inprovidingsuchluxuriesandcomfortsasshe
herselfiscapableofproducing。
(3。xviii。10)If,however,thecolonyisdependantfornecessariesuponthemothercountry,
the
exclusivecompanyexercisesoverthecolonyapoweraltogetherdespotic。Itmaycompelherto
givethewholeproduceofherlabour,fornomoreofthenecessariesinquestion,thanwhatis
justsufficienttoenablethepopulationofthecolonytolive。Ifitisthenecessariesoflife,which
thecolonyreceives,theconclusionisobvious。Ifitiscommodities,suchasiron,andinstruments
ofiron,withoutwhichherlabourcannotbeproductivelyemployed,theresultispreciselythe
same。Shemaybemadetopayforthesearticlessomuchofthewholeproduceofherlabour,
thatnothingbutwhatisnecessarytokeepthepopulationalivemayremain。Itwouldbethe
interestofthemothercountry,nottolessenthepopulation;because,withthepopulation,the
producewouldbelessened,andhencethequantityofcommoditieswhichthemothercountry
couldreceive。
(3。xviii。11)Instead,however,oftradingwithhercoloniesbymeansofanexclusive
company,
themothercountrymayleavethetradeopentoallherownmerchants,onlyprohibitingthe
colonyfromtradingwiththemerchantsofanyothercountry。Inthiscase,thecompetitionofthe
merchantsinthemothercountryreducesthepriceofallthearticlesreceivedbythecolony,as
lowastheycanbeafforded—inotherwords,aslowasinthemothercountryitself,allowance
beingmadefortheexpenseofcarryingthem。Ifitbesaidthatthecoloniesaffordamarket;I
reply,thatthecapital,whichsuppliescommoditiesforthatmarket,wouldstillprepare
commodities,ifthecolonieswereannihilated;andthosecommoditieswouldstillfind
consumers。Thelabourandcapitalofacountrycannotpreparemorethanthecountrywillbe
willingtoconsume。Everyindividualhasadesiretoconsume,eitherproductivelyor
unproductively,whateverhereceives。Everycountry,therefore,containswithinitselfamarket
forallthatitcanproduce。Thiswillbemadestillmoreevident,whenthesubjectof
consumption,thecauseandmeasureofmarkets。,comesunderconsideration。Thereis,therefore,
noadvantagewhatsoeverderived,underfreedomofcompetition,fromthatpartofthetradewith
acolonywhichconsistsinsupplyingitwithgoods,sincenomoreisgainedbyit,thansuch
ordinaryprofitsofstockaswouldhavebeengainedifnosuchtradehadexisted。Itis
neverthelesstruethatthecolonymaylosebysuchatraffic,ifthegoods,whichsheisthus
compelledtopurchaseofthemothercountry,mighthavebeenpurchasedcheaperinother
countries。
(3。xviii。12)Iftherebeanypeculiaradvantage,therefore,tothemothercountry,itmustbe
derivedfromthecheapnessofthegoods,withwhichthecolonysuppliesher。Itisevident,thatif
thequantityofgoods,sugar,forexample,whichthecolonysendstothemothercountry,isso
greatastoglutthemothercountry;thatistosupplyitsdemandbeyondthemeasureofother
countries,andmakethepriceoftheminthemothercountrylowerthanitisinothercountries,
themothercountryprofitsbycompellingthecolonytobringitsgoodsexclusivelytohermarket,
sinceshewouldhavetopayforthemashighasothercountries,ifthepeopleofthecolonywere
atlibertytosellwherevertheycouldobtainthegreatestprice。
(3。xviii。13)Thisadvantage,ifdrawnbythemothercountry,wouldbedrawnattheexpense
of
thecolony。Infreetrade,bothpartiesgain。Intheadvantageproducedbyforcing,whateveris
gainedbytheonepartyislostbytheother。Themothercountry,incompellingthecolonytosell
goodscheapertoherthanshemightsellthemtoothercountries,merelyimposesuponhera
tribute;notdirect,indeed,butnotthelessrealbecauseitisdisguised。
(3。xviii。14)Ifanyadvantageisderivedfromrestraining,anyotherwisethanbyanexclusive
company,thetradewiththecolonies,itmustconsistinforcingthecoloniestoselltononebut
themothercountry,notinforcingthemtobuyfromnonebutthemothercountry。Agreat
improvement,therefore,incolonialpolicywouldbe,tothrowopenthesupplyofthecolonies,
permittingthemtopurchasethegoodswhichtheywant,wherevertheycouldfindthemost
favourablemarket,onlyrestrainingtheminthesaleoftheirgoods:allowingthemtobuy
wherevertheypleased,permittingthemtoselltononebutthemothercountry。
(3。xviii。15)Itisatthesametimetobeobserved,thatifthemerchantsofthemothercountry
havefreedomtoexportthegoodswhicharederivedfromthecolonies,thepriceofthesegoods
willberaisedintheirowncountrytothelevelofthepriceinothercountries。Thecompetitionof
themerchantswill,also,raisethepriceofthegoodstoacorrespondentheightinthecolonies;
andthusthebenefittothemothercountryislost。
(3。xviii。16)Treatiesofcommercearesometimesconcluded,forthepurposeoflimitingthe
freedomoftrade。Onecountrycanbelimitedtoanotherinbuttwoways;eitherinitspurchases,
oritssales。SupposethatGreatBritainbindssomeothercountrytopurchasecertain
commoditiesexclusivelyfromher;GreatBritaincanderivenoadvantagefromsuchatreaty。
Thecompetitionofhermerchantswillmakethemsellthosecommoditiesascheaptothe
merchantsofthatcountry,astotheirowncountrymen。Theirstockisnotmoreprofitably
employedthanitwouldbeifnosuchtradeexisted。Therearecasesinwhichacountrymaygain
