^ 
 
 STATEMENT 
 
 OF SOME 
 
 NEW PRINCIPLES 
 
 ON THE SUBJECT OF 
 
 POLITICAL ECONOMY, 
 
 EXPOSING THE FALLACIES OF THE SYSTEM OF 
 
 FREE TRADE 
 
 AND OF SOME OTHER DOCTRINES MAINTAINED 
 
 IN THE WEALTH OF NATIONS. 
 
 BY JOHN RAE 
 
 When we reason upon general subjects, one may justly affirm, that our speculations can 
 scarce ever be too fine, provided the> be just. — Hume, Essay on Commerce. 
 
 BOSTON. 
 
 HILLIARD, GRAY, AND CO. 
 
 1834. 
 
Entered according to the act of Congress in the year 1834, 
 
 by HiLLiARD, Gray, &. Co. 
 
 in the Clerk's Office of the District Court of the District of Massachusetts 
 
 J. D. FREEMAN, PRINTER, 
 NO. 110, WASHINGTON STREET. 
 
no oui 
 
 PREFACE. 
 
 [The work here presented to the American reader, was composed with the 
 intention of being published in Great Britain; under this idea the following 
 Preface was written. As it explains the design of the original undertaking, 
 it has been thought proper that it should retain the place it was at first intend- 
 ed to occupy.] 
 
 To promote prosperity within, to guard against danger from 
 without, have ever been esteemed the two great branches of the 
 duty of the Statesman. But of all the sources of internal prosperity, 
 or means of repelling external aggressions, no one, in modern times, 
 is of greater efficacy than wealth. We have, therefore, no reason 
 to be surprised, that statesmen should have endeavored to procure 
 for their respective countries the greatest possible amount of it. If 
 the laws they have enacted, and the regulations they have for this 
 purpose established, have really answered the ends they were in- 
 tended to promote, they are certainly praiseworthy. 
 
 Gf the efficacy of such laws, for those purposes, politicians for 
 a long time did not doubt; but a great revolution in public opinion 
 has taken place, and almost all men who now pretend to understand 
 the principles that should govern the policy of nations, agree in 
 condemning them. 
 
 This revolution in the opinions of men, had its rise in France. 
 It might have died there, however, with the sect from which it had 
 birth, had not a man of surprising genius, placing himself at the 
 head of the feeble party then supporting it, enabling them to give 
 their principles currency throughout the nations of Europe. Adam 
 Smith will be recorded among remote generations, as one having 
 powerfully influenced the opinions and policy of the civilized world, 
 during the eighteenth and nineteenth centuries. His great work no 
 sooner appeared in Britain than it was read, and the opinions it 
 maintained adopted, by every one who pretended to any knowl- 
 edge of the important subjects of which it treated. It quickly, and 
 with like success, spread through other lands. Never was the 
 force which mere intellect possesses more strikingly manifested. 
 
 IVl50Sfif.'1 
 
iv PREFACE. 
 
 To illustrate his speculations, to cast them into new forms suited to 
 the varied tastes of various nations, became an employment by which 
 men of undoubted genius thought themselves honored. His rea- 
 sonings are the basis of numerous systems and innumerable essays. 
 A voluminous library might be formed of the works of men who 
 call him master. Nor were the dicta of a retired student acquiesced 
 in, and embraced, only by theorists like himself They have 
 cruided the councils, they have formed the text book of statesmen, 
 and have had an important influence on the policy of nations. 
 
 Against doctrines supported by so great a weight of authority, 
 what, it may be demanded, can possibly be urged? and how comes 
 it, that so obscure an individual as the author of the following 
 pages, places himself in opposition to them ? Custom authorises 
 me, — in a measure calls on me, — in answer to these questions, to 
 state to the reader how I was led to form opinions opposed to this 
 system, and why I bring those opinions before him. 
 
 Many years ago, I became engaged in a series of inquiries into 
 the circumstances which have governed the history of man, or, to 
 vary the expression, into the causes which have made him what he 
 is in various countries, or has been in various times. It seemed to 
 me, that, by gathering together all that consciousness makes known 
 to us of what is within, and all that observation informs us of what 
 lies without, the real agents in the production of the great events 
 by which the fortunes of our race have been diversified, might be 
 at least partially discovered, the laws regulating their procedure 
 traced, and that thus the materials for a true Natural History of 
 man might be reached. The pursuits in which I was engaged led 
 me to the subject on the side of physiology, and what is termed 
 metaphysics, and imagining that I saw a ray of light struggling 
 through the obscurity of the objects, amidst which these inves- 
 tigations placed me, I began to conceive hopes of being able to 
 dispel some of the darkness, in which are involved causes that have 
 produced, and are producing, results of the highest importance to 
 us. To this pursuit I determined to devote myself Such a reso- 
 lution would scarcely have been taken by any one unless prompted 
 by the enthusiasm natural to youth, and would not have been 
 adopted by me, had I not had the prospect of enjoying every facility 
 in following out the objects I had in view; but a sudden and unex- 
 pected change took place in my circimistances, and I exchanged 
 the literary leisure of Kurope for the solitude and labors of the 
 Canadian backwoods. I found, notwithstanding, that this accident 
 could not altogether put a stop to my inquiries, though it retarded 
 them and altered their form. 
 
PREFACE. , V 
 
 I had early turned for assistance to the Inquiry into the Nature 
 and Causes of the Wealth of Nations, and to the speculations of 
 the political economists. But, I found their scope and design too 
 confined, to advance the attainment of my purpose in the degree I 
 had anticipated, and I had besides the mortification of perceiving, 
 that the conclusions to which they led, were, in many points, 
 opposed to those at which I had arrived. Encountering opposition 
 where I had looked for support, I applied myself to ascertain, if 
 possible, the cause, and, after having spent considerable time in 
 the inquiry, conceived I had detected enough of fallacy in the spec- 
 ulations, even of Adam Smith himself, but more especially of his 
 successors, to warrant the belief that my conclusions might be right, 
 though the practical rules that might be deduced from them, would 
 not coincide with those laid down in what is termed the science of 
 political economy. But, though I became satisfied on this head, it 
 was not my intention to have directly attacked any of the tenets of 
 the school. Setting out from a new point, it seemed to me, that, 
 however far I might advance, it would not be necessary for me 
 directly to oppose, or to attempt to controvert, any received opin- 
 ions 
 
 During my residence in this country, the field of my inquiries 
 being much contracted, I again recurred to the disquisitions of 
 Adam Smith, and of other European writers of the same school, in 
 order to trace out more fully than I had hitherto done, the connex- 
 ion between the phenomena attending the increase and diminution 
 of wealth, and those general principles of the nature of man, and of 
 the world, determining, as I conceive, the whole progress of hu- 
 man affairs. Though I was led to this study, simply from my desire 
 to advance, as far as my situation permitted me, in a path of inves- 
 tigation which had, to me, a very lively interest, my prosecution of it 
 had the eflfect of impressing me more deeply with a conviction of 
 the unsoundness of the system maintained in the Wealth of Nations. 
 
 In this stage of my progress I became engaged in a work on the 
 present state of Canada, and on its relations with the rest of the 
 British Empire. These relations seem to me to spring from the 
 mutual benefit arising to the colony and the empire from their con- 
 nexion. The sect of politicians, to whom I allude, deny that any 
 such benefit arises to either party. Were their reasonings correct, 
 it would follow as a necessary consequence, that Canada is, in this 
 respect, of no advantage to Great Britain, and would go far to 
 prove, what, indeed, seems by many to be believed, that the sooner 
 the connexion between them is dissolved the better. 
 
 Dissenting as I do, from the opinions of these theorists, it ap- 
 
VI PREFACE. 
 
 peared to me, that the work I had undertaken required me to state 
 some of the reasons on which I grounded this dissent, and that, 
 without entering at length into any of the important questions 
 involved in the discussion, I should be able at least to cast a shade 
 of doubt over doctrines asserted with great dogmatism, and acted 
 on with unhesitating confidence. In endeavoring, however, for 
 this purpose, to arrange a series of arguments drawn from a modifi- 
 cation of principles that originally suggested themselves to me 
 when engaged in more enlarged inquiries, my work gradually 
 assumed a far more extended and systematic form, than I had at 
 first meditated, and I became engaged in the present attempt, to 
 show that there exist great and radical errors in the whole system, 
 sufficient to vitiate very many of the conclusions drawn from it, and 
 from the fallacies introduced by which, the doctrines of free trade 
 alone derive their plausibility. 
 
 In the prosecution of the argument, I have almost entirely con- 
 fined myself to the consideration of the doctrines to which I am 
 opposed, as they are developed in the Wealth of Nations. I could 
 not have done otherwise, without becoming involved in the discus- 
 sion of contradictory and conflicting opinions. Neither, as I con- 
 ceive, is this limitation of essential importance to the determination 
 of the points in debate. If Adam Smith be essentially wrong, 
 none of his followers can be right. The system established by him 
 stands, or falls, with him. 
 
 I am not ignorant of the dangers to which this attempt subjects 
 me. Whoever ventures to attack a system received so generally, 
 and supported by so great a weight of authority, is exposed to 
 various evils. They who have embraced its principles are apt to 
 slight and neglect, or, if that may not be, to conceive it their busi- 
 ness to overthrow the heterodox doctrines. What of error they 
 may contain is eagerly seized on, what of truth, is overlooked. 
 " Who," asks Mr. Locke, "is there, hardy enough to contend with 
 the reproach which is ever prepared for him, who dares venture to 
 dissent from the received opinions of his country and party? And 
 where is the man to be found, that can patiently prepare himself to 
 bear the names, that he is sure to meet with, who doth in the least 
 scruple any of the common opinions?" Though many things are 
 altered since the days of Locke, mankind are but little changed. 
 In his days, indeed, the prejudices of the times ran towards 
 opinions, which, acquiesed in by many succeeding generations, 
 were, therefore, conceived to have a real plurality of judgments in 
 their favor. Now, on the contrary, to have been believed from of 
 old, is deemed to indicate defect, and that alone is admitted as of 
 
PREFACE. VU 
 
 approved strength, which has not been subjected to the test of time. 
 In this, nevertheless, there is a perfect agreement, that men appeal 
 not so much to truth itself, as to prevalent opinion, and are disposed 
 to treat whatever stands opposed to it, as necessarily erroneous. It 
 were, then, in vain for me, I am aware, in reply to the charge of 
 presumption in challenging the opinions to which the celebrated 
 author of the Wealth of Nations has given currency, to answer, 
 that it is not so, and that, on the contrary, "he is the general chal- 
 lenger : " that his disciples form, in reality, but a sect, one setting 
 itself in opposition to the belief of all preceding ages, and in its 
 rise and progress presenting nothing dissimilar to' the other numer- 
 ous sects, which time, in its course, has seen appearing and disap- 
 pearing : that, therefore, if we really appeal to authority, its deci- 
 sion is against, not for, the present political creed. Such arguments 
 would certainly fall on deaf ears. The authority, in which men 
 acquiese, is that which is present, and to which they have been 
 accustomed to yield assent. Whatever is opposed to this, and 
 separated from it by distance of time or space, has no influence 
 on their judgments. 
 
 But, although, instead of assistance, I have to look for opposition, 
 from this quarter, I nevertheless believe, that I have an auxiliary 
 of great power on my side. In political questions, before they see 
 that they are wrong, it is common for men to feel that they are 
 so. The progress of recent events seems to have excited a general 
 sensation of this sort over Great Britain. Twenty or thirty years 
 ago, according to the prevailing political system, every circumstance 
 in the condition of the empire was at variance with what should 
 give prosperity to a state. To meet the enormous annual expendi- 
 ture occasioned by the most wasteful of all preceding wars, a reve- 
 nue as enormous was drawn by taxation from the people, while, 
 instead of their industry enjoying the boasted advantages of perfect 
 freedom, at home it was restrained by regulations of old established, 
 and abroad its products were legally shut out from every continental 
 port, and could only any where force an entrance with much 
 hazard, and at heavy expense. 
 
 True ; making its power felt through the element that had ever 
 been most propitious to it, it had subjugated almost every spot on 
 the globe, colonized by Europeans, and by this means, in defiance 
 of its enemies, maintained an extended commerce with all parts of 
 the world. But this vast extent of empire, preserved by force of 
 arms, and at great expense, according to the dicta of modern politi- 
 cians, was an evil of the greatest magnitude, and one which, though 
 the burden attending it is now reduced to comparative insignifi- 
 
Vlll PREFACE. 
 
 c;iuce, they are continually assuring us we ought, as quickly as 
 possible, to get rid of. 
 
 Notwithstanding all these disadvantages, however, there is no 
 period in its history in which the condition of Great Britain was 
 apparently more flouri»liing. The exertions of the laborer were 
 liberally rewarded, the expenditure of the capitalist richly repaid. 
 Every thing gave token of rapidly increasing wealth and abun- 
 dance. 
 
 The triumph of that cause, in aid of which war had been em- 
 braced, gave peace to the empire and to Europe. The annual ex- 
 penditure was diminished by one half, and the nation was no longer 
 restrained, but in comparatively a very trifling degree, from partici- 
 pating in all those advantages, which, in every instance, one 
 country, according to prevailing notions, is supposed to gain by 
 free intercourse with another. But, though markets for the manu- 
 facture, and channels for the commerce of the kingdom were largely 
 multiplied, its resources, instead of augmenting, seemed diminish- 
 Hig. The whole fabric of society seemed ready to sink under the 
 pressure of some new burden, — ruin began to threaten, often to 
 overwhelm the man of capital, — want to look industry in the face. 
 In vain were taxes to a large amount repealed, in vain were endea- 
 vors made to trace the depression of the times to mere revolutions in 
 the channels of trade, and to other temporary causes, and hopes held 
 out that they would speedily pass away. The evil proved to be not 
 partial and temporary, but pervading and permanent. Far from 
 confidence in the modern science being shaken by a result con- 
 trary to all its principles, it was resolved to seek a remedy for the 
 acknowledged distress, by adopting largely the policy which this 
 science inculcates. 
 
 It cannot be denied that the results of the experiment, as far as 
 it has hitherto been carried, have been in the whole, unhappy. 
 The events which have followed, not to say flowed from recent 
 enactments, regulating the internal and external commerce of the 
 nation, have been at least unfortunate. The operations of the 
 banking system, and the extension of general confidence and secu- 
 rity in all transactions, which that system is calculated to afford, 
 seem clogged and restrained. The returns which industry and 
 capital receive, have been still farther diminished. Wealth is bar- 
 ren. Labor, plied with all the skill, and more than all the assiduity 
 to which human nature is long adequate, does not always keep 
 famine at a distance. 
 
 It is natural that these circumstances should beget a sort of feel- 
 ing of doubt. That, without pretending to question the general 
 
PREFACE. IX 
 
 truth of the system establislied by Adam Smith, many should yet 
 ask tliemselves, is the path which he has pointed out, truly that 
 which always leads directly to the wealth of nations? In this 
 temper of the public mind, I am inclined to hope that the applica- 
 tion of new principles to a reconsideration of the whole subject, 
 may be conceived to be an undertaking deserving, at least, of be- 
 ing examined, and that the defects of the following pages may not 
 be thought sufficient to prevent what measure of truth they may 
 contain, from being perceived and appreciated. 
 Montreal, 1833. 
 
 POSTSCRIPT. 
 
 In the preceding pages, the reader has an explanation of the 
 original design of the work which I venture to place before him ; 
 but, in preparing it for publication in this country, I have made 
 some alterations in it, the nature of which it is proper I should 
 here state. 
 
 The doctrines which Adam Smith maintained with so' much 
 ability, never took so deep hold in this country as in England, and 
 they have been more strongly opposed. There is, hence, a very 
 considerable difference between the state of public sentiment in 
 Great Britain and America, concerning the most interesting practi- 
 cal questions of political economy. This is especially the case 
 with regard to the policy of the protective system. The practical 
 bearings of that system on the condition of things in this republic, 
 have been discussed so often, and with so much ability, that proba- 
 bly few new arguments or facts concerning it can be brought for- 
 ward by any one, least of all can they be expected from a foreigner. 
 Although, therefore, I look on the effects of the policy pursued by 
 the legislature of the United States, as affording the best practical 
 illustration hitherto existing of the correctness of some of the prin- 
 ciples I maintain, I have scarcely at all referred to them for that 
 purpose, but have contented myself with showing how the benefits 
 resulting from the operations of the legislature, in this and in other 
 similar cases, are to be accounted for. I have thus omitted much 
 matter that would have appeared, had the work been published in 
 England, but which, it seemed to me, would be at least superfluous 
 here. These omissions occur in the third book, which is conse- 
 quently much abridged. 
 
X PREFACE. 
 
 To the second book I have made some additions, having given 
 fuller developement to the principles there explained, and traced 
 their connexion with events at greater length, than is necessary 
 for the mere purpose of exposing the fallacies of the theoretical 
 views, the refutation of which was originally my sole design. As 
 the additions were made in the progress of the work through the 
 press, in one or two instances I have been led to refer to subjects 
 to be afterwards treated of, which I found it impossible to comprise 
 within such limits as would admit of their insertion. These omis- 
 sions, however, do not occasion any break in the chain of reasoning. 
 There are, also, some topics, which, though I have introduced, I 
 have but partially discussed, and merely so far as may serve to 
 show some of their connexions with principles expounded. The 
 most important of these is the subject of banking. 
 
 Boston, 1834. 
 
TABLE OF CONTENTS 
 
 AND SUMMARY OF PRINCIPLES. 
 
 Page 
 
 General Introduction ..... 1 
 
 BOOK I. 
 
 Individual and National Interests are not Identical. 
 
 The causes giving rise to individual and national wealth, are not 
 precisely the same. Individuals grow rich by the acquisition of 
 wealth previously existing ; nations, by the creation of wealth that 
 did not before exist. 
 
 Introduction . . . , . . 7 
 
 CHAPTER I. 
 Of the identity of individual and national interests con- 
 sidered as a simple principle .... 9 
 
 CHAPTER II. 
 Of the Identity of Individual and National Interests Con- 
 sidered as a Theoretical Principle ... 32 
 
 BOOK II. 
 
 Of the Nature of Stock and of the laws governing its in- 
 crease and diminution. 
 
 The first ten chapters of this Book treat of the nature and opera- 
 tion of the causes originating and increasing Stock ; the eleventh 
 and thirteenth, of the nature and operation of those which retard the 
 increase of Stock, or diminish the amount of it already existing; 
 and the twelfth and fourteenth, of the combined actions of the 
 former and latter causes. The last chapter consists of an examin- 
 ation of the claims of the principles of Adam Smith to the rank 
 of Science. 
 
 Introduction ...... "fS 
 
80 
 
 91 
 
 95 
 
 Xii CONTENTS, &C. 
 
 CHAPTER I. 
 
 It is characteristic of man to provide for the wants of the 
 future, by the formation of instruments ; and his power to 
 make this provision, is measured, by the extent and accura- 
 cy of his knowledge of the course of natural events 
 
 CHAPTER n. 
 Of the circumstances common to all instruments, and of those 
 
 proper to some ..... 
 
 There are three circumstances common to all instruments. 1. They 
 are formed, or receive a capacity to produce certain events fitted 
 to supply future wants, by labor, eithei directly or indirectly. 
 2 Before their capacity is exhausted, and they pass from the 
 rank of instruments to that of materials, they yield a return, or 
 produce certain events fitted to supply future wants, which may 
 be estimated in labor. 3. Between the period of their formation 
 and that of their exhaustion, a space of time intervenes. 
 
 Some instruments can be easily moved from place to place, others 
 cannot. The former are termed goods, or commodities. 
 
 CHAPTER HI. 
 Of certain circumstances arising from the Institution of Soci- 
 ety ....•• 
 
 Statement of some generally admitted principles concerning the 
 nature of man and of society, which it is necessary to assume in 
 the progress of the subsequent investigations. 
 
 CHAPTER IV. 
 Every instrument may be arranged in some part of a series, 
 of which the orders are determined, by the proportions ex- 
 isting between the labor expended in the formation of in- 
 struments, the capacity given to them, and the time elapsing 
 from the period of formation to that of exhaustion 100 
 
 CHAPTER V. 
 Circumstances determining the amount of instruments formed 109 
 
 In every society considerably advanced in art, that is to say, in every 
 society the members of which have acquired an extensive know- 
 ledge of the trains of events supplying the wants of man, which the 
 materials they possess are capable of generating, there is no assign- 
 able limit to the capacity that may be given to these materials, or 
 to the amount of events which the instruments that may be formed 
 out of them may bring to pass ; but, that capacity cannot be in- 
 definitely increased, without carrying the stock of instruments 
 owned by the society to an order of slower return, — that is to say, 
 without extending the period between their formation and ex- 
 haustion, or diminishing their return. It so happens, that, other 
 circumstances being equal, the wider the circle of events embraced, 
 the returns made by the instruments constructed take place in a 
 more distant futurity. 
 
CONTENTS, &c. xiii 
 
 CHAPTER VI. 
 Of the circumstances which determine the strength of the 
 eifective desire of accumulation . . . 119 
 
 The order to which the instruments formed by any society will be 
 earried, is fixed by the relative estimation by its members, of events 
 taking place at present, and at a future period, which is denomina- 
 ted the effective desire of accumulation. This is chiefly determin- 
 ed, 1. by the distinctness of the minds conception of future events, 
 which again depends on the strength of the intellectual powers ; 2. 
 on the desire felt for the production of practicable future events. The 
 latter circumstance is regulated by the strength of the moral pow- 
 ers, or what in those investigations are termed the social and be- 
 nevolent affections. As the existence of the individual is preca- 
 rious, and his power of enjoyment continually diminishing, the 
 more the state of feeling and action pervading any community sep- 
 arates individuals from one another, the more limited will be the 
 range of events, which the effective desire of accumulation of the 
 members of that community will embrace. On the contrary, as, 
 though individuals perish, the race remains, the more the interests 
 of the individual are identified with those of others, the wider will 
 be the circle of events which the accumulative principle will com- 
 prehend. Isolation of feeling and action weakens the accumula- 
 tive principle by separating the interests of individuals, and so 
 contracting its sphere of operation ; community of feeling and 
 action strengthens it, by connecting the interests of individuals, 
 and exciting them to comprehend within the circle of their opera- 
 tions a more extended series of events. 
 
 CHAPTER VII. 
 Of some of the phenomena arising from the different degrees 
 of strength of the effective desire of accumulation in dif- 
 ferent societies ..... 130 
 
 The state of feeling and action, the consequent strength of the ef- 
 fective desire of accumulation, the orders of instruments and 
 some of the circumstances thus produced among hunting and pas- 
 toral nations, in the Chinese Empire, in Modern Europe, and 
 among the ancient Romans. 
 
 CHAPTER VIII. 
 Of the division of employments, and of other phenomena 
 produced by efforts to accelerate the exhaustion of instru- 
 ments . . . . . . 164 
 
 When, in consequence of the progress of art, and the strength of 
 the accumulative principle, there are many extended trains of 
 events, or arts, going on in any society, and when, consequently, 
 there exist many sets of tools or instruments producing them, each 
 individual betakes himself to the production of some particular 
 train, and to the formation of the instruments necessary for carry- 
 ing it on. By this means, no instruments lie idle, which must be 
 the case were every man to practice several arts, and, consequently, 
 
Xiv CONTENTS, &,C. 
 
 they are more speedily exhausted, and pass to orders of quicker 
 return. This division of employments introduces the necessity of 
 the exchange of commodities. The exchange of commodities is 
 regulated, by the labor respectively expended on them, in con- 
 junction with the time at which it was expended, reckoning the 
 effects of the latter by the orders at which instruments actually 
 stand. The existence of exchange occasions a choice being made 
 of some commodity, which is kept for the purpose of being ex- 
 changed with all others, and so comes to name the rates at which 
 they exchange, or to fix their values. The commodity chosen for 
 this purpose is termed money, and, among communities possessing 
 the precious metals, consists of them. Exchanges are also effected 
 by means of credit. The modern art of banking consists in a 
 generalization of all credit transactions, and an emission of paper 
 money, or money of credit. Its introduction into any community 
 by facilitating the exchanges of instruments, quickens their ex- 
 liaustion, and carries them to the more speedily returning orders.* 
 The general prevalence of credit, and of the use of money, has 
 produced the mercantile mode of calculating the returns of in- 
 struments, by profits and interest. 
 
 CHAPTER IX. 
 Of the effects resulting from diversities of strength in the ac- 
 cumulative principle, in members of the same society 198 
 In the same society, instruments are kept at nearly the same orders, 
 because prodigals, or individuals in whom the accumulative prin- 
 ciple is weaker than the average, can exchange the instruments 
 they possess for more, according to their estimation of the future 
 and the present, than they are worth, and therefore transfer them ; 
 while frugal persons, individuals in whom the accumulative prin- 
 ciple is stronger than the average, find exercise for it in acquiring 
 instruments transferred by prodigals. Exception to this rule con- 
 cerning instruments that cannot be exchanged, forming a stock 
 reserved for immediate consumption, 
 
 CHAPTER X. 
 
 Of the causes of the progress of invention, and of the effects 
 
 arising from it .... . 208 
 
 Invention, the discovery o{ new possible existences, becomes an active 
 principle by exerting a formative power on old actual existences. 
 The causes exciting its progress, 1. in the nature of man the in- 
 ventor, the same in general as those giving strength to the 
 accumulative principle ; 2. in the nature of the world in 
 which he lives, change exposing to his view new successions of 
 events, exciting him to observe them, and weakening the retarding 
 influence of the principle of servile imitation. The effects on 
 instruments of the progress of invention, are, to produce improve- 
 ments in them, and to carry them on to orders of quicker return. 
 One of the final causes of the changes and revolutions of all sorts, to 
 
 * Sec also note G. 
 
CONTENTS, &C. XV 
 
 which man and art are subject, seems to be, to advance the inven- 
 tive faculty. — ^Of stock absolute, and relative, and its subdivisions. 
 
 CHAPTER. XI. 
 Of Luxury . . . . . . 265 
 
 PART I. 
 
 There is a propensity among men to attain superiority over one 
 another. This may be termed vanity, and is gratified by the evi- 
 dent possession of things which others have not the means of 
 acquiring ; and therefore by the possession of commodities of 
 which the consumption is conspicuous, and which cost much labor, 
 though not better qualified, or, though but little better qualified to 
 supply real wants, than other commodities costing little labor. The 
 comparison of the physical qualities of such commodities does not 
 afford, therefore, the means of measuring them by one another. 
 Hence the assumption, on which the preceding investigations have 
 proceeded, (p. 93) that all commodities compare with one another 
 by their physical qualities is incorrect. In so far as any commodity, 
 when compared with another, excels it only in the gratification it 
 affords to vanity, it is to be considered a luxury, in so far as it 
 compares with others in the capacity which its physical qualities 
 give it to gratify real wants, it is to be considered as a utility. The 
 progress of invention and improvement have no effect in carrying 
 instruments, directly or indirectly producing luxuries, to more 
 quickly returning orders ; on the contrary, they carry them to the 
 most slowly returning orders of which the strength of the accumu- 
 lative principle admits the existence. The labor expended in the 
 formation of luxuries, is so much direct loss to the community, 
 one man's superiority being here equivalent to anothers inferiority. 
 The amount thus dissipated depends on the force of the social and ' 
 benevolent affections, and intellectual powers, as compared with 
 that of the selfish feelings, and is, therefore, inversely as the 
 strength of the accumulative principle. 
 
 PART II. 292 
 
 Narcotics, in so far as their effects ore not measured by the quantity 
 consumed, may be classed with luxuries. A question concerning 
 the effects resulting from their cheapness considered. 
 
 CHAPTER XII. 
 
 Of Exchanges between different Communities . 300 
 
 Exchanges between societies, are not directly regulated by the 
 quantity of labor expended on the commodities exchanged. In- 
 creased facility in the exchange of utilities operates in the same 
 manner as the progress of invention and improvement, and carries 
 instruments to the more quickly returning orders ; increased facility 
 in the exchange of luxuries has an immediate tendency, on the 
 contrary, to carry instruments to the more slowly returning orders. 
 
 CHAPTER XIII. 
 
 Of Waste 312 
 
 The loss which, in any society, the capacity of instruments sustains 
 
XVi CONTENTS, &C. 
 
 by the operation of fraud and violence, seem to be nearly inversely 
 as the strength of tlie accumulative principle ; but violence, as 
 producing change, excites invention. 
 
 CHAPTER XIV. 
 Of the combined operation of the causes investigated in the 
 
 preceding chapters .... 3%.0 
 
 Summary of principles, and account of some events arising from 
 their combined operation. 
 
 CHAPTER XV. 
 Of the " Wealth of Nations " as a branch of the Philosophy 
 of Induction ..... 328 
 
 Adam Smith's great work is to be considered as a philosophical sys- 
 tem, the object of which is to explain known phenomena, on popu- 
 lar principles, not as an inductive inquiry, leading to the discovery 
 of the real laws determining the succession of those phenomena. 
 
 APPENDIX TO BOOK II. 
 
 Of the principle of the division of labor . . 352 
 
 The division of labor ought to be considered rather as a result than 
 a cause. 
 
 BOOK III. 
 
 Of the operations of the legislator on National Stock 358 
 
 Introduction ....-• ib 
 
 Instead of there being any grounds for a presumption against legis- 
 lative interferance, from the assumption, tliat nature ought to be 
 allowed to pursue her own plans ; the presumption is, on the con- 
 trary, that nature gave man his peculiar faculties for the purpose, 
 that, universally, and as well here as elsewhere, he might acquire 
 the direction of events, by discovering the laws regulating their 
 successions. 
 
 CHAPTER I. 
 Of the operations of the legislator in bringing the arts of 
 Foreign Countries to his own 
 
 The legislator may stimulate invention by the introduction of new 
 arts. 
 
 363 
 
 369 
 
 CHAPTER II. 
 
 Of the operations of the legislator on luxuries 
 
 The art of the legislator may apply to the purposes of the state funds 
 naturally dissipated in luxuries. 
 
 CHAPTER III. 
 Of objections to the interference of the legislator in the 
 
 cases indicated in the two preceding chapters 377 
 
 Notes ...... 387 
 
INTRODUCTION 
 
 Of all the circumstances connected with the ''Inquiry 
 into the Wealth of Nations," there is no one more re- 
 markable than the fact, that its celebrated author leaves 
 us in doubt what he himself understands by that wealth, 
 the nature and causes of which it is the object of his 
 inquiry to investigate. His followers have scarce been 
 more fortunate. They have sought, by definitions, to 
 remedy the acknowledged defect, but have been unable 
 to agree in the terms of them. The school is thus split 
 into many little sects at variance with each other re- 
 garding the very elements of the science.* 
 
 It seems to me that this circumstance arises from, 
 and very clearly marks the existence of, a great and 
 fundamental defect in the principles of investigation 
 on which Adam Smith and the school he founded pro- 
 ceed; — an uniform tendency to hold that up as an ex- 
 planation of other things, which, in reality, is the very 
 thing itself to be explained. 
 
 It is the nature of wealth in the general, and the 
 laws regulating its increase and diminution, that can 
 alone, as I conceive, form the proper subject of philo- 
 sophical investigation. These being determined, from 
 them may be deduced the manner in which particular 
 societies, or particular individuals, come to possess this 
 or that amount of wealth. But, though such is the 
 proper philosophical view of the subject, it is not that 
 under which it appears to common observers. 
 
 Vide note A. 
 
2 INTRODUCTION. 
 
 Before men begin to speculate, they are obliged to 
 act. They are therefore first led, in regard to any 
 system with which they have to do, to fix their atten- 
 tion altogether on the phenomena exhibited by it, with- 
 out attempting to reach the causes of those phenomena. 
 It is usually long after the events themselves have thus 
 been observed and noted, that to trace their causes 
 becomes the employment of philosophers. The mere 
 sailor, for example, regards the winds simply as con- 
 nected with the different seasons, the various regions 
 of the globe, and the particular aspect of the heavens 
 at the time. This makes up the sum of his knowledge 
 concerning them, which, notwithstanding, may be very 
 extensive and of great practical utility. It is not his 
 object to inquire into the general causes producing all 
 these phenomena, nor into the laws regulating the 
 general system of things, of which they make a part, 
 and so of ascertaining the true nature of the different 
 wunds, the real manner of their existence, and the 
 measure of their force and duration. He believes that 
 while that system endures as it is, his knowledge will 
 serve to direct his practice, and this is all about which 
 he concerns himself An extensive practical knowledge 
 of this sort here long preceded a philosophical know- 
 ledge of the subject. It has been the business of the 
 latter, as it has at last had place, to ascertain the nature 
 of wind itself, and the causes producing all different 
 winds, and acting on them. For this purpose the phi- 
 losopher has turned himself to the investigation of 
 whatever, in the general system of things, is connected 
 with that concerning which he inquires; — to the con- 
 stitution and properties of the atmosphere ; — the effects 
 of changes of temperature on aeriform fluids ; — the mo- 
 tions induced by these, by the rotatory movement of 
 the globe, and by other circumstances. From them 
 
INTRODUCTION. 3 
 
 he deduces the true theory of wind, and shows that it 
 is in accordance with the observations and rules of him, 
 who has been accustomed to view the subject in its 
 practical bearings alone, and tends to elucidate and 
 simplify them. 
 
 In a somewhat similar manner wealth was felt and 
 noted in its effects long before, as a circumstance 
 largely affecting societies, it was proposed philosophi- 
 cally to investigate its nature and causes. To mark 
 those effects, riches and a series of other terms of the 
 sort, were invented. Like all every-day words and 
 phrases they apply to particular facts and occurrences, 
 and have no necessary reference to the causes of those 
 facts and occurrences. All such speculations are foreign 
 to mere practice, and never enter even into the explana- 
 tions and reasonings of the merely practical man. How- 
 ever complicated the social system of which any person 
 engaged in the acquisition of wealth makes a part, he 
 has no difficulty in tracing the manner in which that 
 portion of it which he possesses has been acquired, nor 
 in explaining how it forms to him a certain amount of 
 what he calls capital. But in giving this explanation, 
 it will be observed that for the elements of his state- 
 ments, he has always recourse to the existence and 
 continuance of certain circumstances and regular trains 
 of events in the general system of human society. What 
 the things may be which give origin and regular suc- 
 cession to these events is a speculation lying out of his 
 road, and on which he probably never enters. Though, 
 therefore, he can easily tell how he got that which 
 constitutes his wealth, and how to him it comes to be 
 wealth, he will yet probably confess that he is unable 
 to say what constitutes wealth in general, from whence 
 it is derived, or what are the exact laws regulating its 
 increase or diminution. These are questions of which 
 
4 INTRODUCTION. 
 
 the solution is very clearly shown to be of great diffi- 
 culty from the mass of discordant opinions concerning 
 them.* 
 
 Adam Smith, in this and in other instances, by trans- 
 ferring, without hesitation, terms made use of to mark 
 and explain the affairs of common life to denote the 
 great phenomena which the affairs of societies present, 
 falls, as it seems to me, into two errors. In the first 
 place, he in a great measure misses that which is the 
 real object at which his inquiry aims, the investigation 
 of the true nature and causes of national wealth, and 
 shows, by holding out sometimes one notion of it and 
 sometimes another, according to the different lights in 
 which at different times the subject presents itself to 
 him, that he has no very definite ideas concerning it. 
 In the second place, he naturally, and in very many 
 instances, falls into the error of taking, what in truth 
 are the results of general laws governing the course of 
 this class of events for the laws themselves, and so 
 of elevating effects into causes. His procedure is 
 not very dissimilar to what that of a philosopher 
 would have been, who, desiring to investigate the 
 nature of wind, should have assumed it as already 
 known, not as an event, but as a thing, and should 
 have conceived it his business merely to connect and 
 arrange the various phenomena in relation to it, with 
 which practice had previously made mankind familiar. 
 Such a system could not have failed to have embodied 
 great radical defects, for it would have been built on 
 principles fundamentally erroneous. 
 
 His followers, by the use they make of definitions, 
 appear to me rather to have introduced new evils, than 
 to have applied a remedy to those already existing. 
 
 * Note B. 
 
INTRODUCTION. 5 
 
 Definitions give us the mastery of words, not of things,* 
 and therefore by taking them as they have done, for 
 principles of investigation, not auxiharies to it, their 
 labors have generally issued in adducing arguments 
 instead of collecting and arranging facts, the former 
 being the proper fruit of an attention to words, the 
 latter of an inquiry into the nature of things. 
 
 I conceive that the fallacies of the particular doc- 
 trines I oppose may be most effectually exposed, by 
 tracing out the true nature of that wealth, the manner 
 of the augmentation and diminution of which, forms the 
 subject of controversy. That we can neither assume 
 this as a thing already known, nor hope, by any mere 
 intellectual effort, to comprehend it in an ingenious 
 definition. That when it is really discovered, it must 
 be, as has happened in other things, that disputes con- 
 cerning its manner of existence, its increase and de- 
 crease will terminate, or instead of hinging on plausi- 
 ble arguments, may be settled by a reference to ascer- 
 tainable facts. It is, therefore, such an investigation, 
 that I propose partially to attempt ; and it is chiefly 
 on the results of it, that I mean to rest my demonstra- 
 tion of the reality of those errors, my conviction of 
 the existence of which, has been my motive for engag- 
 ing in the present undertaking. 
 
 By entering on such an investigation immediately, 
 however, the subject would be brought before the 
 reader under an aspect so different from that in which 
 it is viewed in the Wealth of Nations, and subsequent 
 
 * A sailor would never think it necessary to explain what wind is. Were 
 he asked to do so, it is very probable he would answer " that which blows," 
 and this would be a correct enough marking out of the meaning attached to 
 the word. Mr. Say, in like manner, defines value what a thing is worth. 
 " Valeur des choses. C'est ce qu'une chose vaut." Riches, again, he defines 
 an amount of values. " Richesse, c'est la somme des valeurs." Capital, an 
 accumulation of values. Vide Epitome des principes fondamentaux de 
 Veconomie politique. 
 
6 INTRODUCTION. 
 
 works following in the same train of thought, that I 
 should not have an opportunity of directly meeting 
 some of the arguments there advanced. For this 
 reason I shall first endeavor to show, that even pro- 
 ceeding on similar principles to those adopted in the 
 Wealth of Nations itself, there exist great and insup- 
 erable objections to the doctrines in question. This 
 forms the subject of the First Book. In the Second, I 
 enter on the analysis of the nature of wealth and the 
 laws governing its increase and diminution. The Third 
 is devoted to a practical application to the doctrines 
 in question, of the principles established. 
 
BOOK I. 
 
 INTRODUCTION. 
 
 When wealth, considered in the general, is conceived to be a 
 thing either so clear as to require no definition, or so simple as 
 to be fully grasped by any definition, two different and opposing 
 systems naturally seem to arise concerning it. 
 
 'The wealth of all the individuals in a state being, it may be 
 said, of necessity measured by the amount of the national wealth, 
 whatever adds to the wealth of the nation must increase the 
 stocks of individuals. But it has always been found that nations 
 have become most wealthy when they have engaged most ex- 
 tensively in commerce and manufactures. To encourage com- 
 merce and manufactures by every possible means, should, there- 
 fore, be the great aim of the legislator ; and every enactment and 
 regulation of his conducing to this effect, as it cannot but tend 
 to the increase of the general funds, must ultimately add to the 
 stocks of individuals. This view of the matter leads directly to 
 a system of unceasing regulation and restraint. 
 
 Again, on the other hand, it may be said, that, as the wealth 
 of the nation is necessarily made up of the riches of the various 
 individuals in it, so the national wealth must grow as each indi- 
 vidual adds to the portion of it which he possesses. But every 
 restraint is a hindrance to a man's acquiring wealth, and he always 
 gains by evading it. As, therefore, all interference on the part of 
 the legislator, operates as a restraint, he never in any case ought 
 to interfere. 
 
 As the former view of the subject produces a system of gen- 
 eral regulation and restraint, this teaches the doctrine of com- 
 plete inaction on the part of the legislator, of the removal of all 
 restraint, and of perfect freedom of trade. 
 
 Both systems proceed on the assumption of the exact identity 
 of public and private wealth ; of wealth, as it is the same word, 
 being always the same thing, whether applied to individuals or 
 communities, and being in its increase and decrease subjected 
 in all cases to similar laws ; — an assumption flowing easily from 
 the conception that its nature is very simple and may without 
 difficulty be apprehended. 
 
 The latter of these systems, that adopted by Adam Smith, we 
 might expect would at present, be most popular in Europe. 
 
3 INTRODUCTION TO BOOK I. 
 
 Institutions and forms very often endure after the circumstances 
 that had originally called them forth have disappeared, and 
 when, consequently, their operation injuriously restrains the 
 movements ol" some new order of things. Such seems the con- J 
 
 dition of most European kingdoms at present. The frame of ■ 
 
 their existing constitutions and laws was moulded in remote times, " 
 
 in ages of comparative barbarism and stern military rule, and is, 
 therefore, in many parts, unsuited to the circumstances of the 
 present period. It is perceived that a multitude of abuses exist, 
 and the efforts of the majority are directed to detect, expose, and 
 do away with them. The prejudices of men of liberal minds 
 and enlarged views, for even such men have prejudices, run 
 consequently, rather towards overthrowing and rooting out, than 
 to establishing and maintaining. A system of political economy, 
 the fundamental principles of which, inculcated the doctrine that 
 every attempt of the ruler to direct the industry of the commu- 
 nity was injurious, and that all laws having this tendency, should 
 be abrogated, fell in with the current of pid^lic opinion and could 
 not but draw to itself a large body of zealous and able advocates. 
 It is in this temper that Mr. Bentham addresses its author. 
 " On this subject you ride triumphant, and chastise the imper- 
 tinence of kings and ministers with a tone of authority, which it 
 required a courage like yours to venture upon, and a genius like 
 yours to warrant a man to assume."* 
 
 It maybe remarked, also, that as the circumstances of Europe, 
 in remote ages, produced the former system, in the present give 
 popularity to the latter ; so in North America, where a new form 
 of government suited to the state which society has there assum- 
 ed, has been established, we might expect, as is the case, that a 
 medium would be taken between the two extremes. f 
 
 My main object, in this book, is to show that that notion of the 
 exact identity of the causes giving rise to individual and national 
 wealth, on which the reasonings and arguments of Adam Smith 
 all along depend, is erroneous, that consequently the doctrines he 
 has engrafted on it, cannot be thus maintained, and are incon- 
 sistent with facts admitted by himself. 
 
 * Defence of Usury, 
 t Note C. 
 
CHAPTER I. 
 
 OF THE IDENTITY OF INDIVIDUAL AND NATIONAL INTEREST CONSIDERED 
 
 AS A SIMPLE PRINCIPLE. 
 
 I HAVE already observed that through every part of his work, 
 in the conduct of all his reasonings and arguments, Adam Smith 
 blends together the consideration of the processes by which the 
 capitals of individuals and nations are increased, and always treats 
 of them as precisely identical. Sometimes this is assumed as a 
 self-evident truth, sometimes it is a deduction from an ingenious 
 theory ; but, in one shape or other, it forms the basis on which his 
 whole system is built. If this simple view of the subject be 
 admitted as correct, it may very easily be made to lead to the 
 conclusions at which he is desirous of arriving. 
 
 The axiom which he brings forward, that the capital of a 
 society is the same with that of all the individuals who compose 
 it, being granted, it follows that to increase the capitals of all the 
 individuals in a society is to increase the general capital of the 
 society. It seems, therefore, also to follow that as every man is 
 best judge of his own business and of the modes in which his own 
 capital may be augmented, so to prevent him from adopting these 
 modes is to obstruct him in his efforts to increase his own capital, 
 and, in so far as his capital is a part of the general capital of the 
 society, to check the increase of that general capital ; and hence, 
 that, as all laws for the regulation of commere are in fact means 
 by which the legislator prevents individuals conducting their 
 business as they themselves would deem best, they must operate 
 prejudicially on the increase of individual and so of general 
 wealth. 
 
 In pursuance of the same idea of the perfect identity of the 
 means by which individual and national capitals are increased, the 
 argument is thus further enforced. Accumulation is the means 
 by which individual capital is augmented. We know very well 
 
 2 
 
10 INDIVIDUAL AND NATIONAL INTERESTS 
 
 that if any person spend as fast as he makes, he can never get 
 richer. Whatever his gains are he must save some part of them, 
 else he can never add to his capital. The amount also of his 
 savings for any period of time must measure the addition, which, 
 during that time he makes to his wealth. As, therefore, the 
 capital of a single individual is increased by his continually 
 accumulating and adding to it whatever he saves out of his 
 revenue, so the national capital, or the capital of all the individ- 
 uals in a nation-, is increased by these individuals continually 
 accumulating and adding to it what they save out of their respec- 
 tive revenues. Hence whatever prevents them from making the 
 most of their respective capitals, or drawing from them the largest 
 revenue, in so far as it deprives them of the power of laying past 
 so large a portion of that revenue as they otherwise would, must 
 in a like proportion diminish their individual accumulations, and 
 consequently the sum of all their accumulations, or the amount 
 added to the national capital. But all laws for the regulation of 
 commerce, and all encouragements given to particular branches of 
 industry, do in fact prevent individuals from turning their capitals 
 into the channels which, but for these regulations, they would 
 prefer as offering the largest returns. They must, therefore, it is 
 said, to a certain extent, diminish individual accumulation, and con- 
 sequently, in an equal proportion, the increase of national capital. 
 
 Viewing, then, the subject in this simple light, and taking as 
 undoubted truths the assumptions of our author, that individual 
 and national wealth increase in the same manner, and that the 
 manner in which individuals increase their riches is by saving 
 from their revenues, we would easily arrive at the doctrine he 
 inculcates, that as every man is best judge of his own interests, 
 so he should be left to pursue them in his own w^ay, without the 
 legislator at all interfering with his operations, or pretending to 
 aid or direct them. 
 
 This very simple view of the subject would, however, be 
 defective in two respects. 
 
 1. Though it is, in the general, true that individuals may find 
 some employment, by the prosecution of which they may procure 
 a revenue, and so, by saving from this revenue, acquire wealth, 
 or add to what they have before acquired, yet it seems not so 
 clear that it is by this means alone that nations advance, or can 
 advance, in the acquisition of wealth ; because it must occur to 
 
ARE NOT IDENTICAL. n 
 
 US that materials on which tlie national industry may be employed 
 are to be provided, and often are or may be wanting. 
 
 2. It is not altogether correct to say that the sole means, 
 which an individual employs to add to his capital is the process 
 of saving from revenue. It is very evident he must first gain 
 this revenue, and that the amount he gains, and consequently the 
 amount he can save, must in general depend on the talents and 
 y capacities he possesses for the prosecution of the particular era- 
 \ ployment to which he devotes himself. As an inquiry, there- 
 fore, into the manner in which an individual might most rapidly 
 accumulate wealth, would in part resolve itself into an exam- 
 ination of the modes by which he might acquire the greatest 
 perfection of knowledge, skill, dexterity, and other talents and 
 capacities, tending to the successful prosecution of his business ; 
 so an inquiry into national wealth, even supposing the process 
 by which nations and individuals add to their riches to be the 
 same, must partly resolve itself into an examination of the modes 
 by which the knowledge, skill, and dexterity of all the individ- 
 uals in a nation, in the various businesses and professions that may 
 be carried on in it, may be raised to the highest pitch. 
 
 These two circumstances render the subject more intricate, 
 than the first shnple view we might be inclined to take of it, 
 would lead us to suspect. An attention to the operation of either 
 of them will be sufficient to show that that identity of the inter- 
 ests of individuals and states, which is assumed throughout the 
 Wealth of Nations, is not a self-evident piinciple. In the fol- 
 lowing observations, I shall, however, confine myself to the for- 
 mer of them. 
 
 Individuals, it is very clear, in general, increase their capitals 
 by acquiring a larger portion of the common funds. While one 
 man is growing rich, another is becoming poor, and the change 
 produced, seems not so much a creation of wealth, as a pas- 
 sage of it from one hand to another. These transfers have been 
 going on in all ages of the world and have existed equally, in 
 what has been called the advancing, the stationary, and the de- 
 clining stages of society. Every where this means of acquiring 
 wealth is open to individuals, and they every where avail them- 
 selves of it. Let any one in any country, in Great Britain for 
 instance, trace backwards for fifteen or twenty years the muta- 
 tions that have occurred in the fortunes of the persons with 
 
12 INDIVIDUAL AND NATIONAL INTERESTS 
 
 whom he is acquainted, and he will find that there are few, 
 whose circumstances are not very much changed from what they 
 then were. Good conduct, good fortune, and fmgality have made 
 many rich who were then poor ; imprudence, misfortune, pro- 
 digality have made many poor who were then rich. 
 
 But while that man has thus been adding house to house, and 
 farm to farm, and this has been giving up one portion of pro- 
 perty after another, till he finds all he once possessed in the 
 hands of others, the whole mass of houses, lands and wealth, has 
 undergone but little alteration ; the national capital itself, remains, 
 comparatively, but little changed. It is not by thus acquiring 
 wealth previously in the possession of others, that nations enrich 
 themselves. But a very small pait of the capital of any com- 
 munity, can, I suspect, be accounted for, by tracing its passage 
 from any other community. Instead of one nation growing 
 rich, and another poor, we rather see many neighbouring nations 
 advancing at the same pace towards prosperity and affluence, or 
 declining equally, ,to misery and want. As individuals seem 
 generally io grow rich by grasping a larger and larger portion of 
 the wealtli already in existence, nations do so by the production 
 of wealth that did not previously exist. The two processes differ 
 in this, that the one is an acquisition, the other a creation. 
 \ Ex nihilo nihil jit. Nothing can spring out of nothing. Every 
 thing that exists must have a cause. As we do not see that in- 
 dividuals increase their w^ealth by creating new wealth, we do 
 not think of inquiring how the riches of an individual came to 
 exist, but how they came into his possession. But as we do not 
 see how nations can increase their wealth, but by creating new 
 wealth, we naturally inquire, what are the causes of the wealth of 
 nations. 
 
 Adam Smith asserts, and as I think truly asserts, that these 
 causes are to be found in the improvement of the productive 
 powers of human labor. Men, and therefore nations, are said 
 to be rich or poor according to the degree in which they can 
 afford to enjoy the necessaries, conveniences, and amusements of 
 human life. But as it is the annual labor of the nation which 
 suppl ies these necessaries, conveniences and amusements ; so as 
 this labor is well or ill directed, the supply it affords must be 
 great or small. The skill, dexterity, and judgment with which 
 labor is applied ; that is, I presume, the facility of the operations 
 
\ 
 
 ARE NOT IDENTICAL. ];j 
 
 which it employs for executing its ends, and the accuracy with 
 which it conducts them, must consequently mainly regulate the 
 amount which it produces. Thus the increase of the skiU, dex- 
 terity and judgment with which the national labor is applied, \ 
 furnishes us with a cause for the increased productive powers of 
 that labor, and so for the increase of the national wealth. / 
 
 This account of matters will be found sufficiently to agree with 
 the ideas which the contemplation of their progress forces on 
 every one. When we are told that an individual this year em- 
 ploys in agriculture double the capital which he employed last 
 year, the conception which most readily presents itself to us is, 
 that he now farms double the land w^hich he then farmed, owns 
 double the number of horses, cattle, farming utensils, he. and 
 has double the number of barns and other necessary buildings. 
 When we are told that a country has double the agricultural 
 capital which it had a century ago, we cannot, of course, conceive 
 that its farms are double the extent they then were ; neither do 
 we conceive that its farmers have simply double the number of 
 barns and other buildings, of cattle, ploughs, harrows, and other 
 farming utensils, which they then had. We conceive a change 
 in the mode in which its fields are laid out and tilled ; in the 
 form and qualities of the stock ; in the construction of all the 
 implements of husbandry ; in the size and arrangement of the 
 barns and other buildings, and that through these changes the 
 national agricultural labor produces at least double the products it 
 formerly did. It is this change necessarily involved in our con- 
 ception of the process by which nations increase their capitals, 
 and not necessarily involved in the process by which individuals 
 increase their capitals, that constitutes the difference between 
 them.* 
 
 Though they are thus essentially different, there are neverthe- 
 less two points in which they agree. When estimated in gold, 
 silver, or any other instrument of exchange, the sum at which 
 the agricultural property presently possessed by the individual 
 
 * As here I merely aim at giving a very general view of the subject, I only 
 refer to what generally occurs. In this and some other instances the text 
 does not apply to new countries. Communities commonly occupy the same 
 territories unchanged. The growth of such communities as increase by occu- 
 pying a larger and larger extent of territory must be regulated in part by laws 
 which are exceptions to those that apply to the rest of mankind. 
 
14 INDIVIDUAL AND NATIONAL INTERESTS 
 
 would be rated would be double that at whicb what was formerly 
 in his possession was rated. The sum, also, at which the present 
 agricultural property of the nation would be rated would be 
 double that at which it was formerly rated. The tilings, too, 
 that so estimated formed the increase in both, would have been 
 produced by man : they would be his works. But though two 
 things may both be estimated as worth a sum of money, and may 
 both be works of man, it follows not that the principles which 
 have produced them are perfecdy similar. The poemof Childe 
 Harold cost the publisher a certain sum ; so did the paper on 
 which it was printed. They both, too, were works of man, and 
 required mental and corporeal energy to produce them ; but we 
 should not, therefore, say the principles that produced them were 
 precisely similar. 
 
 Within a few centuries the national capital of Great Britain 
 has increased tenfold. Could we imagine that we could tell 
 this fact to some one of the men of the olden time, waked from 
 the slumber of the tomb and raised up to us, we may suppose he 
 would ask how it could be ; how there could have been produced 
 so mighty a change ; or from whence so full a tide of wealth 
 could have flowed in upon us. But were we then to take him 
 abroad and show him the wonders and achievements of art with 
 which the land is overspread ; the various processes carried on in 
 our manufactories and workshops ; the scientific labors of the 
 agriculturist ; the curious mechanism with which the vast bulk of 
 our ships is put together and guided ; fire and water transformed 
 into our obedient drudges, excavating harbors and draining 
 mines for us, carrying us over the land with the speed of the 
 wind, bearing us through the ocean against tide and storm ; 
 he would no longer wonder whence the wealth was that he saw 
 around, or that the land yielded tenfold what it had done of old, 
 though he might well demand how the power had been acquired 
 that had wrought so great a change. 
 