bybindinganothercountrytoselltononebutitself。Ifonecountryisboundtosellno
commoditieswhatsoever,excepttoanotherparticularcountry;thisisthesamecase,exactly,
withthatofacolonyboundtoselltononebutthemothercountry。Asnofreecountry,however,
islikelytobinditselftosellnoneofitscommoditiesexcepttooneother,thisisnotacasewhich
weneedtoregardaspracticableorreal。
(3。xviii。17)Onecountrymaybinditselftosellexclusivelytoanotherparticularcountry,not
all
thearticlesithasforforeignsale,butonlysomeofthem。
(3。xviii。18)Thesemaybearticleswhichyieldnothing,eveninastateoffreedom,butthe
ordinaryprofitsofstock;ascloth,hardware,hats,&;c。:ortheymaybearticleswhichyield
somethingoverandabovetheordinaryprofitsofstock;ascorn,wine,minerals,&;c。which
are
thesourceofrent。
(3。xviii。19)Onecountrycanderivenoadvantagefromcompellinganothertoselltoit,
exclusively,articlesofthefirstsort。Ifthepricewhichthefavouredcountrypaysforthegoodsis
notsufficienttoaffordtheordinaryprofitsofstock,theywillnotbeproduced。Ifthepricewhich
itpaysissufficienttoaffordtheordinaryprofitsofstock,itwould,atthatprice,obtainthe
goods,withoutanytreatyofrestriction。
(3。xviii。20)Thecaseisdifferent,wherethegoodsyieldsomething,asrent,ortheprofitsofa
monopoly,overandabovetheprofitsofstock。Thequantitywhichmaybesentinthiscaseto
thefavouredcountry,maysinktherethepriceoftherestrictedcommoditylowerthanitisinthe
neighbouringcountries;andlowerthantherestrictedcountrywould,ifnotunderrestriction,be
enabledtosellitinthosecountries。Tothisextent,andtothisonly,canonecountrybenefit,by
confiningthetradeofanothertoitself。Therestrictionmayoperatetoadiminutionoftheprofits
ofamonopolizedcommodity,oradiminutionofrent。
(3。xviii。21)Thereisonemodeofpresentingthissubject,whichisapttopuzzleamindnot
accustomedtotracetheintricaciesofthisscience。
(3。xviii。22)Supposetwocountries,AandB,ofwhichAisboundbytreaty,orotherwise,to
receiveallitsshoesfromB,andtoselltoBallitssugars:Suppose,also,thatAcould,ifleftat
liberty,obtainitsshoes50percent。cheaperfromsomeothercountry;inthatcase,itmayfora
momentappear,thatB,obtainsthesugarswhichitbuysofA,with50percent。lessofitsown
labour,thanitwouldifAwereallowedtopurchasewhereitpleased。
(3。xviii。23)IfBpaidforthesupposedsugarsinshoes,itwould,nodoubt,pay50percent。
more
inthecaseofafreetrade。
(3。xviii。24)Butiftherewereanyotherarticlewithwhichitcouldpurchasethosesugars,and
whichitcouldaffordascheapasanyothercountry,itwouldlosenothinginthecaseofafree
trade;itwouldpurchasethesamequantityofsugarwiththeproduceofthesamequantityof
labourasbefore;only,thatproducewouldbe,notshoes,butsomeotherarticle。
(3。xviii。25)ThattherewouldbearticleswhichBcouldaffordascheapasanyothercountry,
is
certain,becauseotherwiseitcouldhavenoforeigntrade。
(3。xviii。26)Itmaybesaid,however,thatthoughBmighthavearticleswhichitcouldsellas
cheapasothercountries,theymightnotbeindemandinthecountrywhichproducedthesugars。
Butifshoesonlywereindemandinthecolonies,thoseotherarticlescouldpurchaseshoes
wheretheywerecheapest;andthusobtainthesamequantityofsugar,inthefree,asinthe
restrictedstateofthetrade。
Chapter4。Consumption(4。1)Ofthefoursetsofoperations,Production,Distribution,Exchange,andConsumption,
whichconstitutethesubjectofPoliticalEconomy,thefirstthreearemeans。Nomanproduces
forthesakeofproducing,andnothingfarther。Distribution,inthesamemanner,isnot
performedforthesakeofdistribution。Thingsaredistributed,asalsoexchanged,tosomeend。
(4。2)ThatendisConsumption。Thingsareproducedthattheymaybeconsumed;and
distributionandexchangeareonlytheintermediateoperationsforbringingthethings,which
havebeenproduced,intothehandsofthosewhoaretoconsumethem。
SectionI。OfProductiveandUnproductiveConsumption(4。i。1)OfConsumption,therearetwospecies;thedistinctivepropertiesofwhichitisof
great
importancetocomprehend。
(4。i。2)Theseare,1st,ProductiveConsumption;2dly,UnproductiveConsumption。
(4。i。3)1。Thatproductionmaytakeplace,acertainexpenditureisrequired。Itisnecessary,
that
thelabourershouldbemaintained;thatheshouldbeprovidedwiththeproperinstrumentsofhis
labour,andwiththematerialsofthecommoditywhichitishisbusinesstoproduce。
(4。i。4)Whatisthusexpended,forthesakeofsomethingtobeproduced,issaidtobe
consumed
productively。
(4。i。5)Inproductiveconsumption,threeclassesofthingsareincluded。Thefirstis,the
necessariesofthelabourer,underwhichtermareincludedallthathiswagesenablehimto
consume,whethertheseconfinehimtowhatisrequiredforthepreservationofexistence,or
affordhimsomethingforenjoyment。Thesecondclassofthingsconsumedforproductionis
machinery;includingtoolsofallsorts,thebuildingsnecessaryfortheproductiveoperations,and
eventhecattle。Thethirdisthematerialsofwhichthecommoditytobeproducedmustbe
formed,orfromwhichit,mustbederived。Suchistheseedfromwhichthecornmustbe
produced,theflaxorwoolofwhichthelinenorwoollenclothmustbeformed,thedrugswith
whichitmustbedyed,orthecoalswhichmustbeconsumedinanyofthenecessaryoperations。
(4。i。6)Ofthesethreeclassesofthings,itisonlythesecond,theconsumptionofwhichisnot
completedinthecourseoftheproductiveoperations。Themachineryandbuildings,employedin
production,maylastforseveralyears;thenecessaries,however,ofthelabourer,andthe
materials,eitherprimaryorsecondary,ofthecommoditytobeproduced,areallcompletely
consumed。Evenofthedurablemachinery,thewearandtearamounttoapartialconsumption。
(4。i。7)2。Thusitis,thatmenconsumeforthesakeofproduction。Theyalsoconsume,
however,
withoutproducing,andwithoutanyviewtoproduction。Thewageswhichamanaffordstoa
ploughman,aregivenforthesakeofproduction;thewageswhichhegivestohisfootmanand
hisgroom,arenotgivenforthesakeofproduction。Theflaxwhichthemanufacturerpurchases,
andconvertsintolinen,heconsumesproductively;thewinewhichhepurchases,andusesathis
table,heconsumesunproductively。Theseinstancesaresufficienttoillustratewhatismeant,
whenwespeakofunproductiveconsumption。Allconsumption,whichdoesnottakeplacetothe
endthatanincomeorrevenuemaybederivedfromit,isunproductiveconsumption。
(4。i。8)Fromthisexplanation,itfollows,thatproductiveconsumptionisitselfameans;itisa
meanstoproduction。Unproductiveconsumption,ontheotherhand,isnotameans。Thisspecies
ofconsumptionistheend。This,ortheenjoymentwhichisinvolvedinit,isthegoodwhich
constitutedthemotivetoalltheoperationsbywhichitwaspreceded。
(4。i。9)Fromthisexplanation,italsofollows,that,byproductiveconsumption,nothingis
lost:no
diminutionismadeoftheproperty,eitheroftheindividual,orofthecommunity;forifonething
isdestroyed,anotherisbythatmeansproduced。Thecaseistotallydifferentwithunproductive
consumption。Whateverisunproductivelyconsumed,islost。Whateverisconsumedinthis
manner,isadiminutionoftheproperty,bothoftheindividualandofthecommunity;because,
inconsequenceofthisconsumption,nothingwhateverisproduced。Thecommodityperishesin
theusing,andallthatisderivedisthegood,thepleasure,thesatisfaction,whichtheusingofit
yields。
(4。i。10)Thatwhichisproductivelyconsumedisalwayscapital。Thisisapropertyof
productive
consumption,whichdeservestobeparticularlyremarked。Amancommencesthemanufacture
ofclothwithacertaincapital。Partofthiscapitalheallotsforthepaymentofwages;another
parthelaysoutinmachinery:andwithwhatremainshepurchasestherawmaterialofhiscloth,
andtheotherarticles,theuseofwhichisrequired,inpreparingitforthemarket。Itthusappears,
thatthewholeofeverycapitalundergoestheproductiveconsumption。Itisequallyobviousthat
whateverisconsumedproductivelybecomescapital;forifthemanufacturerofcloth,whose
capitalwehaveseentobeproductivelyconsumed,shouldsaveaportionofhisprofits,and
employitinthedifferentkindsofproductiveconsumptionrequiredinhisbusiness,itwould
performexactlythefunctionsperformedbyhiscapital,andwould,intruth,beanadditionto
thatcapital。
(4。i。11)Thewholeofwhattheproductivepowersofthecountryhavebroughtintoexistence,
in
thecourseofayear,iscalledthegrossannualproduce。Ofthisthegreaterpartisrequiredto
replacethecapitalwhichhasbeenconsumed;torestoretothecapitalistwhathehaslaidoutin
thewagesofhislabourersandthepurchaseofhismaterials,andtoremuneratehimforthewear
andtearofhismachinery。Whatremainofthegrossproduce,afterreplacingthecapitalwhich
hasbeenconsumed,iscalledthenetproduce;andisalwaysdistributed,eitherasprofitsof
stock,orasrent。
(4。i。12)Thisnetproduceisthefund,fromwhichalladditiontothenationalcapitalis
commonly
made。Ifthenetproduceisallconsumedunproductively,thenationalcapitalremainsunaltered。
Itisneitherdiminishednorincreased。Ifmorethanthenetproduceisconsumedunproductively,
itistakenfromthecapital;andsofarthecapitalofthenationisreduced。Iflessthanthenet
produceisunproductivelyconsumed,thesurplusisdevotedtoproductiveconsumption;andthe
nationalcapitalisincreased。
(4。i。13)Thoughaveryaccurateconceptionmaythusbeformedofthetwospeciesof
consumption;andthetwospeciesoflabour;productive,andunproductive;itisnoteasytodraw
thelinepreciselybetweenthem。Almostallourclassificationsareliabletothisinconvenience。
Betweenthings,whichdifferthemostwidely,therearealmostalwaysordersofthings,which
approachbyinsensiblegradations。Wedivideanimalsintotwoclasses,therationaland
irrational:andnotwoideascanbemoreclearlydistinguished。Yetbeingsmaybefound,of
whichitwouldbedifficulttosay,towhichofthetwoclassestheybelonged。Inlikemanner,
thereareconsumers,andlabourers,whomayseem,withsomepropriety,tobecapableofbeing
ranked,eitherintheproductive,ortheunproductiveclass。Notwithstandingthisdifficulty,itis
absolutelynecessary,forthepurposesofhumandiscourse,thatclassificationshouldbe
performed,andthelinedrawnsomewhere。Thismaybedone,withsufficientaccuracybothfor
scienceand。forpractice。Itischieflynecessarythatthemoreimportantpropertiesoftheobjects