 Were such a thing possible as we are thus imagining we can 
 scarce suppose that any one would be found to reply, the whole 
 process is nothing extraordinary ; it is just the same as you must 
 have seen in your own days, when, by continual parsimonious 
 saving, an individual accumulated ten times the capital he once 
 had ; he began, perhaps, with one house and died owing ten. 
 Such an assertion would evidently be absurd. 
 
ARE NOT IDENTICAL. I5 
 
 Inyention is the only jqwer on earth, that can be said to cre- 
 ate.* It enters as an essential element into the process of the 
 Increase of national wealth, because that process is a creation, not 
 an acquisition. It does not necessarily enter into the process of 
 the increase of individual wealth, because that may be simply 
 an acquisition, not a creation. The assumption, therefore, that 
 the two processes are perfectly similar is incorrect, and the doc- 
 Irine which I have designated as that of the identity of the in- 
 terests of individuals and communities cannot be thus established. 
 
 The ends which individuals and nations pursue, are different. 
 The object of the one is to acquire, of the other to create. The 
 means which they employ, are also difierent ; industry and par- 
 simony increase the capitals of individuals ; national wealth, 
 understood in its largest and truest sense, as the wealth of all 
 nations cannot be increased, but tlirough the aid also of the in- 
 ventive faculty. Though each member of a community may be 
 desirous of the good of all, yet in gaining wealth, as he only seeks 
 his own good, and as he may gain it by acquiring a portion of the 
 wealth already in existence, it follows not that he creates wealth. 
 The community adds to its wealth by creating wealth, and if we 
 understand by the legislator the power acting for the community, 
 it seems not absurd or unreasonable that he should direct part 
 of the energies of the community towards the furtherance of this 
 power of invention, this necessary element in the production of 
 the wealth of nations. 
 
 In the following cases it would at least seem not improbable, 
 that the power of the legislator so directed, might be beneficial. 
 
 I. In promoting the progress of science. 
 
 II. In promoting the progress of art. 
 
 1. By encouraging the discovery of new arts. 
 
 2. By encouraging the discovery of improvements in the arts 
 already practised in the country. 
 
 * I make use of the term creation, because that of production, which other- 
 wise I should have preferred, has been employed in another sense. I trust 
 my motives will not be misconceived. " Etiam inventa quasi novce creationes 
 sunt, et divinorum operum imitamenta, ut bene cecinit ille : 
 " Primum frucriferos foetus mortalibus agris 
 Dididerant quondam preestanti nomine Athenas : 
 Et recreaterunt vitam, legesque rogarunt." 
 
 jYovum Org. CXXIX. 
 
](] INDIVIDUAL AND NATIONAL INTERESTS 
 
 3. By encouraging the discovery of methods of adapting arts, 
 ah-eady practised in other countries to the particular circumstances 
 of the territory and community for which he legislates. 
 
 In the attainment of all these objects, the aid of the inventive 
 faculty is required. Our judgment of their propriety or impro- 
 priety, as far as this is determined by their direct tendency to 
 promote the wealth of the community, would seem to depend 
 on two circumstances. 1 . On the probability of their success, 
 and of this success enabling the industry of its members to ac- 
 quire with increased facility some of the necessaries, conveniences, 
 or amusements of hfe, the capacity for producing which, mea- 
 sures the general revenue and riches. 2. On the probability of 
 the future wealth to be derived from this new source, being suf- 
 ficient to repay the expenditure of present wealth necessary to 
 open it up. 
 
 As far as any considerations, which I have as yet presented to 
 the reader, warrant us in forming a conclusion, it certainly 
 does appear not impossible, or unlikely, that there might be in- 
 stances in which the legislator might, with advantage to the pro- 
 gress of the wealth of the community, direct the energies of some 
 of its members towards discoveries in all these different depart- 
 ments of knowledge and action. 
 
 But in doing so, he always acts contrary to this doctrine. It 
 teaches that he ought never to disturb the natural course of 
 events ; that is, the course which the efforts of individuals, unin- 
 terfered w^ith, by him, would give to these events. His agency 
 so directed, according to this doctrine, must be injurious ; be- 
 cause, in every instance, it in part changes the direction, and 
 in part retards the progress of the natural course of events. In 
 every such instance, he directs the industry of some of the mem- 
 bers of the society from gaining a revenue by the practice of old 
 arts and so accumulating capital, to the discovery either of ma- 
 terials for new arts, or of means of adapting old ones to new 
 countries. By doing so, he takes from the national revenue, and 
 retards, consequently, the accumulation of the national capital. 
 
 This doctrine, as given by Adam Smith, is in general, blended 
 with theoretical principles afterwards to be considered. The 
 following is an abstract of it, in his own words, from different 
 parts of his system, separated from these principles. 
 
ARE NOT IDENTICAL. I7 
 
 " The capital of all the individuals in a nation is Increased in 
 the same manner as that of a single individual, by their contin- 
 ually accumulating and adding to it whatever they save out of 
 their revenue.* As the national capital is thus increased by 
 parsimony, so it is diminished by prodigality and misconduct. 
 The conduct of those whose expense just equals their revenue, 
 without either accumulating or encroaching, neither mcreases nor 
 diminishes it. It can seldom happen that the circumstances of 
 a great nation can be much affected by the prodigality of indi- 
 viduals; the profusion of some, being always more than com- 
 pensated by the frugality and good conduct of others. Men are 
 prompted to expense, by the desire of present enjoyment, a 
 passion only momentary and occasional. They are prompted to 
 save by the desire of bettering their condition, a passion which 
 comes with them from the womb, and never leaves them till they 
 go to the grave. In the whole course of life of the greater part 
 of men, therefore, though the principle of expense prevails oc- 
 casionally, yet the principle of frugality predominates, and pre- 
 dominates very greatly." f 
 
 " The principle exciting to frugality, the uniform, constant, and 
 uninteiTupted effort of every man to better his condition, pro- 
 duces both public and national, as well as private opulence, and 
 is frequently more than sufficiently powerful to counteract the 
 extravagance of government, and the greatest errors of adminis- 
 tration. Like the unknown principle of animal life, it frequently 
 restores health and vigor to the constitution, in spite, not only of 
 the disease, but of the absurd prescriptions of the doctor.."!: Alone 
 and without any assistance, it is capable, not only of canying on 
 the society to wealth and prosperity, but of surmounting a hun- 
 dred impertinent obstructions with which the folly of human 
 laws too often encumbers its operations." <§> 
 
 The reader will perceive, that the whole force of these ar- 
 guments lies in the assumption, that the process of the increase 
 ol national capital, is precisely the same as that of the increase of 
 individual capital. 
 
 The observation of Bacon is now trite, that men believe that 
 the words they employ in the process of reasoning, serve the 
 intellect as mere passive instruments, but that, in reality, they 
 
 * Wealth of Nations, B. II. c. IV. i Ibid. B. II, c. III. 
 
 t B. II. c. III. § Ibid. B. IV. c. V. 
 
 3 
 
[8 INDIVIDUAL AND NATIONAL INTERESTS 
 
 have often an active reflex power, through which, while the 
 mind deems it governs them, they are enabled to usurp the com- 
 mand of it, and so misdirect its course. 
 
 Our author notices the errors, which, in this way, have arisen 
 from the use of the term money. 
 
 " Money, in common language, as I have already observed, 
 frequently signifies wealth ; and this ambiguity of expression has 
 rendered this popular notion so familiar to us, that even they who 
 are convinced of its absurdity, are very apt to forget their own 
 principles, and, in the course of their reasonings, to take it for 
 granted as a certain and undeniable truth. Some of the best 
 English writers upon commerce set out with observing, that the | 
 
 wealth of a country consists, not in its gold and silver only, but m 
 
 in its lands, houses, and consumable goods of all different kinds. ' 
 
 In the course of their reasonings, however, the lands, houses, 
 and consumable goods, seem to slip out of their memory ; and 
 the strain of their argument frequently supposes that all wealth 
 consists in gold and silver, and that to multiply those metals, is 
 the great object of national industry and commerce." * 
 
 It is remarkable that, in the use of the term capital, he himself 
 leads his readers into a somewhat similar error. Capital means in 
 common language a sum of money, or something for which a sum 
 of money can be got ; and, as the increase both of national and in- 
 dividual capital produces a sum of money, or something for which a 
 sum of money can be got, the similar estimation of both by a row 
 of figures is the thing that in this way naturally comes uppermost 
 to the mind, and hence, the things themselves in both cases formino- 
 the increase not being immediately present to its thoughts, it heed- 
 lessly falls into the conclusion that they also are perfectly similar. 
 In comparing indeed the national capital as it has existed at distant 
 periods, the small national capital of remote periods with the large 
 national capital of the present, we immediately perceive, that not 
 only the sum at which the national wealth was formerly rated is 
 increased, but that the things which constituted it are changed. 
 The wealth of England is certainly ten times now what it was in 
 the reign of Henry the VIII ; we do not conceive, however, that 
 it is formed by the multiplying tenfold such articles as constituted 
 the sole riches of its inhabitants in that somewhat rude and bar- 
 
 * B. IV. c. I. Vide note D. 
 
ARE NOT IDENTICAL. 19 
 
 barous age. We perceive here, that there is, and must be, not 
 only an increase, but a change. When, however, we come to 
 consider the smaller parts of which this increase is gradually made 
 UD, as the change here is not perhaps perceptible, and as all we 
 see is the sum produced by it, the fact of the increase being more 
 easily ascertained than the manner of it, the similarity of the terms 
 naturally inclines us to conceive that it resembles the increase of 
 individual capital, and consists of a mere increase ©y things, not of 
 a change also in them. Would we take time to consider of it, 
 we must perceive that such an increase of national capital as indi- 
 viduals make of individual capital, is, at least, unlikely, seeing 
 there is no apparent cause for it. Considering capital in general, 
 the only use we can discover for it is its enabling the community 
 to draw from the resources the country affords, the necessaries, 
 conveniences, and amusements of life, its supply of which, accord- 
 ing to our author, constitutes its real wealth. It is only so far as 
 it is instrumental to this end that we can see a use, and therefore 
 find a reason, for its existence. Now, as one individual is more 
 provident and prudent than another, we can easily conceive how 
 one may come to procure for himself a greater share than another 
 of the national funds, the means, or instruments, serving to unlock 
 the stores which the nation possesses ; but it is not so easy to con- 
 ceive how, or for what purpose, a general increase of these means 
 or instruments should take place without some accompanying dis- 
 covery of an improvement in their construction by which they 
 may put additional stores within reach of the nation. 
 
 We may easily perceive this, by attending to any of the nu- 
 merous small items of which the national capital is composed. 
 I shall take an example of a very small one. The only instru- 
 ment used for threshing out grain in Great Britain, until of recent 
 years, was the flail. Hence one or more flails formed a part, 
 though a small part, of every farmer's capital, and therefore all 
 the flails that all the farmers had, a part, though an exceedingly 
 inconsiderable part, of the national capital. So simple an instru- 
 ment and one so easily formed, was made, I believe, generally, 
 by the farmer or his servants, though sometimes, by professed 
 mechanics. In whatever way fabricated, it is evident, however, 
 that the number of flails made, though from the convenience of 
 having a supply provided before hand they would exceed, 
 could never much exceed, the number of persons employed in 
 
20 INDIVIDUAL AND NATIONAL INTERESTS 
 
 the operation of threshing. A professed flail-maker indeed, if 
 dihgent and intelhgent, might, by the aid of these quahties, have 
 been able to make them clieaper than his neighbors, and, if 
 economical, to extend his business and come to have some amount 
 of capital in this shape. But, though thus, by his industry and 
 frugality, an individual might have accumulated capital under 
 this form to an extent to which we can set no precise limits, the 
 national capital never could have been so increased, because, if 
 one person by greater diligence and activity, made more flails, 
 another, from a deficiency of these qualities, would make fewer; 
 or, if we suppose all the makers of the instrument to be alike in- 
 dustrious, and thus the stock of it to accumulate, so as to do more 
 than supply the wants of the threshers, the article would remain 
 on their hands, and they would naturally cease to produce the 
 superabundant supply. While, tlierefore, the instrument retain- 
 ed this less perfect form, it is, I think, pretty evident, that, 
 though individuals might accumulate capital by making flails, 
 neither the national capital, nor the national revenue, would be 
 nmch increased by their efforts so directed. 
 
 About forty years ago, the easier and more perfect method of 
 executing this process, by what is called the threshing machine, 
 was invented. These new instruments, though far more expen- 
 sive than the former, yet, performing the operation more effectu- 
 ally, and with much less labor, became naturally things Vvhich 
 farmers were desirous of having. A farmer could have had no 
 motive to accumulate but a very trifling capital in the shape of 
 flails, because half a dozen were as useful to him as half a thou- 
 sand ; but he had a great motive to accumulate a considerable 
 capital in the shape of a threshing machine, because it would save 
 him much annual expenditure of labor, and the operation so per- 
 formed, separating the grain more effectually, would give him a 
 small addition to the corn yielded by his subsequent crops. Ac- 
 cordingly its invention was followed by the accumulation in this 
 form, of a large amount of capital, and so by an increase of the 
 whole agricultural capital of the nation. But, besides this direct 
 effect, the saving it produced in one of the main processes of agri- 
 culture augmented the profits of the farmers, and tended, therefore, 
 to make all farmers cultivate their farms more perfectly, and some 
 to engage in improving land not before cultivated. Both the 
 direct and the indirect effects of this invention, therefore, must 
 
ARE NOT IDENTICAL. 21 
 
 have helped, in no inconsiderable degree, to augment the agri- 
 cultural capital, and so the whole capital of the nation. 
 
 " It readily occurs to every individual that the quantity of 
 hardware, the number of pots and pans, is in every country 
 limited by the use which there is for them ; that it would be 
 absurd to have more of such utensils than are necessary for 
 cooking the victuals usually consumed there ; and that, if the 
 quantity of victuals were to increase, the number of pots and 
 pans would readily increase along with it ; a part of the in- 
 creased quantity of victuals being employed in purchasing them, 
 or in maintaining an additional number of workmen whose busi- 
 ness it was to make them."* But, though the national capital 
 cannot thus be supposed to accumulate in the shape of ,an ad- 
 ditional number of pots and pans, individuals who deal in hard- 
 ware frequently accumulate capitals in this shape, to a large 
 amount. We can easily conceive, that the national capital also, 
 might accumulate in this shape, were some discovery, producing 
 an improvement in the manufacture, to occur. Were a method 
 discovered of procuring and manufacturing platina, or some 
 metal similar to it, at only four or five times the cost of brass, 
 it would, without doubt, be employed in the fabrication of 
 kitchen utensils of all sorts. Not being acted on by fire, and 
 other destroying agents, it would save a great deal of the drudg- 
 ery of the kitchen, and, though more costly at first, would pro- 
 bably, on the whole, be preferred by good economists. Thus, 
 pots and pans becoming more expensive articles, the amount of 
 national capital, or stock, accumulated in them, would be much 
 greater, and, through this improvement, the whole national cap- 
 ital would, with advantage to the society, be somewhat aug- 
 mented. 
 
 If any one will, in a similar manner, consider any of the other 
 articles which help to make up the national capital, I think he 
 will have difiiculty in assigning a sufficient reason, from any of 
 the views presented in the Wealth of JNations, for its increase, 
 unless he connect this increase, somehow or another, with some 
 improvement in the particular department of industry of which 
 its production makes a part, or in some other department de- 
 pendent on it. He will perceive, that, though there is no dif- 
 
 * Wealth of Nations, B. IV. c. I. 
 
22 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ficuhy in conceiving that an individual may accumulate a very 
 large capital in the form of any of those articles or commodities, 
 the total of which make up the national capital ; with the excep- 
 tion, perhaps, of money itself, there Is difficulty in discovering a 
 reason for the accumulation of any of them, throughout the 
 whole community, so as to form any sensible addition to the 
 national capital. 
 
 It may perhaps appear, that, in whatever shape the individual 
 members of the community may accumulate capital, yet, that 
 the efforts of the greater number being thus directed, they might 
 accumulate it under some shape or another. We are not, how- 
 ever, it will be recollected, here discussing a possibility, but a 
 self-evident principle ; not what might be, but what must be. 
 Now, there is no necessity for imagining that this must be the 
 case, for, without entering at all into the minutiae of the subject, 
 it is not difficult to perceive that the action of the principle 
 which prompts to save, itself brings about a state of things, 
 which diminishes the desire to save. A person must be most 
 desirous of getting money when he perceives, that by the ac- 
 quisition of it, he could make a great deal out of it ; when it is 
 manifest to him, that, if he had a sufficient capital, he could enter 
 on some branch of business that would be very profitable. When 
 an opening of this sort presents itself to a prudent and enterpris- 
 ing, though poor man, the exertions he makes to gather together 
 a small sum are sometimes almost incredible. But, if the prin- 
 ciple were to prevail so generally as to fill up every branch of 
 business within the society, the desire to acquire capital so as to 
 enter on some of the particular businesses carried on in the society 
 would naturally be diminished throughout the whole country ; 
 and this general diminution of the motives to accumulate, might 
 be sufficient to preserve the national capital within the bounds 
 it had acquired, and prevent it, for a time, from gaining farther 
 increase- 
 
 Nor is there any thing in the appearance of human afiairs, 
 which should induce us to conclude, that the increase of national 
 capital ever does, in fact, proceed, unless in conjunction with 
 some successful effort of the inventive faculty, some improve- 
 ment of some of the employments formerly practised in the 
 community, or some discovery of new arts. If we cast our eyes 
 over the results, which either reading or observation presents to 
 
ARE NOT IDENTICAL. 23 
 
 US, concerning the condition of different nations, we gather from 
 our review, that many of them, in regard to the acquisition of 
 wealth, have apparently remained stationary for ages, although 
 undisturhed hy external violence, and unmolested by internal 
 tumults. During all the time, however, the process of individual 
 accumulation was going on ; men were continually rising from 
 poverty to affluence, founding families, and leaving wealth to 
 their descendants ; but this wealth passed away from them ; 
 what the father gathered was not able to maintain his race, and 
 they gradually sank to the rank from which he had emerged. 
 The proportion, meantime, between rich and poor, and the total 
 wealth of the community, remained but little changed. 
 
 At length, in some quarter or another, an improvement began 
 to be perceived. What do we find to have been the most 
 prominent accompaniment of this change ? Is it a diminished 
 expenditure — an increased parsimony — a frugality before un- 
 known ? I believe not. Any great diminution of the expen- 
 diture of a whole community, it will be found difficult to trace, 
 but we shall always discover that invention has somehow or 
 another been busy, either in improving agriculture and the other 
 old arts, or in discovering new ones. 
 
 It is only when some great and striking improvement issues 
 from the exertions of the inventive power, that we in general, 
 attend to its effects. Every one readily grants, that, but for the 
 invention of the steam engine, the capital of Great Britain would 
 want much of its present vast amount. We perceive not so 
 readily the numerous small improvements, which have been 
 gradually, from year to year, spreading themselves through every 
 department of the national industry. But, though not so pal- 
 pably forced on our observation, we pass them by, they never- 
 theless exist, and sufficiently account for the manner in which 
 the national capital has been augmenting, by being gradually 
 accumulating in them, without the necessity of stvpposing that it 
 ever has augmented precisely as that of individuals generally 
 does, by a simple multiplication, under the same form, of any 
 or all the items, of which its amount was before made up. 
 
 Adam Smith himself admits, that a country may come to be 
 fully stocked in proportion to all the business it has to transact, 
 and have as great a quantity of stock employed, in every 
 particular branch, as the nature and extent of the territory will 
 
24 INDIVIDUAL AND NATIONAL INTERESTS 
 
 admit. He speaks of Holland also, as a country which had 
 then nearly acquired its fidl compliment of riches ; where, in 
 every particular branch of business, there was the greatest 
 quantity of stock that could be employed in it.* It would 
 then appear that, even according to him, the principle of indi- 
 vidual accumulation, as a means of advancing the national cap- 
 ital, has limits beyond which it cannot pass. The same 
 cannot be said of that increase which is derived from the at- 
 tainment of those objects at which the inventive faculty aims. 
 Had Holland, sixty years ago, been put in possession of the as- 
 tonishing improvements in mechanical and manufacturing indus- 
 try, which, since that period, have sprung up in Great Britain, 
 who can suppose that she would have wanted ability to continue 
 in the successful pursuit of wealth ; or, that she would not have 
 started forward with fresh vigor in the career, and advanced in 
 it with greater rapidity than in any former period of her history? 
 
 There is no avoiding the admission, that, to every great ad- 
 vance which nations make in the acquisition of wealth, it is ne- 
 cessary that invention leading to improvement should lend its 
 aid ; and, granting this, it necessarily follows, as when one cause 
 is discovered sufficient to account for the phenomena, we should 
 confine ourselves to it, that we are not warranted to assume 
 that they make even the smallest sensible progress without the 
 aid of the same faculty. 
 
 To this general observation there are only two apparent ex- 
 ceptions. The progress of commerce by the increase of some 
 particular branch of it, or by the opening of fresh branches ; and 
 the settlement of new countries. 
 
 If these, however, should be esteemed exceptions to the 
 observation with regard to any particular nation or nations, they 
 are extensions of it with regard to all the nations of the earth ; 
 implying that the increase of general wealth is connected with 
 the general spread of invention, or inventions, over the world. 
 
 The principle, therefore, of the identity of the interests of 
 nations and individuals is by no means a self-evident principle. 
 The identhy of their interests can only follow from the identity 
 of the ends which they pursue ; but these ends being, as far as 
 we can see, identical only in name, and in reality not identical, 
 
 * Wealth of Nations, B. I. c. IX. 
 
ARE NOT IDENTICAL. 25 
 
 the presumption rather is, that the means also by which they are 
 arrived at are not identical. 
 
 It seems to me, that it requires very little pausing upon the 
 examination of this principle to perceive its inconclusiveness as 
 an argument. It is a principle, nevertheless, which, like other 
 popular doctrines founded merely on the ambiguity of a word, 
 has been very much insisted on, and meets one in all variety of 
 shapes. On this account, the reader may perhaps excuse me, for 
 detaining him a little longer on the consideration of it, by bring- 
 ing before him a passage from our author, which may serve to 
 expose its unsoundness, by showing how easily it may be made 
 to lead to the most obvious fallacies. " The annual produce of 
 the land and labor of England is certainly much greater than it 
 was more than a century ago at the restoration of Charles II. 
 It was certainly much greater at the restoration than we can 
 suppose it to have been about a hundred years before, at the 
 accession of Elizabeth. At this period, too, we have reason to 
 believe, the country was much more advanced in improvement 
 than it had been about a century before, towards the close of the 
 dissensions between the houses of York and Lancaster. Even 
 then it was probably in a better condition than it had been at the 
 Norman Conquest ; and at the Norman Conquest, than during 
 the confusion of the Saxon Heptarchy. Even at this early 
 period it was certainly a more improved country than at the 
 invasion of Julius Caesar, when its inhabitants were nearly in the 
 same state with the savages in North America. 
 
 " In each of these periods, however, there was not only much 
 private and public profusion, many expensive and unnecessary 
 wars, great perversion of the annual produce from maintaining 
 productive to maintain unproductive hands ; but sometimes, in 
 the confusion of civil discord, such absolute waste and destruc- 
 tion of stock as might be supposed not only to retard, as it cer- 
 tainly did, the natural accumulation of riches, but to have left the 
 country, at the end of the period, poorer than at the beginning. 
 Thus, in the happiest and most fortunate period of tliem all, that 
 which has passed since the restoration, how many disorders and 
 misfortunes have occurred, which, could they have been foreseen, 
 not only the impoverishment, but the total ruin, of the country 
 w^ould have been expected from them. The fire and the plague 
 of London, the two Dutch wars, the disorders of the Revolution, 
 4 
 
26 INDIVIDUAL AND NATIONAL INTERESTS 
 
 the war in Ireland, the four expensive French wars of 1688, 
 1702, 1742, 1750, together with the two rebelhons of 1715 and 
 1745. In the course of the four French wars the nation has 
 contracted more than £145,000,000 of debt, over and above all 
 the other extraordinary annual expense which they occasioned ; 
 so that the whole cannot be computed at less than £200,000.000 ; 
 so great a share of the annual produce of the land and labor of 
 the country has, since the Revolution, been employed upon dif- 
 ferent occasions in maintaining an extraordinary number of un- 
 productive hands. But had not those wars given this particular 
 direction to so large a capital, the greater part of it would natur- 
 ally have been employed in maintaining productive hands, whose 
 labor would have replaced with a profit the whole value of their 
 consumption. The value of the annual produce of the land and 
 labor of the country would have been considerably increased by 
 it every year, and every year's increase would have augmented 
 still more that of the following year. More houses would have 
 been built, more lands would have been improved, and those 
 which had been improved before would have been better culti- 
 vated ; more manufactures would have been established, and 
 those which had been established before would have been more 
 extended ; and to what height the real wealth and revenue of 
 the country might by this time have been raised it is not per- 
 haps very easy even to imagine." * 
 
 These conclusions would indeed ah follow did individual and 
 national capital augment on precisely the same principles ; but 
 as the progress of the inventive faculty, an essential element in 
 the increase of national wealth, is here left out of the calculation, 
 we have good reason to doubt its accuracy. 
 
 Before the time of the Essay on Population, arguments and 
 conclusions very similar to these were brought forward concerning 
 the waste of human life in wars, and the consequent amazing 
 diminution of the greatness and prosperity of nations. Perhaps 
 the fallacy of the one doctrine may be best exposed by stating 
 the other. 
 
 " Nations, it was said, can only advance in greatness and pros- 
 perity as the numbers of their inhabitants increase. Whatever 
 the natural fertility of the soil, however genial the climate, and 
 
 ' Wealtli of Nations, B. II. c. III. 
 
ARE NOT IDENTICAL. 27 
 
 however well fitted the whole country may be for the practice of 
 every species of industry, yet, if it be deficient in population, 
 these natural riches can never be elaborated, and it must hold a 
 poor and inconsiderable rank in the scale of nations. A confined 
 and comparatively barren territory, filled with a numerous, indus- 
 trious population, exceeds the most fertile and extensive country 
 scantily peopled. It is the people that make the state, its real 
 riches lie in its inhabitants. 
 
 " But as population increases, and can only increase, by more 
 coming into the world than go out of it, every man who marries 
 and raises a family is a public benefactor, and the practice of 
 celibacy, so far from being a virtue, is, in reality, a great public 
 crime. The number, however, of those who marry, and have 
 children, in all tolerably quiet and peaceable times, much ex- 
 ceeds that of those who remain single ; and, consequently, the 
 number of all the inhabitants of the earth has continually aug- 
 mented, and, had it not been for the wars w^hich the ambition of 
 princes has stirred up, w^ould have been still much farther aug- 
 mented. 
 
 " The population of England is now much greater than at the 
 Restoration. It w^as greater at the Restoration than at the 
 accession of Elizabeth, and then than during the great civil wars. 
 Even then it was greater than at the Conquest, and at that time, 
 than at the invasion of Julius Cifisar. 
 
 " In each of these periods, however, there were not only many 
 private feuds and public dissensions ; many bloody and harassing 
 wars ; great perversion of the powers of the inhabitants from the 
 production to the destruction of life ; but sometimes such dread- 
 ful massacres and bloodshed, so great multitudes perishing by the 
 svv'ord, and by famine following up its ravages, as might be sup- 
 posed not only to have retarded the increase of the numbers of 
 the inhabitants, but to have left them fewer at the end than at 
 the beginning. Had it not been for these events, the greater 
 part of those whom they carried off would have married and had 
 children, whose whole numbers would naturally have been greater 
 than that of the parents who procreated them. In this manner 
 every generation would have exceeded proportionably the one 
 preceding it. The number of industrious hands thus produced 
 would have built more houses, would have improved more lands, 
 and would have cultivated better those which had been improv- 
 
23 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ed before ; more manufactures would have been established, and 
 those which had been established before would have been more 
 extended, and how far the population of the country, and its real 
 wealth and strength, might have been carried by this time, it is 
 not perhaps very easy to imagine." 
 
 The error of both reasonings arises, in the same manner, from 
 taking what is merely a necessary concomitant, for a cause. It 
 is perfectly true, that the real wealth, strength, and prosperity of 
 a country, cannot advance, but as its population advances, and 
 that population can only advance by more being brought into the 
 world than go out of it. It is also true that they cannot advance 
 but as its capital advances, and that its capital can only advance 
 by more being saved than is spent. But when it is said in either 
 case, that as they can only advance as population advances, or 
 as accumulation advances, we have only to allow population to 
 go on unrestrained, or only to allow accumulation to go on un- 
 checked, we are deceived, and led to unwarrantable conclusions, 
 by a sort of sleight in the use of words. 
 
 The contemplation of a couple contending with unremitting 
 labor against the evils of poverty and want, and, however occa- 
 sionally pinched by them themselves, warding them off with care 
 and success from their offspring, and rearing up a numerous and 
 industrious family, is a very pleasing sight. It is pleasing as an ev- 
 idence of the existence of some of the best and purest affections 
 of our nature ; it is pleasing, also, from the mere view of the 
 healthy addition thus made to that surest stay of a state, an in- 
 dustrious and frugal population. But when it is hence assumed, 
 that nothing is wanting -to augment the numbers of the commu- 
 nity, and carry it forward to greatness, than that similar principles 
 and conduct should be allowed to go on in all its members with- 
 out restraint, a hasty and inaccurate conclusion is drawn from a 
 partial view of a complicated subject. The numbers of a state 
 can never exceed, what its resources can support. When these 
 resources are augmented, the principles which tend to the pre- 
 servation and multiplication of the species are, in all well regu- 
 lated communities, sufficiently active speedily to fdl up their 
 numbers to the amount of the increased supply. 
 
 In like manner, the contemplation of honest industry, and pa- 
 tient frugality, not only manfully bearing up against present ne- 
 cessity and want, but repelling them, and accumulating a plentiful 
 
ARE NOT IDENTICAL. gg 
 
 %J 
 Store to answer the demands of futurity, is also no unpleasino- 
 
 spectacle. But for such principles neither public nor private 
 comfort or affluence could exist, or be preserved. But, when it 
 is hence also assumed, that nothing else is wanting to carry the 
 community forward to the highest degree of affluence and power, 
 than that similar principles and conduct, through all its members, 
 should be encouraged, and allowed to go on w-ithout check, a 
 conclusion equally unwarranted and equally inaccurate, is drawn 
 from a like hasty and imperfect view of a great subject. The 
 capital of a state is a mere instrument in the hands of its indus- 
 try, to enable it to draw forth the riches, with which the conjoin- 
 ed powers of nature and art have endowed it. A multiplication 
 of instruments is of no avail, unless something additional be given 
 on which they may operate. When invention succeeds in dis- 
 covering these additional riches, the mere view is sufficient, in 
 every well regulated community, to induce its members to form 
 the new instruments, nfecessary to draw these riches forth. 
 
 There must be some strong inherent vice in any community, 
 where the certain prospect of plentiful subsistence does not pro- 
 duce an abundant population. It can only be, also, from the 
 effects of some great inherent vice, that, in any community, a 
 very profitable investment for capital can be held out, and yet cap- 
 ital not accumulate with rapidity. Where there is no sufficient 
 prospect of subsistence, people may be restrained from marriage 
 by the dread of their families suffering w'ant. Where there is no 
 sufficient prospect of profit, people may be withheld from accu- 
 mulating capital, because they may see no sufficiently profitable 
 adventure open to them that they would not fear to embark in. 
 But the fact is, that people, rather than live single, are inclined 
 to marry at all risks, and hence population is kept down by mis- 
 ery, and premature death ; and they are also, rather than do no- 
 thing, enclined to embark in adventures where the chances are 
 against their success ; hence the vast numbers of unsuccessful 
 projects that in most communities are continually dissipating pre- 
 vious accumulations of capital. To form aright judgment of the 
 power of any community, under the most favorable circumstances, 
 of increasing its population, we must consider the additional mar- 
 riages which would take place, and the greater numbers that 
 would be reared to maturity from such as do take place, if plen - 
 tiful subsistence w^ere provided. In like manner, to form a right 
 
30 INDIVIDUAL AND NATIONAL INTERESTS 
 
 judgment of the powers of any community, under the most fa- 
 vorable circumstances, to increase its capital, we must consider, 
 that, if abundance of secure and profitable investments for capital 
 were presented, its members would be more eager to possess ad- 
 ditional capital, and, therefore, would be more prompted to accu- 
 mulate it ; and the capital they possessed would be more produc- 
 tive, and would not be subject to be risked and lost in imprudent 
 speculations. 
 
 From the inconsiderable rudiments of population and capital, 
 which Great Britain furnished to North America, is to be traced 
 the great amount of both, of which that flourishing division of the 
 globe at present boasts. The former has increased so greatly, 
 because plentiful subsistence has been afforded it : the latter, be- 
 cause profitable and secure investments have been presented to 
 it. Had it been possible to have afforded, and had the same 
 abundant subsistence been afforded, to the population, and the 
 same profitable and secure investments to the capital remaining 
 within the kingdom, they would have both augmented, we have 
 every reason to believe, in a ratio equal to that at which the frag- 
 ments of both that went to North America have augmented. It 
 certainly was not the voyage across the Atlantic, but the rich 
 soil on which they fell on the other side of it, that excited them 
 to so luxuriant a growth. 
 
 This great productive power of both the population and capi- 
 tal of a country, when room is afforded them to shoot, seems so 
 easily to fill up any gap which is made in the national members 
 or stock, that a calculation founded on the assumption, that any 
 loss in either which a nation may sustain, necessarily occasions a 
 proportionably permanent diminution of its funds must evidently 
 be inconclusive. It is very doubtful if the population of London 
 or England would have been greater than it is at present, had 
 there been no plague. It is very doubtful also if the capital of 
 London or of England would have been greater than it is at pres- 
 ent, had there been no great fire. The additional demand for 
 labor and capital, which these disasters created, may very well 
 be supposed soon to have brought both up to the amount they 
 had previously attained. 
 
 In all instances of such, or even far greater calamities, deslroy- 
 ing a part of the population or capital of a country, while the 
 principles and elements, through and from which they sprang, are 
 
ARE NOT IDENTICAL. 3I 
 
 not consumed along with them, we see them quickly reproduced. 
 When, for example, the great destroyer War holds his course 
 through a country, and clearing wide his path with fire and sword, 
 leaves property and life a wreck behind him, we see not that the 
 traces of his wrath are long perpetuated ; in the midst of the 
 ruins of what were, lie the germs of what are to be, and seizing 
 on the elements of existence that lie waste around, they expand 
 with a vigor proportioned to the magnitude of the void that has 
 been made for them, and speedily replenish it. Like the track 
 of the whirlwind through the forest, the present desolation is 
 quickly covered up and obliterated by the freshness of the new 
 growth, to which that very desolation gives light, and air, and the 
 means of existence. We should think the calculation rather 
 fanciful, which, estimating the trees overborne by the blast for cen- 
 turies, and reckoning the increase that might have possibly come 
 from each of them, should bring out as a correct result, that all 
 this would have been a clear addition to the vegetable life of the 
 forest ; and that so much greater it must have been to-day, had 
 not these disasters had place. Calculations proceeding on the 
 assumption of the indefinite increase of population or capital, 
 without showing also that there will be room for them, are but 
 little more logical. 
 
 Before population can advance, there must be something on 
 which it can subsist ; before capital can increase, there must be 
 something in which it may be embodied. Produce subsistence, 
 and, if vice prevent it not, population will follow ; show that if 
 capital did exist, it would produce great profits, and, if vice pre- 
 vent it not, capital will be accumulated. But, until there be 
 some means of subsisting the population, and employing the 
 capital, they can never, by simply urging on then* production, be 
 rationally expected to be much augmented. 
 
 It is invention, which showing how profitable returns may be 
 got from the one, and how subsistence procured from the other, 
 that may most fitly be esteemed the cause of the existence of 
 both ; and hence this power has most title to be ranked as the 
 true generator of states and people. It is certainly, therefore, 
 very far from being a self-evident tmth, that the legislator, by em- 
 ploying the resources of the country in rousing this principle to 
 activity, necessarily retards, instead of advancing, the increase of 
 wealth and the prosperity of the state. 
 
CHAPTER II 
 
 OP THE IDENTITY OF NATIONAL AND INDIVIDUAL INTERESTS CONSIDERED 
 AS A THEORETICAL PRINCIPLE. 
 
 Though the doctrine of the identity of the interests of indi- 
 viduals and communities cannot be estabhshed as a simple and 
 self-evident principle, from the assumption that the objects which 
 individuals designedly pursue, for their private emolument, are 
 precisely those which most promote the progress of the general 
 opulence ; and though in this sense, as we have seen, the identity 
 of the ends which they pursue is nominal, not real, yet it follows 
 not from this that the doctrine is necessarily erroneous. Many 
 doctrines which are far more simple or self-evident are neverthe- 
 less true. Many, which at first sight seem even contradictory to 
 experience, are found, by closer examination, to be legitimately 
 deducible from it. It is manifest that the general opulence, how- 
 ever brought about, results, in some way or another, from the 
 action and reaction on each other of the whole system of persons 
 and things, which constitute communities, or belong to them. 
 It is then at least possible to conceive that it is entirely produced 
 by the efforts of individuals to advance their private fortunes. 
 That, though it is the object of individuals to acquire wealth, and 
 of nations to create it, yet that the series of actions which the 
 former generate, in endeavoring to make the acquisition, are 
 precisely those which are best calculated to forward the creation ; 
 and that thus, unconsciously to himself, each member of the 
 community, while seeking merely his own benefit, necessarily 
 adopts the very course which ns most for the advantage of the 
 society, and, to use our author's words, " is led in this, as in many 
 other instances, by an invisible hand, to promote an end that was 
 no part of his intention." 
 
 In this view of the subject the doctrine would put off the shape 
 of a simple principle, and assume that of a theory deduced from 
 
INDIVIDUAL AND NATIONAL INTERESTS, &c. 33 
 
 an examination of the whole series of actions that are concerned 
 in the production of the weakh of communities ; and m this way 
 we may conceive that it might be satisfactorily proved by an 
 extended inquiry into the Nature of the Wealth of Nations. 
 
 Such is the theory of this department of human action, which 
 the author gives . If it be found not to be inconsistent with the 
 phenomena, but fairly deduced from them, the truth of the peculiar 
 doctrine, which it is the aim of his work to maintain, would be 
 established by it. 
 
 Before endeavoring to explain it, or attempting to show wherein 
 it fails, it is proper to remark that it is blended, throughout the 
 whole work, with that notion of the exact identity of the ends 
 which nations and individuals pursue, the fallacy of which I trust 
 I have, in some measure, exposed in the preceding chapter. I 
 shall afterwards have occasion to show that this arrangement of 
 his materials sometimes renders his arguments illogical. ] am 
 led to notice it at present, because I wish to account for the 
 appearance of this assumption, unremarked by me, in the analysis 
 of the theory I am about to give. 
 
 It must be apparent to every one acquainted with the system, 
 that its parts would not in any way hang together, if deprived of 
 the support which this popular notion gives to them. Indeed, I 
 conceive that the truest account that could be given of it, would 
 be to say, that it is altogether founded on the assumption that 
 national and individual wealth and prosperity increase, and must 
 increase, in precisely the same manner ; and that the theoretical 
 part of it merely serves to show how the increase of individual 
 wealth does, in reality, produce the events which we see accom- 
 panying national wealth ; that the former is the cause, and the 
 sole cause, of the latter, and must therefore produce all the phe- 
 nomena attendant on it, being taken for an undeniable fact, and 
 the author seeming merely to have proposed to show how it may 
 be supposed to produce those phenomena. Thus, were wdiat was 
 once the popular doctrme concerning population still held to be 
 the correct one, and were we to take it for granted as an unde- 
 niable truth, that, as the national strength, and revenue, and wealth 
 can only advance as the number of industrious hands that form 
 them is increased, so every augmentation of the population of a 
 nation is an addition to the national funds, and that, therefore, 
 things ought to be allowed to take their natural course, and all 
 
 5 
 
34 INDIVIDUAL AND NATIONAL INTERESTS 
 
 restraints on marriage be done away with, the assumption and 
 doctrine might be supported by a theory, showing, or endeavor- 
 ing to show, how all the phenomena attending the advance of 
 mankind towards prosperity and affluence do, in fact, result from 
 their increasing numbers. 
 
 It might, perhaps, in support of such a view of the subject, be 
 said, " that, as necessity is the mother of invention, so, unless 
 pressed^ by want, or the dread of it, mankind might never have 
 exercised their ingenuity in discovering even the rudiments of 
 the arts ; and certainly would not have advanced them beyond 
 the most unformed and imperfect elements. That, while in 
 genial climates the spontaneous fruits of the earth afforded them 
 abundant nourishment, they could have had no motive to tax the 
 labor of either their minds or bodies to produce that for which 
 they had no need. That it was the increase of their numbers, 
 which, rendering the supplies that nature had dealt out to them 
 insufficient, imposed the task on them of searching out the means 
 of procuring additions to them : and that thus necessity, 
 
 " Curis acuens mortalia corda 
 
 •» Jr * « » 
 
 Ut varias usus meditando extunderet artes 
 Paulatim, &c. — " 
 
 " Whetting human industry by care 
 That studious need might useful arts explore," 
 
 is in truth the divinity that taught mankind the most essential arts. 
 
 " Primo Ceres ferro mortales vertere terram 
 Instituit ; cum jam glandes atque arbuta sacrse 
 Defecerunt sylvae et victum Didona negavit." 
 
 " First Ceres taught the ground with grain to sow, 
 And armed with iron shares the crooked plough; 
 When new Dodonian oaks no moi-e supplied 
 Their mast, and trees their forest fruit denied." 
 
 " That this urgent necessity, this imperious mistress, which 
 nature caused to spring from their mcreasing numbers, made them 
 spread themselves over the earth, and people even the most 
 rigorous climates. That the " rigid lore " of the " stern rugged 
 nurse " thus imposed on them, though harsh, was healthful ; as a 
 proof of which we may observe, that men in general subsist in 
 greatest comfort and abundance, where the climate is most for- 
 bidding, and the soil most stubborn, because there, that they 
 
ARE NOT IDENTICAL. 35 
 
 may subsist at all, they have been obliged to call to their succour 
 the most ingenious arts, and the most indefatigable industry, 
 
 " Labor omnia vincit 
 Improbus et duris urgens in rebus egestas." 
 
 " What cannot endless labor urged by need ? " 
 
 That, as it is the action of this principle which has given rise to 
 all the arts, so it is it which has brought them to perfection. 
 That, while a territory is scantily peopled, and its inhabitants 
 spread over it at a great distance from each other, they can never 
 subdivide themselves into different trades and employments, and 
 each devoting himself to a particular busmess and art, exercise 
 his whole ingenuity to bring that particular occupation to perfec- 
 tion ; and that hence arts are in general in the most flourishing 
 condition, w^here the population is the most dense. 
 
 " That to these causes, thus necessarily proceeding from this 
 great principle, we are to ascribe in particular both the opulence 
 and prosperity of our o\\ti nation, and the necessary diffusion of 
 the arts, manners, language, and race, with which they are con- 
 nected, and in which they are embodied, over the remotest 
 regions of the globe. That thus, although men in marrying seek 
 only their own good, they nevertheless adopt that course which 
 is most to the advantage of society ; and here too, as in many 
 other instances, are led by an invisible hand to promote an end 
 which was no part of their intention. That, therefore, as the 
 revenue and power of a nation can only increase as its population 
 increases, and as the increase of population tends to give a begin- 
 ning to every useful art, and to carry it to the highest perfection, 
 legislators act a very absurd and culpable part in attempting, in 
 any instance to restrain it, or to check what is undoubtedly the 
 natural, and apparently the most beneficial course of events." 
 
 Such a theory, like almost every other view of only one side 
 of a complicated subject, would probably be partly correct, and 
 partly erroneous ; but it might be possible to embrace in it a great 
 mass of facts, and perhaps to give it considerable plausibility. 
 
 In examining the soundness of the doctrine founded on it, it 
 might first be expedient to allow the assumptions necessarily 
 involved in it to pass unnoticed, and to test its accuracy by an 
 application to facts. Such is the course which I mean to follow 
 in this introductory examination of the somewhat similar theory, 
 as it seems to me, which is the groundwork for the vast and varied 
 
36 INDIVIDUAL AND NATIONAL INTERESTS 
 
 accumulation of facts and opinions embodied in the Wealth of 
 Nations. I shall allow the author's assumptions to pass unques- 
 tioned in all cases where they are mixed with the explanation of 
 real events, though I may esteem that explanation erroneous ; 
 and it is only where, alone and unconnected with facts, they are 
 brought forward for the purpose of arguments as incontrovertible 
 truths in order to establish the particular doctrine which I com- 
 bat, that I will feel myself called on to expose the fallacies into 
 which they lead. 
 
 The celebrated author remarks, " that it is from his labor alone 
 that man can draw the necessaries, the conveniences, the amuse- 
 ments of human life, from the materials which nature has placed 
 around him. As the amount of these necessaries, conveniences, 
 and amusements, which any man can afford to enjoy, constitutes 
 his riches ; so the amount of them which all the men in the nation 
 can enjoy constitutes the national riches. Labor, then, being the 
 first price, the original purchase money, that is paid for all things, 
 an inquiry into national wealth is, in fact, an inquiry into the 
 means by which the labor of the individuals composing a nation 
 may produce, from the materials they possess, the greatest amount 
 of necessaries, conveniences, and amusements. 
 
 " These may either be the immediate produce of that labor, 
 or what is purchased with that produce from other nations. 
 Hence such an inquiry may be divided into two parts ; the first 
 treating of the means by which the produce of the national labor 
 becomes greatest ; the second, of the manner in which the part 
 transferred to other nations procures from them, in return, the 
 greatest amount of necessaries, conveniences, and amusements. 
 
 " First, then, may be considered the sources of wealth that lie 
 altogether within the society, the means of bringing, by the labor 
 of its members, out of the materials which it possesses, the 
 greatest amount of products ; that is, of articles afibrding neces- 
 saries, conveniences, or amusements. 
 
 " This, in any particular nation, must be regulated by two 
 circumstances. First, by the skill, dexterity, and judgment with 
 which its labor is generally applied ; secondly, by the proportion 
 between the number of those who are employed in useful labor, 
 and that of those who are not so employed." It is to the first of 
 these circumstances, which he observes is of much the greater 
 influence, that our au thorns reasonings chiefly refer, and to the 
 consideration of it, therefore, we may altogether confine ourselves. 
 
ARE NOT IDENTICAL. 
 
 37 
 
 '' The chief cause operatmg on this, the main source of the 
 productiveness of labor, is capital. Without capital, industry 
 could scarce at all exist. While a man is executing a piece of 
 labor, he must have, to maintain him, a stock of goods, and he 
 must have ready provided for him the tools and materials neces- 
 sary for performing the work. These are all procured by capital. 
 A weaver, for instance, could not apply himself to manufacture 
 a web of cloth, unless there were somewhere stored up for him 
 a supply of food, and other necessaries, sufficient to maintain him 
 till he complete and sell it, and were he not provided beforehand 
 with a loom and other requisite tools and materials. It is capital 
 which provides all these, either his own or that of some other 
 person. 
 
 " As capital is thus the most essential element in setting in- 
 dustry in motion, so it is by the amount of it, that the produc- 
 tiveness of that industry is chiefly determined. 
 
 " Every man having capital naturally endeavors to make the 
 most of it ; that is, to cause the labor which it puts in motion to 
 yield the greatest amount of productions. This he effects by the 
 division of that labor ; that is, by separating the operations it has 
 to perform into as many distinct parts as possible, and allotting 
 each of them to one man, or one set of men, as a peculiar em- 
 ployment. 
 
 " The increase arising to the productive powers of labor, from 
 this division of it, is owing to three different circumstances. 
 First, to the increase of dexterity in every particular workman ; 
 secondly, to the saving of the time which is commonly lost in 
 passing from one species of work to another ; lastly, to the inven- 
 tion of a great number of machines which facilitate and abridge 
 labor. 
 
 " First, the improvement of the dexterity of the workman 
 necessarily increases the quantity of the work he can perform ; 
 and the division of labor, by reducing every man's business to 
 some one simple operation, and by making this operation the 
 sole employment of his life, necessarily increases by much the 
 dexterity of the workman. A common smith, for instance, will 
 scarce make more than three hundred nails a day, and those very 
 bad ones. A boy who has devoted himself entirely to the business 
 of making nails, can make upwards of two thousand. 
 
 " Secondly, time is not wasted in passing from one work to 
 
38 INDIVIDUAL AND NATIONAL INTERESTS 
 
 another, and the indolent sauntering hahits induced by the frequent 
 change of employment are avoided. 
 
 " Thirdly, the invention of all those machines by which labor 
 is so much facilitated and abridged seems to have been originally 
 owing to the division of labor. In consequence of it, the whole 
 of every man's attention comes naturally to be directed to some 
 one very simple object. It is naturally to be expected, there- 
 fore, that some one or other of those who are employed in each 
 particular branch of labor should find out easier and readier 
 methods of performing their own particular work, wherever the 
 nature of it admits of improvement. In this mode a great num- 
 ber of such improvements on the productive power of labor have 
 been made. 
 
 " The other improvements in machinery and manufactures * 
 have been also owing to the division of labor. Many of them 
 have been made by the ingenuity of those, who, from this 
 separation of employments, have taken up the trade of making 
 such machines ; others, by that class of citizens of whom also 
 philosophy or speculation becomes the sole trade and occupation. 
 " The perfection to which this division of labor may be carried 
 depends on the amount of capital that sets it in motion ; because 
 the same number of workmen, executing a greater quantity of 
 w^ork in proportion as they are better classified and divided, require 
 consequently, when so classified, a larger stock of materials, and 
 the extent of the stock of materials provided must be regulated 
 by the amount of capital accumulated. Again, when so divided, 
 they both require and cause to be invented many new machines. 
 These machines, also, can only be procured by a capital pre- 
 viously stored up. Not only, however, does the accumulation of 
 capital, by providing more abundant materials and better machines, 
 enable the same number of workmen to be better divided, and to 
 produce more work, but it also may be observed that the number 
 of workmen in any branch of business increases with the division 
 of labor in that branch. Thus the increased accumulation of 
 capital, by effecting a more and more extended division of labor, 
 not only increases the productiveness of the labor of the same 
 number of workmen, but adds to that number. By both means, 
 therefore, it greatly augments the total riches of the society, 
 
 * I add this word because the chain of reasoning seems to require it. 
 
ARE NOT IDENTICAL, 39 
 
 the amount of necessaries, conveniences, and amusements pro- 
 duced by its members, and consequently enjoyed by them. 
 
 '•' Tiiese productions which labor, by the aid of capital, effects 
 have to be transported to the places where they are to be con- 
 sumed, have there to be stored up till they may be wanted, when 
 they have to be divided into small portions, suited to the con- 
 venience of the persons wdio are to use them. The dealers in 
 wholesale and retail are enabled to perform these useful offices 
 by the instmmentality of capital, and the greater the amount of 
 that capital the more easily and effectually they can perform 
 them. Hence, every addition their economy makes to that 
 amount, tends also to the increase of the general prosperity. 
 
 " The division of labor is limited by the extent of the market. 
 Before any man, or any set of men, can in common prudence 
 devote themselves to any particular employment, they must be 
 assured that they can dispose of the commodity which their 
 exertions in the prosecution of that employment will produce. 
 In situations where there is not a sufficient number of customers 
 near at hand to consume the manufactured article, or where it 
 cannot with advantage be transported to those at a distance, the 
 making of that article can never become the exclusive employ- 
 ment of any man, or set of men. When, therefore, there is not 
 a sufficiently extensive market, labor cannot be so much subdi- 
 vided as it otherwise would, and its productive powers are cramped 
 for want of room in which to exert themselves. The increase of 
 capital extends the market by adding to the numbers and general 
 opulence of the community, and by facilitating the modes of 
 communication between all parts of the territories which it pos- 
 sesses, and this extending market gives, in turn, additional celerity 
 to the increase of capital." 
 
 To this accumulation of capital, this continual parsimonious 
 saving out of revenue, the principle that, according to our author, 
 animates the whole progressive movement of the society, he 
 assigns the following limit. 
 
 " When the stocks of many rich merchants are turned into the 
 same trade, their mutual competition naturally tends to lower its 
 profit ; and, when there is a like increase of stock in all the dif- 
 ferent trades carried on in the same society, the same competition 
 must produce the same effect on them all. As, then, the profits 
 of capital continually lower with its augmentation, there must 
 
40 INDIVIDUAL AND NATIONAL INTERESTS 
 
 arrive a period when they will be so diminished as to render it 
 no longer possible to save any part of them." When this period 
 arrives, the country would then, I think, according to our author, 
 have acquired its fliU complement of riches ; every branch of 
 business therein having the greatest quantity of capital that could 
 be employed in it. 
 
 " But besides the immediate produce of its own industry, a 
 country that has made any progress in the accumulation of capital, 
 and consequent division of labor, and facility of production, comes 
 to furnish other countries with many articles, and, in exchange, 
 to receive from them many other articles. This forms another 
 source from whence the necessaries, conveniences, and amuse- 
 ments of nations may be supplied. A country is enabled to do 
 this from two causes. The soil, climate, and natural productions 
 of countries are various. Hence one country has generally 
 peculiar advantages over others in manufacturing certain articles. 
 Again, one country exceeds another in the amount of capital it 
 possesses, and consequently in the skill with which its industry 
 is applied ; hence, also, there are articles which it can produce 
 in greater perfection than other countries, with greater facility, or 
 both. 
 
 " This is the origin, and these are the advantages, of foreign 
 trade. By means of it two or more nations are enabled to ex- 
 change with one another what would otherwise have been to 
 each superfluous for what, through these exchanges, procures to 
 each an additional amount of the necessaries, conveniences, and 
 amusements of hfe. 
 