classifiedshouldbedistinctlymarkedinthedefinitionoftheclass。Itisnotdifficult,afterthis,
tomakeallowance,inpractice,forthosethingswhichhe,asitwere,upontheconfinesoftwo
classes;andpartake,insomedegree,ofthepropertiesofboth。
SectionII。ThatWhichIsAnnuallyProducedIsAnnually
Consumed(4。ii。1)Fromwhatwehavenowascertainedofthenatureofproductionandconsumption,it
will
easilybeseen,thatthewholeofwhatisannuallyproducedisannuallyconsumed;or,thatwhat
isproducedinoneyear,isconsumedinthenext。
(4。ii。2)Everything,whichisproduced,belongstosomebody,andisdestinedbytheowners
to
someuse。Therearehowever,buttwosortsofuse:thatforimmediateenjoyment,andthatfor
ultimateprofit。Touseforultimateprofit,istoconsumeproductively。Touseforimmediate
enjoyment,istoconsumeunproductively。
(4。ii。3)Wehavejustobserved,thatwhatisusedforultimateprofit,islaidout,as
expeditiously
aspossible,inwagesoflabour,machinery,andrawmaterial。Thisisafactofprimary
importance;andmanyerrorsofthosewhoreasonlooselyinPoliticalEconomy,arisefromthe
neglectofit。Whateverissavedfromtheannualproduce,inordertobeconvertedintocapital,is
necessarilyconsumed;becausetomakeitanswerthepurposeofcapital,itmustbeemployedin
thepaymentofwages,inthepurchaseofrawmaterialtobeworkedintoafinishedcommodity,
or,lastly,inthemakingofmachines,effectedinlikemannerbythepaymentofwages,andthe
workingupofrawmaterials。Withrespecttothatpartoftheannualproduce,whichisdestined
forunproductiveconsumption,thereislessfrequentlyanymistake。Asitwouldbeattendedwith
alosstolayinagreaterstockofarticlesofthisclassthanisrequired,forimmediateuse,allof
them,exceptafew,ofwhichthequalityisimprovedbytheirage,arealwaysexpeditiously
consumed,orputinacourseofconsumption。
(4。ii。4)Ayearisassumed,inpoliticaleconomy,astheperiodwhichincludesarevolving
circle
ofproductionandconsumption。Noperioddoessoexactly。Somearticlesareproducedand
consumedinaperiodmuchlessthanayear。Inothers,thecircleisgreaterthanayear。Itis
necessary,fortheendsofdiscourse,thatsomeperiodshouldbeassumedasincludingthiscircle。
Theperiodofayearisthemostconvenient。Itcorrespondswithonegreatclassofproductions,
thosederivedfromthecultivationoftheground。Anditiseasy,whenwehaveobtainedformsof
expression,whichcorrespondaccuratelytothisassumtion,tomodifytheminpracticetothe
caseofthosecommodities,thecircleofwhoseproductionandconsumptioniseithergreateror
lessthanthestandardtowhichourgeneralpropositionsareconformed。
SectionIII。ThatConsumptionIsCo—ExtensiveWith
Production(4。iii。1)Itrequiresonlyafewexplanationstoshow,thatthisisadirectcorollaryfromthe
propositionestablishedintheprecedingsection。
(4。iii。2)Amanproduces,onlybecausehewishestopossess。Ifthecommodity,whichhe
produces,isthecommoditywhichhedesirestopossess,hestopswhenhehasproducedasmuch
ashedesires;andhissupplyisexactlyproportionedtohisdemand。Thesavage,whomakeshis
ownbowandarrows,doesnotmakebowsandarrowsbeyondwhathewishestopossess。
(4。iii。3)Whenamanproducesagreaterquantityofanycommoditythanhedesiresfor
himself,
itcanonlybeononeaccount;namely,thathedesiressomeothercommoditywhichhecan
obtaininexchangeforthesurplusofwhathehimselfhasproduced。Itseemshardlynecessaryto
offeranythinginsupportofsonecessaryaproposition;itwouldbeinconsistentwiththeknown
lawsofhumannaturetosuppose,thatamanwouldtakethetroubletoproduceanythingwithout
desiringtohaveanything。Ifhedesiresonething,andproducesanother,itisonlybecausethe
thingwhichhedesirescanbeobtainedbymeansofthethingwhichheproduces,andbetter
obtained,thanifhehadendeavouredtoproduceithimself。
(4。iii。4)Afterlabourhasbeendividedanddistributed,toanyconsiderableextent,andeach
producerconfineshimselftosomeonecommodityorpartofacommodity,asmallportiononly
ofwhatheproducesisusedforhisownconsumption。Theremainderhedestinesforthepurpose
ofsupplyinghimwithalltheother’commoditieswhichhedesires;andwheneachmanconfines
himselftoonecommodityandexchangeswhatheproducesforwhatisproducedbyother
people,itisfoundthateachobtainsmoreoftheseveralthings,whichhedesires,thanhewould
haveobtained,hadheendeavouredtoproducethemallforhimself。
(4。iii。5)Sofarasamanconsumesthatwhichheproduces,thereis,properlyspeaking,
neither
supplynordemand。Demandandsupply,itisevident,aretermswhichhavereferenceto
exchange;toabuyerandaseller。Butinthecaseofthemanwhoproducesforhimself,thereis
noexchange。Heneitherofferstobuyanythingnortosellanything。Hehastheproperty;hehas
producedit;anddoesnotmeantopartwithit。Ifweapply,byasortofmetaphor,theterms
demandandsupplytothiscase,itisimplied,intheverytermsofthesupposition,thatthe
demandandsupplyareexactlyproportionedtooneanother。Asfarthenasregardsthedemand
andsupplyofthemarket,wemayleavethatportionoftheannualproduce,whicheachofthe
ownersconsumesintheshapeinwhichheproducesorreceivesit,altogetheroutofthequestion。