 " It is capital which enables them to effect these beneficial 
 exchanges, and the amount of them must be limited by the 
 amount of capital that can be embarked in the employment." 
 What quantity of capital this employment may absorb, what 
 quantity of productions may thus be exchanged between different 
 countries, is a problem which our author has not, as far as I per- 
 ceive, given us certain data for solving. Some of his followers 
 think it illimitable, but it is clear that this was not his opinion, 
 and that, though he did not assign the limits, he nevertheless 
 believed there were limits to it. Accordingly he makes another 
 channel, through which, when these are filled, it may flow, 
 gathering still volume to itself, and adding to the national pros- 
 perity as it proceeds. 
 
ARE NOT IDENTICAL. 41 
 
 " This is what is called the carrying trade, the carrying the 
 surplus produce of one nation to another. Two countries may 
 have products which it would be advantageous for them to ex- 
 change, but they may not have capital sufficient to provide the 
 means necessary for effecting this exchange. In such case, an- 
 other nation having a superabundant capital may embark part of 
 it in performing this office for them, and into this employment a 
 country so circumstanced naturally directs such a capital. When 
 the capital stock of any country is increased in such a degree, 
 that it cannot be all employed in supplying the consumption, and 
 supporting the productive labor 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."* 
 
 It may be observed, however, with regard to this last em- 
 ployment, which our author assigns to capital, that it implies a 
 superiority in the progress of the productive industry of the 
 country enjoying the trade, which cannot be calculated on be- 
 forehand. A nation can only possess a carrying trade, from other 
 nations wanting foreign trade. Though it may, therefore, form 
 a source of gain to a particular nation, it seems not so properly 
 to be reckoned among the causes of the wealth of nations ; for, 
 with the general progress of that wealth, according to the theory 
 of our author, it would decay. 
 
 The ingenious theory, of the main elements of which, I have 
 thus attempted to delineate the outlines, its eminent author has 
 illustrated with a felicity of observation, and laboriousness of re- 
 search, which it were as vain to attempt to depreciate, as super- 
 fluous to praise. He conceives that it establishes the following 
 conclusions. 
 
 " The natural effort of every individual to better his own con- 
 dition, when suffered to exert itself with freedom and security, is 
 so powerful a principle, that it is alone, and without any assist- 
 ance, not only capable of carrying on the society to wealth and 
 prosperity, but of surmounting a hundred impertinent obstruc- 
 tions with which the folly of human laws too often encumbers its 
 operations ; though the effect of these obstructions is always, 
 more or less, either to encroach upon its freedom or to diminish 
 its security. "f That " every system which endeavors, either, 
 » Wealth of Nations, B. II. c. V. i B. IV. c. V. 
 
 6 
 
42 INDIVIDUAL AND NATIONAL INTERESTS 
 
 by extraordinary" encouragements to draw towards a particular 
 species of industry a greater share of the capital of the society, 
 than what would naturally go to it, or, by extraordinary restraints, 
 to force from a particular species of industry some share of the 
 capital which would otherwise be employed in it, is, in reality, 
 subversive of the great purpose which it means to promote. It 
 retards instead of accelerating, the progress of the society towards 
 wealth and greatness ; and diminishes, instead of increasing, the 
 real value of the annual produce of its land and labor." And 
 therefore, that " all systems, either of preference or restraint, 
 being completely taken away, the obvious and simple system of 
 natural liberty establishes itself of its own accord. Every man, 
 as long as he does not violate the laws of justice, is left perfectly 
 free to pursue his own interest his own way, and to bring both 
 his industry and capital into competition with those of any other 
 man, or order of men. The sovereign is completely discharged 
 from a duty, in attempting to perform which he must always be 
 exposed to innumerable delusions, and for the proper perfol'mance 
 of which no human wisdom or knowledge could ever be suffi- 
 cient ; the duty of superintending the industry of private people, 
 and of directing it towards the employments most suitable to the 
 interest of the society." * 
 
 I expect in the sequel to show that the system contains certain 
 fundamental errors invalidating very many of the conclusions, 
 which the author desires to establish. In the mean time, 
 passing all such discussions, and viewing the subject in some- 
 thing of the light in which it seems to have been contempla- 
 ted by Adam Smith himself, I would observe, that his system, 
 if correct, must be consistent with itself, and with admitted 
 facts. His theory pretends to show, that the source of the 
 wealth of nations, the abundance, that is, of all the materials 
 of comfort and enjoyment, the necessaries, the conveniences, 
 the amusements of life which men possess, is to be found in 
 the gradual accumulation of capital by the undisturbed industry 
 and economy of individuals, continually, through the division of 
 labor, introducing improvements in the modes in which this labor 
 operates with that capital, and, consequently, increasing with the 
 greatest possible rapidity the returns from them. His doctrine is, 
 
 * Wealth of Nations, B. IV. c. IX. 
 
ARE NOT IDENTICAL. 43 
 
 that the accumulation of capital by individuals, being thus the 
 only tiling required to produce that abundance with the greatest 
 possible rapidity, ought never to be interfered with by the 
 legislature ; and that, if he does so, it must necessarily be to the 
 detriment of the society for which he legislates. If, therefore, 
 even according to him, there are other sources, than the mere 
 accumulation of capital, and consequent division of labor, on 
 which nations are dependent for turning their labor and capital 
 to the best account, and thus drawing from their resources the 
 most abundant returns of necessaries, conveniences, and amuse- 
 ments, that is of wealth ; in so far, his theory would seem im- 
 perfect, and his doctrine inapplicable. If we then in particular 
 turn to the part of the system with which we are specially 
 interested, we find, in reality, that as far as it is concerned, the 
 theory is thus inconsistent with events admitted by its author, 
 that hence this portion of it is contradictory to itself, and to 
 admitted phenomena, and that consequently the doctrine drawn 
 from it cannot here be maintained. 
 
 In the account of the progress of opulence, given in the Wealth 
 of Nations, we find assigned, as one of the causes of it, the intro- 
 duction into a country of new manufactures. " According to the 
 natural course of things," we are told, " the greater part of the 
 wealth of any growing society is first directed to agriculture, 
 afterwards to manufactures, and last of all to foreign commerce."* 
 " After agriculture, the capital employed in manufactures puts 
 into motion the greatest quantity of productive labor." f The 
 utility of such manufactures is enlarged on in many parts of the 
 work. " They give a new value to the surplus part of the rude 
 produce by saving the expense of carrying it to the water side, 
 or to some distant market, and they furnish cultivators with 
 something in exchange for it, that is either useful or agreeable to 
 them, upon easier terms than they could have obtained it before. 
 The cultivators get a better price for their surplus produce, and 
 can purchase cheaper other conveniences which they have occa- 
 sion for. They are thus encouraged and enabled to increase 
 this surplus produce by a farther improvement and better cultiva- 
 tion of the land ; and as the fertility of the land had given birth 
 to the manufacture, so the progress of the manufacture reacts 
 upon the land, and increases still farther its fertility. The manu- 
 
 * Wealth of Nations, B. III. c. IX. \ B. II. c. V. 
 
44 INDIVIDUAL AND NATIONAL INTERESTS 
 
 facturers first supply the neighborhood, and, as their work im- 
 proves and refines, more distant markets. For though neither 
 the rude produce nor even the coarse manufacture could, without 
 the greatest difficulty, support the expense of a considerable land 
 carriage, the refined and improved manufacture easily may. In 
 a small bulk it frequently contains the price of a great quantity of 
 rude produce." * " The revenue of a trading and manufacturing 
 country must, other tilings being equal, always be much greater 
 than that of one without trade or manufactures. By means of 
 trade and manufactures a greater quantity of subsistence can be 
 annually imported into a country than what its own lands, in the 
 actual state of their cultivation, could afford. The inhabitants of 
 a town, though they frequently possess no lands of their own, 
 yet draw to themselves, by their industry, such a quantity of the 
 rude produce of the lands of other people as supply them, not 
 only with the materials of their work, but with the fund of their 
 _ subsistence. What a town always is in regard to the country in 
 its neighborhood, one independent state or country may fre- 
 quently be with legard to other independent states or countries.f 
 Commerce and manufactures gradually introduced order and 
 good governmicnt " (into Europe) " and with them the liberty 
 and security of individuals, among the inhabitants of the country 
 who had before lived almost in a continual state of war with their 
 neighbors, and of servile dependency upon their superiors.;]; 
 
 " No foreign war, of great expense or duration, could con- 
 veniently be carried on by the exportation of the rude produce 
 of the soil. The expense of sending such a quantity of it to a 
 foreign country as might purchase the pay and provisions of an 
 army would be too great. Few countries, too, produce much 
 more produce than what is sufficient for the subsistence of their 
 own inhabitants. To send abroad any great quantity of it, there- 
 fore, would be to send abroad a part of the necessary subsistence 
 of the people. It is otherwise with the exportation of manufac- 
 tures. The maintenance of the people employed in them is kept 
 at home, and only the surplus part of their work is exported. 
 Among nations to whom commerce and manultictures are little 
 known, the sovereign, upon extraordinary occasions, can seldom 
 draw any considerable aid from his subjects.^ In modern war 
 
 * Wealth of Nations, B. III. c. III. t B. III. c. IV. 
 
 t B. IV. c. IX. § B. IV. c. I. 
 
ARE NOT IDENTICAL. 45 
 
 the great expense of fire arms gives an evident advantage to the 
 nation which can best afford that expense ; and, consequently, 
 to an opulent and civilized over a poor and barbarous nation." 
 
 According to our author, some of these manufactures proceed 
 from the original rude arts of the country cultivated and refined 
 by the gradual progress of capital and of the division of labor ; 
 others are introduced from foreiirn states. This transfer takes 
 place in the following manner. Trade first, by degrees, intro- 
 duces a taste for the foreign manufacture ; the demand for it 
 increases with time and the opulence of the society. But when 
 this trade has become so general as to occasion an exiensive 
 consumption, the merchants of the country, to save the expense 
 attending the transport of the article from a foreign country, 
 introduce the manufacture of it at home. 
 
 In some cases, then, the increase of capital, arising from the 
 accumulation of individuals, and division of labor thence arising, 
 is not, it would appear, sufficient alone to account for the progress 
 of improvement, and consequent production of fresh funds out of 
 which wealth may grow. For, in cases where the raw materials 
 exist, and capital to divide labor and put it in motion also exists, 
 these are sometimes confessedly dependent on the importation of 
 new arts from other countries, for the means of beino; advantao-e- 
 ously directed. These admitted facts are certainly not in ac- 
 cordance with our author's theory. Passing, however, the con- 
 sideration of this at present, I should wish to direct the reader's 
 attention to the application of his peculiar doctrines to events of 
 this class ; and, that I may do so, it is necessary to examine them 
 with somewhat more attention. 
 
 When goods are transported from a distance, a great part of 
 their price is made up of the expense, attending the transport. 
 This arises not merely from the simple expense of carriage, but 
 from the risk attending it, from the perils of land and water, and 
 the carelessness or knavery of those who are entrusted with it ; 
 from the profits which the different capitalists, through whom they 
 may be transferred, exact, and from the damage to which com- 
 modities are subject by being long kept on hand. The price of 
 very many commodities transported from one country to another 
 is doubled by the influence of these causes ; not a few of them 
 derive more than three fourths of their value from them. 
 
 Hence the transfer of the manufacture of such goods to the 
 
46 INDIVIDUAL AND NATIONAL INTERESTS 
 
 countries to which, when manufactured, they were before sent, 
 is very highly advantageous to those countries. It is advantage- 
 ous from the saving to the national income which it effects by 
 doing away with the expense of transport ; from furnishing, 
 according to our author, a new and more profitable employment 
 for capital ; and from the general effects it produces on the 
 national prosperity, as exemplified by him in the passages I have 
 quoted. It must be allowed, however, that this introduction of 
 such manufactures, by the violent operation, as he terms it, of 
 the stocks of particular merchants and undertakers, who establish 
 them in imitation of some foreign manufactures of the same kind, 
 is a matter of great difficulty. 
 
 For, in the first place, the materials which the home supply 
 affords will, in all probability, be not altogether similar to those 
 that are used for the same purpose in the foreign country. Some 
 may be better, some worse adapted to the purpose, but they can 
 scarcely be altogether alike. They must vary, too, in their 
 price, some being cheaper, some dearer, than in the country from 
 whence the manufacture is broug-ht. 
 
 The greater part of manufactures are also influenced by the 
 climate. The dryness or moisture of the atmosphere, the de- 
 grees of heat and cold, the brightness of the sky and consequent 
 intensity of the light, are circumstances which all, more or less, 
 affect many manufactures. 
 
 The proportion between the rates of wages and profits of 
 stock is also very different in different countries, and it consider- 
 ably influences the determination of what may be the most ad- 
 vantageous mode of conducting any process in any country. 
 
 When the discovery of that exact mode of procedure, which 
 the relations and connexions that these new circumstances have 
 to each other renders most expedient, has once been made, it 
 may be found that they are on the whole more favorable, and 
 such as will produce a better article, at less cost, in the country 
 to which the manufacture is transported, than in that in which it 
 was originally exercised. To make the discovery, however, of 
 this exact procedure is always a matter of difficulty, and implies 
 almost necessarily the previous commission of many errors and 
 mistakes, and the incurring of much needless expense and loss. 
 A single individual, whatever intelligence and application he may 
 possess, can scarce hope to arrive at it ; it requires the efforts of 
 
ARE NOT IDENTICAL. 47 
 
 many individuals, continued through a considerable course of 
 
 time. 
 
 But these modifications, in the process of any manufac- 
 ture, which its removal from one country to another demands, 
 are far from being the only difficulty attending that removal. 
 An accurate knowledge of the principles of the manufacture, and 
 of the manner in which every part of it is carried on in the 
 foreign country, must be obtained ; the requisite machinery has 
 to be provided, and workmen, possessing the skill and dexterity 
 which each part of the process requires, must be procured. These 
 are generally matters of great difficulty. 
 
 Very few individuals have a thorough knowledge of every 
 different part of any complicated manufacture. In examining 
 any large and successful manufacturing establishment, we com- 
 monly find that the various parts of it depend, for the perfection 
 with which they are conducted, on the efforts of different indi- 
 viduals, who devote their whole attention to their own depart- 
 ments, and are not at all qualified to change places with each 
 other ; while the director of the whole has only such a general 
 knowledge of each as enables him to say when it is properly con- 
 ducted, not himself to point out the exact mode of best conducting 
 it. It is his business to preserve the economy of the whole, and 
 to search out the individuals best fitted for carrying on every part. 
 Hence the undertaker of any such work, in a country where it 
 has not been practised, has not only to engage one, but generally 
 many individuals, in order that the different processes of the 
 manufacture may be properly conducted. The difficulty of 
 finding persons of sufficient intelligence and integrity for the 
 purpose, who will remove to a distant country, without an ex- 
 travagant reward, is very great, and the risk of being imposed on 
 by engaging persons of insufficient skill, and consequently suffer- 
 ing considerable loss, is not small. The difficulty of transporting, 
 or of constructing there, the necessary machinery, is often still 
 greater ; and when these are procured, workmen having the 
 requisite skill and dexterity for performing the mere manual part 
 are still wanting. These, if brought from a foreign country, as 
 is often necessary, can only be induced to expatriate themselves 
 by the receipt of exorbitant wages ; and, even if the natives of 
 the country where the new manufacture is to be established can 
 be trained from .the first to execute the necessary manual opera- 
 
48 INDIVIDUAL AND NATIONAL INTERESTS 
 
 tions, besides the loss arising from their deficient dexterity, they 
 will demand higher wages than those engaged in established 
 employments. A man naturally prefers continuing in any sort 
 of work which he understands, rather than displaying his awk- 
 wardness in attempting to perform an operation that is strange to 
 him. Besides, he has, in general, reason to apprehend that, 
 should the new manufacture fail, he will have difficulty in again 
 finding employment in the trade he had forsaken. On these 
 accounts it happens that " when a projector attempts to establish 
 a new manufacture, he must at first entice his workmen from 
 other employments by higher wages than they can either earn 
 in their own trades, or than the nature of his work would other- 
 wise require ; and a considerable time must pass away before he 
 can venture to reduce them to the common level."* 
 
 All these circumstances create so many obstacles to the efforts 
 of private individuals, in their endeavors to carry a manufacture 
 from a country in which it already prospers, to another in which 
 it is unknown, that it is, I believe, very rarely they have suc- 
 ceeded in doing so, without the occurrence of some favorable 
 conjuncture of events, to aid them in the project. 
 
 In point of fact it will be found, that the transfer of manufac- 
 tures from one nation to another, or rather the general propa- 
 gation, through all countries, of this most important source of 
 the opulence of every one, has been chiefly owing to causes, 
 which, at first sight, would seem little calculated to produce so 
 beneficial effects. Wars and conquests, — tyranny and persecu- 
 tion, — the jealousy and hatred of rival states, have, strange to 
 say, been the main agents in disseminating arts and industry over 
 the globe, and thus ameliorating the social condition of the whole 
 human race. Events, that, to those to whom they happened, 
 brought nothing but calamity and suffering, have procured pros- 
 perity and opulence to the generations that have succeeded 
 them ; convulsions, that disturb and derange the frame of civil 
 society, like those which occasionally shake and desolate the globe, 
 in the midst of present destruction and devastation, carrying often 
 the elements of future fertility and abundance. 
 
 Manufactures have commonly been carried to a distance by 
 the men who have exercised those manufactures. But no one 
 
 * Wealth of Nations, B. I. c. X. 
 
ARE NOT IDEiNTICAL. 49 
 
 willingly expatriates himself. They even, who would seem to 
 have least to attach them to their native soil, the poor mechanic, 
 and drudging lahorer, cling to it with the greatest tenacity, and 
 generally quit it not, unless forced from it by inevitable necessity 
 or by the continued pressure of some heavy evil. In this 
 way the ills, that the tyranny of despots, or civil and religious 
 factions, or war, or famine, brings upon communities, have often 
 compelled great numbers of their most industrious citizens, to 
 abandon their homes, and seek refuge in foreign countries. These 
 emigrations have been powerfully instrumental in improving the 
 arts of civilized life and difRising a knowledge of them over the 
 earth. Perhaps few arts would have much passed the naiTow 
 limits to which their first discovery confined them, had not com- 
 munities been subject to be torn in pieces, and scattered abroad, 
 by the violence of the events to v;hich we allude. They have 
 been taking place in every age since the world began, and have 
 been, every now and then, forcing large bands of men to quit 
 their native homes and seek refuge in foreign countries. When- 
 ever such emigrations occur, they carry the knowledge and skill 
 of the countries they leave, into those in which they settle, and 
 diffuse them over them ; by bringing together the different arts of 
 different countries, they enable one to borrow from the other, and 
 raise all nearer to perfection ; and, by giving opportunity to them 
 to unite with one another, from that union, they occasionally 
 produce some that did not before exist. In all these modes, 
 they have promoted very greatly the progress of human im- 
 provement. The influence of these causes, though more powerful 
 in remote ages than in the present times, has not yet ceased. It is 
 shown in events of very recent date or actual progress. To 
 it we chiefly ovre the origin of tliose flourishing states, which 
 the European race have raised up in North America ; and the 
 rapid progress over the Western Hemisphere, of every improve- 
 ment that art or science effects in the Eastern. 
 
 Besides the direct agency which these outbreakings of the 
 violent passions of mankind, by disturbing and deranging the 
 smooth and uniform course of human existence, have had in 
 casting it into new and often improved forms, they have produced 
 similar effects in a manner less conspicuous and evident. Com- 
 merce introduces a taste for the productions of the arts of one 
 country into others, which are remote from it. These productions, 
 
 7 
 
50 INDIVIDUAL AND NATIONAL INTERESTS 
 
 at first regarded as mere superfluities or luxuries, pass, in time 
 and from habit, into things essential to the comfort, almost to the 
 existence, of those who have become accustomed to tlieir use. 
 War interrupts this commerce and thus cuts off the supply that 
 it afforded of such articles. Excited by the rewards offered by 
 the eagerness of a demand that cannot be supplied from abroad, 
 the domestic industry of the country then exerts itself, first, to 
 produce rude imitations of the foreign commodity, and at length, 
 rival manufactures. This is a cause which has extensively op- 
 erated in modern times, in spreading manufactures from country 
 to country. It is to the wars springing out of the French rev- 
 olution, and the interruption to European commerce that they 
 occasioned, that the first rise of many manufactures in different 
 parts of the old and new world, which are now in a very prosperous 
 condition, is to be traced. 
 
 But besides the influence which the violent operation of for- 
 eign wars, and intestine commotions, has had in promoting the 
 propagation of arts over the world, many of them vmquestionably 
 have been encouraged and enabled to extend themselves to, and 
 take root in, countries rem^ote from the seats where they originally 
 flourished, by the direct efforts of the legislators of such coun- 
 tries, to draw them there, to cherish their first feeble advances, 
 and to promote their subsequent growth and vigor. There are 
 very few productions of modern art, that do not stand indebted 
 to the legislators of the countries in which they are manufactured, 
 for their advancement and perfection. 
 
 These three causes have, generally, more or less cooperated 
 with each other in the extension and advancement of every 
 branch of art. The cases where the efforts of private individ- 
 uals, unaided by one or all of them, have been successful in 
 transferring any manufacture to a distant country, are, as I have 
 already observed, exceedingly rare. 
 
 In accordance with the doctrine which he supports throughout, 
 it is here maintained by our author that the last of these causes 
 operating in the production of new arts, or in their introduction 
 into a country, the interference, viz. of the legislator, is improper, 
 because necessarily injurious ; and that his agency, so directed, 
 always, and from its very nature, instead of promoting the ad- 
 vancement of the general opulence and prosperity, operates in a 
 manner prejudicial to both. Allowing that this introduction of 
 
ARE NOT IDENTICAL. 5J 
 
 new arts and manufactures from foreign states is, in itself, bene- 
 ficial, in so much that he assigns it, as we have seen, as one of 
 the causes of countries becoming wealthy and prosperous ; he 
 maintains, that this particular mode of introducing them is neces- 
 sarily injurious. We have then to inquire, if there are any other 
 means by which, according to his principles, this acknowledged 
 most beneficial result can be brought about. 
 
 The violent operation of foreign wars or domestic disturbances, 
 will scarce, I think, be said to be more advantageous methods of 
 effecting this purpose, than the restrictions and bounties of the 
 legislator. At all events such causes are continually diminishing 
 in their frequency and the vigour of their operations, and be- 
 coming more and more beyond the reach of our calculations. 
 For spreading the useful arts from people to people, this 
 element confessedly of very great importance in the advance of 
 the general welfare of mankind, there remains then, according 
 to these principles, but the unaided efforts of private individuals 
 alone. 
 
 It must be kept in mind, that, by the efforts of individuals, are 
 meant, according to our author, their endeavors to better their 
 condition ; that is, as he defines it, to increase their fortunes. 
 But, in order to add to his fortune, one must get more than he 
 gives. No such efforts can ever lead any individual to embark 
 in a project that will probably take more from him, than it will 
 return to him. Now, to transfer a manufacture from one country 
 to another, must always be a very tedious and expensive opera- 
 tion, for any individual to perform. The consideration of his 
 own profit, the sole motive according to our author, which deter- 
 mines the o\^^ler of a capital to employ it in any undertaking, 
 would never lead one, to engage in the enterprise of establishing 
 a new manufacture in any country unless of such commodities as 
 were of common consumption in it, and which he could therefore 
 be sure to sell. Those commodities being of common consump- 
 tion, and not produced within the country, must at the time 
 be furnished by some foreign state, and, consequently, to procure 
 their sale, he must be able to supply them, at as cheap a rate as 
 that state. The effecting this, for reasons I have stated, would 
 generally take more time and money, than any private individual 
 can afford. But, granting that the funds of some private individ- 
 uals could afford this requisite outlay, and that they should sue- 
 
52 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ceed in bringing the manufacture to such perfection as to enable 
 them to sell the commodity on terms equal to those of the foreign 
 merchant, or lower than his, the more difficult question is, how is 
 this great outlay to be reimbursed ? A great part of an individ- 
 ual's capital has been expended. This expenditure can, evidently, 
 be reimbursed to him only by his drawing proportionally larger 
 profits, than he otherwise could, from what remains. To balance 
 the extraordinary outlay, he must have extraordmary returns. 
 
 But profits far exceeding the usual rate of profit can scarcely 
 ever be drawn, for any time from, any employment. " If, in 
 the same neighborhood, there was any employment evidently 
 more advantageous than the rest, so many people would 
 crowd into it, that its advantages would soon return into the 
 level of other employments."* It is no doubt true, that the 
 proprietor of such new manufacture might, sometimes, not only 
 succeed in establishing it, but in keeping secret the great profits 
 he made from it, for a considerable period. This is a piece of 
 good fortune, however, which, though it might sometimes befall 
 an individual, he could never beforehand fairly calculate on. It 
 is much more probable that his success would be blazoned abroad 
 and exaggerated, that several projectors w^ould establish themselves 
 beside him, and, by bribing his workinen with somewhat higher 
 wages, with comparative ease, succeed in depriving him of the 
 profits he might otherwise have drawn from his extraordinary 
 outlay of labor and capital.f It may, therefore, I think, be safely 
 laid down as a principle, that, in all ordinary cases, a due regard 
 to their own interests cannot be a motive sufficient to prompt 
 individuals to such undertakings. It may no doubt happen, as 
 capitalists are every now and then engaging in injudicious pro- 
 jects, and such as either injure or ruin them, that some one may 
 be imprudent enough to enter on such a project as this, and may 
 succeed in introducing a particular manufacture, though with the 
 loss of part, or of the whole of his capital. But, even granting 
 that such an occurrence as this may sometimes take place, it 
 
 ** Wealth of Nations, B. I. c. X. 
 
 t This accounts for a remark of our author : '' Tlie undertaker of a great 
 manufactory is sometimes alarmed if another work of the same kind is estab- 
 lished within twenty miles of him. The Dutch undertaker of the woollen 
 manufacture at Abbeville, stipulated, that no work of the same kind should 
 be established within thirty leagues of that city." 
 
ARE NOT IDENTICAL. 53 
 
 would be far from serving to help out the theory we are discuss- 
 ing. ''■ Every injudicious and unsuccessful project in agriculture, 
 mines, fisheries, trade, or manufactures, tends to diminish the 
 funds destined for the maintenance of productive labor. In every 
 such project, though the capital is consumed by productive hands 
 only, yet, as by the injudicious manner they are employed, they 
 do not produce the full value of their consumption, there must 
 always be some diminution in what would otherwise have been 
 the productive flmds of the society."* This project then, being 
 injudicious and unsuccessful, for it would have occasioned the 
 loss of a portion of individual capital, must, by these principles, 
 be injurious to the society. 
 
 If it be said by any supporter of these doctrines, that this is 
 too strict and constrained an interpretation of them, and that the 
 loss which the society sustains, by the destixiction of the capital 
 of the original introducer of the manufacture, must be allowed to 
 be made up by the gain which it receives from the profits made 
 by those who afterwards engage in it ;f I reply, that I perfectly 
 agree with him in his conclusions. I too think, that the small 
 present expenditure of the funds of the society which the project 
 may occasion, may be more than repaid, by the large future rev- 
 enue that it will bring in. The only difference between us is, 
 that the doctrines he advocates, teach us to wait, till the miscal- 
 culations of some unfortunate projector confer on us a public 
 benefit, whereas, I hold, that it would be more just and judicious 
 that the necessary fii'st cost of the scheme should be borne by the 
 whole community ; more just, as thus the burden necessary to 
 be borne to procure a common benefit will be divided amongst 
 all, instead of being sustained by one; more judicious, as the 
 society will not have to wait, for the attainment of a desirable 
 object, on so doubtful a chance as the folly of projectors. 
 
 It may also happen, that an individual, by some rare concurrence 
 of accidents, may become initiated into all the secrets of some 
 foreign manufacture, and, by some equally rare and happy union 
 of good fortune and ingenuity, may succeed in introducing it into 
 
 * Wealth of Nations, B. II. c. III. p. 131. 
 
 t " The landlord can afford to trj' experiments and is generally disposed to 
 do so. His unsuccessful experiments occasion only a moderate loss to him- 
 self. His successful ones contribute to the improvement and better cultiva- 
 tion of the whole country." B. V. c. II. 
 
54 INDIVIDUAL AND NATIONAL INTERESTS 
 
 his own country with profit to himself. To wait, however, for 
 this, or any such hke kicky chance, or singularly fortunate con- 
 currence of circumstances, while better could be done, would be 
 like waiting till the natural actions of the winds and tides should, 
 by some strangely propitious concurrence of events, cast upon 
 our shores a valuable plant or seed, that we might directly pro- 
 cure for the mere trouble and expense of sending for it. 
 
 There are, also, another class of motives, capable, no doubt, 
 of leading even individuals into such undertakings, and of carry- 
 ing them successfully through them. The love of country or 
 fame, or the desire to gratify personal vanity, are powerful mo- 
 tives of human action, and may sometimes even be directed into 
 such channels as this. But, as the tendency of such motives to 
 promote the growth of national wealth is opposed to the principles 
 of our author, and is expressly denied by him, we need not here 
 enter into any inquiry concerning them. 
 
 There is, however, one case, in which it cannot be denied, 
 that the efforts of individuals to promote their own interests may 
 be sufficient to introduce a new manufacture. If, in the progress 
 of events, the requisites for a foreign manufacture come to be 
 produced in so great abundance, and with so much facility, in 
 any country, that a projector there finds that he can from the 
 first afford to manufacture the commodity, and sell it at as low a 
 rate as the foreign merchant, a due regard to self-interest will 
 certamly direct a portion of the national capital into that employ- 
 ment. But, a case of the circumstances of a country being so 
 peculiarly favorable to the practice of a foreign art, that, in the 
 very first essays it makes in it, it can successfully compete with 
 another, where that art has been long established, is assuredly 
 very rare ; and, if any such case occur, we may be satisfied that 
 the manufacture might, with much advantage, have been pre- 
 viously introduced. 
 
 In a passage already quoted, it is observed, that, " when 
 a taste for foreign manufactures becomes general, the mer- 
 chants, in order to save the expense of carriage, naturally en- 
 deavor to establish some manufacture of the same kind in their 
 own country." These expressions are somewhat too loose 
 to coincide with our author's theory. It cannot be to save 
 the expense of carriage, but to add to his own riches, that a 
 merchant will endeavor to do any such thing. The consumma- 
 
ARE NOT IDENTICAL. 55 
 
 tion of such a measure, by saving a considerable expense to the 
 community, might indeed add largely to the means of mcreasing 
 their wealth in possession of all the merchants, or rather of all 
 the members of the society ; but " it is his o\\ti advantage, and 
 not that of the society, which every member of it has in view ; " 
 and, in this system of perfect liberty and freedom from restraint, 
 which is asserted to be the true plan of carrying the general 
 prosperity of the community to the highest pitch, the difficulty 
 is, to discover a method of inducing an individual to incur an 
 unavoidable outlay, the returns from which, although very bene- 
 ficial to the whole society, are no more so to him who lays out a 
 great deal, than to others who lay out nothing. Union is said to 
 give strength. But union cannot exist unless there be a bond to 
 unite, and this bond must confine and restrain. The rods to 
 make a bundle were tied together. IMen are tied by law, a 
 bond binding all to pursue the course supposed to conduce most 
 to the general happiness. This bond, though restraining indi- 
 vidual freedom of action, and preventing individuals from pursu- 
 ing the course which they might find most conducive to their 
 0^11 private happiness, has not, on the whole, been esteemed to 
 have slightly promoted the great end for which it exists, the 
 general wellbeing of mankind. We seek to rectify its errors, 
 not to abolish it. The peculiarity of this system, relating to this 
 particular part of the field of human action, is, that it maintains 
 that men cannot in it, as elsewhere, unite, so as to attain a com- 
 mon good. That, on the contrary, when they so unite, instead 
 of attaining a common good, they necessarily burden themselves 
 with a common evil. It aims, not to remedy any errors com- 
 mitted in adjusting the bond, but, to cut it asunder and cast it 
 away. It is called a system of complete freedom from restraint 
 and perfect liberty. These terms, when looked at nearly, will 
 be found to mean a dissolution of all bonds and total isolation of 
 interests. Hence, in this particular case, where an end is to be 
 gained, the attainment of which it is admitted would be beneficial 
 to all, it is yet maintained that it is impossible for all to bring it 
 to pass without hurting instead of benefiting themselves. 
 
 It is impossible to shut the eyes to the fact, that the introduc- 
 tion of an art into any country, enabling the labor of its inhabit- 
 ants at once to transmute the products, which nature, in conjunc- 
 tion with their own industry, procures for them, into thecommodi- 
 
56 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ties their wants demand, instead of sending them to a distance to 
 other people to effect that change, is a great good to all, were it 
 only for the mere saving of transport thus effected ; but it is 
 maintained, that it is mipossible for all the members of the com- 
 munity advantageously to unite in bringing about this common 
 benefit. It is clearly seen, that a new channel might be opened 
 from the exhaustless river of human power, springing fi-om the 
 mingled sources of nature and art, and that, if so, a plenteous 
 stream would flow in on the community from which individuals 
 drawing might largely add to the general opulence. But some 
 means must be employed to open it up. There is an obstraction 
 in the w^ay that must previously be overcome ; a rock blocking it 
 up that must be removed. No individual will open up the ' 
 channel, because, were he so to do, he could derive no more 
 benefit from the labor than others who had not labored. The 
 whole society, or rather the legislator, the power acting for the 
 whole society, might do so, and in suxiilar cases has done so, and, 
 to judge of the measure by the events consequent on it, with the 
 happiest success. Why, then, should he not ? 
 
 The arguments advanced by the author of the Wealth of Na- 
 tions, to prove that the legislator never ought to lend his aid to 
 effect such a purpose, are chiefly contained in the second chapter 
 of the fourth book. They will be found to rest almost altogether 
 on the assumption, that national and individual capital increase 
 in precisely the same manner. This notion, I flatter myself I 
 have shown, cannot, by any means, be taken as a self-evident 
 principle, or one so firmly estabhshed as to serve to build an 
 important practical doctrine on it. But, even admitting that the 
 two processes are similar, the arguments of Adam Smith would 
 not altogether bear out his conclusions. 
 
 It is, he says, and the sentmient serves for a motto, and forms, 
 indeed, the substance of two volumes that have contributed 
 greatly to spread his doctrines over Europe, " It is the maxim of 
 every prudent master of a family, never to attempt to make at 
 home what it Avill cost him more to make than to buy. The 
 tailor does not attempt to make his own shoes, but buys them of 
 the shoemaker. The shoemaker does not attempt to make his 
 own clothes, but employs a tailor. The farmer attempts to make 
 neither the one nor the other, but employs those different artificers. 
 All of them find it for their interest to employ their whole industry 
 
ARE NOT IDENTICAL. 57 
 
 in a way in which they have some advantage over their neigh- 
 bors, and to purchase with a part of its produce, or, what is the 
 same thing, with the price of a part of it, whatever else they have 
 occasion for. What is prudence in the conduct of every private 
 family can scarce be folly in that of a great kingdom." 
 
 To make the fanciful parallel here assumed as complete, in 
 any sense just, it would be necessary to place the tailor at a hun- 
 dred miles distance from the shoemaker. Were he at this dis- 
 tance, and did he find that the expense of getting a pair of shoes 
 carried so far was considerable, perhaps exceeding their first cost, 
 he might find it good economy even to make them himself. To 
 be sure, the procuring the requisite tools and the learning their 
 use, would render the making of the first few pairs much more 
 expensive than the purchasing of them would have been. But 
 this necessary dearness of the first articles produced might be 
 compensated by the cheapness of those produced subsequently. 
 In the same way, though a fanner, if the tailor and shoemaker 
 were near at hand, would do wisely to employ them, yet, if they 
 were at a great distance, he might possibly with advantage dis- 
 pense with their services, and set some of his family to make 
 clothes and shoes for the rest. A farmer, indeed, would have 
 peculiar inducements to practise some trades, those, namely, for 
 which he supplied the raw materials, as by doing so he would 
 be saved the carriage, both of the articles made, and of the stuff 
 for making them. It is thus, that, in fact, in most countries where 
 the population is scattered and the internal communications are 
 bad, many trades are practised in the farmers' houses and by 
 their own famihes. In this way it is that, in very many of the 
 recently settled parts of North America, every operation that the 
 wool undergoes, from the takino- off the fleece to the cutting and 
 making up the cloth, is performed in the farmer's house and by 
 his own family. A similar state of things caused a similar prac- 
 tice to prevail in England a century ago, and, at present, keeps 
 up many of those manufactures which are properly termed 
 domestic, in many other parts of Europe. In Canada it is not 
 uncommon for the farmer to have, not only the whole processes 
 that wool undergoes till it come to be worn, carried on by the 
 members of his own family, but also to get a great variety of 
 other things made by them, which he could not procure other- 
 wise unless by sending to an inconvenient distance. The mend- 
 
 8 • 
 
58 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ing of shoes, very generally, the making of them, not unfre- 
 quently, and sometimes even the manufacturing the leather, are 
 in recent and remote settlements thus performed. The latter 
 process, I may add, from various circumstances, but chiefly from 
 the use of the bark of a sort of pine peculiar to the country, and 
 in general very common, and which, unlike that of the oak, 
 is very thick and easily collected, is much less expensive in 
 Canada than in Britain. 
 
 I knew two brothers whose farms or estates lay in one of the 
 interior districts of that country, in the midst of its forests, and 
 consequently at a considerable distance, perhaps twenty or thirty 
 miles, from artificers of any description. Having each of them 
 large families and productive farms, they had occasion for the 
 services of various artificers, and had the means of paying them. 
 Nevertheless, they very rarely employed them ; almost every 
 article they required was made by some one of the two families. 
 As they were prudent and sagacious men, of which they produced 
 the best evidence in the general success of their undertakings, 
 and the prosperity of the settlement of which they were at the 
 head, I think it likely, tliat in this also they had turned their 
 means to the best account. In fact, as they who are familiar 
 with the details of beginning settlements in North America, will 
 admit, by this plan they in a great measure obviated the two 
 chief drawbacks on the prosperity of new and remote settlements, 
 the excessive dearness of every article not produced there, from 
 the great expense attending the transport of the raw produce and 
 retransport of the manufactured goods, and the serious incon- 
 venience arising from the difficulty, in such situations, of supply- 
 ing, when necessary, unforeseen but pressing wants. 
 
 Among other things which they got made on their own farms, 
 were boots, shoes, and leather. That they might get this done, 
 they were at the pains and expense of sending one of the young 
 men to some distance, to make himself sufliciently master of those 
 trades for their purpose. They thought, however, that the cost 
 they were thus put to was repaid, thrice over, by the saving of 
 time and expense which it effected for them, in enabling them to 
 make, out of leather which cost them very little, numerous arti- 
 cles that they must otherwise have been constantly sending for 
 to a great distance by roads that were almost impracticable a great 
 part of the season. I do not know whether in this their conduct 
 
ARE NOT IDENTICAL. 59 
 
 was judicious or otherwise, but, it is very certain, that however 
 apparently pradent the measure may have been, and however 
 great the saving effected by it might have been, it was completely 
 contrary to our author's doctrines, and might easily be shown by 
 them to have been necessarily and inevitably injurious. 
 
 We may suppose that, just at the time when these two legislators 
 of this little community had come to the determination of taking 
 means to dispense with the services of the distant tanner and 
 shoemaker, they were addressed on this subject by a philosopher 
 of this school. His reasonings would doubtless have been in the 
 following strain. " You are assuredly wrong in the plan you are 
 going to adopt, for it proceeds upon very erroneous and illiberal 
 principles, as I can easily show you. You are in want, you say, of 
 some pairs of shoes, surely then it is best for you to purchase them 
 where you can get them cheapest. But, by the plan you are 
 taking of going to a great expense to have them made at home, 
 they will certainly cost you more when made there, than if bought 
 «t the place where you have hitherto purchased shoes. And, if 
 that place can supply you with this commodity cheaper than you 
 yourself can make it, better buy it there with some part of the 
 produce of your own industry. The general industry of your 
 settlement must always be in proportion to the capital which 
 employs it, and will not be diminished by being left to be 
 em.ployed in a way in which you have some advantage. By 
 forcing it to produce an object which it can buy cheaper than it 
 can make, it certainly is not employed to the greatest advantage. 
 Let things therefore take their natural course, and shoes will be 
 made at your doors when it is fit for them to be made there." 
 
 To these reasonings our legislators might possibly reply, " We 
 confess that the first pairs of shoes that we get, will cost us much 
 more, thus made at home, than they would do were we to buy 
 them abroad. But then it will only be for the first articles man- 
 ufactured that we shall pay so high, in the end they will come 
 cheaper to us at home than from abroad ; and it is to effect this 
 desirable result, that we are going to undertake the project. We 
 don't understand very well what you mean by the natural course 
 of affairs, but we think the sooner we can get them to take a 
 course, that will before long make things cheaper to us, the 
 better." The answer to this in the words of our author would 
 be: " I don't at all dispute, that, by means of this project, this 
 
 ^.r 
 
60 INDIVIDUAL AND NATIONAL INTERESTS 
 
 particular manufacture may be acquired sooner than it could be 
 otherwise, and after a certain time, may be made at home as 
 cheap, or cheaper, than abroad. But, though the industry of your 
 society may be thus carried with advantage into a particular 
 channel sooner than it could have been otherwise, it will by no 
 means follow that the sum total, either of its industry, or its rev- 
 enue, can ever be augmented by any such project. The indus- 
 try of your society can augment only in proportion as its capital 
 augments, and its capital can augment only in proportion to what 
 can be saved out of its revenue. But the immediate effect of 
 this project of yours is to diminish its revenue ; and what dimin- 
 ishes its revenue is certainly not very likely to augment its cap- 
 ital faster than it would augment, were you to leave capital and 
 industry to find their natural employments." 
 
 Our legislators might still possibly answer. " As far as we 
 can comprehend your arguments they reduce themselves to this. 
 We have to give out what is a considerable sum to us, before 
 we can carry this project into effect, and, for this outlay, you 
 think we shall get no adequate return. Now in this our opinion 
 differs from yours. We know indeed that we must expend some- 
 thing, but we think that in the long run we shall be better repaid 
 for this expenditure, by this undertaking, than by any other in 
 which we could employ our funds. We never yet got any thing 
 without giving something for it, and, although we in this instance 
 give money or money's worth, and get chiefly knowledge and skill 
 in return, yet if you will take the trouble of examining the calcu- 
 lations we have been making of the saving which w'e shall in a 
 few years effect, chiefly by means of this knowledge and skill, on 
 what we annually pay for shoes and boots, we think you will 
 agree with us that we shall gather in three times what we gave 
 out." 
 
 " No no," our philosopher would exclaim, " this is quite un- 
 necessary, I see now how the case stands. I perceive you have 
 got a theory as well as I have. But your theory is that of prac- 
 tical men who reason upon facts, w hereas my theory is built upon 
 general axioms. Now there is this great difference between two 
 such theories, that when they are opposed to each other the latter, 
 such as mine must always be right, the former such as yours 
 wrong. My main axiom on which is founded a great system is, 
 that capital always augments by accumulation. This you per- 
 
ARE NOT IDENTICAL. 6| 
 
 ceive is a general axiom, and however it may be that there may 
 be apparent exceptions to it, yet as it is a general axiom, it is a 
 philosophical consequence that these exceptions can only be appar- 
 ent. Your theory is opposed to this axiom of mine, for you 
 pretend to say that capital may be augmented by other means 
 than simple accumulation, and very strangely assert that, after 
 giving it out of your hands, you will get it replaced to you, with 
 large profit, out of the skill and knowledge which the outlay has 
 procured you. But, as in proof of this you bring me only facts 
 and figures, you will see of course that it is quite unnecessary for 
 me to notice such arguments ; for, however plainly it might from 
 them appear that your scheme is practicable and must ultimately 
 liberally repay your advances, yet, this conclusion being proved 
 by reasoning, is a theory, and that theory having the disadvantage 
 of not being drawn like mine from general axioms, and being 
 merely a laborious deduction from particular observations, it must 
 of necessity follow from indubitable philosophical principles, that 
 it is wrong, and mine right. The case being so, you are, I hope, 
 men of too good sense to dispute the matter farther. Should 
 you however persevere I must take the liberty of telling you that 
 you are too narrow-minded theorists, and that, by interfering, in 
 the manner you are about to do, with the natural course of events, 
 you will infallibly waste the resources of your infant community, 
 and retard its prosperity." 
 
 I apprehend such philosophic arguments would not have had 
 much success with them or other men of practice, and that, even 
 should we take the procedure adopted by individuals, as a fit model 
 for that of nations, we would not find that it altos-ether agreed 
 with the rules which the doctrines of Adam Smith inculcate. 
 The reason is, that individuals, as well as nations, acquire wealth 
 from other sources than mere saving from revenue ; that skill is 
 as necessary, and consequently as valuable, a cooperator with the 
 industry of both, as either capital or parsimony ; and that there- 
 fore the expenditure which either may be called on to make to 
 attain the requisite skill, is very well bestowed. 
 
 But, though skill is valuable both to nations and to individuals, 
 there are many circumstances that render it more so to the former, 
 than to the latter. In the first place, it is more durable. What- 
 ever may be the perfection to which an individual may have 
 brought his skill, dexterity, and judgment, in conducting any par- 
 
62 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ticular set of operations, that perfection perishes with him. What- 
 ever expense it may have cost him to acquire this possession, and 
 however valuable it may be to himself, he cannot transmit it to 
 his heirs. But any addition which a society makes, to the skill, 
 dexterily, and judgment, with which its members exercise any 
 branch of industry, is not of this fleeting nature. Instead of the 
 benefits derived from it, being bounded by the short space of time 
 that the active life of an individual embraces, they are continuous 
 with the national existence. If it be worth while paying a con- 
 siderable apprentice-fee, for the acqusition of an art, which can 
 probably only be exercised for twenty or thirty years, it must be 
 better worth while to pay for one, the advantages derived from 
 the possession of which, may be retained for hundreds or thou- 
 sands of years. 
 
 Again, whatever an individual may expend in acquiring any 
 degree of skill is, to a certain extent, lost to him ; though he may 
 draw a revenue, he cannot draw a capital from it. No portion of 
 the future skilled labor of an individual can be sold, because it 
 can only be sold with himself, and such bargains, sanctioned in 
 ancient, are not so in modern times. No where can one effect- 
 ually make over his services for a certain time to any other per- 
 son, because, no where can he give that person the power of en- 
 forcing their exertion. On the contrary, any portion of the 
 future revenue, yielded, by the skilled industry of a nation, may 
 be sold, and, consequently an addition to the national skill gives a 
 proportional addition to the command of national resources, to meet 
 any sudden emergency. The produce of the general industry 
 of Great Britain, stands mortgaged for a sum, which it would 
 have appeared a century ago utterly impossible to conceive that 
 industry could sustain, because, a century ago, it was impossible 
 to conceive the vast increase which has since been made to the 
 skill, dexterity, and judgment, with which it was then directed. 
 
 Besides these and other differences between the effects result- 
 ing from the acquisition of skill in the pursuits of industry by 
 nations, and by individuals, there is one on which I have already 
 enlarged. An increase of skill seems to be always a necessary 
 concomitant of the increase of national wealth, whereas it is not 
 always a concomitant of the increase of individual wealth. It is 
 not therefore true, that nations and individuals increase their 
 wealth in the same manner, nor, were it so, do the rules, which 
 
ARE NOT IDENTICAL. 63 
 
 modem political economists lay down for the increase of national 
 wealth, agree with those which individuals adopt in their en- 
 endeavors to augment their private stocks. 
 
 The main arguments, however, which the author brings for- 
 ward, are built on what he assumes to be general principles. 
 The doctrine he maintains throughout his whole system, and 
 more particularly in the chapter to which I have alluded, turns 
 on the following passage. 
 
 " If a foreign country can supply us with a commodity cheaper 
 than we ourselves can make it, better buy it of them with some 
 part of the produce of our own industry, employed in a way in 
 which we have some advantage. The general industry of the 
 country being always in proportion to the capital- which emplbys 
 it, will not thereby be diminished, no more than the capital of 
 an artificer is diminished who purchases an article from another 
 practising a different art instead of making it himself. It will 
 only be left to find out the Avay in which it can be employed 
 with the greatest advantage. It is certainly not employed to 
 the greatest advantage, when it is thus directed towards an object 
 which it can buy cheaper than it can make. The value of its 
 annual produce is certainly more or less diminished, when it is 
 thus turned away from producing commodities evidently of more 
 value than the commodity which it is directed to produce. Ac- 
 cording to the supposition, that commodity could be purchased 
 from foreign countries cheaper than it can be made at home ; it 
 could therefore have been purchased with a part only of the 
 commodities, or, what is the same thing, with a part only of the 
 price of the commodities, which the industry employed by an 
 equal capital would have produced at home, had it been left to 
 follow its natural course. The industry of the country, there- 
 fore, is thus turned away from a more to a less advantageous 
 employment ; and the exchangable value of its annual produce, 
 instead of being increased, accordins to the intention of the law- 
 giver, must necessarily be diminished by every such regulation. 
 
 " By means of such regulations, indeed, a particular manufac- 
 ture may sometimes be acquired sooner than it could have been 
 otherwise, and after a certain time may be made at home as 
 cheap, or cheaper, than in the foreign country. But though the 
 industry of the society may be thus carried with advantage into 
 a particular channel sooner than it could have been otherwise, 
 
64 INDIVIDUAL AND NATIONAL INTERESTS 
 
 it will by no means follow that the sum total either of its indus- 
 try or of its revenue, can ever be augmented by any such reg- 
 ulation. The industry of the society can augment only in pro- 
 portion as its capital augments, and its capital can augment only 
 in proportion to what can be gradually saved out of its revenue. 
 But the immediate effect of every such regulation is to diminish 
 its revenue ; and what diminishes its revenue is certainb' not 
 very likely to augment its capital faster than it would have aug- 
 mented of its own accord, had both capital and industry been 
 left to find out their natural employments. 
 
 " Though, for want of such regulations, the society should never 
 acquire the proposed manufacture, it would not upon that account 
 necessarily be the poorer in any one period of its duration. In 
 every period of its duration its whole capital and industry might 
 still have been employed, though upon different objects, in the 
 manner that was most advantageous at the time. In every period 
 its revenue might have been the greatest which its capital could 
 afford, and both capital and revenue might have been augmented 
 with the greatest possible rapidity. 
 
 " The natural advantages which one country has over another, 
 in producing particular commodities, are sometimes so great, that 
 it is acknowledged by all the world to be in vain to struggle with 
 them. By means of glasses, hot-beds, and hot-walls, very good 
 grapes can be raised in Scotland and very good wine, too, can 
 be made of them, at about thirty times the expense for which at 
 least equally good can be brought from foreign countries. Would 
 it be a reasonable law to prohibit the importation of all foreign 
 wines, merely to encourage the making of claret and burgundy 
 in Scotland ? But if there would be a manifest absurdity in 
 turning towards any employment thirty times more of the capital 
 and industry of the country than would be necessary to purchase 
 from foreign countries an equal quantity of the commodities 
 wanted, there must be an absurdity, though not altogether so 
 glaring, yet exactly of the same kind, in turning towards any 
 such employment a thirtieth, or even a three hundredth part of 
 either. Whether the advantages which one country has over 
 another be natural or acquired, is in this respect of no conse- 
 quence. As long as the one country has those advantages and 
 the other wants them, it will always be more advantageous for the 
 latter rather to buy of the former than to make. It is an acquired 
 
ARE NOT IDENTICAL. 65 
 
 advantage only, which one artificer has over his neighbor who 
 exercises another trade; and yet they both find it more advan- 
 tageous to buy of one another, than to make what does not be- 
 long to their particular trades." 
 
 I must be excused for running somewhat into repetition in 
 observing, that the strength of this passage evidently lies in the 
 axioms, " The, industry of the society can augment only as its 
 capital augments, and its capital can augment only in proportion 
 to what can be gradually saved out of its revenue ;" and that the 
 proper answer to these axioms is, either, that they prove nothing, 
 or, that they prove it by a begging of the question, by assuming 
 that to be proved which is in process of proof. The expression, 
 the industry of the society can augment only as its capital aug- 
 ments, may signify, either, that the augmentation of a society's 
 capital, and an increase of its productive industry always accom- 
 pany each other ; or, that every augmentation of the productive- 
 ness of the general industry, is produced by an augmentation of 
 capital, and can be produced by nothing else. In like manner, 
 the expression, the capital of the society can augment only in 
 proportion to what can be gradually saved out of its revenue, 
 may signify, either, merely that the saving from revenue is a 
 necessary part of the increase of the general capital, and mea- 
 sures its amount, or, that there are no other means of augmenting 
 its capital but it. In the former of these two senses the axioms 
 prove nothing ; in the latter they prove all things desired, be- 
 cause they assume them as acknowledged truths. The double 
 meaning of the assumptions contained in these axioms, and the 
 fahacy into which they may, in consequence, be made to lead, 
 may be easily perceived by an application of them to the trans- 
 actions of an individual. 
 
 A person residing in England, owns an estate in the West 
 Indies, which he proposes to visit. His motives to do so are, 
 that he thinks, that, by his personal superintendence, he can 
 give a better direction to the industry employed on it, and ren- 
 der the returns greater. In order to do so, it is necessary for 
 him to procure and expend a certain sum to pay for the expense 
 of the voyage, and the cost of the various articles which his pri- 
 vate accommodation will require there, and he therefore takes 
 measures to apply to this purpose a considerable part of one 
 year's revenue of the estate. On account of this disbursement, 
 
 9 
 
56 INDIVIDUAL AND NATIONAL INTERESTS 
 
 some one objects to the project, and endeavors, in the following 
 manner, to prove to him that it must be hurtful to his interests : 
 " The augmented productiveness of your estate, and the in- 
 creased amount of capital at which it will be estimated, must go 
 on together. But, to add to capital, it is necessary to save froni 
 revenue. Now the scheme you are about to embark in requires 
 first a large expenditure of revenue. It must therefore tend to 
 prevent your augmenting your capital, and consequently the pro- 
 ductive industry of your estate, which two things always go on 
 together." The answer to this reasoning would be : " It is 
 chiefly because I am aw^are that the productiveness of my estate, 
 and wdiat it is worth, are inseparably conjoined, that 1 am about 
 to be at this expense and trouble, for I believe they will enable 
 me to put things in such a train that its productiveness will greatly 
 increase, and, as its value I know depends on the revenue it 
 yields, my capital will consequently be augmented by much 
 more than the sum I am going to expend." 
 
 " I perceive I have not expressed my meaning properly," 
 replies the adviser, " 1 should have said ; an increased produc- 
 tiveness of your estate, can be produced by no other means 
 than by an augmentation of the capital employed on it, and the 
 amount of capital you can possess and can employ on it, can be 
 augmented in no other way than by saving from your revenue. 
 But this plan of yours causes an expenditure of your revenue, it 
 must therefore prevent you from adding to your capital, and, 
 consequently, from increasing the productiveness of the industry 
 which is set in motion by it on your estate." 
 
 The West India proprietor might undoubtedly reply : " My 
 dear Sir you are completely wrong. The productiveness of my 
 estate depends, not only on the amount of the capital which sets 
 the industry employed on it in motion, but on the sort of motion 
 it gives it ; and I hope so to improve this, by a more judicious 
 regulation of it, that the same power will produce a far greater 
 effect than it does at present, and thus to show you, that there 
 are other means of augmenting capital than simple saving. For 
 I take it, that if I add to my gains, without increasing my ex- 
 penditure, the procedure may be just as effective to this end, as 
 if I were to diminish my expenditure, and not add to my gains." 
 
 If we understand the axioms of our author in the former sense 
 of the expressions, it is clear, that when applied to national capital, 
 
ARE NOT IDENTICAL. 67 
 
 they prove nothing more than when apphed to individual capital. 
 For, if it be merely meant that the productiveness of national 
 industry, and the augmentation of national capital advance together, 
 the propriety of a proposed measure may as well be inferred from 
 its tendency to render the industry of the community more pro- 
 ductive, as its impropriety may be inferred from its requiring a 
 small immediate expenditure of revenue. The question to be 
 determined in every such case, would then be similar to that which 
 an individual determines when deliberating on any scheme for the 
 augmentation of his private capital, and would resolve itself into 
 an inquiry, whether or not the probable returns from the proposed 
 measure, be likely to be a sufficient remuneration for the expense 
 of carrying it into effect. But, it is very clear, that this would 
 be a constrained interpretation of the import of the passage ; and 
 that the mference the author wished his expressions to convey, 
 is, that an increased productiveness of the industry of the society 
 can be produced by no other means but by augmenting its capital, 
 and that the only means entering into the process of augmenting 
 its capital are saving from its revenue. 
 
 The proper answer to these axioms, so understood, is, this is 
 your theory no doubt, but it is a theory which is merely in pro- 
 cess of proof, and not yet established. Surely, then, it is scarce 
 logical to answer a very obvious objection to it, which the obser- 
 vation of human affairs presents, by assuming its tmth ; or, to 
 deduce the mipropriety of a practical measure, drawii from the 
 phenomena wdiich human affairs present, and apparently very 
 beneficial, by showing that such measure is contrary to its 
 principles. 
 
 The question hitherto stands thus. You pretend to account 
 for the phenomena of the augmentation of national wealth by 
 showing, that an increase of national capital tends to facilitate the 
 division of labor; that this division of labor in itself greatly im- 
 proves the productive powers of labor, and is the cajiise of all 
 other improvements in them. That this increase of the produc- 
 tive powers of labor, being equivalent to an increase of the revenue 
 of the society, adds to its power of accumulating fresh capital and 
 giving farther extent to the division of labor, the great generator, 
 according to your system, of all wealth. It is in this way that, 
 according to you, the augmentation of the industry of the society 
 is produced by an augmentation of its capital, and in no other 
 
68 INDIVIDUAL AND NATIONAL INTERESTS 
 
 manner, and its capital augmented by saving from revenue and 
 nothing else, and that, from the action and reaction of these 
 principles on each other, the whole phenomena of the growth of 
 national capital are deducible. 
 
 Now, admitting for the present that no fallacy can be detected 
 in the principles themselves, they must still be admitted to be 
 only possible or probable theoretical assumptions, to be proved 
 by the observation of their coincidence with facts. Admitting 
 then also that, as far as the facts which relate to what we may 
 call the history of the internal ^irogress of national wealth are 
 concerned, they sufficiently accord with them, there is another 
 class of facts admitted by you, which these principles do not 
 explain, and to which, on the contrary, they seem to be opposed. 
 
 Arts and manufactures, the great sources of increase to the 
 productive powers of labor, do, it is granted, pass from country 
 to country. It would appear then, that the gradual increase 
 which the accumulation of capital produces on the productive 
 powers of any society, is not alone sufficient to call forth all the 
 resources which that society possesses ; but, that it is often 
 necessary to seek in other countries for the means, which give 
 these resources full efficiency. In such cases, at least, therefore, 
 the augmented w^ealth of the society cannot be said altogether to 
 flow from the gradual increase of its capital by accumulation, the 
 consequent division of labor, and the improvements thence 
 resulting. Your theory is, therefore, so far most certainly defec- 
 tive, as it acknowledges the existence of a class of phenomena, 
 the laws regulating which its principles by no means explain. 
 
 Instead, however, of attempting to answer the objections to 
 your system, which this class of phenomena present, you pre- 
 tend to say, that the practical rules directly, and in the simplest 
 manner, deducible from them, are of necessity erroneous, because 
 contrary to the principles of your system. It being acknowledged 
 by every one, even by yourself, that the improvements of the 
 productive powers of labor thus effected by the continued spread 
 of the arts of civilized life from country to country, are among 
 the chief causes of the progress of national wealth and prosperity, 
 they who have had the management of national affairs, have in 
 different cases come to the unavoidable conclusion, that they did 
 well in even sacrificing a small portion of the national revenue, 
 provided this outlay served to introduce acknowledged improve- 
 
ARE NOT IDENTICAL. 69 
 
 merit in the national industry, and source of national wealth. 
 They have acted in this as an individual would do in the manage- 
 ment of his private affairs, they have endeavored to introduce an 
 improvement into the management of the funds with which they 
 were intrusted, and have considered the price to be paid for such 
 improvement warranted by the increased productive powers it 
 would give to the same capital, and consequent increase to the 
 national revenue, and national funds, wliich it would tend to pro- 
 duce. Like individual schemes their projects seem sometimes to 
 have succeeded, and sometimes to have failed. But though, 
 when he acts, it is incident to man's imperfect nature occasionally 
 to eiT, to sit douTi therefore in resolute inactivity would be the 
 worst error he could commit. 
 
 The celebrated author admits, that a manufacture may be 
 introduced by the operations of the legislator, sooner than it could 
 otherwise be, and thus come to be made at home as cheap, or 
 cheaper, than abroad. But then, he says, in spite of these appa- 
 rent advantages of such a proceeding on his part, it must be 
 wrong, because it is contrary to my system. And, before you 
 can prove that it is justifiable, you must prove that the benefits 
 resulting from it could not possibly have happened some other 
 way. " Though, for want of such regulations, the society should 
 never acquire the proposed manufacture, it would not upon that 
 account necessarily be the poorer in any one period of its dura- 
 tion. In every period of its duration, its whole capital and 
 industry might still have been employed, though upon different 
 objects, in the manner that was most advantageous at the time. 
 In every period its revenue might have been the greatest which 
 its capital could afford, and both capital and revenue might have 
 been augmented with the greatest possible rapidity." 
 
 Now, I conceive, that instead of calling on his opponents to 
 prove, that all the advantages arising from any such scheme 
 might possibly come to pass without it, he hmiself has to show, 
 that they must come to pass without it. And, that he has to do 
 so, not by assuming his theoretical principles as true, — ^for, if they 
 are so, his axioms embrace and decide this and every case at 
 once, — but by an examination of the course of human affairs, and 
 a regular deduction from them, of the certainty of these apparent 
 advantages, or others equivalent to them, flowing in from some 
 other channel than that of which he would bar the opening. 
 
70 INDIVIDUAL AND NATIONAL INTERESTS 
 
 A nation imports from a distance a manufactured commodity, 
 which it is granted it could make as cheap, or cheaper, at home, 
 were the manufacture introduced there. To introduce the man- 
 ufacture is, however, too expensive a project to be carried mto 
 effect by any private individual. The whole society might do 
 so, through the expenditure for a few years of a portion of its 
 revenue, much less than what an equal number of years succeed- 
 ing them will return to it in the diminished cost of the article. 
 He, or they, who legislate for the society, embrace the apparent 
 benefit, and, by means of a small expenditure, effect an increase 
 of the productive powers of the community ; that is, they give 
 those powers the capability of producing the same quantity of an 
 article with less expense, which certainly must be allowed to be 
 an increase of them. In this the legislator acts in a manner that 
 would be accounted prudence in a private person, who conducted 
 any system of industry for his own emolument : in a planter, for 
 instance, who owaied and managed a West India estate. We 
 should undoubtedly approve of such a person's being at consid- 
 erable expense, in instructing his overseers and negroes, in any 
 improved mode of conducting the business of the plantation, if 
 this improvement more than proportionably augmented his 
 revenue. Neither have the proceedings of legislators, in many 
 cases parallel in principle to this, been ever objected to. It 
 sometimes happens, for instance, that those engaged in cultivating 
 the ground know that they can procure seeds of plants, or races 
 of animals, at a distance, better fitted for their purposes than 
 those they have at home. If the expense of procuring them is 
 small, and such as will be remunerated to an individual by the 
 gain, individuals send for such seeds and animals. If it is greater, 
 they sometimes club in societies for the purpose. If it be too 
 great for these societies, the legislator aids them in their scheme, 
 or carries it into effect himself. In this way it was, that, it being 
 thought that the culture of the bread fruit tree, a plant indigenous 
 to the Pacific Ocean, could it be introduced into our West India 
 Islands, would be of advantage to them, government were at the 
 expense of sending more than one vessel, on that long voyage, in 
 order to transport the plant there. No one did, or could object, 
 to the outlay of a portion of the public revenue for a purpose so 
 laudable. In this instance, it will be allowed by all, that it would 
 have been as absurd to have waited in expectation that some 
 
ARE NOT IDENTICAL. 7X 
 
 individual should find, or should imagine he would find it for his 
 own private advantage to undertake so expensive a scheme, as it 
 would be to complain of the comparatively trifling expenditure 
 of the common funds, which the accomplishment of this project 
 conducive to the common good required. But the expenditure 
 of a certain amount of national revenue, for the purpose of 
 transporting an useful art from a distant country, bears, surely, 
 a close analogy to a similar expenditure, for the purpose of trans- 
 porting an useful plant. If the one be praiseworthy, the other 
 can scarce deserve the censure that has been heaped on it. 
 
 Our author further observes : " The natural advantages which 
 one country has over another, in producing particular commodi- 
 ties are sometimes so great that it is acknowledged by all the 
 world to be in vain to struggle with them," And, as an instance, 
 he gives the project of raising grapes, for the purpose of making 
 wine, in Scotland. 
 
 Extreme cases are useful, but, to be so, they should be cor- 
 rectly put. The main question in dispute is, whether or not it 
 is proper to introduce a manufacture from abroad, by the aid of 
 the legislator, which, when so introduced, will furnish a com- 
 modity for home consumption at as low, or at a lower price, than 
 it can be bought for in the foreign country. The supposed case 
 of a commodity which, if the manufacture of it be introduced at 
 home, will cost thirty times more, or a thirtieth, or three hun- 
 dredth part more there than abroad, can have nothing to do with 
 the determination of such a question. 
 
 " Whether the advantages which one country has over another 
 be natural or acquired, is in this respect of no consequence." On 
 the contrary, in my opinion, it is of the greatest consequence, 
 and, for this very reason, that it is only " as long as the one 
 country has those advantages, and the other wants them, that it 
 will be more advantageous for the latter rather to buy of the 
 former than to make." Now natural advantages cannot be pro- 
 cured by any expenditure of revenue or capital, but acquired 
 advantages may often be got by means of a very small expendi- 
 ture. One country cannot, at any purchase, acquire the soil, 
 the climate, the commodiousness of situation for conducting trade,, 
 or any of the other natural advantages which another country 
 possesses; were it so, the price would be very large that would 
 not be willingly paid for them. But one country can often with 
 
72 INDIVIDUAL AND NATIONAL INTERESTS 
 
 ease, and at a trifling expense, acquire the practical skill and the 
 knowledge of particular arts and manufactures which another 
 possesses, and, by doing so, gain the advantage of procuring for 
 itself the products of this skill and knowledge at home, instead of 
 having to go abroad for them. In the passage quoted, natural 
 advantages and acquired are reckoned equivalents, and so un- 
 doubtedly they are. They are both valuable on account of the 
 products they yield to human labor. But they differ in this, 
 that the latter can be transferred from one country to another, 
 the former cannot. Could Scotland acquire the sunny skies and . 
 more genial climate of France, its hills might be covered with 
 vineyards, instead of heather, and its inhabitants might procure 
 many commodities at a fourth of the price which they now cost 
 them. No one would object to a considerable expenditure to 
 acquire so great an advantage. If then, the acquisition of natural 
 advantages would be worth paying for, Avhy object to a small 
 expenditure to procure advantages which are allowed to be 
 equivalent to those natural advantages ? 
 
 As the author has given one supposed case, as he conceived 
 illustrative of the question, I may be permitted to give another, 
 also illustrative of it, not like his, however, springing from 
 assumptions liable to be objected to, but, as will be seen, framed 
 upon his very principles and admissions. 
 
 A certain country has the acquired advantage over another of 
 possessing the knowledge of a particular art, wdiich this other 
 w^ants. The latter, therefore, imports from the former all the 
 goods, the product of that art, which it has occasion for. As it 
 has to pay for these goods, it luckily happens that it, on its side, 
 has also acquired advantages in possessing the knowledge of 
 another art, which the former wants, and the commodities pro- 
 duced by which it has occasion for. In this way, the one sort of 
 goods pays for the other. The natural and acquired advantages 
 of these two countries are either similar or equivalent. That is, 
 their soil, climate, convenience of situation for trade, and their 
 knowledge of other arts, though not exactly the same, are on the 
 w^hole equally balanced, their population and capital are equal. 
 In short, they as much resemble two neighboring artificers, ac- 
 cording to the comparison of our author, exercising different 
 trades, as extensive communities inhabiting separate countries 
 well can resemble single workmen whose dwellings are con- 
 
ARE NOT IDENTICAL. 73 
 
 tiguous. The peculiar manufacture of the one nation is hats, of 
 the other silk goods. The silk goods which the one annually 
 consumes cost it £2,000,000 ; the hats which the other con- 
 sumes, the same sum. Of these sums 25 per cent, is made up 
 of transport, including in the term, not the mere freight, but the 
 wdiole charges paid for internal transport, for warehousing, and 
 for the profits of the different capitals, and wages of the various 
 individuals concerned in collecting the commodities in the one 
 country, carrying them to, and distributing them over the other. 
 Thus the annual sum which these commodities cost each country, 
 over and above the expense of producing them, is £400,000. 
 In this situation things have long remained, and must continue to 
 remain, unless altered by some change in the policy, or great 
 revolution in the affairs of the two countries. " It being only 
 for the sake of profit that any man employs a capital in the sup- 
 port of industry," and, from the acquired advantages which each 
 country enjoys over the other in the production of its peculiar 
 manufacture, it being impossible for any projector to manufacture 
 hats, in the country where hats have not hitherto been made, or 
 silks, in the country where silks have not hitherto been made, 
 but at an outlay of more than 25 per cent, over what they cost in 
 the country where these respective manufactures are established, 
 no such project will be entered on. The legislators of the two 
 countries, have hitherto agreed with our author, that, as it is the 
 maxim of every pmdent master of a family, never to make at 
 home what it will cost him more to make than to buy ; what is 
 prudence in tlie conduct of every private family can scarce be 
 folly in that of a great kingdom ; and that, whether the advan- 
 tages which one country has over another be natural or acquired, 
 is of no consequence, it being an acquired advantage only, which 
 one artificer has over his neighbor, who exercises another trade, 
 though they both find it for their advantage, rather to buy of one 
 another, than to make what does not belong to their peculiar trade. 
 Acting on these principles, they have thought it improper to make 
 any alteration in the system. 
 
 About this time however a change takes place in their opin- 
 ions, and they begin to think, that as, though it would not be 
 very prudent in the tailor, that he might have his shoes made in 
 his own workshop instead of his neighbors, to set about making 
 them himself, or the shoemaker, for the same reason, to set about 
 
 10 
 
74 INDIVIDUAL AND NATIONAL INTERESTS 
 
 making his own coat, yet, if there were a town in which there 
 were no shoemakers, but more than enough of tailors, and another, 
 a dozen miles off, in which there were no tailors, but more than 
 enough of shoemakers, it would be a beneficial change for some 
 of the tailors to remove to the one town, and some of the shoe- 
 makers to the other, that the inhabitants of both might have the 
 articles fabricated by these different sorts of tradesmen, made at 
 home, that is, within their respective towns, ■ — so, two countries, 
 of which the one made no hats, and the other no silk goods, 
 might mutually benefit by the introduction of the manufacture 
 in which each was deficient, the inhabitants of each in like man- 
 ner as the inhabitants of each town, having that provided at home, 
 which they must otherwise go abroad for, and thus being saved 
 like them, the expense and inconvenience of transportation. 
 
 Though such a change, in either case, could not be brought 
 about without expense, and though " its immediate effect would 
 therefore be to diminish the revenue of the society," yet, as after 
 a certain time, it would be likely that the new manufacture would 
 be made at home in each case " as cheap or cheaper than 
 abroad," its ultimate effect would be, more than proportionably, 
 to increase the revenues of both towns and both countries. 
 
 Acting on these new views, the legislators of both countries, 
 about the same time, commence encouraging the manufactures 
 in which their respective countries are deficient ; and, by means 
 of a system of premiums, bounties, and duties, on the detail of 
 which it is unnecessary to enter, in the course of years, succeed 
 so far, that silk goods come actually to be fabricated in the 
 country where no silk goods were manufactured, as cheaply as 
 where they were exclusively manufactured, and hats to be made, 
 where no hats were made, as cheaply as where hats were ex- 
 clusively made. Part of the capital and industry which went in 
 the one case to the manufacture of hats, goes to manufacture 
 silk goods, and, in the other case, part of the capital and industry 
 which went to manufacture silk goods, goes to manufacture hats. 
 Both countries produce that at home, which they before imported 
 from abroad, and are therefore saved the expense attending that 
 importation. 
 
 Completely to effect this change requires an outlay, in both 
 cases, of £1,000,000. Being effected however, it of course 
 saves each country the expense of transport, which, at 25 per 
 
ARE NOT IDEiNTICAL. 75 
 
 cent, on the imported goods, makes an annual saving of its ex- 
 penditure, and increase therefore of its revenue, of £400,000, 
 so that, in two or three years time, the sum expended is repaid, 
 and each community supphed with a new fund to furnish addi- 
 tional comforts to its members, or to add to their capital. 
 According to our author's tenets, this proceeding of both legisla- 
 tors, although admitted to be practicable, is yet held to be ne- 
 cessarily, and in its very nature, injurious. 
 
 Although it can seldom happen, that two countries are so 
 circumstanced that both, according to our supposition, can ben- 
 efit equally by the effecting of such a change, yet, if one effect 
 such a change, as far as that country is concerned it would seem 
 to be beneficial, on a simple calculation of expense and gain, 
 provided the saving of revenue produced by it, is greater than 
 the expenditure of revenue necessary for producing it. It is this end 
 which the legislator generally aims at reaching by the regulations 
 he imposes on the trade and industry of the society, and which, by 
 these means, he often arrives at. Yet, even when in such cases 
 successful, our author maintains, that his proceedings are neces- 
 sarily, and essentially prejudicial to the interests of the society. 
 That, even though they may cause a commodity to be produced 
 at home, cheaper than abroad, they must diminish, instead of 
 augmenting, the national revenue and riches. A conclusion so 
 extraordinary, is arrived at by a process of reasoning as extra- 
 ordinary. It is come to by setting out from it. Two general 
 axioms, somewhat ambiguous and vague, are assumed as truths. As 
 usually happens to all other axioms employed in general reasoning, 
 and capable of conveying two senses, they are granted in the one 
 sense, and applied in the other. We assent to the propositions, " the 
 industry of the society can augment only in proportion as its capital 
 augments, and its capital can augment only in proportion to what 
 can be gradually saved out of its revenue," because we see, that 
 the augmentation of industry and capital, the saving from rev- 
 enue and increase of capital, are concomitants of each other; we 
 perceive not, that in the application of these propositions, the 
 sense in which we assented to them is abandoned, and that the 
 augmentation of the capital of the society is assumed as the 
 cause, and the sole cause of the increase of its industry, and 
 the saving fi-om revenue, as the cause, and the sole cause, of the 
 augmentation of its capital. Whereas, from the observation of 
 
76 INDIVIDUAL AND NATIONAL INTERESTS 
 
 the increase of the productiveness of national industry, and of 
 the amount of national capital, going on in general together, we 
 may at least as justly infer that it is the industry which augments 
 the capital, as the capital the industry, and rather come to the 
 conclusion, that part of the national resources should be employed 
 in giving perfection to the industry of the society than that they 
 should be altogether devoted to attempts to increase its capital. 
 In fact, as capital, according to Adam Smith himself, is only 
 valuable for the addition it makes to the efficiency of the national 
 industry, and, as that efficiency is also, according to him, mainly 
 dependent on the skill, dexterity, and judgment, with which it is 
 applied, an expenditure of capital or revenue, having the effect 
 of increasing the national skill, dexterity, and judgment, would 
 seem to be the most judicious possible, seeing it directly increases 
 those sources of production, from the indirect addition that it 
 makes to which, capital is said to derive its sole value. 
 
 It has been my endeavor to show, in the preceding examina- 
 tion of the system of Adam Smith, that the doctrine there main- 
 tained, of the expediency of the legislator's abstaining from any 
 attempt to give increased efficiency to the industry of the society 
 by encouraging the growth of domestic arts or the importation of 
 foreign, founded on the supposition of the perfect identity of the 
 means which add to the wealth of individuals and nations, is 
 erroneous. 
 
 1. That the reasonings which make it assume the form of a 
 self-evident principle, have their foundation in the ambiguities of 
 language alone, and that, in reality, the presumption is against, 
 not for it. 
 
 2. That viewed as a consequence of the theory of the accu- 
 mulation of capital, the division of labor, and the improvements 
 resulting from the action and reaction of these principles on each 
 other, the judgment we form of it must be altogether determined 
 by the probable accuracy of the principles on which that theory 
 proceeds, and by its coincidence with facts ; that granting, for the 
 present, the apparent probability of the theoretical principles 
 themselves, they nevertheless do not agree with the phenomena; 
 that there is a class of admitted facts, which they not only do not 
 explain, but to which they are in opposition ; that the increase of 
 the wealth of every community is acknowledged to be dependent, 
 
ARE NOT IDENTICAL. 77 
 
 not only on the accumulation of capital and division of labor 
 among its members, but also on the progress of arts in other 
 communities, and their subsequent transfer to it ; that to effect 
 this transfer, a measure admitted to be all-important to the pros- 
 perity of the community, the efforts of individuals are insufficient, 
 that, in his endeavors to prove that the legislator ought not here 
 to interfere, Adam Smith runs into inconsistencies and contradic- 
 tions, and that there hence arises a proof of the inapplicability of 
 his doctrine to events of this order, and a strong presumption of 
 the existence of some fundamental error in the general principles 
 of his system. 
 
BOOK II. 
 
 OF THE NATURE OF STOCK, AND OF THE LAAVS GOVERNING ITS INCREASE 
 
 AND DIMINUTION. 
 
 INTRODUCTION, 
 
 DuGALD Stewart prefaces the observations he makes on Adam 
 Smith's great work, with the following remarks : " An historical 
 review of the different forms under which human affairs have ap- 
 peared in different ages and nations, naturally suggests the question, 
 whether the experience of former times may not now furnish some 
 general principles to enlighten and direct the policy of future 
 legislators r The discussion, however, to which this question leads, 
 is of singular difficulty ; as it requires an accurate analysis of by 
 far the most comphcated class of phenomena that can possibly 
 engage our attention, those which result from the intricate and 
 often the imperceptible mechanism of political society ; — a subject 
 of observation which seems, at first view, so little commensurate 
 to our faculties, that it has been generally regarded with the same 
 passive emotions of Xvonder and submission with which, in the 
 material world, we survey the effects produced by the mysterious 
 and uncontrollable operation of physical causes." * The science 
 of Political Economy he considers as a part of this great subject. 
 
 If the accuracy of these observations be admitted, as I think it 
 must, the inquiries in which Political Economy engages, lead to the 
 investigation of the general principles of human action, and it is to be 
 considered but as a branch of a larger science, having for its object, 
 to trace the laws to which man is subject as a moral and intellectual 
 animal, acted on by the system of things existmg in the world, and 
 acting, in turn on them, to explain from those laws the events which 
 his past history, as far as known, exhibits, and to collect the means 
 of ascertaining what will be the future course of it. While to be 
 able clearly to unfold the laws regulating the events with which it 
 deals would imply the capacity of tracing those regulating the 
 whole system of phenomena of which man is the centre, just as 
 to explain with accuracy the laws regulating the motions of one of 
 the heavenly bodies, implies the knowledge of principles capable 
 of disclosing the prescribed movements of them all. 
 
 * Life of Smith. 
 
INTRODUCTION TO BOOK II. 79 
 
 I have already observed, that the subject first met me when 
 engaged in the mvestigation of some principles which I conceived 
 might in time assume a form capable of a general application of 
 the sort. To attempt here an extensive generalization of this 
 kind would be out of place, and is impracticable, because of 
 necessity only a small portion of the phenomena are before us. 
 Political Economy itself makes but a part of the subject to which 
 such generalizations belong, and it is only one division of political 
 economy of which we are to treat. It has usually been discussed 
 under the heads of stock, wages of labor, and rent, and it is to the 
 first of these that our investigations are to be altogether confined. 
 It is only therefore in such parts of the subject as present a suffi-. 
 cient mass of phenomena, to warrant the procedure, that I shall 
 attempt to introduce any very general principles. In other cases 
 1 will confine myself to the simple statement of facts admitted by 
 all parties. 
 
CHAPTER I. 
 
 IT IS CHARACTERISTIC OF MAN TO PROVIDE FOR THE WANTS OF THE 
 FUTURE, BY THE FORMATION OF INSTRUMENTS; AND HIS POWER TO 
 MAKE THIS PROVISION, IS MEASURED, BY THE EXTENT AND ACCURACY 
 OF HIS KNOWLEDGE OF THE COURSE OF NATURAL EVENTS. 
 
 Cicero gives the following summary of the principles exciting 
 man to action, and of the mode in which they lead him to act : 
 
 " inter hominem et beluam hoc maxime interest, quod haec 
 
 tantum, quantum sensu movetur, ad id solum, quod adest, quod- 
 que praesens est, se accommodat, paullulum admodum sentiens 
 prasteritum, aut futurum. Homo autem, quod rationis est par- 
 ticeps, per quam consequentia cernit, causas rerum videt, earum- 
 que progressus, et quasi antecessiones non ignorat, similitudines 
 comparat, et rebus praesentibus adjungit atque annectit futuras : 
 facile totius vitae cursum videt, ad eamque degendam praeparet 
 res necessarias. Eademque natura vi rationis hominem conciliat 
 homini et ad orationis, et ad vitae societatem : Ingeneratque in 
 primis praecipuum quendam amorem in eos, qui procreati sunt : 
 irapellitque, ut hominum coetus, et celebrationes, esse, et a se 
 obiri velit : oh easque causas studeat parare ea, quae suppeditent 
 et ad cultum, et ad victum : nee sibi soli, sed conjugi, liberis, 
 ceterisque, quos caros habeat, tuerique debeat." 
 
 " The chief distinction betweem man and the inferior animals 
 consists in this. They are moved only by the immediate im- 
 pressions of sense, and, as its impulses prompt, seek to gratify 
 them from the objects before them, scarce regarding the future, 
 or endeavoring from the experience of the past to provide against 
 what is to come. Man again, as he is endowed with reason, by 
 which he is able to connect effects with their causes, to perceive 
 the principles which guide the progress of affairs, and to join to- 
 gether the present and the future, easily discerns the course of 
 his whole life and prepares whatever may be necessary for pass- 
 
OF THE NATURE OF STOCK. Ql 
 
 ing it in comfort. The same intellectual powers also, which 
 nature has bestowed on him, give scope to his affections, and 
 join him to his fellows by the ties that spring from language and 
 the connexions of social life. It is from this source that we must 
 trace his peculiar provident love for his offspring, his concern 
 for the interests of society, and his desire to mingle in its business 
 and pleasures. 
 
 " From these principles it is that man is incited and enabled 
 to provide beforehand whatever may be requisite both for utility 
 and ornament, noi only to himself but to his wife, his children, 
 and all others who may be dear to him, or vv^hom it may be his 
 duty to protect." 
 
 It is unquestionably the capacity for perceiving, and retaining 
 in his mind, the course of events and the connexion of one with 
 another, that leads man to perceive what advancing futurity is to 
 bring forth, and enables him to provide for its wants. This pro- 
 vident forethought distinguishes him from the inferior animals, 
 and the degree in which he possesses it marks his rank in the 
 scale of civilization. 
 
 When he has gained any knowledge of the nature of things 
 around him, he finds many that satisfy more or less perfectly his 
 present wants. He knows also that if he live to see the future 
 he will then have similar wants and desires. Some of the things 
 satisfying his desires and wants exist abundantly ; others, sparingly 
 or imperfectly. If he regard the future, he must wish that those 
 things of which he now can only obtain enough to satisfy his 
 wants sparingly and imperfectly, should exist then, so as that he 
 might be able to obtain them to satisfy those wants abundantly 
 and perfectly. 
 
 His faculties of observation and reason generally give him the 
 power of effecting this. For these objects of his desires are mere 
 arrangements of matter. His faculties of observation show him 
 their nature, and the manner in which the train of events going 
 on amongst them succeed each other. He perceives that the 
 things which are the objects of his present wants, or which were 
 of those he felt a little time since, and which will probably be of 
 those he will feel in future, are either the immediate result of the 
 nature and form of some things around him, or of the trains of 
 events which, in consequence of that form and nature, are taking 
 place among them. He cannot alter the nature of things, but, 
 
 11 
 
82 OF THE NATURE OF STOCK. 
 
 in many cases, he is able to change their form, that is, the par- 
 ticular arrangement of the matter of which they are formed, and 
 his reason instructs him, that if, by doing this, he can so alter the 
 trains of events proceeding from them or depending on them, that 
 they may either fonn, or cause to be formed, or put in his pos- 
 session, objects fitted to supply more perfectly or abundantly what 
 probably will be his future wants, than those objects would other- 
 wise exist, he then is able to provide for the future. This in 
 many cases he can do, and thus he acts. 
 
 A North American Indian in his canoe comes to an island in 
 some lake or river' and finds near it a good station for fishino-. 
 He therefore determines to remain there for the fishing; season. 
 Towards evening he paddles his canoe to shore, lands, kindles a 
 fire near a large tree, wraps his blanket about him, places his feet 
 to the fire, his head to the trunk of the tree, and thus prepares 
 for repose. In so doing, with the exception of kindling the fire, 
 he takes advantage simply of his knowledge of the nature of 
 the things around him, and seeks from them the best supply they 
 can give him of what he wants, that is, of shelter from wind and 
 weather. 
 
 It rains and blows during the night, the tree shelters hini 
 somewhat, but still he gets cold and wet. In the morning he 
 spends some hours providing a better shelter against the incle- 
 mency of any such night in future. Of branches and bark he 
 makes something like one half of the roof of a house, only much 
 smaller, the open side being towards the south and the fire, the 
 sloping side towards the north from whence comes cold and rain. 
 Thus, though he cannot prevent the wind from blowing, or the 
 rain from falling, his knowledge of the manner in which the 
 trains of events forming these phenomena succeed each other, or 
 if you will, his knowledge of the laws which regulate their mo- 
 tions, instruct him so to direct them, that the one shall not blow, 
 or the other fall, on a particular spot, which he knows he may 
 at some future time wish to remain calm and dry. This time 
 may be distant, for it may not rain or blow so as to inconvenience 
 him for a week or two, nevertheless to provide against it he 
 gives a good many hours present labor. 
 
 Next evening, before going to repose, he finds the turf damp 
 from the rain of the former night. He looks for an elm tree, 
 cuts off a piece of its strong thick bark large enough for him to 
 
OF THE NATURE OF STOCK. 83 
 
 sleep on, covers it with the soft branches and leaves of the white 
 pine, and forms a dry and soft bed for himself. Thus his know- 
 ledo-e of the materials around him enables him to form what he 
 wants, a dry and soft place of repose. 
 
 In this island he discovers a small wild plumb tree, he relishes 
 the fmit, but there is little of it. Resolving to return in succeeding 
 seasons he lops the branches of the surrounding trees to give this 
 room to spread, and expects thus to find next year a more abundant 
 crop.* Here his knowledge of the manner in which trees and 
 fruit grow and thrive, or his knowledge of the order of the trains 
 of events which tenninate in the full developement of the tree and 
 abundance of its fruit, enables him so to work on the matters 
 around him, as to occasion them to produce more abundantly next 
 season, than they have this, what then he will desire. 
 
 He thinks not of providing for any future want the means to 
 supply which, will, without this, exist in sufficient abundance. 
 Thus water, in such a situation, he knows he will always be sur- 
 rounded with. Were the same Indian encamped in the w^oods, 
 by a very scanty spring, he would dam it up, and cover it with 
 bi'anches so as to keep cool a quantity of water for his future occa- 
 sions. 
 
 The proceedings of man are every where similar-. He has 
 always an end in view, he employs means to effect this end, and 
 there is a manner throusfh which he effects it. The end is a 
 supply for future wants ; the means, the bringing about of such 
 events as may serve to supply them ; the manner, a knowledge 
 of the qualities with wiiicli nature has endowed the materials 
 within his reach, of the series of events in consequence arising 
 among them, and an application of this knowledge to produce, 
 through his corporeal powers, such an arrangement of these mate- 
 rials, as may so change the issues of events that would otherwise 
 have place, as to bring about those which he desires. It is true, 
 that, in most instances, men simply copy the proceedings of others, 
 and think not of the principles on which they conduct their opera- 
 tions, nor of the observations from which these must originally 
 have been deduced. But, though the knowledge thus acquired 
 from this storing of observations, and deduction of principles from 
 
 * This is a possible supposition, but it is more probable he would neglect 
 it, perhaps cut it down for the sake of reaching more easily the fruit it carried. 
 
84 OF THE NATURE OF STOCK. 
 
 them, is not the mode in which individual men operate, it is the 
 mode in which the operations they carry on must have been first 
 brought into practice, and on which they are all founded. 
 
 We may easily satisfy ourselves of this, by turning our atten- 
 tion to the manner in which any of the articles we use for the 
 supply of our wants has been formed. Bread may be an example. 
 A farmer, some two years ago, made choice of a particular field 
 for the cultivation of wheat. Had he been asked why he did so, 
 he could have stated the different circumstances in the soil, and 
 the previous crops that it had carried, which had thus determined 
 him. By ploughing and harrowing it a sufficient number of times, 
 he thoroughly broke, and pulverized the land. This he did, be- 
 cause he knew, from observations he or others had made, that in 
 this state the seed he intended to deposite there would, when it 
 came to germinate, more easily spread its roots around, and draw 
 nourishment from among the particles of earth amidst which it 
 w^ould grow. He allowed a considerable time to elapse between 
 the several operations, that the weeds might have time to spring 
 up, and be destroyed. Thus he knew they would be prevented 
 from afterwards injuring the growth of the crop. He also spread 
 over the field, and covered in, a quantity of manure, because ex- 
 perience had taught that this substance gives vigor to vegetation. 
 He then sowed the seed, in the mode, and quantity, and at the 
 time, which observation had instructed him was the best, covered 
 it with a harrow, and waited the harvest. When he perceived 
 the grain sufficiently ripe, he cut it down with an iron hook 
 having a form and edge which experience had ascertained to be 
 best adapted for this purpose, made it into bundles, exposed 
 them to the sun and air so that they might be dried, when this 
 was effected, conveyed them to his barn and stored them there. 
 Having lain there some time, the grain was separated from the 
 straw by the process of threshing, it was then carried to the 
 granary, where, having been kept for a longer or shorter period, 
 it was thence taken to the mill, and, by a very ingenious process, 
 reduced to small particles, and then separated by another pro- 
 cess into three parts, of which the finest part, the interior of the 
 grain called flour, being packed in sacks or barrels, was preserved 
 for use. A certain portion of this, mixed with a particular fer- 
 ment, wrought with the hand and exposed to the action of fire, 
 became bread. 
 
OF THE NATURE OF STOCK. 95 
 
 It is very evident, that all the steps of these various processes 
 depend on a knowledge of the conrse of natural events, and are 
 regulated by that knowledge. A long series of observations of 
 this sort, and of reasonings deduced from them, could alone have 
 enabled the farmer to prepare the ground properly for the seed, 
 or, after the grain had come to maturity, to preserve it, to sep- 
 arate it from the straw, and fit it for being converted into flour. 
 The observations on the trains of events connected with the pro- 
 duction of this grain that have been committed to writing, fill 
 many large volumes, and besides these, every farmer is obliged 
 to have a great store of his own, to guide him in his proceedings. 
 Thus, in the single process of cutting down and storing up this 
 crop, his success in securing it uninjured depends on observing 
 and noting well a great variety of particulars. He observes the 
 plant carefully, and discovers, from the appearance of every part, 
 from the dryness of the stem, the drooping of the ears, the ful- 
 ness of the grain, if it be in a proper state to cut down. If he 
 make any error in this, he will either have unripe, and therefore 
 shrivelled and light grain, or he will lose great part of it by its 
 being shaken off the stem in harvesting it. Next, before he 
 determine on commencing the operation, he regards the aspect 
 of the sky, watches the rising and setting sun, notes the color of 
 the air, the appearance of the clouds, the direction of the wind, 
 the dew on the grass, and perhaps has recourse to that delicate 
 instrument, the fruit of so many ingenious observations, the 
 barometer. By means of all these, he is enabled to draw 
 tolerably correct conclusions, in regard to the probable state of 
 the weather for some succeeding days. This knowledge influ- 
 ences greatly his farther operations ; for experience has taught 
 him that the injury which severe rains, coming on the grain 
 when newly reaped, would occasion, is very great. If, there- 
 fore, the weather promise to be fine, he will commence cutting 
 it down a few days sooner than he otherwise would ; if rain 
 threaten he will wait a few days longer. When he has it reaped 
 he gets it tied into bundles, which are put up in small parcels, 
 and so disposed, that the w-ind may penetrate through them, and 
 the rain be as much thrown off" from them as possible, and thus 
 the plant may have the best chance of being securely and quickly 
 dried. 
 
 This drying is watched with care, and, when it is judged to 
 
SQ OF THE NATURE OF STOCK. 
 
 be sufficiently advanced, the crop is transported to the bam, 
 there to wait till the proper period of threshing it out arrives. 
 All these processes are, it is evident, governed by rules drawn 
 from assiduous and long continued observation, and their success 
 depends on its extent and accuracy. 
 
 Were we to examine the manner in which all the articles that 
 we provide for the supply of future wants are produced, we 
 should find that they depend, in this way, on observations on the 
 course of events, and on reasonings founded on these observa- 
 tions. Were proof wanting of this, we might turn at hazard to 
 any complete treatise on any art. On examining it, we would 
 invariably find it to contain a set of observations, the result of 
 experience, and of reasonings, and rules, drawn from these ob- 
 servations. 
 
 Since then man provides a supply for his future wants by his 
 reason directing his industry, through means of his knowledge of 
 the course of events, to effect such changes in the form or 
 arrangement of the parts of material objects, that these may pro- 
 duce articles fitted to afford this supply, it were desirable to have 
 some common name to denote all the changes, which, for this 
 purpose, he so makes. On this account I propose to give the 
 denomination of instruments to all those changes that, for this 
 purpose are made in the form or arrangement of the parts of 
 material objects. 
 
 The term instrument is, in general, properly enough employed, 
 to denote any means for the attainment of some end. In com- 
 mon use, however, and as applied to material things, it seems to 
 be restricted to such arrangements of matter as owe their chief 
 efficacy to what are called the mechanic powers. Thus a lever 
 or a wedge is an instrument, the manner in which each of them 
 operate being chiefly explained on mathematical principles. A 
 spade, which is a combination of the two, is also an instrument. 
 The tools which carpenters use are instruments. We speak in 
 the same way of instruments of husbandry, meaning by the 
 phrase the articles used in that art, whose properties may be 
 explained on mechanical principles. 
 
 In all these cases, however, other principles than those which 
 are merely mathematical must enter into our calculations. In 
 the simplest lever, we have not only the properties of a mathe- 
 matical line to consider, but also, the weight and strength of the 
 
OF THE NATURE OF STOCK. QT 
 
 substance used, and these make the difficulty in the proper ap- 
 plication of such an instrument. A wedge operates in many 
 ways, besides those that may be considered to be derived simply 
 from mathematical principles ; as for instance in the percussion^ 
 which it receives and communicates, and through means of which, 
 if skilfully applied, the most solid rocks may be rent. The far- 
 ther we recede from such simple instruments, the more extensive 
 do we find the action of properties, which could only be ascer- 
 tained by a long series of observations. It would be impossible, 
 for instance, to give any a priori rules for the construction of 
 that most useful instrument the plough. It is, no doubt, a wedge, 
 but the particular form giving the greatest efficacy to it, is a point 
 of very difficult determination, not yet, perhaps, fully ascertained. 
 It is accurate observation that has guided the construction of it, 
 to its present efficiency, and which may be expected to render it 
 still more perfect. 
 
 Were we to enter into an examination of more complicated 
 machines or instruments, such as the steam engine, or the cotton 
 mill, the observation would apply with double force, these gen- 
 erally deriving their efficiency from principles, that have been 
 the result of very extensive and accurate investigations of many 
 series of events. In thus using the term, therefore, we shall 
 rather deviate somewhat from common usage, than be opposed 
 to it, and in doing so, our reasonings w^ill only be subject to an 
 inconvenience, to which all general reasonings must be subject, 
 and which may be the more readily excused, as this use of the 
 term may be defended from its derivation, its occasional accepta- 
 tion, and the authority of authors of respectability.* 
 
 In general then, all those changes which man makes, in the 
 form or arrangements of the parts of material objects, for the 
 purpose of supplying his future wants, and which derive their 
 power of doing this from his knowledge of the course of events, 
 and the changes which his labor, guided by his reason, is hence 
 enabled to make in the issue of these events, may be termed 
 instruments. 
 
 In this sense a field is an instrument. The changes effected 
 in the matters of which it is composed, for the purpose of render- 
 ing it an instrument, are the levelling and if necessary making 
 
 Note E. 
 
88 OF THE NATURE OF STOCK. 
 
 the surface dry by -means of ditches and drains, the removing 
 stones from it, the mixing and pulverizing the soil by the plough, 
 the harrow, and the roller, and the incorporating with it various 
 matters termed manures, which render it more fit for the support 
 of vegetable life. The future wants, towards the supply of which 
 it is an instrument, are food and clothing. The power which has 
 made it an instrument, is the agriculturist's labor, directed by his 
 knowledge of the nature of plants and soils. The change made 
 in the consequent issue of events, is the abundant growth of 
 specieses of plants different from those originally produced by it, 
 and conducing to the supply of food and clothing, or, more gen- 
 erally, the conversion of various vegetable matters of the soil, and 
 gaseous matters in the air, into the substance of particular plants. 
 The wheat grown on this field is an instrument. The changes 
 effected in it, are its having been separated from the straw by the 
 process of threshing, and its having been made sufficiently dry by 
 keeping and exposure to air, to be fit to manufacture into flour. 
 The want it tends to supply is nourishment, by affording bran for 
 the support of some of the inferior animals, as hogs or cattle, 
 afterwards to be slaughtered, and flour for the use of man. The 
 power is also the art and industry of the agriculturist. The 
 change in the issue of events consists in the grain being ready for 
 the manufacture of flour, instead of having been left to rot on the 
 ground, to be consumed by vermin, or destroyed by the access of 
 damp or by the want of air. Flour also is an instrument. The 
 changes that have been effected on it are its having been separ- 
 ated from the wheat, and reduced to a fine powdery matter. The 
 want it tends to supply is food by the bread produced from it. 
 The power, which has operated on it, is the art and industry of 
 the miller. The change in the issue of events thereby produced 
 is the existence of flour and bran, instead of wheat. Bread, until 
 such time as it is in process of consumption, is an instrument. 
 The change which it has undergone is that induced by the pro- 
 cesses of kneading, fermenting, and baking. The want it supplies 
 is food. The power which has operated on it is the art and in- 
 dustry of the baker. The change on the issue of events thereby 
 produced is the existence of bread, instead of flour. 
 
 Though it may seem strange to rank all these in one class, that 
 of instruments, nevertheless, the doing so is rather unusual than 
 improper. They are all ineans toward the attainment of an end, 
 
OF TPIE NATURE OF STOCK. 89 
 
 and, for the attainment of this end, that is, the production of 
 bread, do they alone exist. The blade as it springs from the 
 soil, and the soil on which it grows, form together an instrument 
 for this end, the plant when it has extracted all the nourishment 
 from the soil which that can give, and is ripe on the ground, is an 
 instrument ; when it is cut and put up sheltered from the weather, 
 it is still an instrument ; so is the grain when separated from it ; 
 so it is when ground in the mill ; so it is when in loaves, put apart 
 for consumption, until the moment arrives when it is consumed. 
 It is impossible, if we call it at first an instmment, to point out 
 when it ceases to be so, until the moment when it is actually 
 consuming. 
 
 All tools and machines are instruments. Thus a carpenter's 
 saw is an instrument. The changes effected in the matters of 
 which it is composed, for the purpose of rendering it an instru- 
 ment, are, there having been given a fit form and temper to the 
 steel plate of which it is made and a handle having been adjusted 
 to it. The wants which it tends to supply are multifarious, ac- 
 cording to the uses to which it is put. The power that renders 
 it an instrument is the art and industry of him who makes, and 
 of him who uses it. The changes effected in the issue of ev^ents 
 by its fabrication and use, are the dividing into regular parts suited 
 to different purposes, a great number of pieces of timber. 
 
 In a similar manner it might be shown, that houses, ships, 
 cattle, gardens, household furniture, manufactories, manufactured 
 goods, and stores of all sorts are in this sense, instruments. 
 But it is, I apprehend, unnecessary further to multiply instances ; 
 every thing that man, for the purpose of gaining an end, brings 
 to exist, or alters in its form, its position, or in the arrangement 
 of its parts, is an instrument. 
 
 As man is thus enabled to provide for the wants of futurity, 
 by his knowledge of the course of events, it naturally follows, 
 that in any particular situation, his power to provide for them, is 
 measured by the extent and accuracy of his knowledge. If that 
 knowledge be diminished, his power will be diminished. Thus 
 a deficiency of skill in the art of agriculture, or of baking, will 
 alike occasion a diminution of the quantity of food to be got from 
 a field applied to the cultivation of wheat. Neither can his 
 power be increased, but by an increase of his knowledge. It is 
 impossible to point out any improvement in any art, which does 
 
 12 
 
90 OF THE NATURE OF STOCK. 
 
 not depend on some new observations, or reasonings, on the 
 course of events connected with that art. 
 
 The generally admitted axiom, that knowledge is power, may 
 not be strictly true. Many facts have been observed which have 
 not yet been apphed to any useful purpose, though it is probable 
 they will, in time, be so applied. But, though it may not be 
 strictly true, that all knowledge immediately gives power, it is so, 
 that all power springs from knowledge, and is measured by its 
 extent and accuracy. Neither can it be disputed, that it operates 
 by enabhng man's reasoning faculties, so to direct his industry, 
 as to induce certain changes in the form and arrangement of the 
 parts of material objects converting them into instruments. " Ad 
 opera nil aliud potest homo, quam ut corpora naturalia admoveat 
 et amoveat ; reliqua natura intus transigit." 
 
CHAPTER II 
 
 OF THE CIRCUMSTANCES COMMON TO ALL INSTRUMENTS, AND OF THOSE 
 
 PROPER TO SOME. 
 
 All instruments agree in the following three particulars : 
 
 1. They are all either directly formed by human labor, or 
 indirectly through the aid of other instruments themselves formed 
 by human labor. 
 
 Sometimes, though rarely, instruments are constructed by labor 
 alone. Thus occasionally rough stone fences are put up, by the 
 hand alone, without the intervention of even a single tool. But, 
 in most instances, the aid of other instruments is employed. It 
 is seldom, that even the most common laborer is not assisted in 
 his operations by some implement or another. But, whatever 
 instrument or instruments may have cooperated with labor in the 
 formation of any other instrument, they themselves have been 
 either altogether, or in part, formed by labor ; and, by retracing 
 the course of things farther and farther back, we inevitably come 
 to the conclusion, that labor was, in this sense, " the first price, 
 the original purchase money that was paid for all things," and 
 thus that, directly or indirectly, it is to be looked on as the agent 
 that gives form to every instrument. 
 
 For the sake of simplifying the succeeding speculations, as 
 much as may be, labor will be considered as the agent employed 
 in the formation of all instruments. When the cooperation of 
 other instruments is implied in the means by which any particu- 
 lar instrument is constructed, the degree in which they cooperate 
 is understood to be measured by the quantity of labor for which 
 their'cooperation is, or might be, procured : and, in this sense, 
 that cooperation is spoken of as an equivalent to labor. The 
 rules, according to which the one thus measures the other, will 
 be discussed subsequently. 
 
92 OF THE CIRCUMSTANCES COMMON AND PROPER 
 
 2. All instruments bring to pass, or tend, or help, to bring to 
 pass events supplying some of the wants of man, and are then 
 exhausted. 
 
 Some instruments, without the intervention either of labor or 
 of other instruments, produce events which directly supply our 
 wants. Thus a peach tree yields its fruit to our hand. The 
 operation of otliers only tends to the production of events supply- 
 ing our wants. The growth of a crop of wheat is only a step 
 towards the production of bread. Others require the help of 
 either labor, or some other instrument. A row boat is useless 
 without the labor of the man who plies the oar ; a carriage, with- 
 out the cooperation of the horses who draw it. All instruments, 
 however, either produce, or contribute to the production, of events 
 supplying some of our wants. Their power to produce such 
 events, or the amount of them that they do produce, may be 
 termed their capacity. 
 
 It is necessary to have some common measure for the purpose 
 of comparing the capacity of instruments or the returns that are 
 made by them, with the labor or its equivalents that went to 
 form them. For this purpose, also, labor will be adopted, and 
 the events brought to pass by any instrument will be estimated 
 by the amount of labor to which they are esteemed equivalent 
 by the owner of the instrument. As we proceed, it will appear, 
 that this use of the term has no other effect than that of giving 
 distinctness to our nomenclature. Besides, it often really hap- 
 pens, that the returns made by instruments, directly compare with 
 labor, because they directly save labor. For instance, wooden 
 or metal pipes are occasionally used to conduct water from a 
 spring to some dwelling-house. Were they not there, the water 
 would have to be carried within the dwelling by some of the 
 domestics, and therefore the instrument formed by the pipes may 
 be said indifferently, either to supply a certain amount of water, 
 or save a certain portion of labor. 
 
 With one considerable exception, afterwards to be noted, all 
 instruments at length bring to pass, or aid in bringing to pass, all 
 the events which they can bring, or can help to bring to pass. 
 I shall use the term exhaustion, to denote this passage of things 
 from the class of instruments, into things which are not instru- 
 ' ments. When an instrument is said to be exhausted, it is meant 
 that the matters of which it was composed have passed out of the 
 class of instruments into that of materials. 
 
TO ALL INSTRUMENTS. 93 
 
 Sometimes they pass from the one class to the other suddenly. 
 Thus, articles used for food and fuel, bring to pass all the events 
 for which they were formed, very shortly. The appetite of 
 hunger is gratified, and heat is communicated to the frame, in a 
 few minutes, and the faggot and the bread, having yielded all 
 the nourishment and heat stored up in them, then cease to be 
 instruments. Gunpowder brings certain events to an issue 
 instantaneously. The bullet is discharged, and the rock split, 
 in an instant. This sudden and complete exhaustion of the 
 capacity of instruments is what is usually termed consumption. 
 Sometimes the matters of which instruments are formed pass 
 from the class of instruments to that of materials by degrees. 
 Thus tools and articles of wearing apparel are in use for a long 
 time before they cease to be instruments. A saw may be in 
 employment for years ; a hat defends the head for months. 
 When the capacity of instruments is thus gradually exhausted, 
 it is usually said that they are worn out, and this sort of exhaus- 
 tion is termed wear. 
 
 Sometimes the capacity of instruments is accidentally done 
 away with, and they consequently pass out of the class of instru- 
 ments, without being exhausted. Thus a house may be burned, 
 cloth may be eaten by vermin. They are then said to be destroyed. 
 A partial degree of this is damage. In calculating the capacity 
 of instruments, it is necessary to reckon the risk they run of 
 destruction or damage. In any estimation of the capacity, for 
 instance, of a crop of wheat, we have to make as accurate an 
 allowance as may be, for the risk of its destruction or damage, 
 by the inclemency of the weather or other accidents, before the 
 harvesting of it be accomplished. 
 
 3. Between the formation and exhaustion of instruments a 
 space of time intervenes. This necessarily happens because all 
 events take place in time. Sometimes that space extends to 
 years, sometimes to months, occasionally to shorter periods, but it 
 always exists. 
 