(4。iii。6)Inspeakinghereofdemandandsupply,itisevidentthatwespeakofaggregates。
When
wesayofanyparticularnation,atanyparticulartime,thatitssupplyisequaltoitsdemand,we
donotmeaninanyonecommodity,oranytwocommodities。Wemean,thattheamountofits
demand,inallcommoditiestakentogether,isequaltotheamountofitssupplyinall
commoditiestakentogether。Itmayverywellhappen,notwithstandingthisequalityinthe
generalsumofdemandsandsupplies,thatsomeonecommodityorcommoditiesmayhavebeen
producedinaquantityeitheraboveorbelowthedemandforthoseparticularcommodities。
(4。iii。7)Twothingsarenecessarytoconstituteademand。Theseare,1st,awishforthe
commodity;2dly,anequivalenttogiveforit。Ademandmeansthewilltopurchase,andthe
meansofpurchasing。Ifeitheriswanting,thepurchasedoesnottakeplace。Anequivalentisthe
necessaryfoundationofalldemand。Itisinvainthatamanwishesforcommodities,ifhehas
nothingtogiveforthem。Theequivalentwhichamanbringsistheinstrumentofdemand。The
extentofhisdemandismeasuredbytheextentofhisequivalent。Thedemandandtheequivalent
areconvertibleterms,andtheonemaybesubstitutedfortheother。Theequivalentmaybecalled
thedemand,andthedemandtheequivalent。
(4。iii。8)Wehavealreadyseen,thateveryman,whoproduces,hasawishforother
commodities,
thanthosewhichhehasproduced,totheextentofallthathebringstomarket。Anditisevident,
thatwhateveramanhasproduced,anddoesnotwishtokeepforhisownconsumption,isa
stockwhichhemaygiveinexchangeforothercommodities。Hiswill,therefore,topurchase,
andhismeansofpurchasing,inotherwords,hisdemand,isexactlyequaltotheamountofwhat
hehasproducedanddoesnotmeantoconsume。
(4。iii。9)Buteachmancontributestothegeneralsupplythewholeofwhathehasproduced
and
doesnotmeantoconsume。Inwhatevershapeanypartoftheannualproducehascomeintohis
hands,ifbeproposestoconsumenopartofithimself,hewishestodisposeofthewhole;and
thewhole,therefore,becomesmatterofsupply:ifheconsumesapart,hewishestodisposeof
alltherest,andalltherestbecomesmatterofsupply。
(4。iii。10)Aseveryman’sdemand,therefore,isequaltothatpartoftheannualproduce,orof
the
propertygenerally,whichhehastodisposeof,andeachman’ssupplyisexactlythesamething,
thesupplyanddemandofeveryindividualareofnecessityequal。
(4。iii。11)Demandandsupplyaretermsrelatedinapeculiarmanner。Acommoditywhichis
supplied,isalways,atthesametime,acommoditywhichistheinstrumentofdemand。A
commoditywhichistheinstrumentofdemand,isalways,atthesametime,acommodityadded
tothestockofsupply。Everycommodityisalways,atoneandthesametime,matterofdemand,
andmatterofsupply。Oftwomenwhoperformanexchange,theonedoesnotcomewithonlya
supply,theotherwithonlyademand;eachofthemcomeswithbothademandandasupply。The
supply,whichhebrings,istheinstrumentofhisdemand;andhisdemandandsupplyareof
courseexactlyequaltooneanother。
(4。iii。12)Butifthedemandandsupplyofeveryindividualarealwaysequaltooneanother,
the
demandandsupplyofalltheindividualsinthenation,takenaggregately,mustbeequal。
Whatever,therefore,betheamountoftheannualproduce,itnevercanexceedtheamountofthe
annualdemand。Thewholeoftheannualproduceisdividedintoanumberofshares,equalto
thatofthepeopletowhomitisdistributed。Thewholeofthedemandisequaltoasmuchofthe
wholeofthesharesastheownersdonotkeel)fortheirownconsumption。Butthewholeofthe
sharesisequaltothewholeoftheproduce。Thedemonstration,therefore,iscomplete。
(4。iii。13)Howcompletesoeverthedemonstrationmayappeartobe,thatthedemandofa
nation
mustalwaysbeequaltoitssupply,andthatitnevercanbewithoutamarketsufficiently
enlargedforthewholeofitsproduce,thispropositionisseldomwellunderstood,andis
sometimesexpresslycontradicted。
(4。iii。14)Theobjectionisraiseduponthisfoundation,thatcommoditiesareoftenfoundto
be
tooabundantfordemand。
(4。iii。15)Thematteroffactisnotdisputed。Itwilleasily,however,beseen,thatitaffectsnot
the
certaintyofthepropositionwhichitisbroughttooppugn。
(4。iii。16)Thoughitbeundeniable,thatthedemand,whicheverymanbrings,isequaltothe
supply,whichhebrings,hemaynotfindinthemarketthesortofpurchaser,whichhewants。No
manmayhavecomedesiringthatsortofcommodity,ofwhichhehastodispose。Itisnotthe
lessnecessarilytrue,thathecamewithademandequaltohissupply;forhewantedsomething
inreturnforthegoodswhichhebroughtItmakesnodifferencetosay,thatperhapsheonly
wantedmoney;formoneyisitselfgoods;and,besides,nomanwantsmoneybutinordertolay
itout,eitherinarticlesofproductive,orarticlesofunproductiveconsumption。
(4。iii。17)Everymanhavingademandandasupply,bothequal;ifanycommoditybein
greater
quantitythanthedemand,someothercommoditymustbeinless。
(4。iii。18)Ifeverymanhasademandandsupplybothequal,thedemandandsupplyinthe
aggregatearealwaysequal。Suppose,thatofthesetwoequalquantities,demandandsupply,the
oneisdividedintoacertainnumberofparts,andtheotherintoasmanyparts,allequal;andthat
thesepartscorrespondexactlywithoneanother;thatasmanypartsofthedemandasarefor
corn,justsomanypartsofthesupplyareofcorn;asmanyoftheoneasareforcloth,somanyof
theotherareofcloth,andsoon:itisevident,inthiscase,thattherewillbenoglutofanything
whethertheamountoftheannualproducebegreatorsmall。Letusnextsuppose,thatthisexact
adaptationtooneanotherofthepartsofdemandandsupplyisdisturbed;letussupposethat,the
demandforclothremainingthesame,thesupplyofitisconsiderablyincreased:therewillof
coursebeaglutofcloth,becausetherehasbeennoincreaseofdemand。Buttotheverysame
amounttheremustofnecessitybeadeficiencyofotherthings;fortheadditionalquantityof
cloth,whichhasbeenmade,couldbemadebyonemeansonly,bywithdrawingcapitalfromthe
productionofothercommodities,andtherebylesseningthequantityproduced。Butifthe
quantityofanycommodityisdiminished,ademandequaltothegreaterquantityremaining,the
quantityofthatcommodityisdefective。Itis,therefore,impossible,thatthereshouldeverbein
anycountryacommodityorcommoditiesinquantitygreaterthanthedemand,withoutthere
being,toanequalamount,someothercommodityorcommoditiesinquantitylessthanthe
demand。
(4。iii。19)Theeffects,whichareproduced,inpractice,bythewantofadaptationintheparts
of
demandandsupply,arefamiliar。Thecommodity,whichhappenstobeinsuperabundance,
declinesinprice;thecommodity,whichisdefectiveinquantity,rises。Thisisthefluctuationof
themarket,whicheverybodysufficientlyunderstands。Thelownessoftheprice,inthearticle
whichissuperabundant,soonremoves,bythediminutionofprofits,aportionofcapitalfrom
thatlineofproduction:Thehighnessofprice,inthearticlewhichisscarce,invitesaquantityof
capitaltothatbranchofproduction,tillprofitsareequalized,thatis,tillthedemandandsupply
areadaptedtooneanother。
(4。iii。20)Thestrongestcase,whichcouldbeput,infavourofthesuppositionthatproduce
may
increasefasterthanconsumption,wouldundoubtedlybethat,inwhich,everymanconsuming
nothingbutnecessaries,alltherestoftheannualproduceshouldbesaved。Thisis,indeed,an
impossiblecase,becauseitisinconsistentwiththelawsofhumannature。Theconsequencesof
it,however,arecapableofbeingtraced;andtheyservetothrowlightupontheargument,by
whichtheconstantequalityhasbeendemonstratedofproduceanddemand。
(4。iii。21)Insuchacase,whatcametoeveryman’sshareoftheannualproduce,batinghis
own
consumptionofnecessaries,wouldbedevotedtoproduction。Allproductionwouldofcoursebe
directedtorawproduceandafewofthecoarsermanufactures;becausethesearethearticlesfor
whichalonetherewouldbeanydemand。Aseveryman’sshareoftheannualproduce,batinghis
ownconsumptionwouldbelaidoutforthesakeofproduction,itwouldbelaidoutinthe
articlessubservienttotheproductionofrawproduceandthecoarsermanufactures。Butthese
articlesarepreciselyrawproduceandafewofthecoarsermanufacturesthemselves。Everymans
demand,therefore,wouldconsistwhollyinthesearticles;butthewholeofthesupplywould
consistalsointhesamearticles。Andithasbeenproved,thattheaggregatedemandand
aggregatesupplyareequalofnecessity;becausethewholeortheannualproduce,batingthe
portionconsumedbytheshareholders,isbroughtastheinstrumentofdemand;andthewholeof
theannualproduce,withthesameabatement,isbroughtassupply。
(4。iii。22)Itappears,therefore,byaccumulatedproof,thatproductioncanneverbetoorapid
for
demand。Productionisthecause,andthesolecause,ofdemand。Itneverfurnishessupply,
withoutfurnishingdemand,bothatthesametime,andbothtoanequalextent。
(4。iii。23)Ithasbeenobjected,that,forthevalidityoftheargumentitisnecessaryto
suppose,
"thatnewtastesandnewwantsspringupwiththenewcapital。"Asinglereflectionwill,Ithink,
makeitclearthatthetaste,andwants,inquestion,areessentiallyandnecessarilyimpliedinthe
veryexistenceofthecapital。
(4。iii。24)Thenewcapitalisalltobelaidoutinthepurchaseofsomething,accordingtothe
plansoftheowner。Itisofinfiniteimportancetoobserve,thateverycreationofcapitalisthe
creationofademand。Itissurprisingthatthismaterialpointissofrequentlyoverlooked。It
seemstobelittlelessthanselfevident,andifadmitted,itcarriesinitselfananswertoevery
argumentthathasbeen,orthatcanbeadduced,infavouroftheglut。
(4。iii。25)Whatisitthatwemean,whenwesaythedemandofanation,speakingofthe
aggregate,andincludingadefinitecircleofproductionandconsumption,suchasthatofayear?
Dowe,orcanwe,meananythingbutitspowerofpurchasing?Andwhatisitspowerof
purchasing?Ofcourse,thegoodswhichcometomarket。What,ontheotherhand,isitwemean,
when,speakinginlikemanneraggregately,andincludingthesamecircle,wesaythesupplyof
thenation?Dowe,orcanwemeananything,butthegoodswhichcometomarket?The
conclusionistooobvioustoneedtobedrawn。
(4。iii。26)Whatproducestheconfusionofideas,whichsooftenoccursintheconsideration
of
thissubject,istheglut,whichmay,anddoestakeplace,ofparticularcommodities。Doesit
followfromthis,thattherecanbeaglutofcommoditiesintheaggregate,whenitisnecessarily
truethattherecannotbeanaggregatesupplywithoutanequalaggregatedemand,equalbothin
quantityandinvalue?