 The circumstances we have hitherto assumed as common to 
 all instruments, and the events they generate, will, I beheve, on 
 examination, be found actually to be so. There is one circum- 
 stance, however, which it is necessary to assume as common to 
 them all, and which in reality is not altogether so. In comparing 
 the capacity of two or more instruments, which supply, or tend to 
 
94 OF THE CIRCUMSTANCES COMMON AND PROPER, &c. 
 
 supply, wants of the same sort, we may very often measure them 
 by the relative physical eftects, resulting from the action of the 
 events brought to pass by them. Thus, if the consumption of 
 one cord of fire wood, of a particular sort, is capable of producing 
 exactly double the heat which the consumption of another cord 
 of another sort produces, a cord of the former, will have double 
 the capacity of a cord of the latter, and, if the one be equivalent 
 to four, the other will be equivalent to exactly two days labor. 
 In the same way, a log of timber from Norway, about to be em- 
 ployed in the constmction of a house, if of equal size, strength, 
 and durability, with another from Prussia, may, with justice be 
 considered as of equal capacity to it ; and so of many other in- 
 struments. We shall see afterwards, however, that this mode of 
 determining the capacity of similar instruments, is in many cases 
 incorrect, and that the instances are very numerous, where the 
 relative capacities of instruments of the same sort, depend on 
 other causes than their mere physical properties. The assump- 
 tion, therefore, that they may be so determined, is to be considered 
 as hypothetical, and to be tolerated from the difficulty of other- 
 wise treating the subject ; in the same manner as the hypothetic 
 existence, of strictly mathematical lines, and the absence of fric- 
 tion and of the resistance of the air, is excused, in reasonings 
 concerning the mechanical properties of matter. As in these 
 reasonings, an attempt will be made to ascertain the extent, and 
 mode of operation of those other causes ; and, having traced 
 what seem to be the great moving powers, and the laws govern- 
 ing them, we shall endeavor to. discover the circumstances which 
 retard or derange their motions. 
 
 It may be proper here to notice the acceptation, in which two 
 other terms of frequent subsequent occurrence, are to be received. 
 Some instruments are easily moved from place to place, and, on 
 this account, there are peculiar facilities, in exchanging them with 
 others. This seems to be the character distinguishing what are 
 called goods, or commodities, from other instruments, and it is in 
 this sense, that these terms will, in the subsequent pages, be em- 
 ployed. 
 
CHAPTER III. 
 
 OF CERTAIN CIRCUMSTANCES ARISING FROM THE INSTITUTION OF SOCIETY. 
 
 1. Man hardly exists but in the social state. If separated 
 from infancy from his fellows, his peculiar faculties scarcely at 
 all develop themselves. His mental and bodily capacities and 
 energies seem, also, to be moulded by the condition of the society 
 of which he is a member. We may venture to predict, that 
 three children born tomorrow, one in CafFiaria, another in China, 
 and a third in London, and remaining in their respective countries 
 till the age of twenty, will be very different beings, and that each 
 will possess the mental and bodily peculiarities, that characterize 
 the particular community to which he belongs. The same 
 things, though in a lesser degree, hold true concerning the men 
 composing every nation. Whether these characteristics of different 
 races, tribes, and peoples, proceed altogether from some peculiar 
 hereditary conformation of the bodily organs, or from the effects 
 of education, example, and habit, or from the combination of these, 
 or from other causes, it is very certain that they exist, and that 
 the moral and intellectual condition, as well as the bodily organi- 
 zation of men, vary, as they belong to this, or that society. Be- 
 sides this, institutions, forms of government, and laws, influence 
 somewhat the genius, and considerably affect the conduct, of 
 every people, and these also are very various. It thus happens 
 that every society has, what may be termed, a distinctive charac- 
 ter of its own. 
 
 It is therefore assumed, in the succeeding investigations, that 
 the moral and intellectual powers, the knowledge, the habits and 
 dispositions of the men composing every separate community, 
 society, nation, state, or people, terms which, as far as our subject 
 is concerned, may be considered synonymous, are such as to give 
 
96 CIRCUMSTANCES ARISING FROM 
 
 it a peculiar character distinguishing it from other communities. 
 It is also assumed, that the average character of the members of 
 different portions of the same community is similar, so that, were 
 a considerable number of the inliabitants of any particular stated- 
 taken from one part of its territories, tliey would closely resemble 
 an equal number, taken from any other part. This latter assump- 
 tion is not exactly accurate. There are great differences, espe- 
 cially in extensive states, between the characters of the inhabitants 
 of different portions of the same territory. These diversities render 
 it sometimes necessary to modify the conclusions that follow from 
 considering the average character of the members of the same 
 community as perfectly similar. Thus, the different characters 
 of the inhabitants of England, Ireland, and Scotland, affect some- 
 what deductions in this subject, drawn from treating the characters 
 of the population of different parts of Britain as uniform. In 
 truth, every large society might be divided into several smaller 
 societies, differing somewhat from each other. If they differ in 
 some particulars, however, they agree in many more, and certain 
 results follow from this agreement, which make it convenient to 
 treat of them as one. If necessary too, the amount of the inaccu- 
 racy, arising from the assumption of a more perfect uniformity 
 than exists, may be ascertained. 
 
 2. Man, as an organic being, is governed by laws similar to 
 those which other organic beings obey. Our subject obliges us 
 to advert to a consequence arising from one of them. 
 
 In the midst of the numerous revolutions and accidents to which 
 the surface of the globe is subject, it is always abundantly re- 
 plenished with animal and vegetable life, and the numbers of 
 every race upon it are kept up to the quantity of materials fit for 
 their subsistance which it afibrds them. The increase and de- 
 crease of the human species, follows the general law. This 
 seems to be the foundation of what has been termed the doctrine 
 of population. In the subsequent pages it is received, simply as 
 a statement of the fiict, that the numbers of every society increase, 
 as what its members are inclined to esteem a sufficient subsistence, 
 is provided for them. 
 
 The great majority of the members of every community, pro- 
 cure their subsistence by labor, and, according to this principle, 
 the number of laborers in every community must finally depend 
 oa the amount of those things esteemed by them sufficient for 
 
THE INSTITUTION OF SOCIETY. 97 
 
 their subsistence, which is annually distributed among them. It 
 has been supposed, however, that there is a constant oscillation 
 above and below this limit, and that sometimes therefore the sup- 
 ply having to be divided among a greater number, the amount 
 that each receives is less, sometimes, having to be divided among 
 a smaller number, is greater, and thus that the wages of labor, 
 though they always tend towards a fixed standard, never remain 
 at it. Admitting that this continual vibration may take place, I 
 conceive I may be permitted nevertheless to disregard it, and to 
 assume that the remuneration awarded the laborer, is, in the same 
 society, always a fixed quantity. As it is not intended to enter 
 into any investigation of the principles determining the amount of 
 the wages of labor in all societies, and at all times, nor to discuss 
 the somewhat contradictory doctrines that have been maintained 
 on this subject, the most simple assumption, and that, the errors 
 arising from which may be supposed to balance each other, seems 
 the best. 
 
 Even considering the subject however under the most simple 
 conditions possible, there are still some difficulties attending it. 
 The articles which the laborer uses, for food, clothing, &ic., 
 and which constitute his real wages, are continually varying. 
 Thus, among the working classes in Great Britain, fabrics of 
 cotton have, in a great measure, taken the placeof those of linen, 
 and wool for clothing ; as coal has taken the place of wood for fuel. 
 Seeing there is this change in w^hat constitute the wages of labor, 
 how then, it may be demanded, can wages at any two times be 
 considered equal ? 
 
 In answer to such a question, it may be observed in general, 
 that all articles supplying the wants of the laborer, and forming 
 his real wages, are fitted for this purpose by some physical qual- 
 ities they possess, producing certain effects on his bodily organs, 
 and, through them, occasionally, on the perceptions and thoughts 
 of his mind. One article, therefore, may be esteemed equal to 
 another and different article, if the effects produced by both are 
 equal. Thus a certain quantity of coal, may be considered equal 
 to another of wood, if each gives out the same degree of heat. 
 In many cases it is indeed very difficult to make this comparison 
 with accuracy. This however is not absolutely necessary for 
 our purpose, it being sufficient to conceive, that, what are termed 
 the wages of labor, in the same society, at different periods, 
 
 13 
 
98 CIRCUMSTANCES ARISING FROM 
 
 are really equal quantities, whether we have, or have not, the 
 means of measuring them, and ascertaining that they actually 
 are so. This may evidently be assumed, if we suppose that the 
 laborer is equally well nourished, clothed, lodged, and instructed, 
 and has equal leisure, at the one period and at the other ; whether 
 he be fed, clothed, and lodged, in the same way or not. 
 
 As the vigor of mind and body, as well as the skill, of different 
 individuals in the same society, are unequal, the rate of the 
 «vages of labor, even in the same society, is far from uniform. 
 It is however difhcult and in general reasonings unnecessary, 
 continually to refer to this variety ; and as it has, in consequence, 
 been usually neglected, we shall not farther advert to it. 
 
 According to the preceding assumptions, labor, in the same 
 society, is to be considered as an invariable quantity, and a day's 
 labor as the unit, serving as the base for calculations, concerning 
 the formation and exhaustion of the capacity of instruments. 
 It is to be observed, however, that when so employed, it finally 
 refers, not to the mental and corporeal effort exerted throughout 
 the day by the laborer, but to the wages received by him. The 
 laborer is, usually, merely the agent of some other person, and 
 that other person is, in reality, the one forming the instrument 
 constructed, as the wages of the laborers employed by him are 
 the causes of its being constructed. In cases too, where the laborer 
 works for himself, he rates his daily labor equal to a certain 
 amount of some of the things he is in the habit of consuming, and 
 this amount may be considered, as what he really gives to the 
 construction of the instrument, in the formation of which he em- 
 ploys himself. 
 
 The rates of wages vary, very much, in different societies. A 
 Chinese laborer, for example, subsists on very much less than an 
 English laborer. On the principles of calculation which we have 
 adopted, there is, therefore, a difference, in the quantity embraced 
 by a day's labor in one country and in another, and we cannot 
 immediately compare, by this means, instruments formed in one 
 society, with those formed in another. Our system has, in this 
 respect, an analogy to the different systems of numeration, with 
 regard to weights, measures, and coins, adopted in different 
 countries. It will, as we proceed, appear, that this diversity in the 
 rate of wages, in different communities, has also other and more 
 unportant effects. 
 
THE INSTITUTION OF SOCIETY. 99 
 
 3. Every society possesses a certain amount of materials capa- 
 ble of beinff converted into instruments. The surface of its ter- 
 ritory, the various minerals lying below the surface, its natural 
 forests, its waters, the command it may have of the ocean, and 
 its consequent property in the minerals and animals contained in 
 it, the rain that waters its soil, the elementary principles that may 
 be extracted from the atmosphere, even, perhaps, the light and 
 heat of the sun, are all to be regarded as materials, which, through 
 the agency of the labor of its members, may be converted into 
 instruments. The extent of the power, which the inhabitants of 
 any state may possess, to convert into instruments the materials 
 of which they have the command is however variable ; and in- 
 creases, as we have seen, as their knowledge of the properties, of 
 these materials and of the events, which in consequence of them, 
 they are capable of bringing to pass, increases. Thus the large 
 extent of the knowledge of the civilized man, compared with that 
 of the savage or barbarian, gives him the power of constructing 
 a much greater number of instruments out of the same materials, 
 and enables the European emigrant to convert the soil and forests 
 of America or New Holland, into means of producing a great 
 mass of desirable events, which it was beyond the capacity of the 
 ignorant native to effect. 
 
CHAPTER IV. 
 
 EVERY INSTRUMExVT MAY BE ARRANGED IN SOME PART OF A SERIES, OF 
 WHICH THE ORDERS ARE DETERMINED, BY THE PROPORTIONS EXISTING 
 BETWEEN THE LABOR EXPENDED IN THE FORMATION OF INSTRUMENTS, 
 THE CAPACITY GIVEN TO THEM, AND THE TIME ELAPSING FROM THE 
 PERIOD OF FORMATION TO THAT OF EXHAUSTION. 
 
 As by the capacity of instruments is to be understood their 
 power to produce, or bring to an issue, events equivalent to a 
 certain amount of labor, and as they are also formed by labor, it 
 is evident that the capacity given to any of them, and the labor 
 expended in its formation, have determinable numerical relations 
 to each other. The length of time likewise, elapsing between 
 their formation and exhaustion, may be expressed in numbers. 
 If a series then were devised, of such a nature, that any relation 
 that can exist among these three quantities, in consequence of 
 their varying proportions to each other, might be embraced in it, 
 every possible instrument would find a place there. 
 
 It is to be observed that, in consequence of a principle soon to 
 be explained, no instruments will be designedly formed, but such 
 as have a greater capacity, or issue in events, equivalent to more 
 than the labor expended in their construction. This circumstance 
 renders the formation of such a series more easy, as it renders it 
 unnecessary to take account, of any other instruments than such 
 as issue in events equivalent to more than the labor expended in 
 their formation, or, what may be termed, the cost of their forma- 
 tion. To simplify the consideration of the matter, we may, for 
 a little, proceed on the supposition, that every instrument is con- 
 structed at one precise point of time, and exhausted at another. 
 In that case, every instrument would find a place, in some part of 
 a series, of which the orders were determined by the period of 
 time at which instruments placed in them, issue, or would issue, 
 if not before exhausted, in events equivalent to double the labor 
 
OF THE NATURE OF STOCK. iqi 
 
 expended in forming them. Tliese orders may be represented 
 by the letters A, B, C, "* * Z a, h, c, $fc. The relation to each 
 other of the cost of formation, the capacity, and the time elapsing 
 between the period of formation and that of exhaustion, of in- 
 struments in the order A, is such as may be expressed by saying, 
 they in one year issue in events equivalent to double the labor 
 expended on their formation, or would so issue, if not before ex- 
 hausted. The relation between these, in instruments of the order 
 B, is such, that in two years they issue in events equivalent to 
 double the labor expended on them, and are then exhausted. 
 Instruments in the order C, in three years issue in events equiva- 
 lent to double the cost of formation ; of the order D, in four years ; 
 of the order Z, in twenty-six years ; of the order a. in twenty- 
 seven years, &c. For the sake of facility of expression, instru- 
 ments in the order A, or in the orders near it, will be said to be- 
 long to the more quickly returning orders ; instruments in the order 
 Z, or in the orders near it, or beyond it, will be said to belong to 
 the more slowly returning orders. 
 
 To imagine, in the first place, as simple a case as possible. 
 An individual, say an Indian trader, is obliged to reside on 
 a particular spot in the interior of North America, for somewhat 
 more than a year. He arrives in autumn, and immediately sets 
 about inclosing and digging up a piece of ground, for the purpose 
 of having it planted with maize. He expends on this twenty days' 
 labor. That labor he reckons equivalent to ten bushels of maize. 
 He gets the maize planted, hoed and harvested next season, by 
 Indian women, agreeing to give them part of the crop. After 
 deducting their portion he has twenty bushels for himself, with 
 which he leaves the place. The field he formed was then an 
 instrument of the order A. The same individual has to reside a 
 little more than two years in another quarter of the interior. He 
 clears, or has cleared on his arrival, another piece of ground, and 
 also expends on this operation twenty days' labor. Owing how- 
 ever to the soil being overrun with small roots, and it being neces- 
 sary to wait till they partially rot before a crop can be put on it, 
 he is aware that it cannot be planted until the second year. It is 
 then planted as before, and, as it happens, with the same event as 
 in the former field, yielding him net twenty bushels maize. This 
 field then was an instrument of the order B. In the same way 
 it is possible to conceive the formation and exhaustion of other 
 
IQ2 OF THE NATURE OF STOCK. 
 
 instruments of this sort, answering to the orders C, D, E, &;c. 
 the capacity of them all being double the cost of formation, and 
 the times intervening between the periods of formation and ex- 
 haustion, being respectively three, four, five, &c. years. Al- 
 though, however, instruments exactly corresponding to the con- 
 ditions assumed, may occasionally exist, and although it is pos- 
 sible at least to conceive their existence throughout a lengthened 
 series, yet, in fact, they seldom do exist so as exactly to answer 
 the suppositions. In by far the greater number of instances, 
 neither the times, elapsing between the periods of formation and 
 exhaustion, are any exact number of years, nor are the capacities 
 doublethecost of formation. But, in all variations of these three 
 quantities from an exact correspondence with any of the orders, 
 the proportions existing between them, will, nevertheless, always 
 be such, as to make it possible to reduce the instruments in which 
 they occur, to some order or another in our series, or to an order 
 that may be interposed between two proximate orders. 
 
 Such variations may be reduced to three sorts. The first con- 
 sists of instances where the capacity is double the cost of produc- 
 tion, but the time, no exact number of years. In this case, the 
 instrument does not exactly belong to any of the enumerated 
 orders, but falls between two proximate orders ; it may therefore 
 be said to belong to an order, that may be supposed to be inter- 
 posed between these two. Thus, an instrument being exhausted 
 in between seven and eight years, and having a capacity equal to 
 double the costof production, might be said to belong to an order 
 lying between G and H. This designation would mark its char- 
 acter with sufficient accuracy for our purpose. 
 
 There are only two other cases. The capacity of the instru- 
 ment may be exhausted before it arrive at an amount equal to 
 double the cost of formation, or, it may not be exhausted until it 
 has come to an amount greater than double the cost of formation. 
 In the former case it is necessary to suppose the period of ex- 
 haustion prolonged, the excess of the capacity of the instrument 
 over the cost of formation increasing at the same ratio, until the 
 capacity double the cost. It will then be shown to belong to 
 some particular order, or to lie between two proximate orders. 
 Thus, let an individual have it in his power to make use of a small 
 plot of ground for six months, and let him expend an equivalent 
 to two days' labor in preparing it for receiving the seeds of some 
 
OF THE NATURE OF STOCK. [03 
 
 plant, sowing them, and cultivating the crop, and let it return 
 him, at the end of six months, an amount, which, reduced to the 
 value of days labor, would be 2,828. If then we suppose the 
 period of exhaustion prolonged, the excess of the capacity over 
 the cost increasing at the same ratio, in twelve months time the 
 capacity will be 4 ; for, 2,828 is a mean proportional between 2 
 and 4. The instrument formed by the plants so cultivated, would 
 therefore belong to the order A, that order doubling in one year. 
 
 In the case where the capacity comes to more than double 
 the cost of formation, the order in which the instrument should be 
 placed, is to be found, by retracing the progress of its capacity, 
 under the supposition that it advanced at the sam.e rate, until we 
 arrive at a period when it was only double the cost. The 
 interval between that and the period of formation, will then 
 indicate the order to which it really belongs. 
 
 The bread fruit tree is perhaps twenty years before it bear ; 
 but ten of these trees, when in bearing, will, it is said, nearly 
 supply a family of South Sea islanders, with a sufficiency of this 
 sort of food for eight months in the year. This sort of fruit tree 
 requires, too, no other labor or attention than that bestowed in 
 planting it. Suppose, then, that an inhabitant of one of those 
 islands were to spend an hour in planting a few of these trees, 
 and that, according to the hypothesis of sudden exhaustion, on 
 which we are proceeding, at the termination of the twenty-two 
 years they are exhausted, yielding at that period an equivalent 
 to two thousand and forty-eight hours labor. If then we 
 retrace the progress, at which the capacity of this instrument 
 has advanced, we will find that it belongs to the order B. 
 For, instruments in that order doubhng in two years, one hour's 
 labor, if employed in forming an instrument of that order, 
 ought to yield an equivalent to two hours, at the end of the 
 second year ; and being then employed in constructing other 
 instruments, at the end of the fourth year should yield an 
 equivalent to four hours, at the end of the sixth to eight, 
 and so the geometrical series, 2, 4, 8, 16, Sic. would arise, 
 which, carried out to the eleventh term, at the end of the twenty- 
 second year, is 2048. It may perhaps serve somewhat to illus- 
 trate the matter, to suppose, that the individual who applied 
 an hour's labor to planting the bread fruit tree, gave the same 
 portion of time to the cultivation of another sort of plant, yielding 
 
104 OF THE NATURE OF STOCK. 
 
 its produce, and perishing, at the termination of the second year 
 from the time of its being placed in the soil, and the returns made, 
 from which are equal to double the labor expended on its 
 culture. Instead of consuming the crop at the termination 
 of the second year, he gives it to some other person or persons, 
 on condition of their applying for his benefit two hours' labor, 
 its equivalent, to tlie culture of a second crop ; at the end of 
 the fourth year, he proceeds in the same manner, and, con- 
 tinuing the process, at the termination of the twenty-second 
 year, the produce of the labor, of both hours', the one applied to 
 the cultivation of the former plant, and the other, to that of the lat- 
 ter, would be equal. The only difference in the cases would 
 be. that, the person in question, would, in the latter case, have 
 the trouble of making a bargain with one or more individuals every 
 second year, and would then also have the power to apply, if he 
 so chose, to the supply of his wants, the events, in this instance 
 brought about by his previous expenditure ; and that, in the latter 
 case, he would have neither the power nor the trouble. 
 
 We have assumed, that all instruments are formed at one point 
 of time, and exhausted at another. This is the case with but 
 very few. The period of formation almost always spreads over 
 a large space of time, and that of exhaustion, over another. It 
 is evidently, however, possible to fix on a point, to be determined 
 by a consideration of all the periods at which the labor going to 
 the formation was expended, which shall represent the true 
 period of formation ; and on another point, determined from a 
 consideration of similar circumstances regarding the times when 
 the capacity was exhausted, which shall represent the true period 
 of exhaustion. 
 
 Thus, suppose a small field in some new settlement in North 
 America, were formed by twelve days labor, it would, were it of 
 the order A, return in one year an equivalent to twenty-four days 
 labor, and then be completely exhausted and worthless. It 
 might, however, be, that it belonged to this order, although it 
 neither yielded so much as twenty-four days labor, nor was ex- 
 hausted at the end of the year. Say, that the crop sown is wheat, 
 and, that one bushel wheat is equivalent to one day's labor. 
 Were it at once exhausted, it ought to yield twenty four bushels 
 wheat; it however only yields eighteen, 'and is not then exhausted. 
 There is consequently a deficiency of six liushels. Now, six 
 
OF THE NATURE OF STOCK. 105 
 
 bushels at the end of the second year, at the same rate of doubhng 
 in a year, ought to produce twelve. Let us suppose that the 
 next crop is hay, and that the net hay yielded the second year 
 is one ton, equal to eight bushels wheat, then 12 — 8 = 4, tliere 
 is still a deficiency of four bushels, equivalent, at the end of the 
 third year, to eight. If, therefore, the next crop of hay the third 
 year, be equal to what it was the second, that is to eight bushels 
 wheal, the deficiency will then be made up. Let us suppose 
 that it is so, and that the field is at that time totally exhausted 
 and useless. It is evident, that such a field, though not producing, 
 or being exhausted as by the supposition, yet producing and 
 being exhausted, in a manner equivalent to the supposition, might, 
 with propriety, be said to belong to the order A. 
 
 But, it is farther probable, that such a field, might not pro- 
 duce quite so much grain, or hay, as we have even by the last 
 hypothesis supposed, and would not even at the end of the third 
 year, or for a much longer period, be exhausted; still, if the 
 deficiency in the one, w^ere equivalent to the farther supply in 
 the other, it would evidently properly belong also to the same 
 order. 
 
 Again, by the suppositions we have made, the labor, or Its 
 equivalent, was expended exactly at the commencement of the 
 period of one year. It might however have been, that some 
 part of the expenditure, going to the formation of this instrument, 
 was made several months before the commencement of the year, 
 and some several months after. But, had what was expended 
 before, been proportionably less, and what was expended after, 
 proportionably greater, the change w^ould not make any alteration 
 to the relation existing between the time and the expenditure, 
 or, consequently, to the place of the instrument. 
 
 The spaces over which the several points of time, at which 
 the formation of any instrument is effected, extend, and those 
 over which the several points of time at which its capacity is 
 exhausted also extend, frequently run into each other. Thus 
 according to our system a riding-horse is an instrument. The 
 space of time over which the w^iole period of his formation 
 extends, commences when his dam is put apart for breeding, con- 
 tinues as long as any thing is laid out for the purpose of giving 
 efficiency and durability to him as an instrument, and probably 
 therefore only terminates a few days before the death of the 
 
 14 
 
106 OF THE iNATURE OF STOCK. 
 
 animal. There would be a number of points all along that space^ 
 at each of which something had been expended on his account, 
 and from the date of which, and the amount expended at each, 
 data would be furnished, to ascertain the whole expense of his 
 fomiation, and the precise point from whence it might be dated. 
 The whole period of his exhaustion would also extend over a 
 large space. It would commence when he was first ridden for 
 pleasure, or business, and would terminate shordy after his death, 
 when his hide went to the tanner, and his flesh to the dogs. 
 An account of the several items expended, and the times when 
 they were expended, and of the several items yielded, and the 
 times at which they were yielded, would furnish data for determin- 
 ing the total cost of formation and capacity and the points to be 
 fixed on as the periods of formation and exhaustion, and thus the 
 place of the instrument could be determined. 
 
 Calculations of this sort would be intricate, and could not be 
 well effected without having recourse to methods, not usually em- 
 ployed in investigations like the present. In point of fact, there 
 is in practice, as we will afterwards see, a system of notation of 
 instruments, which enables us pretty accurately, and very easily 
 to determine their place in such a series as we have supposed. 
 It is sufiicient for the end here aimed at, to perceive that when 
 all particulars are known, concerning the formation and exhaustion 
 of any instrument, and the periods intervening between these, 
 data are then furnished for placing it in some part of such a series 
 as we have described ; and that it may consequently be assumed 
 that every instrument does, in reality, belong to some one order 
 in the series A, B, C, D, &;c., or to an order that may be inter- 
 posed between some two proximate orders of that series. 
 
 It may perhaps appear, tliat though, could instruments be con- 
 sidered apart, the foregoing explications might serve to show, 
 that they might all be reduced to a place in our series, yet, as 
 they very commonly act in combination, and as, in such instances, 
 the events in which two or more of them issue are the same, it 
 must be impossible to fix with accuracy the order to which each 
 belongs. Thus, a horse and a cart form together an instrument 
 for the transport of goods. The events, therefore, in ^vhich both 
 issue, being the same, we cannot measure the part that may be- 
 long to each, in any other manner, than by appropriating to each 
 the proportion indicated by their respective costs of formation, and 
 hence they will both appear to belong to the same order, though 
 
OF THE NATURE OF STOCK. JQT 
 
 perhaps they do in fact belong to different orders. But our subse- 
 quent inquiries will show, that the great mass of the instruments 
 existing in the same society are, in reality, at about the same 
 orders ; and, that instruments acting in combination with other 
 instruments, are almost always at the same orders. This objec- 
 tion is therefore removed, as all instruments acting in combination 
 may thus be considered as one. 
 
 Instruments are frequently repaired. The labor or its equiva- 
 lent, so expended, may be considered, either as a partial reforma- 
 tion of the old instrument, or as the addition of a new instrument 
 to be combined in action with the old one. The same rules 
 therefore, apply to repairs effected on instruments, as to their 
 original formation. 
 
 We have assumed, hitherto, that both formation and exhaustion 
 are properties common to all instruments. There is however a 
 class of instruments, that forms an exception to this general rule. 
 An extensive and important class exists, of a nature so peculiar, 
 that the instruments belonging to it are never exhausted, unless 
 in consequence of some revolution in the circumstances of the 
 society. That part of the surface of the earth devoted to agricul- 
 tural purposes composes this class. The peculiarity arises from 
 every portion of land so employed, forming two distinct instru- 
 ments. A piece of land, that it may do its part in providing a 
 supply for future wants, must first be rendered capable of culture, 
 and then be cultivated. It is not necessary that he who renders 
 it fit for culture, should also cultivate it, though it commonly 
 happens that both operations are performed by the same indi- 
 vidual. But by whomsoever the operation of converting waste 
 land, into land bearing crops, be performed, two ends are always 
 gained by it, the power of cultivation, and the actual culture. 
 There is this great difference between them, that while the 
 changes produced in a piece of land to fit it for cultivation are 
 lasting, remaining unless some means be taken to do away with 
 them ; those that are effected on it by the actual process of culti- 
 vation are of short, or at all events, of limited duration. When 
 an individual has converted a portion of morass or forest, into a 
 field fit for the operations of tillage, it does not return again to 
 the state of morass or forest. He has fitted it for being made an 
 instrument of aorriculture, or rather a succession of instruments of 
 agriculture. The farmer, by manuring it, sowing certain seeds 
 in it, and tilling it, forms it into such an instrument. The changes 
 
108 OF THE NATURE OF STOCK. 
 
 he thus effects however pass away. The seeds he sows, grow- 
 ing into plants of different kinds, are carried off ; the manure 
 yields part of its substance to them, and is in part dissipated ; the 
 soil that had been loosened and pulverized by the plough and 
 harrow, is gradually again compacted and hardened, by the effects 
 of the action of the sun and rain. As far then as it was actually 
 an instrument of agriculture it is exhausted. But its power of 
 being again formed into such an instrument remains, and the same 
 operations, the same rotation of crops, may indefinitely succeed 
 one another. 
 
 The individual who first forms a portion of land into these 
 combined instruments, has probably in view, only the ends to be 
 gained by one of them. His motive to expend labor on the for- 
 mation of the field, is to fit it for immediate culture. But, he 
 cannot effect this, without also rendering it capable of being cul- 
 tivated to all succeeding times. The returns, which for this 
 reason it makes in those succeeding times, form what is called 
 rent ; and this peculiarity in the nature of this sort of double in- 
 strument, is one of the chief causes of the existence of that par- 
 ticular species of revenue. Any portion of land therefore, which 
 bears a crop, considered as regards its fitness for being cultivated, 
 is an instrument of -indefinite exhaustion, and will not conse- 
 quently coincide with the conditions by which the orders in our 
 series are determined. We shall afterwards see, that in every 
 instance it may, notwithstanding, be reduced to a determined 
 place in that series. A portion of cultivated land, considered as 
 an instrument actually subject to the operations of the husband- 
 man, does not differ from any other instrument. 
 
 In conclusion, it may be observed that the position in our 
 series which any instrument will occupy, is determined by the 
 following circumstances. 
 
 1. The shorter the space of time between the period of its 
 formation, and that of its exhaustion, the nearer will any instru- 
 ment be placed to the order A, that is, towards the more quickly 
 returning orders. 
 
 2. The greater the capacity, and the less the cost of its form- 
 ation, the nearer will any instrument be to the order A ; the 
 less the capacity, the greater the cost of formation, the farther 
 will it be from A. 
 
 Generally, the proximity of instruments to A is inversely as the 
 cost and the time, and directly as the capacity. 
 
CHAPTER V 
 
 CIRCUMSTANCES DETERMINING THE AMOUNT OF INSTRUMENTS FORMED. 
 
 Having traced the general nature of instruments, and shown, 
 that the relations existing among the circumstances by which 
 they are affected, make it practicable to arrange them in a reg- 
 ular series, the object next claiming our attention, is, to ascertain 
 the causes determining the amount of them which each society 
 possesses, and to mark the more remarkable phenomena which 
 the operation of those causes produces. 
 
 The causes determining the amount of instruments, formed by 
 any society, will, I believe, be found to be four. 
 
 1. The quantity and quality of the materials owned by it. 
 
 2. The strength of the effective desire of accumulation. 
 
 3. The rate of wages. 
 
 4. The progress of the inventive faculty. 
 
 The nature of the second of these, and the circumstances on 
 which its strength depends, will form the subject of the next 
 chapter, but previously to entering on it, it is necessary to estab- 
 lish the following proposition. 
 
 The capacity which any people can communicate to the mate- 
 rials they possess, by forming them into instruments, cannot he 
 indefinitely increased, while their knowledge of their potoers and 
 qualities remains statioriary, without moving the instruments 
 formed continually onwards in the series ABC &fc. : but, there 
 is no assignable limit to the extent of the capacity, which a peo- 
 ple having attained considerable hnoivledge of the qualities and 
 powers of the materials they possess, can communicate to them, 
 without carrying them out of the series ABC &fc., even if 
 that knowledge remain stationary. 
 
 The capacity of instruments may be increased, by adding to 
 
110 OF THE NATURE OF STOCK. 
 
 their durability, or to their efficiency ; that is, by prolonging the 
 time during which they bring to pass the events, for the purpose 
 of effecting which, they are formed, or, by increasing the amount 
 of them which they bring to pass within the same time. 
 
 A dwellins-house is an instrument, aidinir to bring; to an issue 
 events of various classes. It more or less completely prevents 
 rain, damp, and the extremes of cold and heat, from penetrating 
 to the space included within its area. It preserves alf other 
 instruments contained within it, in comparative safety. It gives 
 those who inhabit it the power of carrying on unmolested, various 
 domestic occupations, and of enjoying, undisturbed by the gaze 
 of strangers, any of the gratifications or amusements of life, of 
 which they may be able and desirous to partake. Events of 
 these sorts, it may bring to pass, for a longer or shorter time, or 
 to a greater or less extent, within the same time. In the former 
 case, the durability is increased, in the latter, the efficiency ; in 
 both, the capacity is augmented. Dwelling-houses are built of 
 different materials, and those materials are wrought up with more 
 or less care. A dwelling might be slightly run up of wood, 
 lath, mud, plaster, and paper, which wpuld only be habitable for 
 a few months or years, like the unsubstantial villages, that Cathe- 
 rine of Russia saw in her progress through some parts of her do- 
 minions. Another of the same size, accommodation, and appear- 
 ance, that might last for two or three centuries, might be con- 
 structed, by employing stone, iron, and the most durable woods, 
 and joining and compacting them together, with great nicety and 
 accuracy. Between these two extremes there are all imaginable 
 varieties. According to that adopted, both the durability and the 
 efficiency will be greater or less. These two may be separated 
 from each other, at least in imagination, and therefore we may 
 consider them apart. 
 
 If the increased durability that may be given an instrument be 
 considered apart from the increased efficiency that will also proba- 
 bly be communicated to it, it must be regarded simply as an 
 extension of its existence, and consequently as a like extension of 
 its capacity. A dwelHng-house lasts, we shall say, sixty years, but 
 in other respects is perfectly similar to one lasting only thirty 
 years. Considered as an instrument, the former is, therefore, 
 exactly equal to two of the latter, the one formed thirty years 
 after the other. A house lasting one hundred and twenty years 
 
OF THE NATURE OF STOCK. m 
 
 would in like manner have the capacity of four houses, one 
 formed now, a second thirty, a third sixty, and a fourth ninety 
 years hence. The capacity thus increasing at the same rate as 
 the duration, if the limits to the power of giving durability be 
 indefinite, the limits to the power of communicating capacity are 
 also indefinite. 
 
 But to give additional durability to the instrument there must 
 be additional labor bestowed on its formation. An increase of 
 the durability of an instrument may therefore be considered as 
 a power communicated to it of giving existence to a new instioi- 
 ment at the end of a certain period, and purchased by a present 
 expenditure. The effects produced by the change will be de- 
 termined by the relations subsisting between the returns made by 
 the addition, its cost, and the time elapsing between the ex- 
 penditure and return. If we suppose the present expenditure 
 necessary to produce the durability, to be always equal to the 
 durability produced, then the compound instrument will be moved 
 towards the more slowly returning orders, because the new in- 
 strument is in that case one of slower return. One dwelling-house 
 lasts thirty years ; another, the same as it in other respects, but 
 costing double the expense of formation, lasts sixty years ; the 
 former house is an instrument of the order O, doubling in fifteen 
 years. The part of the duration of the latter extending from 
 the thirtieth to the sixtieth year, is to be considered, by our 
 hypothesis, as a separate instrument. If we suppose, that dur- 
 ing the time it is in use it returns as the other, at the end of the 
 sixtieth year it will have returned only four, and, therefore, is an 
 instnniient of the order C doubling only in thirty years. The 
 compound instrument will, in consequence, be of an order be- 
 tween X and Y, doubling in between twenty-four and tv/enty- 
 five years. The procedure of adding to the durability, by 
 adding equally to the expense of formation, will have greater 
 effect in placing an instrument further from A, the more it is 
 subjected to its operation. Thus, were an instrument of this sort 
 to have its duration prolonged to one hundred and twenty years, 
 and at the same expense, the last thirty would return only four 
 in one hundred and twenty years, whereas, had it formed an 
 instrument of the order O, it ought to have yielded two hundred 
 and fifty-six. Were the durability increased still farther, at the 
 same cost, the divergence would be much greater, going on in a 
 
112 OF THE NATURE OF STOCK. 
 
 geometrical ratio. If, therefore, continual additions be made to 
 the durability of an instrument, it cannot be preserved at an 
 order of equally quick return, unless the several aligmentations 
 be communicated to it, by an expenditure diminishing in a geo- 
 metrical ratio ; that is, in a ratio becoming indefinitely less, as 
 it is continued. This, however, cannot happen, for, it would 
 imply an absurdity. While instruments are in existence, they 
 are either producing events, or giving a new direction to their 
 course. But, mere matter, unless in some very rare instances, 
 is never acting, or acted upon, without undergoing a change. 
 This we term wear, and the effects it indicates form consequently 
 a definite power, to counteract which, a definite force must be 
 found. It cannot then, be counteracted, by a force indefinitely 
 small. 
 
 The same thing may be illustrated in another manner. When 
 events are produced and governed by design, they in turn gen- 
 erate other events of greater powers than themselves, and these 
 others, in a series rapidly increasing. Mere durability in instru- 
 ments, may be considered as a capacity to generate future events, 
 lying dormant in them, till the lapse of years exposes its exist- 
 ence, and gives it opportunity to act. The greater the time 
 therefore, for the expiration of which it must wait, the less the 
 chance of its being on an equality with rivals, whose powers are 
 continually and rapidly multiplying either events, or enjoyments, 
 whenever they have a field on which to exert their energies. 
 
 While the knowledge of the course of events which the mem- 
 bers of any society possess remains unaltered, and the materials 
 they own are the same, the duration of the instruments they 
 form cannot, consequently, be indefinitely increased, without their 
 being moved, farther and farther, from the more quickly return- 
 ing orders. 
 
 The durability of instruments refers only to those of gradual 
 exhaustion ; their efficiency, or the extent of their power to bring 
 about events within a certain time, refers both to those of gradual, 
 and of sudden exhaustion. If the knowledge of the course of 
 events, and the amount of the materials remain the same, the 
 efficiency of these materials when formed into instruments cannot 
 be indefinitely increased, without that increase being at length 
 made with additional difficulty, and through means of an amount 
 of labor greater than was required in the earlier stages. The 
 
OF THE NATURE OF STOCK. H;^ 
 
 action of matter upon matter always depends on some cause. 
 Tliose causes, — the inherent qualities and powers of the different 
 matters around him, — are the means man employs to make one 
 material to act so on another as to produce the events he 
 desires, and he does so by applying his labor to give them 
 such a form and position as may bring their powers into 
 play. If we suppose any number of men to be fixed to one 
 situation, and their knowledge of the qualities of the materials 
 around them to remain stationary, they will naturally first make 
 choice of those materials, whose powers are most easily brought 
 into action, and which produce the desired events most abundantly 
 and speedily. But as the stock of materials which any society 
 possesses, is limited, its members, if we suppose them to acquire 
 no additional knowledge of the powers of those materials, and 
 yet to add continually to the amount of instruments they form 
 out of them, must at length have recourse to such as are either 
 operated on with greater difliculty, or bring about desired events 
 more sparingly or tardily. The efficiency of the instnuiients 
 produced must therefore be generated by greater cost ; that is, 
 they must pass to orders of slower return. 
 
 This passage will be rapid, or slow, as the amount of know- 
 ledge possessed is small, or great. When art is in its infancy, 
 and men know but a few of the properties fitting them for be- 
 coming instruments, that are inherent in the materials in their 
 possession, they cannot much vary their mode of proceeding on 
 them, by combining, and giving new turns to their actions on each 
 other. In more advanced stages of society, on the contrary, where 
 the powers of a great number of materials are known, and where 
 consequently their operations on each other, may be combined, 
 and multiplied to a great extent, the means by which the same 
 end may be attained are very numerous. Some of them are 
 more easy or expeditious than others, but they differ by very 
 slight degrees, and the instruments formed by successively adopt- 
 ing them, would occup)^ positions in one series not widely distant 
 from one another. 
 
 If we then consider the capacity that may be given any amount 
 of materials, by a society among whom the progress of art is 
 stationary, as separated into the durability, and efficiency, of the 
 instruments its members form, it would appear, that they are 
 both subject to similar laws, and that neither can be indefinitely 
 
 15 
 
114 OF THE NATURE OF STOCK. 
 
 increased, witlioul carrying the instruments constructed contin- 
 ually on, to orders of slower return. The same general conclu- 
 sions must obviously hold good, concerning the capacity consid- 
 ered as combined of both. There is, however, a circum- 
 stance flowing from the consideration of this union, which is 
 deserving of notice, as it has considerable effect in the relations 
 between the cost and capacity of instruments, and, consequently, 
 on the position to be assigned them. It often happens, that ad- 
 ditional labor bestowed on an instrument, to give it greater 
 efficiency, gives it also greater durability. Thus the same choice 
 of materials, and the same careful and laborious formation of 
 them, that render the walls of a dwelling-house effective in ex- 
 cluding the inclemency of the w^eather, give it also solidity and 
 strength, and consequently prolong its duration. A tool, in the 
 fabrication of which good steel has been employed, not only cuts 
 better, but lasts longer, than one formed of inferior stuff. In 
 such cases, and they are very numerous, the capacity being in- 
 creased, both as concerns durabihty and efficiency, by the same 
 outlay, its proportion to the cost is greater and a larger expen- 
 diture may be made on the formation of the instrument without 
 moving it at all or moving it but a short distance towards the orders 
 of slower return. Sometimes the same expenditure that gives 
 efficiency to instruments, partly also increases their durability 
 and partly, quickens their exhaustion. Thus, the majority of 
 roads in North America, and in many other countries, are con- 
 structed altogether of the soil of Avhich the surface happens to 
 consist, arranged in a form adapted to the purpose. Such roads, 
 unless in the best of weather, are very inefficient instruments in 
 facilitating transport, and their durability is so small, that they 
 are probably reconstructed, by repair, every four or five years. A 
 road formed of small fragments of stone, in the manner that is 
 termed macadamization, costs perhaps tw^enty times as much, 
 but is both a far more efficient, and a far more durable instru- 
 ment. Besides however being more durable, and efficient, the 
 facility it gives to transport occasions an increase of transport, and 
 its exhaustion is thus quickened. For example, the capacity of 
 a road of tlijs sort, may be adequate to the transport of two hun- 
 dred thousand carriages ; if this be spread over twenty years, it 
 will be an instrument of much slower return, than if, in conse- 
 quence of the annual transport being doubled, that number pass 
 over it in ten years. 
 
OF THE NATURE OF STOCK. ]15 
 
 As efficiency and durability are frequently produced by the 
 same means, so, it sometimes happens, that the means which 
 would add to the one, cannot be employed, without diminishing 
 the other. Thus there are many tools and utensils, that cannot 
 be made very strong, and therefore durable, without being at the 
 same time clumsy, and inefficient ; and they cannot be made very 
 light, and easy to work with, without being also of little durability. 
 The difficulty in the combination of the qualities of durability 
 and efficiency, in the same materials, can only, however be con- 
 sidered as absolutely luniting the capacity of those instruments, 
 to support the weight of which, a corporeal exertion is required ; 
 and is consequently confined to wearing apparel, and to those 
 tools, and utensils, which are altogether moved by the hand. 
 When the weight rests on some firm basis, it can be poised, 
 and by the application of sufficient expenditure friction, can be 
 removed. The circumstance of the qualities of durability, and 
 efficiency, depending on the same materials, has therefore, pro- 
 bably, on the whole, the effect of retarding somewhat, though 
 not very greatly, the progress of instruments as greater capacity 
 is given to them, towards the more slowly returning orders. 
 
 The various powers of the material world, seem to be connected 
 at some common centre, and its several parts to exercise reciprocal 
 influences on each other. Hence, a discovery of new properties 
 in any one material, or more easy modes of bringing the old into 
 play, generally extends the power of man over a great range of 
 the other materials, which he had been in the habit of before 
 applying to his purposes. When art, therefore, has made con- 
 siderable progress, and comprehends within its dominion a mul- 
 tiplicity of materials, the variety of effects that may be generated, 
 from the action, and reaction, on each other, of the numerous 
 powers at its disposal, becomes illimitable. As in numbers, every 
 addition multiplies amazingly the possible antecedent combina- 
 tions, until at length the amount becomes too great to be ascer- 
 tained. Hence it is, that, though among barbarous nations, the 
 ability of man to increase the amount of instruments he possesses 
 may be bounded, among nations having made considerable ad- 
 vance in art, there seems no assigning any limit to it, other than 
 that indicated in the second part of the proposition, the necessary 
 gradual passage of the instruments constructed, to orders of 
 slower and slower return. 
 
11(5 OF THE NATURE OF STOCK. 
 
 It is hence, that, if we turn to any community where art has 
 advanced, we invariably sec, that however much industry may 
 have aheady exerted itself, on the materials within its reach, the 
 field for its possible future action seems rather increased than 
 diminished, and that the farther we stretch our view over it, to 
 the greater distance its extreme circumference recedes from us. 
 The industry of the people of Great Britain, has probably been 
 as largely applied to the materials which its limited territory 
 possesses, as that of any other community presently existing ; yet 
 certainly, there is no lack of matters on which it might be farther 
 exercised. A large portion of its surface, and which wants not, 
 nevertheless, all the requisites for the sustenance of vegetable 
 life, lies yet uncultivated. With the exception of the mountain- 
 ous and rocky regions, heat, light, air and water, in sufficient 
 abundance rest on every part of it, nor is the presence of many 
 of the earths, the mixture of which forms a proper shelter for the 
 tender radicle fibres, and a commodious storehouse for an impor- 
 tant part of their nourishment, any where wanting. There is 
 also in general a considerable supply diffused over the surface, of 
 the decomposing remains of former vegetables, and animals, the 
 material which constitutes nearly the whole solid food, that the 
 organic life of plants requires ; and, even when this is deficient 
 at one point, there are larger collections of it at some other. 
 The outlay requisite, in many instances, to give such form to 
 these materials, as to fit them for the purposes of the agriculturist, 
 would, no doubt, be very great, still, whatever it might be, as 
 the instrument formed would be of unlimited duration, the annual 
 returns from it, would, in time, exceed the cost of formation, 
 and bring it within the limits of our series. 
 
 Were we to go over the various other instruments, the returns 
 from which supply the wants of this community, we should per- 
 ceive, that every where, their capacities are capable of being 
 greatly increased. One would not find it very easy to say, how 
 much might be added, to the durability and efficiency, of dwel- 
 ling-houses alone. The amount of the capacity for the facilita- 
 tion of future transport, which might be embodied in railroads, 
 returning ultimately much more than the cost of their formation, 
 is incalculable ; as is also, the degree to which mining operations 
 might be extended. Even supposing all these, and many other 
 instruments, to have acquired a vastly increased extent, both as 
 
OF THE NATURE OF STOCK. nT 
 
 concerns durability and efficiency ; instead of limiting their far- 
 ther increase, it would seem likely, rather to open up a still 
 wider space, for the exertion of future industry in the formation 
 of others. Were the soil universally cultivated, were railroads 
 extended and ramified throughout the country, and were the 
 riches of the mineral kingdom more fully brought out, the addi- 
 tional facility given to the formation of instruments, by the com- 
 mand afforded of the materials necessary for their construction, 
 and the ease with which they might be transported from point to 
 point, would, it may well be supposed, be sufficient, to give the 
 means of a still greater increased construction of them, and a 
 still farther advance, of the amount of the capacities for the sup- 
 ply of futurity, embodied in the various instruments, spread over 
 the surface of the territory, or lying above, or beneath it. In 
 short, the more we consider the subject, the more clearly shall 
 we perceive the impossibility of fixing any limit to the amount 
 of the labor which may be expended in the formation of instru- 
 ments, in this, or any other community, where art has made 
 considerable advance. 
 
 This progress, while art itself remained stationary, would, 
 however, undoubtedly, gradually carry instruments to more and 
 more slowly returning orders, and would not therefore take place, 
 unless the society were inclined to construct instruments of those 
 orders. What the circumstances are, which determine individ- 
 uals, and societies, to stop at this, or that order of instruments, 
 will form the subject of the next chapter. 
 
CHAPTER VI. 
 
 OP THE CIRCUMSTANCES WHICH DETERMINE THE STRENGTH OF THE 
 EFFECTIVE DESIRE OF ACCUMULATION. 
 
 It has been shown, in the preceding chapter, that, in commu- 
 nities where an extensive knowledge of the materials within 
 reach of the industry of their members has generated numerous 
 arts, we can assign no limit, in the nature of the materials them- 
 selves, to the capacity for the supply of future wants that might 
 be given to them : but, that the instmments so formed, pass, by 
 a gradual and uninterrupted progress, to orders of slower and 
 slower return. It is scarcely necessary to observe, that the in- 
 crease to the capacity which may be given to instruments, can- 
 not be restricted by inability to devote additional labor to their 
 construction ; for, as all instruments at the period of their ex- 
 haustion return more than the cost of their formation, they give 
 the means of reconstructing others, returning also, somewhat 
 more largely than themselves. There are, nevertheless, in 
 every society causes, effectually bounding the advance of instru- 
 ments to orders capable of embracing a larger and larger circle 
 of materials, and the determination of those causes is the subject, 
 now claiming our attention. 
 
 Instruments are all formed by one amount of labor, or some 
 equivalent to it, that is, by something either capable of yielding, 
 or itself constituting some of the necessaries, conveniences, or 
 amusements of life, and they return another greater amount of 
 labor or its equivalents. The formation of every instrument 
 therefore, implies the sacrifice of some smaller present good, for 
 the production of some greater future good. If, then, the pro- 
 duction of that future greater good, be conceived to deserve the 
 sacrifice of this present smaller good, the instrument will be 
 formed, if not, it will not be formed. According to the series in 
 
OF THE NATURE OF STOCK. 119 
 
 which we have arranged instruments, they double the cost of 
 their formation in one, two, three, fcc. years. Consequently, 
 the order to which in any society the formation of instruments 
 will advance, will be determined by the length of the period, to 
 which the inclination of its members to yield up a present good, 
 for the purpose of producing the double of it at the expiration of 
 that period, will extend, according as it stretches to one, two, 
 three, twenty, forty, &c. years will the formation of instruments 
 be carried, to the orders. A, B, C, T, n, &c. and, at the point 
 where the willingness to make the the sacrifice ceases, there the 
 formation of instruments must stop. The circumstances there- 
 fore, on such occasions governing the decision of the members of 
 all societies, must be the causes, fixing the point, to which the 
 formation of instruments may in any society be carried, and be- 
 yond which it cannot advance. The determination to sacrifice 
 a certain amount of present good, to obtain another greater 
 amount of good, at some future period, may be termed the effect- 
 ive desire of accumiilation. All men may be said to have a 
 desire of this sort, for all men prefer a greater to a less ; but to 
 be effective it must prompt to action. 
 
 Were life to endure for ever, were the capacity to enjoy in 
 perfection all its goods, both mental and corporeal, to be prolonged 
 with it, and w^ere we guided solely by the dictates of reason, there 
 could be no limit to the formation of means for future gratifica- 
 tion, till our utmost wishes were supplied. A pleasure to be 
 enjoyed, or a pain to be endured, fifty or a hundred years hence, 
 would be considered deserving the same attention as if it were to 
 befall us fifty or a hundred minutes hence, and the sacrifice of a 
 smaller present good, for a greater future good, would be readily 
 made, to whatever period that futurity might extend. But life, 
 and the power to enjoy it, are the most uncertain of all things, 
 and we are not guided altogetlier by reason. We know not the 
 period when death may come upon us, but we know that it may 
 come in a few days, and must come in a few years. Why then 
 be providing goods that cannot be enjoyed until times, which, 
 though not very remote, may never come to us, or until times still 
 more remote, and which we are convinced we shall never see? 
 If life, too, is of uncertain duration and the time that death comes 
 between us and all our possessions unknown, the approaches of 
 
120 OF THE NATURE OF STOCK. 
 
 old age are at least certain, and are dulling, day by day, the 
 relish of every pleasure. 
 
 A mere reasonable regard to their own interest, would, there- 
 fore, place the present very far above the future, in the estima- 
 tion of most men. But, it is besides to be remarked, that such 
 pleasures as may now be enjoyed, generally awaken a passion 
 strongly prompting to the partaking of them. The actual pre- 
 sence of the immediate object of desire in the mind, by exciting 
 the attention, seems to rouse all the faculties, as it w^ere, to fix 
 their view on it, and leads tliem to a very lively conception of 
 the enjoyments which it offers to their instant possession. The 
 prospects of future good, which future years may hold out to us, 
 seem at such a moment dull and dubious, and are apt to be 
 slighted, for objects on which the day-light is falling strongly, 
 and showing us in all their freshness just within our grasp. There 
 is no man perhaps, to whom a good to be enjoyed to day, would 
 not seem of very different importance, from one exactly similar 
 to be enjoyed twelve years hence, even though the arrival of 
 both were equally certain. 
 
 Nor, while we retain any taste for pleasures, is it easy to pre- 
 scribe limits to the extent in which we may indulge in them, or 
 to the amount of the funds they may absorb. Every where we 
 see, that, to spend is easy, to spare, hard. Every one indeed 
 looks upon those in the rank immediately above him, as rolling 
 in superfluous extravagance. But, in every rank, from the 
 prince to the peasant, there are very many individuals, who have 
 difficulty in procuring funds to defray the cost of articles, the ex- 
 penditure of which they look upon as necessary to their condi- 
 tion, and, for the remainder, in the different classes, who have 
 more than their utmost real desires would call for, pleasure is so 
 entwined with extravagance, in the forms in which she presents 
 herself to each, that it is difficult fully to embrace the one, 
 without coming within the circle of the other. 
 