(4。iii。27)Totheargument,whichshowsthattothesamedegree,inwhichoneormore
commoditiesmaybeinsuchabundanceasexceedsthedemand,someothercommoditiesmust
fallshortofthedemand,ithasbeenreplied,thatthecommoditieswhicharesuppliedin
superabundancefallinvalue,thatthisinvolvesalltheeviloftheglut,andisthereforeareplyto
thewholeoftheargumentwhichdeniesitsexistence。
(4。iii。28)Thisisareplyinwordsonly。Whatismaintainedinmyargumentis,thattherecan
be
noglutofcommoditiesintheaggregate,thoughtheremaybeinparticularinstances。Theanswer
madetomeisthattheremaybeaglutinparticularinstances。
(4。iii。29)Intheverywordsofthepretendedreply,thecertaintyofthedisputedfactis
admitted。
Thevalue,itissaid,ofthegoods,whichareinthestateofsuperabundance,falls。Ifthisisnota
playupontheword,itimpliestheverythingwhichitisbroughttodispute,thatwheneverone
setofgoodsissuppliedabovethedemand,anotherissuppliedbelowthedemand。
(4。iii。30)Whatisitthatisnecessarilymeant,whenwesaythatthesupplyandthedemand
are
accommodatedtooneanother?Itisthis:thatgoodswhichhavebeenproducedbyacertain
quantityoflabour,exchangeforgoodswhichhavebeenproducedbyanequalquantityoflabour。
Letthispropositionbedulyattendedto,andalltherestisclear。
(4。iii。31)Thus,ifapairofshoesisproducedwithanequalquantityoflabourasahat,so
longas
ahatexchangesforapairofshoes,solongthesupplyanddemandareaccommodatedtoone
another。Ifitshouldsohappenthatshoesfellinvalue,ascomparedwithhats,whichisthesame
thingashatsrisinginvaluecomparedwithshoes,thiswouldimplythatmoreshoeshadbeen
broughttomarket,ascomparedwithhats。Shoeswouldthenbeinmorethanthedueabundance。
Why?Becauseinthemtheproduceofacertainquantityoflabourwouldnotexchangeforthe
produceofanequalquantity。Butfortheverysamereasonhatswouldbeinlessthanthedue
abundance,becausetheproduceofacertainquantityoflabourinthemwouldexchangeforthe
produceofmorethananequalquantityinshoes。
(4。iii。32)Whatistrueofanyoneinstanceistrueofanynumberofinstances。Itistherefore
universallytrue,that,astheaggregatedemandandaggregatesupplyofanationnevercanbe
unequaltooneanother,sotherenevercanbeasuperabundantsupplyinparticularinstances,and
henceafallinexchangeablevaluebelowthecostofproduction,withoutacorresponding
deficiencyofsupply,andhenceariseinexchangeablevalue,beyondcostofproduction,inother
instances。Thedoctrineoftheglut,therefore,seemstobedisprovedbyreasoningperfectly
conclusive。
(4。iii。33)Letusrecapitulatethepoints。Aglut,asitissupposedinthisdoctrine,namelyan
excessofproductionintheaggregate,cantakeplaceonlybyacontinuedincreaseofproduction。
Letusimaginethatwehavejustcometothesupposedpoint,when,thesupplybeingfull,any
additionalproductionwillbesomuchofglut。Theadditionalproductiontakesplace,andcomes
tomarket。Whatistheconsequence?Thisnewproductseeksanequivalent。Thatistosay,itisa
newdemand。Howthenisitpossibletosaythateverynewsupplyisaglut,whenanewdemand
iscreatedequaltoit?Itisobviouslynugatorytosay,thatthisnewsupplymaynotfind
purchasers,orthenewdemandmaynotfindthecommoditiestowhichitisdirected;forthisis
onlytosaythatinparticularinstancestheremay,frommiscalculation,besuperabundanceor
defect。Thenaturaleffects,insuchacase,maybeeasilytraced,andtheyafforddecisive
evidence。Thecommodities,ofwhichtheadditionalproductionconsists,maybenaturally
supposedtoconsistofsomeofthesortswhicharepreviouslyinthemarket。Bysupposition,the
goodspreviouslyinthemarketwereaccommodatedtooneanother,nospeciesbeingeitherin
defective,orsuperabundantsupply。Theadditionwhichismadetosomesortsofthesegoods,by
thenewproduction,wouldrenderthemsuperabundant,iftherewasnotanewdemandcreated。
Thesegoodswouldfallinexchangeablevalueascomparedwithothers,otherswouldrisein
exchangeablevalueascomparedwiththem。Butthereisanewdemandcreated;fortheownerof
thenewproduce,ashehascomeintothemarkettosellgoodsofsomekinds,sohehascometo
buygoodsofsomeotherkinds。Asthesupply,whichhebrought,ofcertainkindsofgoods
tendedtoreducetheirvalue,sothedemand,whichhebrings,forotherkindstendstoincrease
theirvalue。Theresultis,thatnowtherearecertainkindsofgoods,whichitislessprofitable
thanusualtoproduce;others,whichitismoreprofitablethanusualtoproduce:andthisisan
inequality,whichtendsimmediatelytocorrectitself。Thisisthemode,inwhicheveryaddition
ismadetotheproductionsofacountry,anditisamode,whichisevidentlythesameatevery
stageoftheprogress,fromthegreatestdefect。tothegreatestexcess,ofnationalriches。It
commonly,ofcourse,happens,thattheman,whobringsintothemarketanadditionofproduce,
endeavourstobringitingoodsthatareindefectivesupply,andtopurchasegoodsthatarein
superabundantsupply;andthestateofthemarketgenerallyenableshimtodoso:sothatan
additionofproducebroughtintothemarketmayjustasoftenremedyaglutasbeinanydegree
thecauseofit。
(4。iii。34)ThedoctrineofMr。Malthus,onthesubjectoftheglut,seems,atlast,toamountto