 It would then appear, that merely personal considerations, can 
 never eive o-reat strength to the effective desire of accumulation. 
 A future good, as concerns the individual, when balanced against 
 a present good, is both exceedingly uncertain in its arrival, and 
 in the amount of enjoyment k may yield, is probably far inferior. 
 Such considerations would undoubtedly represent it, as a great 
 
OF THE NATURE OF STOCK. 121 
 
 folly to deny youth or manhood pleasure, that old age miglit 
 have riches not to be enjoyed by it, but which, like the fabled 
 monster in the garden of the Hesperides, it must employ itself 
 with restless care to guard for others, 
 
 " Conservans aliis, quae periere sibi 
 
 Sicut in auricomis pendentia plurimus hortis 
 
 Pervigil observat non sua poma draco."* 
 
 A prudent calculation of mere personal enjoyment, could 
 prompt to nothing more than a provision for self, and would only 
 lead to the making, as it is said, the day and the journey alike, 
 and taking care, that youth should not want pleasure, nor old 
 age comfort. But, as passion is ever getting the better of mere 
 prudence, this limit would every now and then be exceeded, and 
 in numerous instances, the satiety of riot would be succeeded by 
 the miseries of want. Wherever a large amount of means for 
 the gratification of the present existed, they would be squandered, 
 and no one, on the other hand, would be inclined to make any 
 great sacrifice of the present, for the purpose of providing for 
 the future. The strength of the effective desire of accumulation 
 would be low, and only such instruments would be formed as 
 were of the quickly returning orders. 
 
 But man's pleasures are not altogether selfish. He receives 
 pleasure, from giving pleasure, and is far from the {)erfection of 
 his existence when he does not draw his enjoyments, rather 
 from the good he communicates, than from that which he re- 
 serves. Without the ties which bind him to others through the 
 conjugal and parental relations, the claims of his kindred, his 
 friends, his country, or his race, life would be to most men a 
 burden. These are its great stimulants, and sweeteners, giving 
 an aim to every possible exertion, and an interest to every mo- 
 ment. If, sometimes, they shadow our being with cares and 
 fears, those passing shadows but prove there is a sunshine. The 
 light of life only disappears, and its dreary night then commen- 
 ces, when we have none for whom to live. Then the whole 
 creation is a void. Really to live is to live with, and through 
 
 * C. C. Galli. Eleg. I. The whole elegy is illustrative of that isolation of 
 feeling and action, and consequent individual misery, and general weakness, 
 that pervaded the, Empire at the time. . 
 
 16 
 
122 OF THE NATURE OF STOCK. 
 
 others, more than In ourselves. To do so we must do so trulv. 
 
 " Love, and love only, is the loan for love." 
 
 If the mere pretence deceive others, it mocks and tantahzes our- 
 selves, encircling us with a joy as unreal, as that, which the looks 
 and tones of affection shed round him, who receives them dis- 
 guised in a borrowed garment. We cannot enjoy them, because 
 we feel that they are not ours, but some other's whose dress we 
 v.-ear. 
 
 In so far as to procure good for others, gives a real pleasure 
 to the individual, he is released from that narrow and imperfect 
 sphere of action, to which his mere personal interests would con- 
 fine him, and the future goods which the sacrifice of present ease 
 or enjoyment may produce, lose the greater part of their uncer- 
 tainty and worthlessness. Though life may pass from him, he 
 reckons not that his toils, his cares, his privations, will be lost, if 
 they serve as the means of enjoyment to some whom he may 
 leave behind. These feelings, therefore, investing the concerns 
 of futurity with a lively interest to the individual, and giving a 
 continuity to the existence and projects of the race, must tend to 
 strengthen very greatly the effective desire of accumulalion. 
 There would seem to be no limit to the possible extent of their 
 operation. The more powerful and predominating they become, 
 the greater must be thsir influence. It is true they are often 
 feeble, and oppressed by other principles, and it is just as true 
 that the world is full of deceit, hollowness, and unhappiness. As 
 far as they exist, howev^er, they form a real element, of great 
 power in the determination of the course of human action, and 
 one the nature of which would seem to indicate, and experience 
 to prove, to be of great influence, on the particular part of it 
 that forms our present subject. In the succeeding pages, the 
 terms, the social and benevolent affections, will be employed to 
 denote them. 
 
 The strength of the intellectual powers, giving rise to reason- 
 ing and reflective habits, forms another important element in the 
 determination of the course of human action. These habits in 
 opposition to the passions of the present hour, bring before us 
 the future, both as concerns ourselves, and others, in its legitimate 
 force, and urge the propriety of providing for it. Although 
 therefore, were our cares limited altogether to ourselves, the 
 greatest strength of the reasoning faculty, could prompt, to but a 
 
OF THE NATURE OF STOCK. 123 
 
 very limited operation on the events of futurity, yet, the farther 
 they extend to others, the wider is the circle of operations that 
 it leads us to embrace. These two principles of our nature, the 
 social and benevolent affections, and the intellectual powers, 
 serve indeed mutually to move each other to action, the affections 
 exciting the intellect to discover the means of producing good, 
 the intellect opening up a channel to the affections by giving 
 the power to do good. 
 
 All circumstances increasing the probability of the provision 
 we make for futurity being enjoyed by ourselves or others, also 
 tend to give strength to the effective desire of accumulation. 
 Thus a healthy climate, or occupation, by increasing the pro- 
 bability of life, has a tendency to add to this desire. When 
 engaged in safe occupations, and living in healthy countries, men 
 are much more apt to be frugal, than in unhealthy, or hazardous 
 occupations, and in climates pernicious to human life. Sailors 
 and soldiers are prodigals. In the West Indies, New Orleans, 
 the East Indies, the expenditure of the inhabitants is profuse. 
 The same people, coming to reside in the healthy parts of Eu- 
 rope, and not getting into the vortex of extravagant fashion, live 
 economically. War, and pestilence, have always waste, and 
 luxury, among the other evils that follow in their train. 
 
 For similar reasons, whatever gives security to the affairs of 
 the community, is favorable to the strength of this principle. 
 In this respect the general prevalence of law and order, and the 
 prospect of the continuance of peace and tranquillity, have con- 
 siderable influence. 
 
 These seem to be the chief circumstances, determining the 
 relations between present and future good, in the minds of 
 those in any society, who have a mind and a will, at the time 
 they are forming habits. When habits are once formed, they 
 regulate the tenor of the future life, and make slaves of their 
 former masters. There are, however, in every society, very 
 many, who form habits, and pursue a certain line of conduct 
 through life, not from any reasoning or choice of their own, 
 but hurried on by the example of those around them, and the 
 general direction in which the current of feeling and action sets 
 throughout the whole body. It is evident, however, that the 
 power that moves and directs the mass, lies not in them, but in 
 those, who govern their conduct in whole, or in part, by their 
 own feelings and passions, and the reflections which the situation 
 
124 OF THE NATURE OF STOCK. 
 
 of circumstances around them sugcrest to them. These form the 
 great moving principle, the others, hke the balance-wheel in an 
 engine, merely keep up, and give uniformity, to the motion they 
 
 generate. 
 
 The desire to accumulate would then seem to derive strength, 
 
 chiefly from three circumstances. 
 
 1. The prevalence throughout the society, of the social and 
 benevolent affections, or, of that principle, which, under what- 
 ever name it may be known, leads us to derive happiness, from 
 the good we communicate to others. 
 
 2. The extent of the intellectual powers, and the consequent 
 prevalence of habits of reflection, and prudence, in the minds of 
 the members of the society. 
 
 3. The stability of the condition of the affairs of the society, 
 and the reign of law and order throughout it. 
 
 It is weakened, and strength given to the desire of immediate 
 enjoyment, by three opposing circumstances. 
 
 1. The deficiency of strength in the social and benevolent 
 afl'ections, and the prevalence of the opposite principle, a desire 
 of mere selfish gratification. 
 
 2. A deficiency in the intellectual powers, and the consequent 
 want of habits of reflection and forethought. 
 
 3. The instability of the affairs of the society, and the imper- 
 fect diffusion of law and order throughout it. 
 
 The reader may perhaps conceive, that, in enumerating these 
 different circumstances, and deducing the strength of the effect- 
 ive desire of accumulation from the preponderance of the one 
 class over the other, I am attempting an unnecessary refine- 
 ment, and that the principle of a regard to self interest alone, 
 though it may not, of itself, give great strength to this desire, yet, 
 from its combination with other springs of action, must, generally 
 do so indirectly and ultimately and may, therefore, be assumed as 
 a cause sufficient to account for the phenomena. If we confine 
 our attention to the present times, and to particular parts of the 
 globe, this may be readily admitted. Now, and in those places, 
 a prudent regard to self interest would doubtless prompt many 
 individuals to cooperate effectively in the increase of the general 
 means of enjoyment. But there is nothing more apt to mislead 
 us, when investigating the causes determining the motions of any 
 great system, than to take our station at some particular point in 
 
OF THE NATURE OF STOCK. 125 
 
 it, and, examining the appearances there presented to us, to sup- 
 pose that they must be precisely similar through the whole sphere 
 of action. Because, in Great Britain, a regard to mere self in- 
 terest, may now prompt to a course of action leading to making 
 a large provision for the wants of others, we are, in reality, no 
 more warranted to conclude that it will do so always, and in every 
 place, than were the ancients warranted to conclude, because, in 
 their particular communities, the pursuit of wealth commonly 
 generated evil, that it must therefore do so always and in every 
 place. 
 
 There seem to be, in modern times, and in particular com- 
 munities, two circumstances, that may lead an individual, from a 
 mere regard to his personal interest, to pursue the paths of sober 
 industry and frugahty, and, consequently, to make an extended 
 provision for the wants of others. These seem to be the desire 
 of personal, and family aggrandizement, and a wish, conjoined 
 with the pursuit of both, to rank high in the estimation of the 
 world. The acquisition of fortune, is a road open to the am- 
 bition of all men, and, in the present days, is the only road open 
 to that of most men. The mere desire to rise in the world, and 
 envy of the superiority of other men, may excite many to enter 
 on this path, and preserve them steadily in it. This sort of 
 spirit, however, must be kept in strict check, by a large sur- 
 rounding mass of genuine probity, and tenderness of the hap- 
 piness of others, or it certainly breaks out into disorders. There 
 is none more easily tempted to evil, or more dangerous. It is 
 the first to diminish the security of all compacts, and transactions 
 of business, by fraud and exactions ; it is the first to disturb the 
 public tranquillity, by seditions and conspiracies. It is such a 
 spirit, predominating over a character otherwise good, that 
 Shakspeare paints in Cassius. Cresar thinks him to be feared, 
 because, 
 
 '' Such men as he be never at heart's ease, 
 While they behold a greater than themselves; 
 And therefore are they very dangerous." 
 
 It is this temper that spurs him on, " in envy of great Cassar," 
 to " humour, and win, the noble Brutus," to the assassination. 
 It is the same spirit, that renders him unscrupulous, 
 
 " To sell and mart his offices for gold, 
 To undeservers ;" 
 
12Q OF THE NATURE OF STOCK. 
 
 and, to wring 
 
 " From the hard hand of peasants, their vile trash, 
 By any indirection." 
 
 When, therefore, the mere desire of distinction, is the object 
 for which wealth is generally pursued, there, the pursuit infallibly, 
 at length, withdraws from the path of virtue, and excites those 
 eno-ased in it. to a disreo-ard of their own honor, and the suffering 
 of others. 
 
 " Magnum pauperies opprobrium jubet 
 Quidvis et facere et pati, 
 Virtutisque viam deserit ardute." 
 
 When such is the character of only a small minority of those 
 who pursue wealth, it is not injuriously felt. The energy of their 
 motion, rather quickens the progress of the whole, than retards it. 
 It is very different, when such characters compose the majority 
 of those engaged in such pursuits. A chaos of deceit, treachery, 
 knavery, is then generated, in which truth, generosity, good faith, 
 compassion, perish. Hence it was, that the pursuit of wealth, 
 in ancient times, was held as absolutely incompatible, with the 
 lowest degree of liberal sentiment, virtuous spirit, or common 
 honesty. Plato expressly says, that in commerce and traffic 
 there is no such thing as an honest man, and numerous passages 
 from the Greek and Roman writers might be cited in proof, that, 
 in those days, it was admitted on all hands, that the character of 
 the money-making man, was uniformly vicious. The following 
 is one of the most striking 1 can presently find. 
 
 " It is impossible for the same man to be given to sensual 
 pleasures, and to the love of money, and to be religious. For 
 he who is a lover of pleasure will be a lover of money, and he 
 who loves money, must of necessity be unjust, and a violator 
 of the laws of God and man."* It is here not thought necessary 
 to give any proof of the assertion, on the contrary, it is taken as 
 an admitted fact, from which a consequence may be deduced. 
 
 In those times, therefore, the pursuit of wealth was disreputa- 
 ble, and the self-love of no one could be gratified by the charac- 
 ter it procured him. We are apt to conceive the observation of 
 
 * O (filriSovov xai (ftXoaMfiajor nm (pdoxQ^jf^aTOv xai (f.dodeov ibv 
 d.viov uSvvcaov livai. 6 yuq cpihjSovog y.cxi (ptkoain^iaiog 6 8s (pdoacofiaTOS 
 7ittVTb)g xai tpiKoxQrj^iaiog. O de cpiXoxQ^^fintog £§ avayxr^g adixog. O 
 dB ttSmog tig fie.v Ofov avoaioc Eig Ss av&Qomovg Ttaqavofiog. Demophili 
 
 SimilitiKline.'!. 
 
OF THE NATURE OF STOCK. 1^27 
 
 St. Paul, that " the love of money is the root of all evil, and in- 
 fallibly leads to wickedness," as springing from the ascetic spirit 
 in which he contemplated matters, whereas it is common to him 
 with all the moralists of his tim.e, even with the most liberal of 
 them, and must be held as a mere statement of what was then 
 an obvious fact. Thus Horace calls it the same thing, " summi 
 materiam mali," and the voice of the whole age agrees with him. 
 An assiduous care to the increase of fortune w^as then esteemed 
 Bvil, and the source of evil, and was reprobated accordingly. It 
 was evil, because generally proceeding from a grasping, sordid, 
 selfish spirit. It was the source of evil, because the great exciter 
 of fraud, knavery, and violence. It is in more moral communities 
 alone, where the real springs of action are not selfish, and where 
 a desire for the good of others is one of the chief movers, animat- 
 ing the exertions, and giving a tone to the feelings and actions of 
 the whole body, that the virtuous and liberal mind, sympa- 
 thizes w-ith, and approves the conduct of the man, who 
 gives his days to labor, and his nights to engrossing care, for the 
 purpose of increasing his gains. There, such a life is not deemed 
 selfish, sordid, or unhappy, because there, it is known generally 
 to proceed from a totally opposite spirit, and to have for its sus- 
 taining principle, the welfare of others, rather than of the indi- 
 vidual ; and there, it is esteemed praiseworthy, because there, 
 its general tendency is good, not evil. There, too, ambition alone 
 may, no doubt, lead those who want other motives into the paths 
 of sober industry and frugality, because the desire of excelhng in 
 whatever is attempted, must impel individuals actuated by it, to 
 every pursuit that other men gain credit by. It is not perhaps 
 the object gained, so much as the gaining of it, which gives it 
 value in their eyes. But, it is only where such conduct pro- 
 cures consideration, and respect, that we can expect it will be 
 steadily pursued by such persons. Where patient and assiduous 
 industry, and undeviating integrity, procure the highest name, 
 and fame, they will be followed by many who value them not in 
 themselves. But this observation only proves, that we have to 
 seek for the general course of action of the individual, in the cir- 
 cumstances determining that of the society. 
 
 In modern times, again, and in particular comm.unities, mar- 
 riage and offspring, and the consequent desire of family aggran- 
 dizement, may often succeed in imposing on those, to v/hom the 
 
128 <^F THE NATURE OF STOCK. 
 
 welfare of others is naturally of little moment, the necessity of 
 providing for that welfare, and therefore may often generate and, 
 keep up a much stronger attention to the cares of futurity, than 
 could be excited by a mere regard to self interest. But, it is 
 to be observed, that the mode in which the passions prompting 
 to marriage will operate, must depend, on the feelings, and con- 
 sequently, manners, pervading the society. When the general 
 feelings and morals become corrupt, marriage will never be 
 sought after, by men in easy circumstances, for the mere plea- 
 sures of sense. Socrates remarks this to his son, when pointing 
 out the obligations he owed him for giving him being* and every 
 pure voluptuary is ready to curse, with Eloisa, " all human ties." 
 The indulgences to which these passions prompt, when the 
 feelings become purely selfish, will, indeed, I suspect, be found 
 to be the great weakeners of this very principle. Out of the 
 heart are the issues of life, and the evils to which they give rise 
 are the worst of any, because they contaminate the sources of 
 all healthy energy and activity, at the very fountain head. It is 
 to them, that Horace, in my opinion, truly traces, the load of 
 mischief which in his time pressed on Rome, and which finally 
 overwhelmed her ; 
 
 " Faecunda culpse secula, nuptias 
 Primum inquinavere, et genus et damos : 
 Hoc fonte derivata clades 
 Inque patres populumque fluxit." 
 
 Even on the supposition of legitimate offspring, it is only in 
 countries where the general sentiment applauds that course of 
 action, that the man actuated by mere self interest, can be sup- 
 posed to pride himself on rearing up and providing for a family, 
 in preference to enjoying, without restraint, all the pleasures he 
 may be able to procure. Cool, calculating, self intei'est, would 
 thus speak. " Who knoweth whether his son shall be a wise 
 man or a fool ? Yet shall he have rule over all his labor, where- 
 in he hath labored, and wherein he hath showed himself wise 
 under the sun. This is also vanity. Wherefore I perceive 
 that there is nothing, better than that a man should rejoice in 
 his own works : for that is his portion : for who shall bring him 
 
 * Kal fiei' dv tCoi' je (jccpQodiaiiov evsy.a ncndortoiFiod'ui lovti ur&Qfhnovg 
 TuTiolu/iiSiiroig- inh t6vtov ys tmp &.itol.vaoyjMV fisarat fiev ot 6dol jHEardi 
 de 7(i oixii/uona. Xenoph. Memorabilia. 
 
OF THE NATURE OF STOCK. 129 
 
 to see what shall be after him : it is good and comely for one to 
 eat and to drink, and to enjoy the good of all his labor that he 
 taketh under the sun, all the days of his life, which God giveth 
 him, for it is his portion." We find accordingly that in states 
 where mere selfish enjoyment is the chief principle of action, that 
 the interests of posterity are neglected. Thus, among the Roman 
 writers, the heir is always represented in an invidious light, and 
 to save for him is represented as a folly. The writings of Horace, 
 and the contemporary poets, throughout, exemplify the prev- 
 alence of this feeling. 
 
 " Parcus ob hiEridis curam — 
 Assidet insano. — " 
 
 For a frightful picture of causes and effects, in this particular, the 
 epigram of Martial to Titullus beginning, 
 
 " Rape, congere, aufer, &.c." 
 
 might be quoted. But, it is time to conclude a digression, on 
 which perhaps I have somewhat prematurely entered. 
 
 We shall then assume that there are motives, as above enu- 
 merated, derived from the principles of human nature, acting on 
 all men, and exciting them to expend what they presently pos- 
 sess in providing for future wants, as there are others, derived 
 from the same source, tempting them to lay it out in the gratifi- 
 cation of their immediate wants. The strength of the effective 
 desire of accumulation, in any man or society of men, or this 
 desire manifested in action, is determined by the preponderance 
 of the one class of motives, over the other. It is manifested, and 
 may be measured, by the willingness of the individual, or indi- 
 viduals, to lay out a certain amount to-day, in order to produce 
 the double of that amount at a period more or less remote, that 
 is, at the expiration of one, two, three, &,c. years. 
 
 17 
 
CHAPTER VII 
 
 OF SOME OF THE PHENOMENA ARISING FROM THE DIFFERENT DEGREES 
 OF STRENGTH OF THE EFFECTIVE DESIRE OF ACCUMULATION IN DIFFER- 
 ENT SOCIETIES. 
 
 The effective desire of accumulation is of different degrees of 
 strength, not only in different societies, as compared with each 
 other, but also in the several individuals composing the same 
 society as compared together. Disregarding, however, for the 
 present, the effects produced on the formation of instruments, 
 from diversities in the strength of this principle among individ- 
 uals in the same society, we are, in this chapter, to endeavor to 
 trace solely some of those resulting from the operation of causes 
 varying its strength in different societies. As has been already 
 stated, there are three other causes operating in the formation of 
 instruments ; the quantity and quality of the materials owned by 
 any particular society ; the progress which the inventive faculty 
 has made in it ; and the rate of the wages paid the laborer. The 
 first of these depending on the original constitution of the whole 
 globe, and its different regions, and the correspondence between 
 these and the corporeal system of man, is determined by circum- 
 stances, the consideration of which would be foreign to the pre- 
 sent inquiry. With regard to our subject it is to be taken as an 
 important but ultimate fact. The causes on which the progress 
 of the inventive faculty seems chiefly to depend, will form the 
 subject of a subsequent chapter. At present, the extent of that 
 progress is to be received simply as a circumstance of admitted 
 importance. 
 
 The rate of the wages of labor, the last of the causes affecting 
 the formation of instruments, though a subject of investigation in 
 itself highly interesting, and closely connected with this whole 
 inquiry, is not, as has been already stated, to be otherwise con- 
 
OF THE NATURE OF STOCK. 131 
 
 sidered in these investigations, than as an existing circumstance, 
 the operation of which is also of importance in the determination 
 of the extent to which the stock of materials, in possession of 
 any society, will be wrought up by it, but the laws regulating 
 which lie beyond our prescribed limits. So considered, a low 
 rate of wages may be esteemed, in its direct effects, as producing 
 the same results as an improvement in the quality of the mate- 
 rials operated on, or an extension of the power to operate on 
 them, through an advance in the progress of invention. All 
 these cause the same returns to be produced from a less expen- 
 diture, or greater returns, from the same expenditure. They 
 all, therefore, place a greater range of materials within compass 
 of the accumulative principle, and occasion the construction of a 
 larger amount of instruments. The advance of invention, how- 
 ever, differs from a lowering in the rate of wages, in being a 
 quantity to the increase of which we can set no bounds, whereas, 
 we soon arrive at a limit to the possible diminution of the rate of 
 wages. In the principles on which they depend, and in their 
 ulterior consequences they differ, I believe it will be found, still 
 more widely. 
 
 The first example I shall take, of the effect, of circumstances 
 in moulding the characters of communities, and of these again, 
 in determining the extent to which they carry the formation of 
 instruments, will be that of the American Indian. 
 
 The life of the hunter seems unfavorable to the perfect 
 developement of the accumulative principle. In this state man 
 may be said to be necessarily improvident, and regardless of 
 futurity, because, in it, the future presents nothing, which can 
 be with certainty either foreseen, or governed. The hunting 
 grounds are the sources from which, among hunters, the means 
 of subsistence are drawn. But these belong to the nation or the 
 tribe, which alone therefore, can make more abundant provision 
 for futurity by securing to itself a domain more extensive, or 
 better supplied with wild animals ; or meet poverty, by being 
 restricted to one more narrow, or barren. As regards his future 
 means of living, every member of such a community thinks of 
 nothing but whether the supply of game will be plentiful, or 
 scanty ; in the one case, he knows that he will enjoy abundance, 
 in the other that he must endure want. In such societies there- 
 
132 OF THE NATURE OF STOCK. 
 
 fore, the view can never be directed to any distant future good, 
 which present exertion may secure to the individual, but is con- 
 fined to what, by that exertion may be added to the power, or 
 the territory of the tribe. What apphes to the individual hun- 
 ter, applies to his family. Their comfort depends less on his 
 particular exertions, than on circumstances affecting the whole 
 band, or little nation to which he belongs. It is only in infancy 
 that the wants of the young savage are, to any great extent, pro- 
 vided for by his parents. Afterwards he feasts, or fasts, like 
 every other member of the community, as abundance, or scarcity 
 reigns in the camp. That camp, indeed, may be said to form 
 the family of the Indian. His whole thoughts, and affections 
 centre there, nor has he any cares for a distant futurity, either 
 for himself, or his offspring, separated from the common suffer- 
 ings or enjoyments of his tribe. 
 
 Were the causes determining the future good or evil flow- 
 ing to each of these great families, to be within reach of the 
 energies of the individuals composing them, they would have a 
 steady aim for their exertions, and having the means, might 
 acquire the habit of purchasing future plenty, and security, by 
 present toil, and privation, and of tracing out with certainty, remote 
 consequences, to immediate acts. But this is a mode of thought 
 and action, to wdiich the circumstances of their condition are op- 
 posed. As the utmost pradence, foresight, and fortitude, can but 
 little affect the future welfare of the individual, so, their power 
 to promote the prosperity of the society, is limited and precarious. 
 
 If a tribe of hunters occupy a healthy territory, and one plen- 
 tifully supplied with game, they are pressed on by others, eager 
 to seize on these advantages, and so are continually engaged in 
 destructive wars. While the individuals composing such a tribe, 
 can slaughter their foes, that is, the surrounding tribes, or can 
 drive them to a distance, they want for nothing. The defeat of 
 their own trib^, is the only calamity they have to dread. This 
 calamity is every now and then overtaking them. 
 
 War is always a game of hazard. In such a state of society 
 it is peculiarly hazardous. There the art of war is surprise. 
 The scanty population which the chase can alone maintain, is 
 divided into small bands, living widely apart — mere points in 
 a vast continuity of wilderness. In such situations warfare can 
 never be open. The attacking party must advance with secrecy ; 
 
OF THE NATURE OF STOCK. 133 
 
 were they to make their approach known, their enemies would 
 only wait for them, if convinced of their own superiority ; other- 
 wise, they ^70uld retire, and, if acting prudently, and skilfully, 
 never suffer themselves to be seen, unless to strike their foes, 
 themselves being safe, in some well-conducted ambush. But 
 where success depends upon concealment, and surprise, it also 
 depends on chance. No precautions can succeed in always 
 guarding a small band, encamped in the midst of a great forest, 
 from being unexpectedly assailed. No precautions can prevent 
 the track of a party advancing, through an enemy's country, 
 from being occasionally discovered. Victory, or defeat, and all 
 that follow them, depend on the slightest accident. Fortune is 
 a goddess, on whose influence the schemes of the most skilful, 
 and greatest captains, are always in some measure, dependent, 
 but here she reigns supreme. 
 
 The effects of these circumstances are increased by the char- 
 acter of the laws of war of the savage. His wars are wars of 
 extermination. They cannot well be otherwise. Were he 
 pressed to defend, what he thinks recjuires no defence, but is 
 prepared alike to execute on others, or suffer himself, he might 
 so do from the necessity of the case, the plea which man always 
 urges for every evil he inflicts on his fellows. He can neither safely 
 let his enemies go, nor possibly retain them captive. In the 
 former case they would be as much to be dreaded as ever. In 
 the woods half a dozen men may make war upon a nation, as 
 wars are there conducted. That is, they may waylay, surprise, 
 and slaughter detached parts of them. Nor can he retain cap- 
 tives. They would both be useless, and ro.ust escape. A plunge 
 into the surrounding forest sets them free. Hence it is not con- 
 quest, as with other warriors, but destmction, that is his aim, and 
 what he executes on others, when he has the power, he sees 
 continually impending over him, from them, when fortune gives 
 them the power. 
 
 Thus the whole existence of the hunter is chequered by quick 
 changing extremes. Abundance, famine, the fierce joys of vic- 
 tory, the horrors of surprise and defeat, rapidly succeed each 
 other, in an order which he can neither pretend to foresee, nor 
 direct. Like all men in similar circumstances, he refers the 
 events, of which his being is the sport, to the continual and 
 capricious agency, of supernatural powers. All the good that 
 
134 OF THE NATURE OF STOCK. 
 
 happens to him, is from their having been propitious to his de- 
 signs, and from his having rightly interpreted their omens ; all 
 the evil that befalls him, arises, in his conception, from their 
 hostility, or from his having mistaken, or neglected, some vision, 
 or token they sent him. The warrior turns back, in the middle 
 of an expedition, if his sleep be disturbed by a dream betokening 
 evil ; the unsuccessful hunter accuses neither his unsteady hand, 
 nor imperfect sight, but some magical influence hanging on his 
 weapon which only the priest or sorcerer can therefore remove. 
 The direction of all events whose arrival is distant, seems thus to 
 the hunter of the woods to lie entirely beyond his control ; and, 
 instead of endeavoring to make the ease, or aWmdance of the 
 present, provide for the evils of the future, he prides himself in 
 enjoying the good of to-day undisturbed by a single care, and, in 
 feeling, and knowing, that he can bear the ill of tomorrow without 
 a murmur. 
 
 Hence the Indian has a character altogether his own. Feeling 
 himself hurried on by the course of events, not directing it, he 
 thinks as Httle of refraining from the pleasures that course may 
 offer him, as of shrinking from the pains to which it may expose 
 him, and indulges, therefore, without restraint, in the enjoyments 
 of the hour. His intellectual faculties, unaccustomed to deduce 
 remote consequences from immediate causes, and still less accus- 
 tomed to adopt as a ground for action, and to watch, carefully, 
 and anxiously, any concatenation of the sort, are feeble ; either 
 in themselves, or from inaction. His passions, on the contrary, 
 are strong. Unaccustomed to reflection, the warm and generous 
 feelings of affection and gratitude, as well as the darker ones of 
 hatred and revenge, are often formed hastily, and on inadequate 
 grounds, but while they last they are exceedingly vehement. His 
 tribe forms the point in which all these feelings centre ; it is in fact 
 his family, with which all his joys and sorrows are in common. 
 
 An attention to the effects, naturally flowing from this char- 
 acter, will explain many circumstances in the present con- 
 dition, and past history of these tribes, which are in themselves 
 interesting, and which are closely connected with our sub- 
 ject. Of all those circumstances, none is more remarkable, than 
 their neglecting, or refusing, to adopt the arts, of the new neigh- 
 bors which the discovery by Europeans of the country they in- 
 habit, brought, and has kept in contact with them. Surrounded 
 
OF THE NATURE OF STOCK. 135 
 
 as are the scattered wrecks of those once numerous tribes, by a 
 great people, rapidly converting the soil, and almost whatever 
 grows on it, or is hid beneath it, into instruments, capable of 
 plentifully supplying every variety of future want, they are yet 
 unable to imitate them. This deficiency among them, of the 
 effective desire of accumulation, the principle leading to the 
 formation of instruments, seems to arise both from a want of mo- 
 tives to exertion, and from a want of the principles and habits of 
 action which would lead to effective exertion. 
 
 The settlement of their country by the European race, has in 
 itself, gradually diminished, or entirely destroyed, the political 
 importance of their tribes, and consequently, the ties binding 
 too;ether the members of each of these communities, and leading 
 them to feel, and to act, in common. Nor have these been re- 
 placed by others. Those growing out of the family relations, in 
 other states of society, — the anxious prospective care of the 
 parent, and the exertions, the pleasures, and the duties thence 
 arising, — have not had time to spring up. Hence the Indian 
 continues to seek shelter in apathy, and to regard life and its 
 enjoyments, both for himself and his children, as did his fore- 
 fathers, gifts to be made the most of while they last, but which 
 no care can secure, and which, therefore, it is his business not to 
 provide for the continuance of, but to learn calmly to resign when 
 called on. He thus sits, listless, in the midst of the incessant 
 activity and industry that surround him, incapable of discovering 
 an adequate cause for the never-ceasing care and toil. The 
 motives that excite the white man, though possessed of means 
 that would enable him with his more needy brethren, abundantly 
 to enjoy the present, to devote himself, instead, to labors, to 
 which no season brings a respite, in order to bring about events, 
 that may provide for the wants of some remote and uncertain 
 futurity, are to him incomprehensible. Instead of applauding 
 the conduct, in his secret soul he censures the mean, timorous, 
 and, as it seems to him, selfish spirit, which prompts it. 
 
 But, besides a want of the motives exciting to provide for the 
 needs of futurity, through means of the abilities of the present, 
 there is a want of the habits of perception and action, leading to 
 a constant connexion in the mind of those distant points, and of 
 the series of events serving to unite them. Even therefore, if, 
 motives be awakened capable of producing the exertion neces- 
 
136 OF THE NATURE OF STOCK. 
 
 sary to effect this connexion, there remains the task of training 
 the mind to think, and act, so as to estabhsh it. 
 
 These deficiencies in the motives to exertion, and in the hab- 
 its of action of the Indian, serve to account for the condition of 
 the remnants of the tribes scattered over the North American 
 continent, in situations where they are in contact with the white 
 man. There is a general similarity throughout, that will, I be- 
 lieve, render an example, taken from one part of the continent, 
 sufficiently illustrative of the state of the whole. 
 
 Upon the banks of the St. Lawrence, there are several little 
 Indian villages. They are surrounded, in general, by a good 
 deal of land from which the wood seems to have been Ions: ex- 
 tirpated, and have, besides, attached to them, extensive tracts 
 of forest. The cleared land is rarely, I may almost say never, 
 cultivated, nor are any inroads made in the forest for such a pur- 
 pose.. The soil is, nevertheless, fertile, and were it not, ma- 
 nure lies in heaps by their houses. Were every family to inclose 
 half an acre of ground, till it, and plant in it potatoes and maize, 
 it would yield a sufiiciency to support them one half the year. 
 They suffer too, every now and then, extreme want, insomuch 
 that, joined to occasional intemperance, it is rapidly reducing 
 their numbers. This, to us, so strange apathy proceeds not, in 
 any great degree, from repugnance to labor ; on the contrary, 
 they apply very diligently to it, when its rew^ard is immediate. 
 Thus, besides their peculiar occupations of hunting . and fishing, 
 in which they are ever ready to engage, they are much employed 
 in the navigation of the St. Lawrence, and may be seen laboring 
 at the oar, or setting with the pole, in the large boats used for 
 the purpose, and always furnish the greater part of the additional 
 hands, necessary to conduct rafts through some of the rapids. 
 Nor is the obstacle avei'sion to agricultural labor. This is no 
 doubt a prejudice of theirs; but mere prejudices always yield, 
 principles of action cannot be created. Where the returns from 
 agricultural labor are speedy, and great, they are also agricultur- 
 ists. Thus, some of the little islands on lake St. Francis, near 
 the Indian village of St. Regis, are favorable to the growth of 
 maize, a plant, yielding a return of a hundred fold, and forming, 
 even when half ripe, a pleasant and substantial repast. Patches 
 of the best land on these islands are, therefore, every year, cul- 
 tivated by them, for this purpose. As their situation renders 
 
OF THE NATURE OF STOCK. 137 
 
 them inaccessible to cattle, no fence is required ; were this ad- 
 ditional outlay necessary, I suspect they would be neglected, 
 like the commons adjoining their village. These had apparently, 
 at one time, been under crop. The cattle of the neighboring 
 settlers, would now, however, destroy any crop, not securely 
 fenced, and this additional necessary outlay, consequently bars 
 their culture. It removes them to an order of instruments, of 
 slower return, than that which corresponds to the strength of 
 the effective desire of accumulation, in this little society. 
 
 It is here deserving of notice, that what instruments of this 
 sort they do form, are completely formed. The small spots of 
 corn they cultivate are thoroughly weeded, and hoed, A little 
 neglect in this part would, indeed, reduce the crop very much ; 
 of this experience has made them perfectly aware, and they act 
 accordingly. It is evidently not the necessary labor, that is the 
 obstacle to much more extended culture, but the distant return 
 from that labor. I am assured, indeed, that, among some of the 
 more remote tribes, the labor thus expended, much exceeds 
 that given by the whites. The same portions of ground being 
 cropped without remission, and manure not being used, they 
 would scarce yield any return, were not the soil most carefully 
 broken, and pulverized, both with the hoe and the hand. In 
 such a situation, a white man would clear a fresh piece of ground. 
 It would perhaps scarce repay his labor the first year, and 
 he would have to look for his reward in succeeding years. 
 On the Indian again, succeeding years are too distant to make 
 sufficient impression, though, to obtain what labor may bring 
 about in the course of a few months, he toils even more assid- 
 uously than the white man. The wages of labor with hitn, are 
 lower than with the white man, for his wants are fewer. But 
 for this, the range of materials, coming within reach of his effec- 
 tive desire of accumulation, would be even more limited than 
 it is, and the amount of instruments formed by him, less. 
 
 Similar observations will apply to all the remnants of the race, 
 scattered through the parts of the North American continent, to 
 which the industry and enterprise of the white man, have brought 
 modem arts and civilization. They can no where be said to 
 form an agricultural people. All the great tracts of land, reserv- 
 ed for their use, throughout the continent, retain their native for- 
 est character ; and it is only at great intervals, where spots of 
 
 18 
 
138 OF THE NATURE OF STOCK. 
 
 soil appear offering peculiar facilities for cultivation, that the 
 riches of the earth are even partially brought into action. When 
 such materials are neglected, it is not to be supposed that others, 
 requiring greater strength of the accumulative principle to form 
 them into instruments, will be put to use. None, therefore, even 
 of the most common handicrafts, which they see the white man 
 continually exercising, are to be found among them. The axe, 
 and the knife, are almost their only tools. Their houses, their 
 furniture, their clothing and utensils are all similar, and of a sort 
 to serve only the needs of the moment. Nothing is either re- 
 served or provided for a futurity in any ways distant. Their 
 stock of instruments being thus confined to such as are of the 
 most quickly returning orders, a vast mass of materials is neglect- 
 ed, which by another race, governed by other principles of action, 
 are converted, or converting, into the means of abundantly sup- 
 plying the necessities, and enjoyments of a numerous population. 
 They thus afford a striking instance, of the effects resulting from 
 a great deficiency of strength in the accumulative principle. 
 They have skill, adequate to the formation of instruments, capa- 
 ble of ministering to the necessities and comforts of a numerous 
 population, for with the powers of fire, the axe, and the hoe, the 
 great agents in converting the forest to the field, they are well 
 acquainted ; they have industry, content with a very moderate, 
 if immediate reward ; yet, from inadequate strength in this prin- 
 ciple, these all Ke inert, and useless, in the midst of the greatest 
 abundance of materials ; and, the means for existence in the 
 time to come not being provided, as what was future becomes 
 present, want and misery arrive with it, and these tribes are dis- 
 appearing before them. The white man robs their woods and 
 waters of the stores with which nature had replenished them, 
 and the arts, by the communication of which he would compen- 
 sate for the spoliation, are despised. 
 
 Though the civilized man may be truly said to have been the 
 greatest enemy of the Indian, yet he has, not always been so 
 wilfully, and, in many instances, he has endeavored to be his 
 benefactor. But, though his endeavors may occasionally, for a 
 time, have arrested the progress of the evil, they have never 
 altogether removed it, or been of permanent advantage. Of all 
 attempts of the kind, that of the Jesuits, in Paraguay, seems to 
 have been productive of most good, and to have given the fairest 
 
OF THE NATURE OF STOCK. 139 
 
 promise of ultimate success. This partial success, is evidently 
 to be traced, to the usual talent of those fathers, in a clear per- 
 ception of the actual circumstances of the condition, and disposi- 
 tion of the men with whom they had to deal, and to their usual 
 ability in converting these circumstances into means of accom- 
 plishing the ends they had in view. 
 
 Their plan presents two great features. They wrought upon 
 the Indians through that, which was alone in them capable of 
 exciting to extended action, their love of their several nations, 
 and devotion to their interests : they took every means to show 
 them that they could, and would, promote these interests, and 
 thus identifying themselves with the national existence and pros- 
 perity, transferred to their order, a large portion of the strong 
 feelino-s arising from benefits received from, and obligations and 
 duties owdng to his tribe, which are the great movers, and rulers, 
 of the being of the Indian. 
 
 The efforts of the missionaries seem first to have been directed 
 to convince the chiefs, and leaders, of the several tribes to which 
 they penetrated, of the sincerity of then: desire to be of service 
 to them. As the messengers of a religion, promising peace on 
 earth, and immortal happiness after death, they had claims on 
 their attention which are foreign to our subject. Besides these 
 however, as the possessors of the arts and powers of civilization, 
 they had others, which were more palpable to the comprehen- 
 sion of the savage. Europeans were known by this unfortunate 
 race, as possessors of powers so great, as to appear supernatural ; 
 but they had hitherto been known only as enemies and oppres- 
 sors, the bearers of unspeakable calamities or utter ruin. Once 
 then they were convinced, that the white men who now came to 
 them, were really friends, and were desirous of exerting those 
 powers for their preservation and happiness, which had hitherto 
 been employed for their destmction, they were ready to welcome 
 them as their best benefactors, and most powerful protectors. 
 The usual intelligence, prudence, and fortitude of the fathers did 
 not desert them on this occasion, and, though not without the 
 expense of the martyrdom of several of the order, they succeeded 
 in impressing the Indians with the belief, that they were really 
 their friends. The rest of the task was comparatively easy. 
 Convinced on this head, the savages willingly, and immediately, 
 became docile disciples. Fully satisfied of the advantages, which 
 
140 OF THE NATURE OF STOCK. 
 
 European arts give to a people, they set themselves with zeal to 
 acquire and practise them, for the benefit of their several tribes. 
 Though not for his individual advantage, or that of his family, 
 would the Indian sacrifice present pleasure or embrace present 
 toil ; for the good of his nation he had been taught, and was ready 
 to bear, or forbear, any thing. The Jesuits had, therefore, only 
 to teach what it was necessary to do, or endure. The details 
 they have left us of their progress, are generally interesting, 
 sometimes amusing, not unfrequently, to those unacquainted with 
 the peculiarities of the Indian character, almost incredible. 
 
 They themselves, in the first instance, taught their proselytes 
 how agricultural operations were to be performed, by taking the 
 spade, and other instruments, in their own hands. But, when 
 thus, by precept and example, they had brought them to be able 
 to execute the several operations of ploughing, sowing, reaping, 
 he. the difficulty was but half over. Without the constant 
 superintendency, and vigilance, of their instructers, they never 
 would have practised them. Thus, at first, if these gave up to 
 them the care of the oxen with which they ploughed, their in- 
 dolent thoughtlessness would probably leave them at evening 
 still yoked to the implement. Worse than this, instances occurred 
 where they cut them up for supper, thinking, when reprehended, 
 that they sufficiently excused themselves by saying, they were 
 hungry. 
 
 By the indefatigable persev^erance, and dexterous management 
 of the missionaries, they were, however, at last, brought so to 
 labor the earth, as, in that fertile soil and warm climate, to pro- 
 duce abundant returns. They were also at peace with one 
 another, and feared by their enemies. The tranquillity, the 
 security, and the plenty, they thus enjoyed, gave the Jesuits 
 additional claims on their confidence and gratitude, which the 
 good fathers seem to have taken care should be made sufficiently 
 apparent to them. Hence it was, as Charlevoix tells us, that they 
 thought they could never sufficiently testify their affection and 
 gratitude for those, who had rescued them from barbarism and 
 idolatry, and who, in spite of the most severe persecution, and 
 the greatest toil, had procured them all the advantages they 
 enjoyed. They continually recalled to mind the miserable state 
 firom which they had been brought, the parents instructed their 
 children, and they saw, with their own eyes, the condition of the 
 neighboring nations, who had not participated in their happiness. 
 
OF THE NATURE OF STOCK. 141 
 
 It was by no means wonderful, as he continues, that these things 
 produced an attachment for the missionaries, that was without 
 bounds. 
 
 The additional authority and influence thus acquired, they 
 employed in enforcing stricter obedience, and increased industry, 
 and gradually leading on their disciples to the practice of the 
 finer and more difficult arts. In this they perfectly succeeded, 
 so that there were every where to be seen, says the same 
 autlior, workshops of gilders, painters, sculptors, goldsmiths, 
 watchmakers, carpenters, joiners, dyers, &c. In the exercise of 
 these useful and ornamental arts, we must not suppose the 
 artists were animated by the motives that excite similar labors 
 elsewhere. They seem scarcely to have had an idea of personal 
 property, or individual gain, but to have been as mere children, 
 looking up to the Jesuits for every thing, and ready to do every 
 thing for them, or submit to any thing from them. 
 
 " These fathers," says Ulloa, " have to visit the houses, to ex- 
 amine what is really wanted ; for, without this care, the Indians 
 would never look after any thing. They must be present too, 
 when animals are slaughtered, not only that the meat may be 
 equally divided, but that nothing may be lost." " It has been ne- 
 cessary," says Charlivoix, " to appoint superintendents, who 
 inspect every thing accurately, and see if they are busy, if their 
 cattle are in good condition, &:c. The labors of the women are 
 regulated, as well as those of the men. At the besfinnino; of the 
 week, there is distributed among them, a certain quantity of wool, 
 and cotton, which they are obliged to return, on Saturday eve- 
 ning, ready for the loom. But, notwithstanding all this care and 
 superintendence, and all the precautions which are taken to pre- 
 vent any want of the necessaries of life, the missionaries are 
 sometimes much embarrassed. This proceeds from three defects, 
 of which the Indians have not yet been corrected, their improvi- 
 dence, indolence,* and want of economy, so that, it often happens, 
 that they do not reserve themselves a sufficiency of grain, even for 
 seed. As for their other provisions, were they not well looked 
 after, they would soon be without wherewithal to support life." 
 
 * Indolence and improvidence are, in our system, reduced to one defect. 
 Indolence is, the not laying out present labor to secure future abundance. 
 Improvidence, the squandering present abundance, in disregard of future 
 coming want. They both proceed from the predominance of the present over 
 the future, the low strength of the effective desire of accumulation. 
 
142 OF THE NATURE OF STOCK. 
 
 The mode of operation, which the Jesuits adopted, had un- 
 doubtedly the advantage of bringing out all the energies of the 
 Indian. He was thus induced willingly, and therefore zealously, 
 and successfully, to apply his powers to the acquisition and prac- 
 tice of European arts, and, while the missionaries maintained 
 their power, and formed a part of the polity which their sagaciiy 
 and perseverance had established, it gave every token of pros- 
 perity and vigor. Their prudence and providence led into 
 efficient action the desire, which every individual felt for the 
 future prosperity of his tribe. The powers of the social and 
 benevolent affections of the mass had free course, and what was 
 wanting in intellectual energy, being supplied by the fathers, the 
 desire of accumulation of the whole body became sufficiently 
 effective and strong, to form a larger stock of instruments. What, 
 therefore, might, at first sight, strike us as the most difficult part 
 of the project, the establishing a community of goods, and inter- 
 ests, was, in reality, that which rendered it of easy execution. 
 With all the advantages attending such a form of society, the 
 freedom from strife, jealousy, contention, and care, enjoyed by 
 the great majority, it had also the disadvantage of requiring, and 
 therefore exciting, in the multitude, little, or no exertion of the 
 intellectual faculties. The converts had become, or were be- 
 coming, mere machines in the hands of the missionaries. The 
 whole stock of instruments formed by the common labor, was 
 in the possession of the fathers, and the share which the Indians 
 received of the returns, depended "on their pleasure. They were 
 in fact regarded as beings of a superior order, whose actions were 
 of necessity right, and whose slightest wishes were laws. 
 
 If we judge from what is known of the state of the American 
 continent at its discovery, it would seem that this form of society, 
 is that which the hunter, changing directly to the agriculturist, 
 naturally assumes. His devotion to the interests of the tribe, 
 passes there into affection for the person, and blind obedience to 
 the will of the chief. The accounts we have of the condition of 
 the kingdoms that the Spaniards found established in the most 
 fertile regions of the continent, describe the power which the 
 rulers possessed, and the reverence paid them, as excessive. 
 The people seem to have, in general, approached the condition 
 of slaves, and to have had a large share of the defects of that 
 condition, a want of intelligence and energy. 
 
OF THE NATURE OF STOCK. 143. 
 
 Our own barbarian ancestors, such as they are described by 
 Tacitus, have been often hkened to the savage aborigenes of 
 North America. But, though there may be some points of 
 resemblance, the parallel will be found to fail, in several impor- 
 tant particulars, which, as they seem to have operated through 
 the influence they have exerted on that principle, the effects of 
 which we are at present considering, may be allowed to claim 
 our attention for a little. 
 
 The race, whose occupation of the forests and wildernesses;, to 
 the northward of the Roman Empire, made these, in the days of 
 its strength, to be regarded as the regions of mystery and wonder, 
 in those of its weakness, of well-founded, and increasing anxiety, 
 and dread, were properly shepherd warriors. Though the ex- 
 citement of the chase frequently gave fit employment to their 
 ardent spirits, and its toils to their hardy frames, and though its 
 products ministered to many of their wants, their cattle were yet 
 their main support, and to provide for the sustenance of these, 
 their great business. But the possession of flocks and herds, 
 implies a considerable degree of care and foresight, both in pro- 
 tecting, and making provision for them, and in avoiding to con- 
 sume too great a number of them. It also implies the existence 
 of private property to a large amount, and, consequently, of 
 strength in the ties binding families together. The parent, if he 
 desires to see his offspring enjoy plenty, must exert himself to 
 procure it for them. The performance of this duty gives him 
 claims on their gratitude, and draws closer the connexion between 
 them. The sort of life they lead too, demands less of severe 
 exertion, and affords longer intervals of ease. It brings them 
 too^ether in larger bands and societies, of which each member has 
 rights to defend, and interests to provide for, and thus produces 
 the rudiments of law, justice, and the policy of civilized society. 
 
 War may be said to be natural to them, as well as to hunters, 
 but it is always open ; concealment is out of the question ; their 
 greater numbers, and the necessity of having always with them a 
 large train of domestic animals, render it impracticable. They 
 have not therefore to fear being surprised and overcome, before 
 they can have time to defend themselves. Hence, the members 
 of a numerous and warlike pastoral nation, live in comparative 
 security. They see that chance has less influence, prudence 
 and resolution more. They perceive that they are not altogether 
 
144 OF THE NATURE OF STOCK. 
 
 the sport of destiny, but that their fate depends, in a great 
 measure, on themselves. Their minds are less shaken, and their 
 judgments less clouded by superstitious fears and imaginings. 
 The greater security they enjoy renders them also less relent- 
 lessly cruel. Utterly to exterminate their enemies is not neces- 
 sary ; to break, and drive them off, is sufficient. When, there- 
 fore, the fury of the fight is over, mercy has, with them, a place. 
 
 All these circumstances pertaining to the condition of pastoral 
 nations tend strongly to excite the social and benevolent affec- 
 tions, and the powers of reason and reflection, and to give scope 
 to their action among them. The pastoral ancestors of the pre- 
 sent European race were fierce, cruel, and vindictive barbarians ^ 
 yet, spite of these forbidding features of their character, we can 
 as distinctly trace to them the sources of all the more generous 
 and softer virtues, that give happiness to their descendants, as 
 we can the free and independent spirit that bestows on them 
 liberty and security. Such nations have, therefore, naturally a 
 much higher efi:ective desire of accumulation than nations of mere 
 hunters. The strength of this principle, in fact, seems with them 
 in general, so great, as to incline them to form instruments re- 
 quiring a much superior degree of providence and self-denial, to 
 that indicated by the breeding of cattle. They are prevented 
 from doing so, by their wandering life, and by the wars in which 
 they are necessarily constantly engaged. When, for instance, they 
 are settled in a country suited to agriculture, and to which the 
 knowledge of the art has penetrated, they have a tendency to be- 
 come agriculturists ; that is, to change the land, from which they 
 draw their subsistence, from an instrument yielding a large return, 
 in proportion to the labor bestowed on it, to one yielding a still 
 larger return, though requiring proportionally more labor and 
 time, and being, therefore, of a more slowly returning order. 
 
 But such a change, though increasing the whole population of 
 the state, leaves fewer in it who can be spared from labor, and, 
 consequently, fewer soldiers. In pastoral nations, almost all the 
 men are warriors ; in agricultural, only a few can be withdrawn 
 from the labors of the field. The latter are therefore, naturally 
 inferior to the former in military prowess, and are consequently 
 subject to be conquered and destroyed by them. Such seems 
 to have been the fate impending over Gaul, from the side of 
 Germany, when the appearance of Caesar gave another turn to 
 
OF THE NATURE OF STOCK. 145 
 
 affairs. The Gauls, we learn from him, though then inferior, 
 had once been superior, in military renown, to the Germans. It 
 appears likely, that the revolution had been occasioned, by their 
 becoming an agricultural people, which they, in a great measure, 
 were, in his time. The Germans, again, preserved themselves 
 from the fatal eflects of such a change, by the singular national 
 custom, or constitution, that obliged them all, every year, to ex- 
 change the lands they respectively occupied. By this constant 
 transfer of instruments, and of the materials of which they might 
 be formed, they took away every inducement to work them up 
 into orders of slow return, and confined the members of the 
 community to the pastoral condition, which experience had 
 doubtless instructed them, was most favorable to military prowess. 
 In the times of the Caesars, Europe was thus divided, by an 
 irregular line running east and west, into two great parts, 
 the one occupied by the barbarians, the other by the Empire. 
 To the northward of this line, were many rude nations, strong in 
 the mental and corporeal energies of the individuals composing 
 them, and in the willingness of each to devote his abilities to 
 objects conducive to the good of all, but whose strength was 
 largely expended in furious intestine wars. These contests, 
 destructive as they were, did not, however, occasion any pro- 
 gressive diminution of the vigor of the whole body ; it was 
 only the surplus powers of the parts that thus ran to waste. 
 The strength of the people of the empire was, on the contrary, 
 derived, from their union in one great body, and the power 
 thence resulting of the energies of the whole being directed to 
 any particular point. But this union, as it had been produced 
 by compulsion, augured weakness in the several parts, and was 
 the cause of weakness. What each contributed to the common 
 good was not of will, but from necessity, and, in the strife thus 
 arising, every man learned to consider his own good as separate 
 from that of all others. Hence a continually increasing separa- 
 tion of interests, and consequent continual decrease of power and 
 general decline. The gradually increasing weakness of the em- 
 pire, while the strength of the nations to the northward, if not 
 augmenting, remained at least unimpaired, rendered the arrival 
 of a period wdien the former should be overpowered by the latter 
 inevitable. These barbarians believed, that the riches of the 
 earth belonged, of right, to the best ; according to their creed, 
 
 19 
 
^46 C)F THE NATURE OF STOCK. 
 
 the bravest. Their most powerful and warlike tribes, therefore, 
 possessing themselves of the more fertile regions, those bordering 
 on the line dividing them from the empire, pressed violently 
 against it, and, opposed by a force continually diminishing, at 
 lenoth burst through it. 
 