this:thatifsavingweretogoonatacertainrate,capitalwouldincreasefasterthanpopulation;
andthatifcapitaldidsoincrease,wageswouldbecomeveryhigh,andprofitswouldsustaina
correspondingdepression。Butthis,ifitwereallallowed,doesnotprovetheexistenceofaglut;
itonlyprovesanotherthing,namely,thattherewouldbehighwagesandlowprofits。Whether
suchanincreaseofcapital,scarcelycomingwithintherangeevenofarationalsupposition,
wouldbeagoodthingoranevilthing,itwouldinfalliblyproduceitsownremedy,asthepower,
ofcapitaltoincreaseisdiminishedwiththediminutionofprofits。
(4。iii。35)Mr。Malthusfurthersays,thatthehighwagesthusproducedwouldgenerate
idlenessin
theclassoflabourers。Thepredictionmaybedisputed;but,allowedtobecorrect,whatisits
import?If,wagescontinuingthesame,lessworkisdone,thisishigherpayforanequalquantity
oflabour;itisthereforethesamethingasariseofwages。Itwouldmerelyacceleratethat
diminutionofprofits,whichmustintimeretardandfinallystoptheincreaseofcapital,in
consequenceofwhichwageswouldnaturallyfall。This,therefore,isnotadifferentobjection
fromtheformer;itispreciselythesameobjection,onlyinadifferentform。
(4。iii。36)Mr。Malthus,thus,totallyfailingtoproveaglut,evenfromacontinuedincreaseof
capitalgreaterthanthegreatestincreaseofpopulation,substitutes,forargumentstoprovethat
effect,argumentstoprovecertainothereffects。
(4。iii。37)Hesays,thatweretheannualproducethustogoonincreasing,itsvaluewouldbe
diminished。Butthisismerelyaplayupontheword。Hesays,Icallthevalueofacommoditythe
numberofdays’wagesitisequalto。Ifthenwagesaremorethandoubled,thoughyoudoublethe
amountofyourcommodities,andhavetwiceasmuchofeverything,yetyouwillhaveless
value。Anarbitrarychange,however,inthemeaningofawordprovesnothing。Thefacts,and
theirrelations,remainthesome,whateverMr。Malthus,orI,maychoosetocallthem。Thefacts
stillaremerelythese,thatsocietywouldhavethesupposedamountofcommodities,andallits
benefits,andthatwageswouldbeveryhigh。
(4。iii。38)Mr。Malthusfurthersays,thatthisrapidincreaseofcapitalwouldtendtodiminish
production。Thatonwhichtheincreaseofproductiondepends,istheincreaseofitstwo
instruments,capitalandlabourers。BytheverysuppositionwhichMr。Malthushimselfhas
made,andonwhichheisreasoning,bothoftheseinstrumentsareincreasingattheirmostrapid
possiblerate。Itseemsthereforeamostextraordinarysupposition,thatproductionshouldnotbe
increasingatitsmostrapidpossiblerate。
(4。iii。39)Ifitbetrue,asMr。Malthussupposes,thatthehighwagessupposedwould
diminish
labour,itwillbetruethatlessworkwillbedone,andlessproductioneffected,thanifeveryman
workedmore。Letussupposethatthediminutionoflabourgoesongradually,aswagesincrease,
tillatlasteachmandoesonlyhalfasmuchworkasbefore,whatthenistheconsequence?
Merelythis,thatifpopulationisgoingonatitsgreatestpossiblerate,doublingitselfintwenty
years,therewillnotbeagreaterincreaseofproductionfromlabour,thantherewouldbeifit
doubleditselfonlyinfortyyears,andeachmanperformedtwiceasmuchwork。Thiswouldstill
beamorerapidratethanthatatwhichcapitalincreases,exceptinsomeveryrareand
extraordinarycircumstances。But,iflabourweresoverydear,andcapitalsoabundant,the
consequencewouldbe,thataslittleaspossibleofproductionwouldbeperformedbyman’s
labour,asmuchaspossiblebymachineryandcattle。Ingenuitywouldberackedtofindthe
meansofsupersedingthemostcostlyinstrument。Machineswouldbemultipliedandimproved
withoutend;andamuchgreaterproportionoftheannualproducewouldbetheresultofcapital,
amuchlesstheresultofimmediatelabour。Thediminutionofproductionwouldnotthereforebe
nearlyinproportiontothediminutionofeachman’slabour。
(4。iii。40)Thesupposedeffectsthereforearereallyofnoimportance,otherwiseitmightstill
be
questionedhowfartheinferenceiswarranted,thathighwagestendtodiminishindustry。
Experienceseemstobeveryfullontheoppositeside。Wherewagesareexcessivelylow,asin
Ireland,thereisnoindustry;whereexcessivelyhigh,asintheAmericanUnitedStates,thereis
thegreatest。WhatdoesMr。Malthushimselfmeanbythestimuluswhichhesaysisgivento
industrybyanenlargementofthemarket?
SectionIV。InWhatMannerGovernmentConsumes(4。iv。1)Allconsumptioniseitherbyindividuals,orbythegovernment。Havingtreatedofthe
consumptionofindividuals,itonlyremainsthatwetreatofthatwhichhasgovernmentforits
cause。
(4。iv。2)Althoughtheconsumptionbygovernment,asfarasreallynecessary,isofthe
highest
importance,itisnot,unlessveryindirectly,subservienttoproduction。Thatwhichisconsumed
bygovernment,insteadofbeingconsumedascapital,andreplacedbyaproduce,isconsumed,
andproducesnothing。Thisconsumptionis,indeed,thecauseofthatprotection,underwhichall
productionhastakenplace;butifotherthingswerenotconsumedinawaydifferentfromthatin
whichthingsareconsumedbygovernment,therewouldbenoproduce。Thesearereasonsfor
placingtheexpenditureofgovernmentundertheheadofunproductiveconsumption。
(4。iv。3)Therevenueofgovernmentmustbederivedfromrent,fromprofitsofstock,orfrom
wagesoflabour。