 Three great events, each leading on this other, would seem to 
 have been the necessary consequence of this revolution. Of 
 these, the first was the occupation of the whole continent by the 
 barbarians, and the driving back the still onward-urging host of 
 their brethren ; the adoption by them of the arts which had 
 previously flourished in the empire, and their becoming an agri- 
 cultural people, was the second ; and their running the chance 
 of being in turn overpowered by the northern warriors, the third. 
 Until the arrival of the first period, when, the continent having 
 been completely overrun and ravaged by the barbarian multitude, 
 had assumed a form closely approximating to that of the territo- 
 ries they had formerly occupied, there could be no approach to 
 rest, but the tide must still advance. When the receptacle 
 vacant for its reception was once completely filled, the mighty 
 mass had to recoil on itself. The battle of Chalons fixes this 
 period. Europe, with the exception of the corner occupied by 
 the Eastern Empire, and which belonged rather to Asia than to 
 it, seems then to have been nearly reduced to the state of one 
 immense cattle-pasture. But the impetus that had been given 
 still continued, and new hosts crowded on to share that, of which 
 the last fragments had been divided. The reflux then of neces- 
 sity took place. The hosts of the west and the south, under 
 Theodoric and Elius, met those of the east and the north, under 
 Attilla, on the plains of Champaigne. The vastness of the 
 masses and the violence of the shock are shown by the destruc- 
 tion produced ; the accounts of the period rating the slaughter 
 variously at from one hundred and sixty-two thousand to three 
 hundred thousand. 
 
 From this period the great body neither much advancing nor 
 receding, was Agitated chiefly by fierce internal commotions. 
 The time when their violence terminated marks the second 
 period, when the general prevalence of agriculture, lessening the 
 number of warriors, diminished the extent and frequency of wars. 
 The knowledge of the elements of it, and of the other arts, dif- 
 fused throughout the various multitude that now peopled the 
 
OF THE NATURE OF STOCK. 147 
 
 continent, could not forever lie dormant. It has been already 
 observed, that the strength of their eftective desire of accumula- 
 tion, had been such as to produce a tendency among them to 
 give greater capacity even to the materials of wliich they had 
 the command in the northern regions, though at the expense of 
 changing them into instruments of somewhat slower return, by 
 converting their lands from pasture to tillage. This tendency 
 became inevitably stronger, as they advanced into more fertile 
 soils and milder climates. The revolution itself took place grad- 
 ually. The exact date of the preponderance of the one condition 
 over the other, cannot, perhaps, be determined but by the efiects 
 produced by its arrival. It is only in the state of hunters, or 
 sheplierds, that nation can literally go to war with nation. In 
 the agricultural state, it is not the men of the nation, but a small 
 part of them, the soldiery, that fight. Taking this as the criterion, 
 we might fix the reign of Charlemagne as that, in wiiich war, as 
 the business of European nations, properly ceased. The con- 
 clusion of that monarch's reign, has sometimes been reckoned 
 the commencement of a period of weakness in the several states, 
 and of want of ability in their monarchs. The historian, it is 
 true, for centuries afterwards, finds no events that he esteems 
 great to record. His art can call up no pictures of heroes lead- 
 ing armies to the field, conquering, or being conquered, over- 
 throwing, or establishing kingdoms. Nevertheless, if the view 
 we are taking is correct, it is from this era that we must date the 
 commencement of strength, not of weakness. The people of 
 Europe then began to rise in the scale of industry. They com- 
 menced a new era, to which no one can assign a positive termi- 
 nation, because it became their occupation to conquer nature, 
 and not man, and, to the fruits of the one conquest, Ave can set 
 no limit, whereas the utmost advantages of the other are very 
 speedily exhausted. 
 
 It may here be observed, that the difference of the strength of 
 the principle of accumulation in nations of hunters, and in pas- 
 toral nations, seems to mark out a very opposite destiny to a 
 great country overrun by the one, to that which would await it 
 from being subdued by the other. The naturally low degree of 
 strength of the accumulative principle among nations of hunters, 
 prevents them, as we have seen, from forming instruments of 
 sufiiciently slow return to embrace the materials to which the 
 
148 OF THE NATURE OF STOCK. 
 
 arts of civilized life might give capacity. While in their posses- 
 sion, therefore, they lie unemployed, and useless. The progress 
 of civilization and art, over the continent of North America, is 
 now, every day, bringing to light traces of their former presence, 
 and evidence, consequently, of the existence there at some remote 
 period, of a people far superior in these respects to the tribes that 
 occupied all but the southern parts, when discovered by Euro- 
 peans. The question has been asked, how did it happen that 
 they, and the knowledge and power they possessed, utterly per- 
 ished ? In other instances, civilization has either protected its 
 possessors, or, if they were overcome, has reacted on their con- 
 querors, and spreading among them, has, so to say, subjugated 
 and governed them in turn. The history of our own barbarian 
 ancestors has been quoted, as a circumstantial account of this 
 seemingly natural progress. But, if the principles, the operation 
 of which forms our present subject, be correct, they furnish a 
 sufficient cause for the diversity of effects, flowing from the two 
 events, and show, that, instead of there being any reason for sur- 
 prise at the hunter of the woods disdaining the labors and re- 
 wards of civilization, it is rather our business to inquire how he 
 could ever have been led to adopt them. Had the nations whom 
 the north poured forth on the south of Europe, been hunters, 
 and, had no extraneous cause intervened, it is not improbable, 
 that that continent would, even at the present day, have been 
 one wide forest from side to side. 
 
 The third of the great events referred to, the evils and dangers 
 arising to the ancestors of the present inhabitants of Europe, from 
 their former brethren of the north and east, when the strength of 
 their accumulative principle led them to put off the barbarian, and 
 employ themselves in giving to the materials within their reach the 
 capabiUties for the supply of the wants of futurity which art showed 
 that they possessed, were felt for many centuries. The change they 
 were then undergoing, though it added very greatly to the total 
 numbers of the several nations, lessened the numbers of the warriors. 
 The instruments they formed being of the more slowly returning 
 orders, though the whole income from them was much greater, 
 the labor necessary to produce it was more than proportionally 
 greater, and the portion of the population left free for the pur- 
 poses of warfare was consequently less. It were foreign to 
 our purpose farther to allude to this cause of commotion and 
 
OF THE NATURE OF STOCK. 149 
 
 revolution, than to observe, that the mischiefs and clangers 
 arising from it, seem to have been moderated by the very gradual 
 manner in which the change took place, and to have been coun- 
 teracted, and finally overcome by the additional power acquired 
 through the progress of invention in the arts of civilized life. 
 
 The next example I shall adduce, of the influence of the accu- 
 mulation principle, will be that of the Chinese Empire. All 
 accounts agree in ascribing to the people of this Empire, a 
 peculiarity running through the whole structure of their social 
 and domestic life, by which alone perhaps its mechanism can 
 be well explained, and which seems to form its great gov- 
 erning and sustaining principle. Their moralists and legislators 
 appear to have successfully endeavored to give to the feelings, 
 naturally springing from the parental and family relations, an 
 influence and authority, far superior to what these possess 
 among other nations, — the power and unity of a regular sys- 
 tem of duties and obligations. A father, as the immediate, 
 though secondary cause of existence, is regarded with much of 
 the feelings that are elsewhere reserved for the infinite and eter- 
 nal fountain of all existence, power, and perfection, and, conse- 
 quently, claims, as a sacred right, a measure of love, reverence, 
 and obedience, that to us seems perfectly unnatural. Both while 
 alive, and after his death, he is reverenced, w^e might say adored. 
 His descendants form a little distinct society bound together by 
 the strongest ties, a system apart from all others, having a com- 
 mon centre of action of its own. What is conceived to be a reality 
 in families, is metaphorically applied to the whole empire, and 
 its several parts. The emperor is the father of his people, his 
 affection for them as his children is held to be the animating 
 principle of his actions, implicit obedience to him as their parent, 
 who can only command what is good, is the first duty of his 
 subjects. Each inferior magistrate is also regarded as the father 
 of those over whom he rules. 
 
 The result has been so far happy, that the harshness of des- 
 potism is somewhat tempered by the mildness of the paternal 
 character. We are so constituted, that no part can be assumed, 
 and habitually acted, without, in some degree, moulding our 
 nature to its form, and making that a reality, which may at first 
 have been only a fiction. It has also been happy in the strength 
 it has given to the connexions and affections of those belonging 
 
150 OT THE NATURE OF STOCK. 
 
 to the same family, or springing from the same stock. A man 
 must be strongly excited to good, and deterred from evil, by 
 being aware that his actions and fortunes are the objects of solici- 
 tude to every member of the little community to whom he is 
 bound by the ties of blood and kindredship ; that they rejoice at 
 whatever he accomplishes that is honorable and happy ; and are 
 afflicted and disgraced by his imprudencies and errors. 
 
 But, viewing the system on another side, we may perceive 
 that evil has sprung out of it. The blending of the characters of 
 parent and lord, and thus making of each head of a family an 
 absolute master, the judge of right and wrong, places man in a 
 situation dangerous to his weakness. It may encourage, at all 
 events, it enables him to gratify without fear, whatever vice or 
 immorality is not necessarily open or declared, but may have a 
 veil, however thin, of outward decorum thrown over it. Besides 
 this, the absolute submission and unreflecting obedience, which it 
 inculcates, are much opposed to the expansion of the intellectual 
 and moral powers. When all impulses are from without, it is 
 impossible that the mental eye should turn steadily on the divinity 
 within, or promptly and resolutely execute, what it dictates. 
 
 We perceive a great attempt to organize a society, animated 
 by the principles of love and affection, regulated by those of 
 virtue. The form indeed exists, but under it there is little sub- 
 stance. Hence is generated a mass of apparent contradictions ; 
 viewed in one light, we see a great family, w^isely and beneficently 
 governed ; in the other, a servile herd, crouching beneath the 
 sharp lash of selfish despotism. On the one hand is presented 
 to us a people, among whom doctrines of a very pure morality, 
 of universal benevolence, of devotion to the public good, are 
 inculcated both by reward and precept ; among whom learning 
 is held in such esteem as to be the sure, and, in theory at least, 
 almost the only road to honor and authority ; among whom the 
 freedom of the press may be said to have been established a 
 thousand years ;* among whom outward decency and decorum 
 prevail, and security and order are strictly maintained, not by 
 
 * Where the press is merely a brusli, and the types are blocks of wood, 
 which a common workman carves out for a kw pence, it must of necessity 
 be essentially free ; the best proof of this is, that books for which there is a 
 demand, licentious publications for instance, are extensively circulated, not- 
 withstanding all the efforts of the magistrate. 
 
OF THE NATURE OF STOCK. 151 
 
 military authority, but by tlieir own good sense quietly submit- 
 ting to the rule of the civil magistrate. On the other hand we 
 see this same people, in private, abandoned to gross sensuality, to 
 drunkenness and degrading licentiousness ; in public, in affairs of 
 trade and traffic, in the business and diplomacy of the state, making 
 their individual advantage their sole practical rule of right and 
 wrong. 
 
 Such being the character of this singular people, our principles 
 would give to them a less strength of tlie eifective desire of 
 accumulation than the generality of European nations, but a 
 greater than that of other Asiatics. This desire is lessened by a 
 propensity to sensual gratifications and selfish feelings, and by a 
 state of society where there is any thing to endanger the security 
 of future possession. All these produce a tendency to seek the 
 enjoyments of to-day, at the risk of leaving the wants of to-morrow 
 unprovided for. As compared with other than European nations, 
 however, we might expect them to possess no inconsiderable 
 portion of the virtues of prudence and of self-control. The 
 general diffusion of a tincture of learning, and perception of 
 something of the beauty and obligations of moral rectitude, the 
 consequent subjection at all events of the more violent passions, 
 and the great desire to provide for the wants of their families, 
 which the strength of the connexion thus subsisting between 
 parent and child engenders, raise them, in these respects, much 
 above Asiatics in general. We should, therefore, a priori, suppose, 
 that the instruments formed by them must be of orders of quicker 
 return, and embracing a less compass of materials, than those 
 constructed by European nations ; but of slower return, and em- 
 bracing a greater compass of materials, than those to which the 
 strength of the accumulative principle carries the other nations of 
 Asia. All who have written concerning this great empire agree 
 in the statement, that the necessary cost of subsistence is there 
 small, and the wages of labor low. To these two circumstances, 
 determinino- their state, is to be added a third. The inventive 
 faculty would appear to have been once very active among them ; 
 their knowledge of the arts suited to their country is very ex- 
 tended. 
 
 Durability is one of the chief qualities, marking a high degree 
 of the effective strength of accumulation. The testimony of 
 travellers ascribes to the instruments formed by the Chinese, a 
 
152 OF THE NATURE OF STOCK. 
 
 very inferior durability to similar instruments, constructed by 
 Europeans. The houses, we are told, unless of the higher ranks, 
 are in general of unburnt bricks, of clay, or of hurdles plastered 
 with earth ; the roofs, of reeds fastened to laths. We can 
 scarcely conceive more unsubstantial, or temporary fabrics.* 
 Their partitions are of paper, requiring to be renewed every year. 
 
 A similar observation may be made, concerning their implements 
 of husbandry, and other utensils. Tliey are almost entirely of 
 wood, the metals entering but very sparingly into their construc- 
 tion ; consequently they soon wear out, and require frequent 
 renewals. A greater degree of strength in the effective desire 
 of accumulation, would cause them to be constructed of materials 
 requiring a greater present expenditure, but being far more durable. 
 From the same cause, much land, that in other countries would 
 be cultivated, lies waste. All travellers take notice of laro-e 
 tracts of land, chiefly swamps, which continue in a state of nature. 
 To bring a swamp into tillage is generally a process, to complete 
 which, requires several years. It must be previously drained, 
 the surface long exposed to the sun, and many operations per- 
 formed, before it can be made capable of bearing a crop. Though 
 yielding, probably a very considerable return for the labor bestowed 
 on it, that return is not made until a long time has elapsed. The 
 cultivation of such land implies a greater strength of the effective 
 desire of accumulation than exists in the empire. f 
 
 The produce of the harvest is, as we have remarked, always an 
 instrument of some order or another, it is a provision for future 
 want, and regulated by the same laws as those to which other 
 means of attaining a similar end conform. It is there chiefly rice, 
 of which there are two harvests, the one in June, the other in 
 October. The period then of eight months, between October 
 and June, is that, for which provision is made each year, and the 
 different estimate they make of to-day and this day eight months, 
 will appear in the self-denial they practise now, in order to guard 
 against want then. The amount of this self-denial, would seem 
 to be small. The father Parennin, indeed, asserts, that it is their 
 great deficiency in forethought and frugality in this respect, which 
 is the cause of the scarcities and famines, that frequently occur. 
 
 * La Harp, Vol. 8. p. 289. Lettres edifiantes, Vol. X. p. 107. 
 
 t Staunton, Vol. 2, p. 241. Ellis, p. 268 and 316 ; the best proof perhaps is 
 in the premiunns offered for their cultivation. See Lettres edifiantes, Vol. xi. 
 p. 525. 
 
OF THE NATURE OF STOCK. 153 
 
 "I believe," he says, "that, notwithstanding its great number of 
 inhabitants, China would furnish enough of grain for all, but that 
 there is not sufficient economy observed in its consumption, and 
 that they employ an astonishing quantity of it in the manufacture 
 of the wine of the country, and of raque." As confirmative of 
 his observations he remarks, the number of fires occasioned by 
 the habit of drinking to excess before going to bed, and tlie 
 prevalence, among the lower orders, of a malady called ye-che, 
 produced by the same vice.* 
 
 A document given in the Jesuit's Letters, a translation from the 
 Gazette of the empire in 1725, probably shows nearly what order 
 instruments of this sort, and therefore of all sorts, really belong 
 to ; that is, the difference between a quantity of rice, or of any 
 thing else, in possession at the end of harvest, and a quantity to 
 be had in spring. It proceeds on the supposition that three 
 bushels at the former period are equivalent, and, in ordinary 
 years, when there is neither famine nor scarcity, will produce 
 four at the latter. By purchasing at the former period, and 
 selling at the latter, the WTiter therefore estimates, that thirty 
 bushels will, at the end of five years, produce more than one 
 hundred. The estimate is perhaps a little high, but from the 
 nature of it, of the individual from whom it comes, and those to 
 whom it is addressed, it is unreasonable to suppose that it is 
 much too high. Taken in conjunction with a description of a 
 scheme for raising funds, of which an account is subjoined,! it 
 indicates that instruments in China are about the order D. 
 
 The deficiency of the strength of the effective desire of ac- 
 cumulation, is balanced by the smallness of the necessary cost of 
 subsistence, and wages of labor, and by the great progress which 
 has been made in the knowledge of the arts suited to the nature 
 of the country, and the wants of its inhabitants. Where the 
 returns are quick, where the instruments formed require but little 
 time to bring the events for which they are formed to an issue, 
 
 *Lettre3 Edifiantes, Tom. XII. p. 199. The father Parennin seems to have 
 been one of the most intelligent of the Jesuits, and had the very best oppor- 
 tunities for observation, having spent a long life among the Chinese of all 
 classes. His testimony is much more to be depended on, concerning such a 
 fact, than that of passing travellers, whose cursory observations extend only 
 to what may be seen on the exterior of the habitations. 
 
 t Note F. 
 
 20 
 
154 OF THE NATURE OF STOCK. 
 
 even the defective principle of accumulation of the Chinese is 
 able to grasp a very large compass of materials. 
 
 The warmth of the climate, the natural fertility of the country, 
 the knowledge which the inhabitants have acquired of the arts 
 of agriculture, and the discovery and gradual adaptation to every 
 soil of a variety of the most useful vegetable productions enable 
 them very speedily to draw from almost any part of the surface, 
 what is there esteemed an equivalent to much more than the 
 labor bestowed in tilling and cropping it. They have commonly 
 double, sometimes, treble harvests. These, when they consist 
 of a grain so productive as rice, the usual crop, can scarce fail to 
 yield to their skill, from almost any portion of soil that can be at 
 once brought into culture, very ample returns. Accordingly 
 there is no spot that labor can immediately bring under cultiva- 
 tion, that is not made to yield to it. Hills, even mountains, are 
 ascended and formed into terraces ; and water, in that country 
 the great productive agent, is led to every part by drains, or car- 
 ried up to it by the ingenious and simple hydraulic machines, 
 which have been in use from time immemorial among this sin- 
 gular people. They effect this the more easily from the soil, 
 even in these situations, being very deep and covered with much 
 vegetable mould. But what yet more than this marks the rea- 
 diness with which labor is found to form the most difficult mate- 
 rials into instruments, where these instruments soon bring to an 
 issue the events for which they are formed, is the frequent 
 occurrence on many of their lakes and waters of structures resem- 
 bling the floating gardens of the Peruvians, rafts covered with 
 vegetable soil and cultivated. Labor in this way draws from the 
 materials on which it acts very speedy returns. Nothing can 
 exceed the luxuriance of vegetation, when the quickening powers 
 of a genial sun are ministered to by a rich soil, and abundant 
 moisture. It is otherwise, as we have seen, in cases where the 
 return, though copious, is distant. European travellers are sur- 
 prised at meeting these little floating farms, by the side of swamps 
 which only require draining to render them tillable. It seems 
 to them strange that labor should not rather be bestow^ed on the 
 solid earth, where its fruits might endure, than on structures that 
 must decay and perish in a few years. The people they are 
 among think not so much of future years as of the present time. 
 The effective desire of accumulation is of very different strength 
 
OF THE NATURE OF STOCK. 155 
 
 in the one, from what it is in the other. The views of the Eu- 
 ropean extend to a distant futurity, and he is surprised at the 
 Chinese, condemned, through improvidence and want of sufficient 
 prospective care, to incessant toil, and, as he thinks, insufferable 
 wretchedness. The views of the Chinese are confined to nar- 
 rower bounds, he is content, as we say, to live from day to day, 
 and has learnt to conceive even a life of toil a blessing. The 
 power which the singular skill and dexterity of this people, not- 
 withstanding their deficiency in the strength of that principle 
 that forms the subject of this chapter, gives them, to work up 
 into instruments supplying a larger circle of wants, many mate- 
 rials that would otherwise lie dormant, is seen in various instances 
 besides those referred to. It may be sufficient to mention 
 the manufacture of silk, and the cultivation and manufacture of 
 tea. They are both instances of the power of the inventive 
 facultv to form instruments, soon bringing to an issue events, that 
 repay, according to the rate at which labor is there repaid, con- 
 siderably more than the cost of their formation. 
 
 However we explain it, it will I think be admitted as a fact, that 
 Europeans in general far exceed Asiatics both in vigor of intellect, 
 and in strength of moral feeling. The average duration of human 
 life is also with them more extended, and property more secure. 
 These circumstances give much superior power to the accumula- 
 tive principle in the one continent, to what it has in the other, 
 and occasion the instruments constructed in each to be of very 
 different orders, and to form a strong contrast when compared 
 together. The attention of an European, when he visits Asia, is 
 arrested by the slightness and want of strength, solidity, finish, 
 and consequently durability, of every instrument he sees. Were 
 an Asiatic city deserted, the place where it stands would, in half 
 a century be scarcely discernible. The instruments constructed 
 being of the more quickly returning orders, all materials which 
 require much labor, and bring in only distant returns, are neg- 
 lected. Mud takes the place of stone, wood of iron. In Europe, 
 on the other hand, in proportion as the minds of the people are 
 reflective and intelligent, and their habits moral, we find that the 
 interests of futurity operate on them so largely as to occasion a 
 great capacity to be given to materials, on which, in Asia, a very 
 small capacity would be bestowed, or which would there be 
 altogether neglected. The most stubborn morasses are drained, 
 
156 OF THE NATURE OF STOCK. 
 
 and converted into arable lands ; roads, canals, bridges, fences, 
 dwelling-houses, furniture, tools, utensils, in short all instruments 
 whatever indicate that the formers of them have regard to a dis- 
 tant futurity, and are willing to give up for its interests a large 
 portion of the means of present enjoyment. 
 
 It is to be observed, however, that in Europe invention has in 
 general made much greater progress than in Asia. Perhaps in 
 their knowledge of agriculture and horticulture the Chinese equal 
 most European nations, but in other arts they are far inferior, 
 and, with the exception of them, no Asiatics, in the knowledge 
 of these or of other arts, can compete with Europeans. On the 
 other hand, the wages of labor in Europe, are far higher than in 
 Asia. This circumstance, countervailing the other, would pro- 
 bably, in many cases, bring the durability and efficiency of the 
 instruments constructed in both continents nearly to an equality, 
 were it not for the existing difference in the strength of the 
 accumulative principle. 
 
 The examples we have hitherto considered have been of 
 societies, where the principle of accumulation has been either 
 advancing, or, at least, not sensibly retrograding. It may be 
 well to turn our attention to the effects produced by a sensible 
 decrease in its strength. The history of the declining ages of 
 the Roman empire furnishes us with such an one. 
 
 Rome may be said to have carried with her, from her earliest 
 germs, the elements of decay. Her power was entirely that of 
 force, a principle suppressing and subduing every thing, generating 
 nothing ; like flame spreading far and wide, investing whatever it 
 catches with momentary splendor, but, like it, destroying that 
 which feeds it, and going out at length leaving desolation behind 
 it. The proper trade of the Romans was war. But when in 
 agricultural countries war becomes the occupation of a commu- 
 nity, and conquest the means by which it seeks to acquire wealth 
 and greatness, evils arise which time, instead of mitigating, in- 
 creases. When hunters go to war with hunters, or herdsmen 
 with herdsmen, the object in View, besides overcoming their 
 enemies, is to obtain possession of a portion of the surface of the 
 earth, and the animals wild, or tame, nourished by it. Over such 
 communities therefore, though war, passing like a destroying 
 tempest, leaves ruin behind, yet time obliterates all traces of the 
 devastation produced by it, and the same territory sees a new 
 
OF THE NATURE OF STOCK. I57 
 
 generation arise from the victors or vanquished, as free, happy, 
 and prosperous, as their forefathers. But in states of society 
 where the riches of the earth are not brought out by the wild or 
 tame animals which its surface nourishes, but by the husbandman 
 who tills it, there conquest can never be a permanent gain, unless 
 through some permanent right acquired by it over the inhabitants 
 of the territory subdued. Hence the fact of war being success- 
 fully pursued as a gainful trade by any community, seems to 
 imply, that the conquered submit to slavery, either personal or 
 political, probably partly to both. Gain was always the ultimate 
 object aimed at by the Romans. It was not to chastise an insult, 
 or to protect their citizens in the undisturbed prosecution of in- 
 dustry, that they fought or conquered. These might occasionally 
 serve for pretexts, and were sometimes perhaps the exciting 
 causes of war, but for the real fruits of victory they always looked 
 to the spoliation of the vanquished, and tribute, in one shape or 
 other, imposed on them. Every people with whom they came 
 in contact was regarded by them first as an enemy to be subdued, 
 afterwards as a province from which they were to be enriched. 
 They were in truth a band of well disciplined robbers, whose 
 virtue, law, religion, centered in their swords ; courageous indeed, 
 and keeping to their positive engagements with a fidelity common 
 to brave men, and which, as it is for their interest, even scattered 
 banditti observe, but whose course of rapine was still onward, 
 relentless, merciless, unchecked by thoughts of the corporeal 
 pains, or mental debasement it produced. 
 
 Such an empire could only have been formed by overpowering 
 the finer and more generous and elevating feelings, and could 
 not be maintained without having the effect of giving the pre- 
 ponderance to the debasing, selfish, and therefore destructive 
 principles of our nature. It left but one great virtue, that of 
 patriotism, with the Romans a sort of enlarged esprit de corps, 
 and one great moral quality, that of courage, or the meeting 
 danger undauntedly when the interest of the individual or the 
 state required it, — a principle of action, it may be remarked, 
 differing considerably from the more generous and self-devoting 
 gallantry of the modern. These were strong in Italy while Italy 
 was the governing power ; but even they gradually disappeared 
 as the provinces were amalgamated with it, and Italians ceased 
 to be the conquering soldiery. 
 
 It were needless to enlarge on a subject so well known as that 
 
158 OF THE NATURE OF STOCK. 
 
 of the general corruption of Roman manners, from the time of 
 the first Caesar. Venahty and hcentiousness may be said to 
 have been universal. I shall confine myself to one particular, 
 as marking sufficiently the declension of those principles on 
 which the strength of the effective desire of accumulation mainly 
 tlepends. I allude to the decay of the family affections, of 
 which evidence every where meets us. The men did not wish 
 to be fatliers, scarcely did the women wish to be mothers. The 
 joys of the relation were to them too small, to be a compensa- 
 tion for the sacrifices it demanded. The bringing up children 
 cost the one parent too much money, and took from the other 
 too much pleasure. If families were raised up, it was not from 
 the natural influence of the parental affections, but in obedience 
 to the laws, that the man might have the approbation of the 
 magistrate, and that there might be citizens to the state. They 
 lived, not in others, or for others, but for themselves, and sought 
 their good in enjoyments altogether selfish. It was their aim to 
 expend on their own personal pleasures whatever they possibly 
 could. It would seem as if the majority, could they have fore- 
 known the exact limits of their lives, would have made their 
 fortunes and them terminate together. As they could not do 
 so, the lives of many ended before their fortunes, as the fortunes 
 of others held out beyond their lives. To reap, however, them- 
 selves, while alive, all possible benefit from wliat they might 
 chance to leave others to enjoy after their death, they encour- 
 aged some of the members of a despicable class who seem to 
 have constituted no inconsiderable part of Roman society. Par- 
 asites ready to minister to every pleasure, and to perform every 
 possible service, waited on the man of wealth, in the hope and 
 expectation of enjoying a portion of it after his death. They 
 were more desirable than children, both because they were able 
 to give something more than mere unsubstantial affection and 
 esteem, and because they were" willing to give it, while a son 
 or daughter might imagine they had claims to receive what they 
 could not be said to have labored for. The poets and satirists 
 of the Augustine age, and of subsequent times, give sufficient 
 evidence of the existence of a state, evil in itself, and the fore- 
 runner of many evils.* It gave occasion to the law compelling 
 
 * Horace V. Satire H Book. It is worth while observing, that, according 
 to this satire, to cheat these parasites into the service, by holding out a 
 
OF THE NATURE OF STOCK. I59 
 
 parents to leave their children a certain part, a fourth, of their 
 property. Its prevalence may be judged of by the wording of 
 the enactments increasing the children's share. It is stated, as 
 a fact well known, that parents generally either disinherit, or omit 
 their children in their wills, leaving the bulk of their property to 
 distant relations, to strangers, or to slaves, to whom thev give 
 freedom ; and that thus, if their family is numerous, they, who 
 during the lifetime of their father enjoyed affluence, find that his 
 death leaves them in poverty.* 
 
 Nothing, surely, can more clearly show the extreme and per- 
 vading selfishness of the time, than its becoming necessary for 
 the magistrate to compel the citizens to marry, and also to compel 
 them to leave portions to their children. The existence of such 
 a state of things implied a degree of isolation of feeling and ac- 
 tion, so great, as necessarily to produce general weakness and 
 decay. The general selfishness of the principles guiding the 
 conduct of individuals, may be gathered from a prevailing pro- 
 verb " when I die let the world burn."f When such were the 
 
 reward they were never to get, was reckoned a thing to be laughed at. — 
 Probably the practice existed from a very early age, though I cannot give 
 authority for it. Parasites are in Plautus' Plays, but these are in a great 
 measure translations. The following quotation from that author, however, 
 expresses a feeling, which I should suppose prevailed in Roman society at the 
 time : 
 
 " Quando habeo multos cognatos, quid opus mihi sit liberis. 
 Nunc bene vivo et fortunate, atque animo ut lubet, 
 Mea bona raea morte cognatis dicam interpartiant, 
 Illi apud me edunt, me curant, visunt quid agam, ecquid velim, 
 Qui mihi mittunt muuera, ad prandium, ad caenam vocant." 
 
 ^ Quia plerumque parentes sine causa liberos suas exhereduntvel omittunt. 
 Inst. Lib. II. Tit. 18. Capiunt quidem cognati omnia, et extranei, vel cum 
 libertate servi; filii vero licet multi consistant; etiamsi nihil offenderint 
 parentes, confunduntur, &c. Novel. XVIII. Pref. 
 
 f Eitov duvoviog yula iM/drjibi TtvgL Suet. A similar proverb " a pres 
 nous le deluge," is said to have been often in the mouth of Madame Pompa- 
 dour, one of the purest self- worshippers ever existing. It is perhaps worthy 
 of remark, as showing the propensity of selfishness to grasp the present, that 
 both the Romans and the lady were very prodigals even in what was entirely 
 their own. The former it is well known rapidly exhausted their constitu- 
 tions by every sort of debauchery and excess, the latter was as little econom- 
 ical of her personal charms. At twenty her lips are said to have been livid 
 from the too constant application of her teeth to make them pout, at thirty 
 she was haggard. 
 
IQQ OF THE NATURE OF STOCK. 
 
 maxims ruling society, there could not fail to be a heedless sa- 
 crifice of the interests of futurity, an exhaustion of the means or 
 instruments which the forethought of previous generations had 
 employed industry to accumulate, without any correspondent 
 reformation of them. Sallust, in a fragment quoted by Mon- 
 tesquieu, well describes the men of his day as a race who could 
 neither themselves hold property, nor allow others to retain it.* 
 Only such instruments could consequently be formed as were of 
 very quickly returning orders, and, as the vigor of the accumu- 
 lative principle decayed, the members of each succeeding gen- 
 eration saw a mass of materials fall from their grasp, which had 
 afforded a plentiful supply to the wants of their morfe provident 
 forefathers. 
 
 The means of supporting human life diminished, and the num- 
 bers of mankind diminished with them. When vice itself did 
 not sufficiently check the growth of the elements of life, it 
 brought want and famine to its assistance. The history of the 
 Roman world under the Caesars, is a melancholy detail of the 
 gradually decaying funds of the Empire, and the gradually de- 
 creasing numbers of its inhabitants. Italy, according to Pliny, 
 and other writers, was in the old times crowded with people, 
 thickly set with cities, and rich in all things ministering to the 
 needs of its inhabitants. In his day, its diminished population 
 depended for their sustenance on the productions of other ter- 
 ritories. The change certainly was not owing to any alteration 
 in the materials. " Non fatigata aut efFoeta humus," says Colu- 
 mella. The earth would have yielded the same returns, had 
 they who possessed it been willing to expend what was necessary 
 to give it the capacity of yielding them. As the materials were 
 only wrought up to very quickly returning orders, they had ne- 
 cessarily a much smaller capacity, and the annual returns made 
 by them were of consequence much less. Pasture took place 
 of tillage ; corn was brought from the provinces ; and when the 
 supply failed famine ensued. Even the construction of ships 
 for the transport of this, and other merchandise, would seem to 
 have been an effort to which the accumulative principle was 
 scarcely equal. It was found necessary to encourage it by re- 
 
 * " Merito dicatur genitos esse, qui nee ipsi habere possent res famil- 
 iares, nee alios pati." 
 
OF THE NATURE OF STOCK. 161 
 
 warding those who prosecuted that branch of industry.* Some- 
 times land formerly cultivated was allowed to lie entirely waste, 
 and passed altogether out of the class of instruments. The forest 
 and wilderness gained on the Romans, as they would now, for 
 similar reasons, on an Indian population, were some of these 
 tribes put in possession of the domains, anciently the property of 
 their race, at present yielding abundantly to the provident indus- 
 try of the whites. Had there been no irruption of the barba- 
 rians the Empire must have perished, more slowly perhaps, but 
 as certainly, from the operation alone of these internal causes of 
 decay. They were occasioning a progressive diminution of the 
 capacity which materials formerly possessed. Thus, it is to the 
 Romans themselves as much as to the barbarians, that the de- 
 struction of the public edifices is to be ascribed. The stones 
 were applied to private purposes. With the capacity for yield- 
 ing a return, there necessarily perished the return yielded, and 
 the power, consequently, of maintaining the same number of 
 men, and contributing an equal amount to the wants of the state. 
 Hence the population of the Empire, and the imperial revenue 
 diminished from aoe to age. 
 
 The diminution would have been much more rapid but for 
 some counteracting causes. Rome, while she conquered and 
 enslaved, gave peace, and peace enabled the arts to pass from 
 country to country, and often, under her protection, carried them 
 to regions before barbarous. Again, she herself, as she gradually 
 proceeded to enslave the rest of the world, and encircle it in 
 her empire, received into her bosom those who had been free, 
 or were the immediate descendants of freemen, and retained 
 somethino; of their virtues. The ungovernable licentiousness, 
 extravagance, and proneness to evil of the Italians, were tempered 
 by the greater decency and frugality of the neio men of many 
 of the distant provinces, who flocked in to recruit the diminishing 
 numbers of her citizens.f 
 
 These two circumstances, however, only retarded, they could 
 
 * Nam et negotiatoribus certa lucra proposuit, sascepto in se damno si cui 
 quid per tempestates accidisset; et naves mercaturfe causa fabricantibus 
 magna conimoda constituit, pro conditione cuj usque.; civibus vacationem 
 legis PappesB : Latinis jus quiritum : foeminis jus quatuor liberorum ; quae 
 constituta liodie servantur. Suet, in vita Claudii, XIX. 
 
 t Tacit. Ann. C. 55. L. III. 
 
 21 
 
[Q2 OF THE NATURE OF STOCK. 
 
 not resist, the advancing degeneracy, poverty, and weakness, that 
 were gradually sapping the foundations of the Empire, and ex- 
 posing it to be overturned by external violence, or to fall to ruin 
 by its own weight. While some of her provinces gave strength 
 to Rome, she corrupted them ; if she gave them her arts, she 
 gave them also her manners. Like liquor, already begun to turn, 
 mixed with what is yet fresh, the defects of the compound were 
 not at first perceptible ; by and by, the adulteration diffused 
 through it wroudit on the whole, and rendered it all alike worth- 
 less. 
 
 The propagation of Christianity over the Empire is to be 
 reckoned as another of the causes retarding its decay. It is to 
 be observed, how^ever, that this took place too late for reaping 
 the advantages, which the morality of the Gospel might have 
 otherwise conferred ; and that the corruptions of the times were 
 so great as to lead its teachers rather to preach the duty of with- 
 drawing from the world, than to inspire them with the hopes of 
 remoulding the world to an accordance with a system of perfect 
 purity of morals and benevolence of purpose. The effects of 
 this cause were therefore comparatively small. 
 
 The reader will perceive that the subject we are upon might 
 be stretched to an indefinite length. Circumstances have given 
 to every community a peculiar character ; the moral and intel- 
 lectual powers of every people have received different degrees 
 of developement, and the continuance of life is more or less 
 probable, and the possession of property more or less assured, in 
 one country than in another. All these particulars vary the 
 relations between the present and the future, in the estimation of 
 the members of different societies, and would therefore determine 
 each community to stop short at some particular point in our 
 series, towards which, the strength of the accumulative principle 
 may be said to cause the instruments it forms continually to gravi- 
 tate. Unhke the operation of gravity however, the force with 
 which they tend to this point diminishes, as their distance from 
 it decreases, and the farther they are removed from it, the greater 
 the rapidity of their progress towards it. 
 
 The subject would not therefore be fairly exhausted, until all 
 the circumstances of the moral and intellectual state, and other 
 particulars of the condition of every people, had been examined, 
 
OF THE NATURE OF STOCK. 153 
 
 and compared with the extent to which the formation of instru- 
 ments among them is advanced. Enough however, has perhaps 
 been done to show, that this principle is of very extensive opera- 
 tion, and that in our subsequent inquiries we are warranted in 
 assuming the strength of the effective desire of accumulation, to 
 be a circumstance of primary importance in the determination of 
 the extent to which the formation of instruments will be carried 
 in any society. We should now proceed to examine the more 
 important effects resulting from variations in the strength of this 
 principle in different members of the same community. It is 
 however necessary first to consider some phenomena produced by 
 the progress of it, and of the inventive faculty, and certain classi- 
 fications of instruments and names applied to them, which have 
 thence arisen. This will form the subject of the next chapter. 
 
CHAPTER VIII. 
 
 OF THE DIVISION OF EMPLOYMENTS AND OTHER PHENOMENA PRODUCED 
 BY EFFORTS TO ACCELERATE THE EXHAUSTION OF INSTRUMENTS. 
 
 Every individual endeavors to exhaust, as speedily as he can, 
 the capacity of the instruments which he possesses. By rapidly 
 exhausting the capacity of apy instrument, the returns yielded 
 by it are not lessened, but quickened. The powers it possesses 
 to bestow enjoyment, or to aid in the formation of other instru- 
 ments, are not diminished in quantity, but sooner brought into 
 action, and it passes to an order of quicker return. When there- 
 fore the efforts of individuals, so divided, are successful, by placing 
 the instruments operated on in more quickly returning orders, 
 they stimulate the accumulative principle to give greater capacity 
 to instruments of the sort, and proportionally increase the capacity 
 of the whole stock of instruments owned by the society. It is 
 to certain phenomena, in the production of which these two cir- 
 cumstances are the main agents, that we have in this chapter to 
 direct our attention. 
 
 As the knowledge which mankind possess of the course of 
 nature advances, and they discover a greater number of means to 
 provide for their future wants, the instruments they employ for 
 this purpose become very various. The exercise of the arts of 
 the weaver, the blacksmith, the carpenter, the farmer, implies 
 the existence of a great variety of tools with which they may be 
 carried on. But, as a man can only do one thing at once, if any 
 man had all the tools which these several occupations require, at 
 least three fourths of them would constantly lie idle and useless. 
 It were clearly then better, were any society to exist where each 
 man had all these tools, and alternately carried on each of these 
 occupations, that the members of it should if possible divide them 
 amongst them, each restricting himself to some particular em- 
 ployment. There would then be no superfluous implements, 
 
OF THE NATURE OF STOCK. 165 
 
 each set of tools would form an instrument much more speedily 
 exhausted, and therefore of an order of quicker return than be- 
 fore. In cases where this could be done, common sense would 
 point out the advantage of it. When, for instance, a man's loom 
 came to be worn out, he would go to his neighbor and say, " I 
 shall not make another loom if you will undertake to do what 
 weaving I may require ; in return I will give you some of the 
 produce of my farm, or will do some blacksmith work for you." 
 The offer would be accepted, and similar motives operating 
 throughout the society, each individual in it would confine his 
 industry, as far as possible, to the employment of some particular 
 set of tools or instruments. It is not perhaps likely, that this 
 was the manner in which that division of occupations with which 
 we are now familiar was originally produced, but it must evidently 
 have been produced in this way, had it not been otherwise 
 brought to pass, as we see, in fact, that even now it is thus 
 brought to pass in the progress of settlements in North America. 
 In such situations, every man is at first probably obliged to be 
 his own carpenter, glazier, tanner, cobbler, and perhaps to a 
 certain extent his own blacksmith. As the settlement fills up, 
 and the population becomes sufficiently dense, he gives up this 
 multifarious industry, and takes to some particular branch. The 
 advantages of the change to the whole community, and therefore 
 to every individual in it, are great. In the first place, the various 
 implements being in constant employment yield a better return 
 for what has been laid out in procuring them ; being sooner ex- 
 hausted they pass to a more quickly returning order. In con- 
 sequence, their owners can afford to have them of better quality 
 and more complete construction ; the effective desire of accumu- 
 lation carries them on to a class correspondent to its own strength. 
 The result of both events is, that a larger provision is made for 
 the future wants of the whole society. 
 
 Such a revolution can only have place, where the individuals 
 exercising the different employments, have a ready communication 
 with each other. In situations where they cannot easily com- 
 municate, either from distance, or difficulty of transit, such ex- 
 changes cannot take place. If a man had to go twenty miles for 
 every little piece of carpenter work that he wished executed, it were 
 better for him to keep a few carpenter tools of his own. Neither 
 is it likely to take place extensively unless where the accumu- 
 
166 OF THE NATURE OF STOCK. 
 
 lative principle has considerable strength, and where, consequently, 
 a large amount of labor is wrought up in the several implements in 
 use. Where, as in Hindostan, the loom is merely a few sticks, 
 it would save one individual very little to employ another to 
 weave for him. It is accordingly, in countries where the pop- 
 ulation is most dense, the facility of communication greatest, and 
 instruments wrought up to the more slowly returning orders, that 
 employments are most divided. 
 
 As a division of employments implies the existence of ex- 
 change or barter, so, as it extends, these exchanges become ne- 
 cessarily more frequent. Every man, to procure the supply of 
 his various wants, has to employ the services of more individuals 
 than he had before. The farmer, who used to manufacture his 
 own cloth from his own fleeces, transfers these to some one else, 
 and perhaps, after they have passed through the hands of the 
 carder, the spinner, the weaver, the fuller, he. part of them' re- 
 turns to him again in the shape of cloth for some garment that 
 he is in need of. In an advanced state of society, very few 
 wants are supplied but by articles or instruments which have 
 passed through many hands. We can scarce then fitly pursue 
 our subject, without some examination of the manner in which 
 these exchanges take place, and of the rules by which they are 
 regulated. 
 
 As all instruments exist solely to supply wants, so any man 
 will consent to receive an instrument in exchange, or expect to 
 give it in exchange, only as it is a means of supplying wants. 
 It is the business of every man to adopt the readiest and easiest 
 means he can devise to supply all coming needs, and it is solely 
 because the medium of barter presents the readiest means of 
 effecting this end, that he adopts it. 
 
 But labor is the fund which all men have, out of which to 
 supply their wants. Some have other funds besides, but every 
 man has this, and strip a man of every thing adventitious, this 
 alone remains to him. It is this, then, which a person may most 
 fitly be said to expend, in provision for any future want. When 
 one man exchanges this for that, he may be said to give the 
 labor which he has expended on this, for the labor which has 
 been expended on that, and labor for labor would seem to be the 
 most simple of exchanges. It never, as we shall see, exactly 
 takes place, but sometimes it is nearly approximated to, and, 
 
OF THE NATURE OF STOCK. I57 
 
 that we may set out from the most simple elements, we may 
 suppose that it is actually arrived at. 
 
 Any man will be inclined to exchange one instrument for 
 another, if, by so doing, he can save himself any part of the labor 
 which he must otherwise expend in producing that other. A 
 lives in some place where willows are to be had for cutting them ; 
 he employs himself in making willow baskets, one of which he 
 finishes in two days ; B ofFei's him a straw hat for it. If he wants 
 a straw hat, and thinks that, were he to set a making one, it 
 would occupy him more than two days, and moreover, that neither 
 D, E or F, who make straw hats, will give it for less ; he will 
 be inclined to make the exchange. In doing so, it is a matter of 
 indifference to him what time B may have expended in making 
 the hat, his only reason for entering into the transaction, is the 
 saving of labor to himself he thereby effects. In reality, however, 
 it is altogether likely that B has not expended more than two 
 days in making it. For, supposing, as in this case we may, that 
 both A and B have the same natural faculties, B, were he to set 
 about makino; willow baskets, could make them as well and as 
 easily as A, that is at the rate of one in two days. If then the 
 straw hat cost him more than two days' labor, he would rather 
 make a willow basket for himself than exchange his straw hat for 
 it. Even if he had not the manual skill necessary, he would 
 apply himself to acquire it, and take to the occupation of basket- 
 making in preference to that of making hats ; as we see, in em- 
 ployments where mere labor is concerned, that one is deserted 
 for another according as it gives less or more wages. 
 
 It so comes to pass that in the same society, in all ex- 
 changes, as far as we can conceive mere labor to be concerned, 
 one man, A, barters that which has cost him two, or twenty days' 
 labor, with that which has cost another, B, two, or twenty days' 
 labor. We must however bear in mind, that neither does A 
 offer the article, nor does B receive it, simply because it has cost 
 two, or twenty days' labor. A offers it, and B receives it, 
 because it is an instrument to supply future wants, and under the 
 supposition that it cannot be got for less than two or twenty days' 
 labor. In such cases, the person desirous of making the exchange 
 may indeed say to the individual with whom he wishes to ex- 
 change ; Sir, I assure you the article cost me two, or twenty 
 days' labor, as the case may be ; and being assured of this, the 
 
168 OF THE NATURE OF STOCK. 
 
 person so addressed may think it sufficient grounds to make the 
 excliange, and may so conclude the bargain ; but he does so, not 
 because the other has expended two or twenty days' labor on it, 
 but because, he having expended this, he concludes it cannot be 
 got for less. That if it has cost him two or twenty days' work, 
 it would have cost, and would cost himself, or a'ny other, the 
 same labor. If he knows that the person desirous of exchanging 
 is an unskilful or bungling workman, or if he sees that the labor 
 has been injudiciously applied, he will not give what is demanded. 
 He knows, in that case, that he can make it, or get it made, for 
 less. Were one to employ himself in rolling a stone up hill and 
 down hill for a month together, he would leave it as useless to 
 him in the way of exchange as before he put his hand to it. 
 
 It may be laid down as a rule, then, that in as far as labor 
 simply is concerned in all exchanges, one thing will be bartered 
 for another, not in proportion to the labor that has been respec- 
 tively bestowed on each, but in proportion to that which it is 
 necessary to bestow on materials, similar to those of which each 
 has been constructed, to make other articles equal to them in 
 capacity to supply wants. That, if this basket exchanges for that 
 hat, though each may have cost two days' labor, it is not exactly 
 because each has cost it, but because neither a basket equally 
 good as the one, nor a hat equally good as the other, can be 
 made for less than two days' labor. 
 
 As a corollary from this, it follows that, whenever an article 
 comes to be made with less labor than formerly, articles of the 
 same sort which may have been previously manufactured, procure 
 for their owners less of other articles in exchange than they did 
 before. They exchange, not for what labor has been actually 
 wrought up in them, but for what is now required to make others 
 similar to them. Thus, supposing that a basket-maker, say in 
 some settlement in North America, havinjj to e:o on foot a con- 
 siderable distance through woods and swamps for his willow twigs, 
 requires one day to procure enough to make a basket, and that 
 he lakes another to work them up, he would then probably 
 receive for each basket two days' labor, or articles having cost 
 two days' labor. If now, however, a place where equally good 
 willows grow is discovered near at hand, so that only half a day 
 is required to get enough for a basket, and if this is generally 
 known, he will no longer be able to exchange them at the same 
 
OF THE NATURE OF STOCK. 169 
 
 rate, because, as we have seen, other people would make baskets 
 for less, that is, for one and a half days' labor, or for articles in 
 the fabrication of which the labor of one and a half days had been 
 expended. Any stock then he might have on hand of baskets 
 made previously to this discovery, would only exchange for ar- ' 
 tides requiring for their fabrication the labor of a day and a half. 
 The same rule that applies to this trivial instance, holds good in 
 affairs of greater importance, and regulates a large amount of 
 exchanges. 
 
 It can however never exactly happen, that labor will be ex- 
 changed, in this simple way, for labor. The formation of every in- 
 strument, besides labor, requires also the assistance of some other 
 instrument. Even the basket-maker and the hat-maker, allowing 
 them to get the twigs and straw they require, for the trouble of 
 collecting them, would need, the one at least a knife, and the 
 other a needle and thread. Auxiliaries so inconsiderable as these 
 need scarce be noticed in the reckoning ; but there are cases 
 where these assisting instruments may be said to do a great part, 
 others, in which they may be said to do nearly the whole of the 
 work. In a steam-boat the engine may be considered as the 
 great laboring power, though the services of the men who supply 
 fuel, and regulate the motion of it and of the boat, enter also 
 largely into the account. In a set of well-contrived, and well- 
 finished pipes, for conducting water through a city to the different 
 houses in it, the amount of human labor entering into the process 
 is very trifling. 
 
 A weaver we shall suppose receives thread to weave into a 
 piece of linen, and finishes the job in thirty days. Were he now 
 in return, to receive from his employer simply thirty days' labor, he 
 would get too little. For, his loom being an instrument partially 
 exhausted in fabricating the linen, this exhaustion ou^ht to form 
 an item in the account. Suppose that the effective desire of 
 accumulation of the individual, is of strength sufficient to carry 
 him to the order G, doubling in seven years, that the loom cost 
 one hundred days' labor, and that it will be exhausted in seven 
 years ; it would then require to return two hundred days' labor, or 
 an equivalent, at the end of that period. The return however 
 is not delayed so long, but begins to come in daily, immediately 
 after its construction. Calculating then what yearly return is 
 equal to two hundred days at the end of seven years, in the 
 
 22 
 
170 OF THE NATURE OF STOCK. 
 
 estimation of a man who reckons one day now equal to two then, 
 it will turn out to be nearly twenty days. We may allow that 
 the loom is in employment three hundred days a year, it would 
 therefore, on these principles, have to return two days labor, for 
 every thirty days during which it was in operation, and the 
 weaver would consequently have to receive an equivalent to thirty- 
 two days' labor ; at least had he not a moral certainty of receiving 
 this, he would not have formed the instrument, and were such 
 return to cease he would not reconstruct it. 
 
 The transport of goods by sea is an event brought about as 
 iDUch by the agency of instruments, as by direct human labor. 
 A vessel costs, we shall say, five thousand days' labor, and is 
 exhausted in seven years, she is navigated by three men. If she 
 belongs to a person whose effective desire of accumulation carries 
 him only to the class G, and supposing they who navigate her to 
 be paid for three hundred days' labor, she must, on these principles, 
 return about nineteen hundred days' labor annually. Say she 
 is freighted to carry a cargo of timber, and that the voyage oc- 
 cupies three months. This transport is a part of the process of 
 the formation of certain instruments, houses, furniture, &c. as 
 necessary as any other part of it, the owner will tlierefore receive 
 directly, or indirectly, from those engaged in their formation, an 
 equivalent to not less than four hundred and seventy-five days' 
 labor. 
 
 It is to be observed, too, that, even in cases where labor alone 
 seems to be paid for, time generally also forms one of the items 
 to be taken into account. Thus, an individual contracts, within 
 three months, to fell the trees on a certain piece of forest 
 land in a North American settlement. If then he be paid at the 
 commencement of the three months, he will expect to receive 
 less than if payment be deferred until the expiration of that time, 
 and the difference between the two amounts will be regulated, 
 as in other cases, by the particular orders to which instruments, 
 in that particular situation, are generally wrought up. The same 
 things hold good in all instances where labor is paid for by the 
 work executed, or, as it is termed, by the piece. 
 
 The division of employments and consequent prevalence of 
 the system of exchange, occasions a particular classification of 
 instruments. 
 
 Before the division of employments takes place, the instru- 
 
OF THE NATURE OF STOCK. 171 
 
 ments which every man forms, or causes to be formed, are for 
 his immediate use, and after it has taken place, the portion in- 
 dividuals reserve for this purpose makes still a considerable part 
 of the whole instruments belonging to any community. Even 
 the poorest beggar has some clothes to cover him ; the opulent 
 have houses, furniture, clothing, gardens, pleasure-grounds, k.c. 
 This part of the whole instruments possessed by individuals or 
 communities is termed a stocJc reserved for immediate consumption. 
 
 The remainder of the general stock of instruments of individ- 
 uals and of societies, with the exception of land, considered not 
 as actually cultivated, but as having a capacity for being culti- 
 vated, is termed capital. The instruments to which this term 
 applies supply the future wants of the individuals owning them, 
 indirectly, either from being themselves commodities that may 
 be exchanged for articles directly suited to their needs, or by 
 their capacity of producing commodities which may be so ex- 
 changed. 
 
 Capital itself is again subdivided into fixed, and circulating 
 capital. Fixed capital consists of instruments which have a 
 capacity for producing commodities to be exchanged, but are not 
 themselves formed for the purpose of being exchanged. Cir- 
 culating capital consists of commodities fitted for being exchanged, 
 or of instruments in process of formation into such commodities. 
 
 It often happens that the division between fixed and circulat- 
 ing capital is drawn with difficulty, some instruments belonging 
 partly to the one, and partly to the other. Thus a horse em- 
 ployed for agricultural purposes is a part of fixed capital, while 
 an ox may belong partly to fixed, and partly to circulating cap- 
 ital, as he is reared and fed, in part for the services expected 
 from him as an animal of draft, and in part for tlie price his carcase 
 brings. 
 
 The whole instruments owned by an Individual, or a society, 
 and comprehended under the terms a stock reserved for imme- 
 diate consumption, fixed and circulating capital, have received 
 the general appellation of stock. 
 
 All instruments, whether comprehended under the divisions 
 capital fixed and circulating, or a stock reserved for immediate 
 consumption, possess a capacity for supplying the wants, or sav- 
 ing the labor of man. But the wants which they supply, and 
 the labor which they save, are in general not immediate, but 
 
172 OF THE NATURE OF STOCK. 
 
 future. Now we cannot estimate the same amount of labor saved, 
 or wants supplied tomorrow, and five, or fifty years hence, as 
 equivalent, the one to the other. Thus if we compare together 
 a hundred full grown trees, and as many saplings, it may be, 
 that, estimated in the supply they yield the wants of futurity, 
 they are alike. If the former be cut down tomorrow they may 
 yield a hundred cords fire wood, and if the latter be cut down 
 fifty years hence they may yield the same. We should not 
 nevertheless conceive, that they were equal the one to the other. 
 What measure then are we to adopt for comparing them and 
 other such instruments together, and thus finding an expression , 
 in a quantity of immediate labor for the whole capacity of in- 
 struments possessed by any community or for the whole stock 
 of that community ? The natural measure would seem to be 
 the relative estimate, which the individuals concerned them- 
 selves form of the present and the future, that is, the strength 
 of the effective desire of accumulation of the particular com- 
 munity. Thus in a community whose effective desire of ac- 
 cumulation is of strength sufficient to carry it to the formation 
 of instruments of the order E, doubling in five years, an in- 
 strument, which at the expiration of five years yielded a re- 
 turn equivalent to two days' labor, might fairly be estimated as 
 equivalent to one day's present labor ; if at the expiration of 
 ten years it yielded an equivalent to four days' labor, it might 
 also now be rated at one day's labor, and so for other periods. 
 This therefore is a mode of expressing in present days' labor the 
 whole capacity of the instruments owned by any society which 
 will be made use of in the following pages ; and the terms, the 
 absolute stock, and absolute capital of that society, will be em- 
 ployed to denote it. 
 
 The mode however in which the fixed and circulating capital 
 and stock belonging to societies, is usually estimated, is different. 
 It is usual to estimate the instruments belonging to any society, 
 by comparing them with one another as they actually exchange, 
 some particular commodity being made choice of as the standard 
 to which all other instruments are referred. To capital and stock 
 estimated in this mode, the terms, the relative capital and stock 
 of societies, will be applied. 
 
 In cases where the effective desire of accumulation of a com- 
 munity has had opportunity to work up the materials possessed by 
 
OF THE NATURE OF STOCK. I73 
 
 it into instruments of an order correspondent to its own strength, 
 the absolute and relative stock must, it is obvious, agree ; but, in 
 cases where the accumulative principle has not yet had time fully to 
 operate, the former will exceed the latter. Thus, were we to sup- 
 pose the returns made by the whole instruments belonging to a so- 
 ciety, or their total capacity, to be suddenly doubled, without any 
 addition to the labor employed in forming them, the total absolute 
 stock of the society would also be doubled, while its relative 
 stock would remain unaltered. The relations of the several in- 
 struments possessed by it remaining the same, whatever commodity 
 had been adopted as the standard, when applied to measure the 
 others it would give the same results as before. It never, indeed, 
 can happen that any increase to the capacity of the instruments 
 forming the stock of a society, so great and sudden as we have 
 supposed, can take place ; but however small such increase, it 
 would have a real effect, and would occasion a difference in the 
 amount of the whole stock as estimated in the one or the other 
 manner. Every such increase is effected through th^ operation 
 of the inventive faculty, and we shall therefore refer the consid- 
 eration of the effects flowing from it, until we come to treat of 
 the phenomena resulting from the progress of that faculty. 
 
 Though the division of employments consequent to the pro- 
 gress of science and art, and the operation of the accumulative 
 principle, on the whole greatly accelerates the exhaustion of 
 instruments, there are yet some particulars in which it tends 
 somewhat to retard that exhaustion. In the most simple state 
 of society, when art is so rude, and accumulation so little ad- 
 vanced, that each individual forms almost all the instruments he 
 himself or his family exhaust, and when, consequently, the general 
 stock of the community is nearly altogether a stock formed and 
 reserved for immediate consumption, it can seldom happen that 
 there will be either an over abundance, or a deficiency of instru- 
 ments of any sort. As each individual can make an accurate 
 estimate of his own wants and those of his family, prudent men, 
 in such a state of things, provide only the instruments that may 
 be of use to them, and do not form any but such as they foresee 
 will come into employment as they are formed. But when in- 
 dividuals ceasing to form only instruments directly supplying their 
 own wants, give the greater part of the industry they can com- 
 mand to manufacturing commodities for the purpose of exchange, 
 
174 OF THE NATURE OF STOCK. 
 
 as they have not the means of calculating with equal accuracy 
 the wants of other men, it occasionally happens that some com- 
 modities are produced in excess, and that there is a deficiency 
 of others. 
 
 When again the state of society is such, that each individual 
 forms almost the whole instruments he requires, there is very little 
 transport of commodities from place to place. The amount of 
 transport necessarily increases with the separation of employments. 
 This forms another drawback from the advantages arisins; from the 
 extension of the division of occupations, and system of exchange. 
 On account therefore both of many commodities being produced 
 in excess, and of its being necessary to transport most from 
 place to place, there are always, in such states of society, very 
 many commodities lying idle, being neither under process of 
 formation or exhaustion, but collected in masses at different points, 
 waiting till some vacancy be found for them. The longer they 
 .continue in this state tlie farther they must pass towards the 
 orders of slower return, and the more the operation of the 
 accumulative principle must be retarded. 
 
 It seems to be chiefly from the desire of obviating somewhat 
 these two disadvantages attending the general advance of art and 
 industry, that, when the nature of the occupation permits it, in- 
 dividuals engaged in all the different divisions of industry place 
 themselves as near each other as possible, and form villages and 
 towns. Each can thus more easily adjust the amount of com- 
 modities he produces to the wants of other men, and thus also 
 there arises a great saving of transport. 
 
 It is also in a great measure owing to the necessity of trans- 
 porting commodities from place to place, and to the difficulty of 
 regulating the precise amount produced consequent on the divi- 
 sion of occupations, that there arises an order of men, that of 
 merchants, devoting themselves solely to the business of transport 
 and exchange. Merchants are the great exchangers of society, 
 regulating the production of commodities, and collecting and dis- 
 tributing them to situations where the never-ceasing processes of 
 formation and exhaustion are producing vacancies for them. It 
 is their business to make these exchanges with the greatest pos- 
 sible rapidity, and least possible expense. 
 
 There is a general average time elapsing from the period of 
 the formation of every commodity, until it pass from the Individ- 
 
OF THE NATURE OF STOCK. I75 
 
 ual havino- formed it, to the individuals who exhaust it in the 
 supply of their wants, or employ it in tlie formation of other 
 instruments. The merchant who effects the transfer of com- 
 modities between the other members of society is entitled to 
 receive an amount exceeding that which he gave, by the return 
 which the labor embodied in the commodity exchanged should 
 yield for this average time, according to the general rate of re- 
 turn of capital in the community. If therefore the superior 
 intelligence, penetration, and activity of any merchant, giving 
 him the power of foreseeing with greater accuracy than his 
 brethren where vacancies are about to exist, and what will be 
 their extent, and of discovering where the commodities proper 
 to fill them up may most readily be found, and most easily trans- 
 ported to the requisite places, enables him to effect these trans- 
 fers with greater facility than usual, and within less than the 
 average time, he will receive a proportionally greater return than 
 other merchants. On the contrary, if, from a deficiency in these 
 qualities, any merchant attempt the transfer of commodities for 
 which there is no vacancy, or effect the transfer of commodities 
 for which there is a vacancy, at more than tlie average ex- 
 pense, or in more than the average time, the returns his cap- 
 ital yields him will be less than those usually received by the 
 other members of the community. Mercantile energy is thus 
 stimulated to effect all practicable exchanges with the greatest 
 possible celerity, and at the least possible expense. The activ- 
 ity wjiich is in consequence given to the process of exchange, is 
 a circumstance exceedingly beneficial to the interests of the com- 
 munity. By lessening the distance between the periods of for- 
 mation and exhaustion, and diminishing the expense of forma- 
 tion, for transport makes a part of that expense, the successful 
 exertions of the mercantile portion of society have a powerful 
 tendency to preserve instruments in the more quickly returning 
 orders, and to excite the action of the accumulative principle. 
 Our subject consequently requires us to examine somewhat more 
 particularly the mechanism by which the business of merchants 
 is conducted, and the mode of calculation by which it is practi- 
 cally regulated. Our attention too is more especially called to 
 these, because it is from the former that the principles of the 
 present science of political economy are derived, and on the 
 latter that its nomenclature is founded. 
 
176 OF THE NATURE OF STOCK. 
 
 The foundation of the mechanism of mercantile transactions is 
 
 Money. 
 
 Gold and silver, or, as they are called, the precious metals, 
 are more properly entitled to the appellation of money than any 
 other thing is, because they more generally pass for money than 
 does any thing else. Their beauty, their incorruptibility, and 
 some other of their qualities afterwards to be considered, have, 
 in almost every country, rendered them the means of affording 
 much enjoyment, that is, of supplying, to a large extent, certain 
 of the wants of man. It seems likely that these qualities, joined 
 to the facility with which they may be transported from place 
 to place, first made them esteemed the most desirable of all com- 
 modities that one could possess. In the very frequent revolu- 
 tions and commotions that occur in the earlier ages of society, 
 articles that do not decay, can be hid, or carried off without dif- 
 ficulty, and are always estimable, would naturally of all others 
 be most coveted. They thus probably were first chiefly sought 
 after, for the purpose of being retained, not for that of being 
 exchanged ; even yet in many countries, partly from old habits, 
 and partly from still prevailing insecurity, they are chiefly prized 
 as of all things, those best fit to be hoarded. But, in whatever 
 manner their use may have been introduced, or how much soever 
 in some countries it may be dependent on a feeling of insecurity, 
 at present or formerly prevailing, and prompting their possessors 
 to keep not to part with them, they are now more generally sought 
 for, for the purpose of being imrnediately passed away, forming, 
 in the shape of money, the great medium of exchange, and it is 
 solely in the part they thus act, that we have here very briefly 
 to consider them. 
 
 When, in the progress of society, men divide into different 
 occupations, and each ceasing to fabricate himself all the instru- 
 ments his wants require, barters the instruments or commodities 
 he forms for those formed by others, the system of exchange, as 
 we have seen, commences. The introduction, to a greater or 
 less extent, of some sort of money, seems naturally to follow. 
 For when a man forms only one sort of instruments or commod- 
 ities, it cannot at all times happen that he can exchange them 
 with articles fabricated by other men, and necessary to supply 
 his wants, because these other men, the formers and possessors 
 of what he desires, may not at the moment have occasion for 
 what he has formed. " The butcher has more meat in his shop 
 
OF THE NATURE OF STOCK. 177 
 
 than he himself can consume, and the brewer and the baker 
 would each of them be willing to purchase a part of it. But 
 they have nothing to offer in exchange, except the particular 
 productions of their respective trades, and the butcher is already- 
 provided with all the bread and beer which he has immediate 
 occasion for."* There are two modes by which the desired ex- 
 change may be effected. If the brewer and the baker have a 
 commodity received by every one for all others, such as money 
 is, they may each give the butcher a certain quantity of it for a 
 quantity of meat, and when he requires their ale and bread, he 
 may, in turn, send back to them also a quantity of money. Or, 
 the butcher may be satisfied with the promise of the brewer and 
 the baker, that, at some future time, when he has occasion for 
 it, they will give him a quantity of ale and bread, or of some- 
 thing else. These two modes of effecting the object form the 
 two systems of cash, or credit, by which all the business of every 
 country that consists not in barter, is carried on. 
 
 Pieces of gold and silver coined, that is stamped with a mark 
 regulating and assuring by the authority of the magistrate the 
 weight and fineness of each, enter largely into transactions of 
 the former order ; they make the bulk of the current coin of most 
 countries. Supposing the whole of the exchanges of any coun- 
 try that are not simple barter, effected by money, and that gold 
 and silver form the sole money, then the amount of them so 
 employed would seem to be regulated by two circumstances. 
 
 1st. By the quantity of commodities that may exist to be ex- 
 changed. This again must depend on the quantity of materials 
 wrought up into instruments, and on the progress of the division 
 of labor. As the number of instruments increase, and as from 
 their first commencing formation, until they are exhausted, they 
 pass through more hands, the amount of exchanges must in- 
 crease. As the number of instruments formed decreases, and as 
 every man himself constructs a greater proportion of those ne- 
 cessary to supply his own wants, the amount of exchanges must 
 diminish, and as the amount of exchanges increases, or dimin- 
 ishes, so must there be required a greater or less quantity of the 
 medium through which they are transacted. 
 
 In such a state of things as we suppose, could every man see 
 
 * Wealth of Nations, Book I. c. IV. 
 
 23 
 
178 OF THE NATURE OF STOCK. 
 
 exactly beforehand the whole series of the exchanges that would 
 present themselves to hhn, every prudent man would so manage 
 his exchanges, his purchases that is, and his sales, as to provide 
 himself with the exact amount of money necessary to effect 
 every exchange that he might deem it advisable to execute. 
 But no man can with accuracy foresee what transactions may 
 present themselves to him, or when they may do so. The 
 amount of possible future exchanges that may offer to any man, 
 and the time they may occur, are exceedingly uncertain, depend- 
 ing on many things not to be foreknown, the operations of other 
 individuals engaged in the formation of instruments, immediately, 
 or remotely connected with those on which his means or industry 
 is engaged, the course of the winds and seasons, the fortune of 
 war, the progress of treaties, and numberless other events equally 
 doubtful in their issues. Every man, therefore, would in such a 
 state of things, suffer two inconveniences, he would occasionally 
 have too much money, and occasionally too little. He would 
 sometimes have a sum lying for a long time useless by him, and 
 an advantageous purchase would sometimes present itself to him 
 which he had not cash sufficient to effect. Between these two 
 opposite evils, it would be his business to steer as safe a course 
 as possible ; he could not hope altogether to avoid them, but 
 must be content to suffer occasionally from both. Which of the 
 two it would be most prudent for liim to run the risk of suffering 
 from, would, I conceive, depend on another circumstance, form- 
 ing the second of those that, under the suppositions we have 
 made, regulate the amount of precious metals in circulation. 
 
 Every man must be more unwilling to run the risk of having 
 a sum of money lying useless by him, by how much greater the 
 amount of the returns he could have by turning it to the forma- 
 tion of instruments. If then, in the society of which any man 
 is a member, instruments are not far removed from the first orders 
 of our series, when they soonest double the expenditure of their 
 formation, he will rather risk the inconvenience of having too 
 little money by him, than the loss of having a sum in his coffers 
 long unemployed, which might have been converted into instru- 
 ments yielding large returns. But if, in the society of which he 
 is a member, instruments are far removed from the first orders of 
 our series, he will be disposed to reserve a greater amount in 
 the hopes of making more by some advantageous bargain, than 
 he could by expending it on the formation of any instrument. 
 
OF THE NATURE OF STOCK. 179 
 
 We should expect then to find, that, in countries where either the 
 principle of accumulation is too weak to carry instruments on to 
 the more slowly returning orders, or where it has not yet had 
 time to do so, money would be scarce, and that, where this prin- 
 ciple having had lime to act, its strength has carried them to the 
 farther orders, there money would be plenty. Such will be 
 found to be the fact. In China, gold and silver are rarely seen, 
 in the interior traffic of the country^ in Holland, they have 
 always abounded. In new settlements in America, where from 
 the superabundance of materials, instruments are of very quickly 
 returning orders, the amount of coin to be found is exceedingly 
 small. When a man there has cash in his pocket, he finds so 
 many things that he could with profit expend it on, that he can 
 scarcely refrain from doing so. 
 
 An European visiting some parts of Upper Canada, is sur- 
 prised, when he comes to discover, that a kw dollars is all the 
 cash that even men comparatively rich may have lying by tbem. 
 He is apt to conceive that they are poor men, and to describe 
 the country as a poor country. In doing so, however, he does 
 not make a correct use of words. He sees, for instance, a man 
 who, ten years before, may have brought a sum of two hundred 
 pounds to the place where he is now setded, without at present 
 twenty dollars in his pocket, and who perhaps, were that sura sud- 
 denly demanded of him, might have difficulty to procure it. In 
 one sense, then, the man is poor. But, were this man asked to 
 sell his farm and his other property, he probably would not give 
 it for less than a thousand pounds, and he might get this sum 
 for it. If so, it is ten to one that he would lay out the greater 
 part of it in the purchase of a larger quantity of land than he 
 before possessed, and the remainder in improving that land, so 
 that a year or two would see him just as bare of cash as before, 
 and twelve years afterwards, if he went on prosperously, he 
 would still have but a trifle of ready cash, though perhaps he 
 might truly consider his property worth two or three thousand 
 pounds, and might not be disposed to take less for it. He could 
 hardly therefore be called a poor man. In this part of America, 
 as formerly over the whole of it, " the scarcity of gold and silver 
 money is not the effect of the poverty of that country, or of the 
 inability of the people there to purchase those metals. The 
 scarcity of these metals is the effect of choice and not of neces- 
 
130 OF THE NATURE OF STOCK. 
 
 sity. It is convenient for the Americans, who can always em- 
 ploy with profit, in the improvement of their lands, a greater 
 stock than they can easily get, to save as much as possible the 
 expense of so costly an instrument as gold and silver ; and rather 
 to employ that part of their surplus produce which would be 
 necessary for purchasing those metals, in purchasing the instru- 
 ments of trade, the materials of clothing, several parts of house- 
 hold furniture, and the iron work necessary for building and ex- 
 tending their settlements, in purchasing, not dead stock, but 
 active and productive stock."* 
 
 But, though the loss of having more idle cash lying by one, 
 than can possibly be dispensed with, must be felt most sensibly 
 where such cash can be most profitably expended, where instru- 
 ments, that is, are not far from the first orders of our series, still 
 it must always be felt. A man will never keep two hundred 
 pounds in his chest, if he thinks it probable that one hundred 
 will be sufficient, because he can always make something of the 
 other hundred. Although however, men, in such cases, must be 
 governed by what they think probably will happen, yet, as no 
 man can foresee with certainty what may happen, every man 
 will now and then be wrong in his calculations, and therefore, 
 under the suppositions we have made, every man would occa- 
 sionally suffer from having too little cash, as well as at other 
 times from having too much. 
 
 The effect of both these sorts of losses must be, to place the 
 Instruments on which they operate in orders of slower return, 
 than they would otherwise occupy. One wishes to purchase a 
 pair of young horses of a particular sort ; for this purpose he 
 reserves a quantity of coin equivalent to four hundred days' labor ; 
 he happens, however, not to meet with a pair that suits him for 
 the space of six months, when he purchases two, giving for them 
 the amount he had anticipated. It is evident, in this case, that 
 they have really cost him, not only the four hundred days' labor, 
 but all that in the country in which he lives, that labor would 
 have produced, besides paying for itself, during the six months 
 he was looking; out for the bargain. Now, as this additional 
 outlay cannot add to the capacity of these instruments, to the 
 strength, swiftness, beauty, and health, that is, of the animals, 
 nor diminish their age, it must be esteemed as lessening the pro- 
 
 * Wealth of Nations, Book V. c. III. 
 
OF THE NATURE OF STOCK. 181 
 
 portion between the return to be got from them, and the outlay 
 expended on them, and must move them proportionally towards 
 the orders of" slower return. Again, it may have been that the 
 person who at last sold the horses, may have been desirous of 
 selling them for six months before he effected the sale, and that 
 at the commencement of that period he may have met with an 
 individual who would have purchased theuj, but not having an- 
 ticipated the occurrence of so favorable an offer, happened not 
 then to have the necessary cash. If we suppose them to have 
 been merely useless to their owner during the period from thence 
 elapsed, the service they rendered him being just sufficient to 
 pay for their food and keep, still, this retardation in the return 
 from the ouday in the formation of them as an instrument, also 
 moves them so much towards the more slowly returning orders, 
 and diminishes the activity of the accumulative principle. If 
 the individual who raised them does not receive an additional 
 price, proportionate to the delay, the occurrence will have a 
 tendency to make him give up this branch of business. 
 
 Similar events taking place in the exchange of other instru- 
 ments, would produce similar results, and therefore two evils 
 would necessarily accompany the state of affairs we have sup- 
 posed. There would be two drawbacks on the progress of the 
 industry of the society, the one consisting in the expense of the 
 circulating medium, the other in the loss arising from a deficiency 
 in it. The two together would be in proportion to the amount 
 of exchanges which the progress of knowledge, the strength of 
 the principle of accumulation, and the quality of the materials 
 within reach of the society caused to be transacted. The evil 
 directly arising from them would be the consequent retardation 
 of the returns from the industry of the society, an evil equiva- 
 lent to a proportional diminution of these, and placing them in 
 more slowly returning orders. The evil indirectly arising from 
 them would be the keeping a greater or less extent of materials, 
 without reach of the strength of the accumulative principle of 
 the society, and the consequent nonformation, to a greater or less 
 extent, of instruments that would otherwise have been formed. 
 
 The proportion between the two would be determined by the 
 order to which the strength of the effective desire of accumula- 
 tion, and the time which it had had to operate, had carried the 
 formation of instruments. 
 
182 ^^ THE NATURE OF STOCK. 
 
 But the state of things we have supposed never exists. It 
 scarcely happ£ns, even to return to the sort of transactions we 
 set out from, that a butcher, a brewer, a baker, deahng together, 
 effect all their business either by direct barter, or by cash. The 
 butcher would, in very many cases, be satisfied with the implied 
 promise of the brewer and the baker, that, at some future time, 
 they will give him a quantity of the commodities they respect- 
 ively deal in, or of money, or some equivalent to it, equal to the 
 price of the beef each received. 
 
 This mode of effecting the object, constitutes the system of 
 credit, the second of the two systems by which exchanges are 
 carried on. It has an existence in every country, and in most 
 civilized countries, as is well known, the great bulk of transac- 
 tions are carried on by the aid of it. Were the actual or implied 
 promise, which the party receiving the commodity makes to 
 him giving it, always fulfilled, it would in itself be unattended 
 with any loss, and might possibly be so managed as almost 
 entirely to supersede the use of coined money as a medium of 
 exchange. 
 
 The amount of the whole purchases made by any individual 
 within a limited time, is, in general, about equal to the sales he 
 effects within the same time. If, therefore, in any community, 
 all the exchanges, which are not direct barter, were to be trans- 
 acted by credit, and were the obligations to pay granted by all 
 persons engaged in business in it to expire at the same time, 
 when that time came round, every individual would hold obliga- 
 tions to receive, to about as large an amount as he had granted 
 to pay. If then each individual had granted obligations to pay, 
 to the same persons as he had received others from, the business 
 would be at once concluded by a reciprocal delivery of obliga- 
 tions. But this can scarcely ever happen ; almost all the obli- 
 gations to receive payment, which any individual holds, will be 
 from other persons than those to whom he himself has granted 
 obligations. The affair might however be managed, and the 
 same end arrived at, by a transfer of obligations from hand to 
 hand. A has bound himself to pay B fifty pounds, B to pay C 
 fifty pounds, and C to pay A fifty pounds. If, then, A pay B, 
 by giving him C's obligation, B can discharge his debt to C with 
 it, and thus the debts and credits of the whole three be settled. 
 By operations more complicated, but conducted on similar prin- 
 
OF THE NATURE OF STOCK. 183 
 
 ciples, nearly the whole system of exchanges of any community 
 might be managed. 
 
 There are two obstacles to this mode of efFectino; exchanges 
 by credit. The first arising from its inherent complexedness and 
 difficulty, the second from the liability of the contracting parlies 
 to fail in fulfilling their engagements, from dishonesty, miscal- 
 culation, and accidents impossible to be foreseen. These restrict 
 its application in general to transactions for large amounts, little 
 doubtful in themselves, and which from their nature can be easily 
 systematized and arranged. Such appears to have been the 
 viremens, or transfers, at Lyon.* Such also are the transfers 
 effected by the London bankers. In Russia, however, it would 
 seem to be applied to transactions much more various, and com- 
 plicated. ]Mr. Storch informs us that the creditors and debtors 
 of the province of Kief, and several others adjoining, the pro- 
 prietors, capitalists, merchants, those who want funds, and those 
 who want to dispose of them, meet in the month of January, in 
 the town of Kief, to make such transfers, and that in 1804, the 
 amount of their exchanges was upwards of twenty millions of 
 rubles, or about three millions seven hundred thousand pounds 
 sterling. Transfers similar to these are made, he adds, at Reval, 
 and many other towns in the empire.f 
 
 There is another method by which the system of credits might 
 be conducted, and which may be illustrated by an example taken 
 from a country already referred to, where the causes exciting to 
 its introduction, and giving prevalence to it, operate very power- 
 fully. In many parts of North America, but more especially in 
 new settlements in Upper Canada, the scarcity of cash, and 
 perhaps other circumstances, often lead traders to adopt a peculiar 
 plan of business. Every dealer provides himself with a general 
 assortment of all sorts of commodities in demand in the settle- 
 ment he inhabits, and reckons on being paid for them in the 
 shape of grain, potash, pork, beef, and other commodities, in the 
 formation of which his customers are engaged. But in this sort 
 of barter, one article will generally fall short or exceed the value 
 of the other, a pound of tea will not exchange for a hog, nor a 
 quarter of wheat for a dozen pounds of sugar. To obviate the 
 
 * Ganilh Des systemes d'economie politique, Tome II. p. 155. 
 t Storch Cours d'economie Tome II. p. 3.53. 
 
184 OF THE NATURE OF STOCK. 
 
 difficulty, the merchant opens an account with each of his cus- 
 tomers, charging him with the goods furnished, and giving him 
 credit for the produce received, and in this way perhaps all the 
 transactions between the two are managed, either by barter or 
 credit, witliout the assistance of a dollar of cash. Nor is this 
 all, a great variety of other transactions are also effected, through 
 his intervention. Any person who may have furnished him with 
 an overplus of produce, or who has credit with him, can through 
 his means settle most accounts or balances due on accounts. He 
 may thus pay the laborers, and the artificers, and tradesmen, he 
 may employ, by an order on the shop, or as it is called, store, of 
 the country dealer. Besides these, the transactions of the store- 
 keeper extend to the giving out of the raw produce of the coun- 
 try, to Individuals in the settlement, tradesmen, he. who may 
 not themselves have enough, and to the receipt in return of 
 various articles, such as axes, shoes, boots, made-up clothes ; 
 and in this way through his books, a very large portion of the 
 business of the settlement is transacted. It is not difficult to 
 conceive, that the whole might be so transacted. 
 
 Were the country dealer always to have a supply of every 
 article in demand in the settlement, at a reasonable rate, and 
 were all contracts for the delivery of produce to him to be regu- 
 larly executed, almost all the requisite exchanges might be con- 
 veniently efiected through his books. But in this sort of traffic, 
 as the merchant always has commodities to sell, and his custom- 
 ers have not always produce to return, it inevitably happens that 
 they get Into his debt. As his object is to sell as many goods 
 as possible, he is very apt to allow many to run in his debt, who 
 do not fulfil their engagements. He suffers from the dishonesty, 
 or the imprudence and miscalculations of those who deal with 
 him. Very many of his customers are much longer of paying 
 him than they have promised, or they do not pay at all. Aware 
 of the risk he runs, he is obliged to balance it by charging an 
 additional sum, over and above what he would otherwise demand, 
 on all commodities that pass through his hands. In some cases, 
 this advance amounts to at least 30 per cent. In this way he 
 makes, or endeavors to make, the prudent and honest persons 
 who deal with him, pay for the imprudent and dishonest, who 
 also deal with him. The former class, in consequence, keep out 
 of the circle of all such transactions, as much as possible, and 
 store-pay, as it is called, is depreciated. 
 
OF THE NATURE OF STOCK 185 
 
 The business of banking, seems to owe its foundation and ex- 
 tension, to its capacity for giving room for the developement of 
 the benefits, and for restraining and remedying the evils of the 
 system of credit. The operations which the banker executes in 
 a great society, have more than the advantages of those performed 
 by the system of viremens in France, or Russia, and by the 
 petty store-keeper in a remote American settlement, and avoid 
 many of the inconveniences of both. He is the instrument, 
 through which the mass of the exchanges, taking place in the com- 
 munity, is performed. It is his business to furnish the means of 
 transacting all exchanges that the condition of the society re- 
 quires, and it is the business of all individuals having many such 
 exchanges to effect, to make application to him for the means of 
 transactino- them. 
 
 In a great society, a person extensively engaged in business, 
 may, in a short time, have transactions with twenty, thirty, or a 
 hundred individuals ; his circumstances can be known but to a 
 few of them, nor is it possible for him to produce to each satis- 
 factory evidence of his own capacity to discharge his engage- 
 ments, or to give him the security of others for their performance, 
 and even could he do this, it would be insufficient for the pur- 
 poses of the greater part of them. If such a person, however, 
 really possessed funds in trade and manufacture, if he really 
 owned a stock of instruments requiring a constant change and 
 transfer with those in the hands of others, he might find means 
 to satisfy one individual, the banker, of his capacity to execute 
 these exchanges in reasonable time, or procure others to be 
 responsible for his doing it. It is then the business of the banker 
 to give him the means of doing so, and he accordingly lends him 
 money when he requires to add to his stock of instruments, that 
 is to buy, and receives money from him again, when he transfers 
 instruments to others, that is, when he effects sales. Every person 
 ensatred in business doins; the same, the banker is the general 
 lender, and receiver of the society. 
 
 The mechanism of banking is managed in two ways. The 
 one is by discounting bills, that is by giving money immediately, 
 for the obligations by which one man contracts to pay money to 
 another, at some future time, deducting a part, the proportion of 
 which is determined by the order in which instruments stand in 
 the society, and by the length of the period. This method is 
 
 24 
 
186 <^F THE NATURE OF STOCK. 
 
 analogous to that of viremens, but far preferable. Thus, an in- 
 dividual who holds an obligation by which another binds himself 
 to pay him the sum of two thousand pounds in six months, were 
 he in some parts of Russia, would be justifiable, were he confi- 
 dent of the solvency of his debtor, to contract obligations to that 
 amount, and payable at the same time. Were he then desirous 
 of having something transferred to him, of the value of two thou- H 
 sand pounds, his granting an obligation to that amount, and payable 
 at six months, might help to make the two transactions of easy 
 arrangement. But, supposing that he were desirous of having a 
 number of small transfers made to him, that he were to grant a 
 proportional number of obligations, that the persons to whom he 
 granted them were again to grant others, still smaller and more 
 numerous, and that these were again to be subdivided and re- 
 united, it is evident that the mass of affairs, would become so 
 complicated, and the number of individuals concerned in them 
 so large, that the trouble of arranging them would be excessive. 
 This system is of consequence, as has been already observed, 
 of limhed application. But when an individual gets a bill dis- 
 counted, the transfers he effects with the bank bills he receives, 
 occasion no future trouble to himself or others. 
 
 The system of bank credits is the second mode, in which the 
 business of banking is managed. It is somewhat analogous to 
 that carried on, through the aid of the books of the North Amer- 
 ican store-keeper. The banker gives the means of effecting 
 any purchases which those dealing with him are desirous of 
 making, and, when they sell, gives them immediate credit for the 
 amount they receive. He is not, however, like the store-keeper, 
 urged on, by the dread of a stock of goods lying on his hands 
 too long, to allow people to run accounts with him, whose credit 
 is in any means doubtful. He is a dealer simply in credit, and 
 it is bis business, before giving credit, to demand such security as 
 may satisfy him that he can sustain no loss, and this being grant- 
 ed, to afford the requisite accommodation on reasonable terms. 
 
 The advantages which the banker derives fiom being the gen- 
 eral lender of the community, arise chiefly, from the peculiar 
 sort of money he lends. It is not specie, but merely an obliga- 
 tion to pay in specie. But as all who engage in business have 
 to return cash to him, it is equally good to them as specie, and 
 through them is equally well received among the other mem- 
 
OF THE NATURE OF STOCK. 187 
 
 bers of the community. Thus the money of the banker comes 
 to make a great part, or nearly the whole, of the ch'culating 
 medium. 
 
 The benefits which the society receives from the system, 
 when there are no defects in the conduct of it, seem to be three- 
 fold. 
 
 1st. As far as it extends, the expense of the circulating me- 
 dium, the expense which men in business must otherwise be 
 put to by being obliged to have a quantity of cash always lying 
 by them to meet sudden emergencies, is done away with. When 
 a man wants cash, he goes to the bank for it, when he has cash, 
 he carries it to the bank. Money never lies idle. 
 
 2d. It does away with all deficiency in the circulating medium. 
 When the system of instruments which belong to an individual, 
 is defective in any part, he can at once supply the defect, and 
 when it is redundant, he has no difficulty in disposing of the 
 superfluity where it may be usefully employed. 
 
 3d. It does both, without the evils otherwise attendant, on the 
 substitution of credit for coin. The dealings of men of prudence 
 and character, are not so mixed up with those of improvident 
 and suspicious persons, as to make the one bear the burden of 
 the losses sustained through the folly or dishonesty of the other. 
 Every instrument, as its formation is pushed on by the industry 
 of the members of the society, is moved directly to its proper 
 station. It neither runs the risk of being subjected to remain 
 useless, owing to the expense of moving it, nor of being mis- 
 placed or destroyed in the process of moving it. 
 
 The tendency of these three effects, flowing from the banking 
 system properly conducted, is to carry the instruments subject to 
 the operation of exchange, to orders of more quick return, than 
 they would otherwise have occupied. The outlay expended on 
 them is not so great, and they sooner make the expected returns. 
 The accumulative principle receives in consequence, a stimulus, 
 that enables it to embrace a larger compass of instruments, and 
 the general stock of the society is soon proportionally increased. 
 Greater facility is also given to the division of employments, 
 from there beins; no obstruction to the additional exchan2;es re- 
 quired, and new branches of business arise. From both these 
 circumstances, the number and am.ount of exchanges increase. 
 
 The money of the banker, compared with gold and silver, as 
 
188 OF THE NATURE OF STOCK. 
 
 a medium of exchange, would thus seem to be not only less ex- 
 pensive, but more efficient. When the circulating medium in 
 any country is specie, probably far the larger portion of it lies 
 idle. Every merchant, in such a country, has a quantity of gold 
 or silver, proportioned in amount to the business he carries on, 
 doing actually nothing, but only waiting to do whatever may 
 offer. The strong boxes of all the merchants in the country, 
 always hold, therefore, a large portion of its capital in inactivity. 
 In a country, on the other hand, where the bills of the banker 
 form the circulating medium, the quantity of money lying for 
 any time idle is insignificant. No money is retained, but for a 
 specific purpose. In Scotland, for example, every merchant 
 places in the hands of the banker, all the cash for which he has 
 not immediate use. 
 
 Were we, therefore, to confine the advantages derived from 
 the institution of banks, in any community, to the substitution of 
 a cheap medium, for a dear one, we should make an imperfect 
 estimate of them. If, for instance, the circulating medium in 
 any country be one million in coin, and if that be superseded by 
 paper, should the quantity of paper in circulation be found to 
 amount also, to one million, it would indicate a great increase in 
 the transfers effected, and would show, either that a larger com- 
 pass of materials had been brought within reach of the accumu- 
 lative principle, or that employments had been more subdivided, 
 or that both these circumstances had occurred. 
 
 From the same causes, the effects of a recurrence to a metallic 
 currency, and the compulsory substitution of one million of 
 specie, for one of paper, would be far from being limited to the 
 expense of the bullion employed in the operation. It would, 
 besides this, render impracticable a multitude of transfers, that 
 might otherwise have taken place, disorganize the whole system 
 of exchange, place the stock of the society in orders of slower 
 return, and put a mass of materials, which the accumulative 
 principle had before been able to grasp, beyond its reach. 
 
 The extent to which the banking system may, in any country 
 be carried, seems to depend on four circumstances. 
 
 1st. The amount of the science, skill, and population existing 
 in the country, to work up the materials it affords, and the 
 abundance of these materials. 
 
 2d. The strength of the accumulative principle, the oppor- 
 
OF THE NATURE OF STOCK. jgg 
 
 tunity it has had to operate, and consequent division of employ- 
 ments, approach of instruments to the more slowly returning 
 orders, and accuaiulation of stock. These two circumstances 
 determine the amount of the possible exchanges, and, conse- 
 quendy, of the money that may be employed in effecting them. 
 
 3d. The general intelligence, sagacity, and integrity of the mem- 
 bers of the community. A person greatly deficient in any of these 
 respects, is one with whom a banker would not wish to deal. But, 
 these qualities are of those giving strength to the effective desire of 
 accumulation ; this circumstance, therefore, may be considered 
 as merging in the last, the general strength of the accumulative 
 principle. 
 
 4th. The efficiency and security of the system of banking 
 adopted. 
 
 On the other hand, the benefits to be derived from bankins:, 
 in proportion to its extent, would seem to be greater, the nearer 
 instruments are to the more quickly returning orders, and the 
 greater consequently the scarcity of specie. Where, therefore, 
 the accumulative principle being strong, and from the implied 
 intelligence, and honesty of the community, the system of bank- 
 ing extensively practicable, but from want of time to work up 
 materials to more slowly returning orders, instruments are at those 
 of quicker return, there the operations of the banker are pecu- 
 liarly beneficial. 
 
 We have, perhaps, sufficiently enlarged already, on the three 
 first of the circumstances referred to. It only remains, to show the 
 chief points of connexion of the last of them, with the princi- 
 ples it has been attempted to explain. To do so, it is necessary 
 to refer to the occasional evils resulting from the system of bank- 
 ing, diminishing its general utility. They may be reduced to 
 two. 
 
 1st. The money which bankers circulate, must be the repre- 
 sentative of real property. It must be exchangeable for some 
 commodity, or commodities, equal to the amount at which it is 
 rated. If it may be always exchanged for specie, or for some 
 proportion of the general revenue abstracted for the purposes of 
 government, it will be a representative of something real. But 
 it sometimes happens that bankers squander, or waste, the funds 
 provided for payment of the demands to which they are liable, 
 and this being discoveredj their money becomes valueless, and those 
 
190 OF THE NATURE OF STOCK. 
 
 holding it as an equivalent to capital, sustain loss to the amount 
 they hold. The loss thus sustained, both in itself, and in the 
 general diminution of confidence in banking transactions and re- 
 tardation of exchanges consequent on it, makes it a matter of 
 great importance to every mercantile community, to have banks 
 of indubitable solvency established throughout it. It were be- 
 yond the present purpose, to inquire into the particular system and 
 regulations that may best produce such a result. There are, 
 however, tvi^o general observations, arising from the nature of 
 things, which naturally present themselves. 
 
 When capital is largely accumulated, and at orders of slow 
 return, there will be very many, who will be disposed to allow 
 their funds to remain in that employment, and be content with 
 the moderate revenue thus produced to them. When, on the 
 other hand, they are at orders of quicker return, there is a great 
 temptation to divert the fund, set apart for these purposes, to 
 speculations promising great gain, but sometimes producing great 
 loss. Banking will consequently be in general safest, where 
 capital is most largely accumulated. 
 
 Again, as no possible precaution can prevent a company of 
 bankers from acting dishonestly, who are wiUing to combine for 
 such a purpose, for they can only be required to produce state- 
 ments drawn up by themselves, where there exists a great defi- 
 ciency of real principle, and a proneness to defraud, banking 
 becomes dangerous or impracticable. 
 
 2d. The second evil arising from the practice of banking, 
 has its origin, in the system of credit itself; and the shock which, 
 as it is founded on prevailing opinion, it is liable to receive from 
 whatever shakes public confidence. 
 
 Every person engaged in the formation and transfer of com- 
 modities, and adopting the system of credit as the medium of 
 transfer, is indebted to some individuals, as, in turn, other indi- 
 viduals are indebted to him. The stock also of instruments he 
 has on hand, allows him to offer a certain amount of commodities 
 for sale, and requires him, if he continue his business on the 
 same footing, to purchase certain other commodities, and pay for 
 certain amounts of labor. What is owing him, and payable 
 within a given time, may exceed what he owes others, payable 
 within the same time, or may equal it, or come short of it. 
 What he is able to sell others within a given time, may also ex- 
 
OF THE NATURE OF STOCK. IQl 
 
 ceed what he requires to buy within the same time, or may be 
 equal to, or less than it. It will always be the case, too, that 
 individuals will look forward for the means of dischariring the 
 debts they have contracted, not only to the debts owing them 
 by others, but to the sales they expect to effect. Were this 
 to happen only to persons of really abundant capital, there would 
 be no reason to fear the non-performance of engagements con- 
 tracted. But it also happens to those, whose capitals have been 
 reduced by misfortune or imprudence, and therefore, there 
 are always many in every mercantile community, whose ability 
 to discharge their oblisations is more or less doubtful. When, 
 therefore, any cause operating extensively, and prejudicially, 
 on mercantile transactions occurs, it generally happens, that there 
 arise cases of incapacity to meet engagements, and, as one 
 man depends for the means of discharging his debts, on the 
 debts others owe him, that embarrassment and distress spread 
 throughout the whole mercantile body. The experience of the 
 misfortunes attending this state of things, leads every one en- 
 gaged in business, when he thinks there is reason to fear its 
 approach, to endeavor to withdraw himself from the danger, by 
 avoiding to contract obligations to pay. There is consequently 
 a general diminution of purchases, and a general temporary fall 
 in prices.* 
 
 But while prudent people are thus able to secure themselves 
 from evil, they increase the difficulties of those, who have con- 
 tracted obligations to pay, in dependence on the proceeds of sales 
 to be effected ; and some of these becoming incapable of ob- 
 tainintr the means of meetino- their engagements, their failure 
 increases the general distress, and farther lessens the number in- 
 dined to purchase. 
 
 At this conjuncture, the affairs of the banker undergo a revo- 
 lution. For, as the number of buyers diminishes, there is less 
 money requisite for transacting the business of the community, 
 and this overplus naturally returns on him. But while less money 
 
 * Market price, which is fluctuating, is here spoken of. What is termed 
 the natural price of things, or their general average price, is that alone treated 
 of in other parts of this inquiry, it being only the permanent causes affecting 
 the increase and diminution of stock, that it was proposed to investigate. 
 On this account, the view here given of phenomena resulting in a great 
 measure from the operation of temporary causes, is somewhat confined and 
 imperfect. 
 
192 OF THE NATURE OF STOCK. 
 
 is really wanted to execute the business of the society, he is 
 called on to furnish as much, or probably more. The debts those 
 dealing with him formerly contracted have to be paid, while the 
 sales of commodities, the means by which it was anticipated that 
 part of the funds for that payment, would be procured, have 
 much diminished. 
 
 The situation of the banker becomes therefore at this crisis, 
 very critical. He cannot, in justice to himself, grant all the re- 
 quisite accommodation, and yet, his refraining from doing so must 
 aggravate existing evils. As specie is, in such a state of things, 
 the most desirable of commodities, he has reason to fear that a 
 large portion of his money will be returned on him, which he will 
 be required to replace with gold or silver, and he knows that if 
 a suspicion of his solvency arise, he may be required thus to 
 replace the whole of it. If he be unable to meet these diffi- 
 culties, his failure adds very much to the general mass of misfor- 
 tune, and farther diminishes public confidence. 
 
 The natural termination to such a state of things, would seem 
 to be the diminution of contracts, and consequently of debts, 
 progressively diminishing the amount of payments, for which it 
 is necessary to provide. This termination is retarded by the 
 struggles of those whose real funds, in proportion to the extent 
 of their business, are smallest, and whose motives to engage in 
 fresh transactions, are chiefly the hopes of extricating themselves 
 from the embarrassments in which present transactions have in- 
 volved them. It is also more injuriously retarded, as has been 
 observed, by the failure of those engaged in the business of 
 banking. 
 
 The liability of the mercantile community to be largely affect- 
 ed by such sudden pressures, must depend, in a great degree, on 
 the peculiar circumstances of the country, and nature of the 
 employments and trades carried on in it. 
 
 It must also be dependent on the system of banking, that is 
 there pursued, and its capacity to furnish funds where there is 
 real capital ; to check unsafe and gambling transactions by with- 
 holding funds from those desirous of extending hazardous specu- 
 lations, though deficient in capital ; and to pursue its operations 
 steadily and confidently notwithstanding any general embarrass- 
 ment. To attempt, however, an enumeration and comparison 
 of the different systems of transacting the business of banking. 
 
OF THE NATURE OF STOCK. 193 
 
 which have been adopted in different times and places, would 
 involve us in inquiries of so complicated a nature, that while to 
 discuss them partially would be unsatisfactory, to do so fully 
 would lead too far from our present object. I reserve therefore 
 the few observations I have to make on the subject, to another 
 place. "* 
 
 Gold and silver would thus seem to have been considered, 
 first, simply as tliemselves the most precious, and easily preserv- 
 ed of all articles ; next, their capacity for being divided and 
 re-united without injury, would seem to have led to their general 
 employment in exchange for other things the acquisition of 
 which their possessors found useful or necessary :f convenience 
 then to have rendered it expedient to have them formed into 
 pieces of a certain weight, and fineness, when they began to con- 
 stitute what is now called money ; lastly, their general adoption as 
 money would seem naturally to have rendered them proper 
 measures to give fixedness to those obligations to future delivery 
 of things in exchange, which the increased security and tranquil- 
 lity of modern times, and the great amount of exchanges trans- 
 acted, have in recent days, introduced. In the two latter em- 
 ployments, as serving for real, or determining the rights which 
 the possession of fictitious money conveys, they occasionally 
 serve as media for exchanging all instruments, and, therefore, 
 for determining and expressing their relation to each other, as 
 things capable of being exchanged. In this way measuring all 
 things exchanged, or capable of being exchanged, that is, all in- 
 struments, they come to denote the amount of instruments, or 
 capital, or stock, Avhich any man possesses. A person is said to 
 be worth five hundred, or five thousand pounds, as he has in- 
 struments, which, in exchange, would be measured by these sums 
 respectively ; and, as in common life all things are considered, 
 not as they are, but merely in their actions and relations, instru- 
 ments come there, also, to be spoken about, and conceived of, 
 altogether in the relation they have to certain pieces of gold 
 and silver. 
 
 These are not the only effects which the exchange of instru- 
 
 * See Note G. 
 
 t Thus the Knight parted with a linii or two of his gold chain, when in 
 need, and in more ancient times the traveller carried his bag of gold dust. 
 
 25 
 
194 OF THE NATURE OF STOCK. 
 
 ments for one another, and the consequent use of money as the 
 medium of exchange, have produced in our conceptions of them. 
 The system of exchanges, being attended by that of credit, 
 imphes the existence of some mode of ascertaining the amount 
 to be rendered back, for instruments received in trust. It is 
 sufficiently obvious that this must be determined by the oi'der to 
 which the principle of accumulation, and the time it has had to 
 operate, has carried tlie formation of instruments in the society. 
 If, in any society, instruments are at the order D, doubling in 
 four years, then one receiving an instrument on trust, for four 
 years, will, at the end of that period, have to return two of the 
 same sort and quality. If they are at the order E, he will have 
 to return two at the end of five years, &.c. Thus it is a com- 
 mon practice in many parts of North America, especially in new 
 settlements, to sell cattle and sheep on trust, the terms being 
 that double the number thus transferred, is to be returned in four 
 or five years, as the agreement may be made. More generally, 
 however, much shorter periods are adopted, for the settlement of 
 accounts. The natural periods of a year, and a month, have in 
 different times and places, been made choice of for this purpose. 
 It is then necessary to calculate what is due, by the one party 
 to the other at these periods, and these calculations are naturally 
 made in money. 
 
 Instead, for instance, of returning two cows at the end of five 
 years, the bargain may be, that a proportional sum is to be paid 
 at the end of the first, second, third, fourth, and fifth years. 
 Were money paid for the cow immediately, the amount we shall 
 say would be twenty dollars, the double of that, which would 
 be the sum to be given were the time of payment deferred till 
 the expiration of five years, is forty dollars. The annual pay- 
 ment can neither be a fifth part of the one sum, four dollars, nor 
 of the other eight dollars, but one between the two, in this case 
 about six dollars. Again, the bargain may be, that a cow be 
 returned, at the expiration of the fifth year, and that, for her use 
 during that time, an annual remuneration be made ; this would 
 be a half of the former annual payment, nearly three dollars, 
 and that sum accordingly, when such an arrangement takes place, 
 is the usual yearly payment, for what is called the rent of the cow. 
 Whatever order instruments may be at, some similar calculation 
 might determine, what should be the proportion annually paid 
 
c 
 
 26 
 
 D 
 
 19 
 
 E 
 
 15 
 
 F 
 
 12 
 
 H 9 per cent. 
 
 per ann. 
 
 I 8 " 
 
 
 J 7 « 
 
 
 K6, 5 « 
 
 
 L 5, 9 " 
 
 
 M 5, 5 " 
 
 
 N5 " 
 
 " & 
 
 OF THE NATURE OF STOCK. 195 
 
 for the use of any of them. The employment of money in these 
 calculations has simplified them, by the introduction of general 
 rules. The return which instruments make, is estimated at so 
 much in the hundred, or per cent, that is, in the hundred pounds, 
 dollars or whatever may be the current coin. Reducing our 
 orders to this phraseology, they w^ould be respectively : — 
 
 A 100 per cent, per ann. 
 B 41 « « 
 
 (( (( 
 
 (C (( 
 
 i( <e 
 
 G 10 " " 
 
 It is on these principles, that all reckonings are made, not only 
 of instruments given on credit, but of those retained. In the 
 latter case, the annual return is termed profits of stock, in the 
 former interest. There is, however, this difference between the 
 two, that, in the profits of stock, is generally included the return 
 that has to be made, for the menial exertion and anxiety, and 
 bodily fatigue, of the owner of the stock. There is, also, a 
 difference between them, in common language, arising from its 
 being the practice to speak of the more favorable issues of in- 
 struments, as determining the rate, without reckoning those that 
 have turned out less favorably, or unfortunately. Thus Adam 
 Smith : " In a country where the ordinary rate of clear profit 
 is eight or ten per cent, it may be reasonable that one half of it 
 should go to interest, wherever business is carried on with bor- 
 rowed money. The stock is at the risk of the borrower, who, 
 as it were, insures it to the lender; and four or five per cent, 
 may, in the greater part of trades, be both a sufficient profit 
 upon the risk of this insurance, and a sufficient recompense for 
 the trouble of employing the stock."* Here, ordinary profit 
 evidently means, not the average profit, but the profit of favora- 
 ble years. The average profit of a merchant, for example, is 
 not properly the profit he makes upon his more favorable adven- 
 tures, but what he makes on all those adventures that yield a profit, 
 whether great or small, after deducting the actual loss he may sus- 
 tain on others. The average profits of all the merchants of any 
 
 " Wealth of Nations, Book I. c. III. 
 
196 , OF THE NATURE OF STOCK. 
 
 country, also include their very favorable, their less favorable, and 
 their losing adventures. In this way, using the term profit, for the 
 return made from the outlay expended on the formation of the 
 whole instruments spoken of, actual losses are also included in 
 it, and, in speaking prospectively of future profit, the risk of 
 future loss is included, and what Adam Smith calls the risk of 
 insurance disappears. If in a country where the average profit is, 
 in reahty, only eight per cent, a particular merchant continue 
 for some years, to make ten per cent, he may indeed expect, 
 and is perhaps apt to expect, the same return in future years, 
 but, unless in so far as he can truly calculate on his mercantile 
 sagacity and activity being above par, in so doing, he acts im- 
 prudently, and the chances are, that he is undeceived by having 
 to sustain actual losses in succeeding years. 
 
 We may then assume the rate of interest as a fair measure of 
 the real average rate of profits, in any country, and consequently 
 of the order in our series, at which instruments are there arrived. 
 So receiving it, we shall find that it agrees very closely with the 
 preceding observations. 
 
 In China, we are told by Barrow, that the legal rate of inter- 
 est is twelve per cent., but that, in reality, it varies from eighteen 
 to thirty-six. The remarks of other authors agree pretty accu- 
 rately with this statement, fixing the orders at C or D. The 
 Dutch seem, of all European nations, hitherto to have been in- 
 clined to carry instruments to the most slowly returning orders. 
 The durability given to all the instruments constructed by them, 
 the care with which they are finished, and the attention paid 
 to preserving and repairing them, have been often noticed by 
 travellers. In the days when their industry and frugality were 
 most remarkable, interest was very low, government borrowing 
 at two per cent, and private people at three.* The former in- 
 dicating an order doubling in about thirty-three years, the latter 
 one doubling in twenty-three years. In ancient Rome, interest 
 was in reahty exceedingly high, from twelve to fifty per cent.f 
 Were we farther to compare the orders in which instruments 
 appear to stand in other countries, with the rate of interest in 
 those countries, we should find the two every where correspond- 
 
 * Wealth of Nations. 
 
 t Histoire de I'usure par Boucher Paris 1819. p. 25. Tlie laws against 
 usury, there, as elsewhere, increased, instead of diminishing the evil. 
 
OF THE NATURE OF STOCK. . 197 
 
 ent. I apprehend, however, that this is needless, for, as the 
 reader must on consideration perceive, it is impossible it can be 
 otherwise. Loans, indeed, pass under the name of money, but 
 money is only the means of effecting the loan, it is in reality in- 
 struments that are lent, and they must in return yield not much 
 less than what is paid for their use, otherwise they would not be 
 borrowed, and not much more, otherwise they would not be 
 lent. 
 
 The system of calculation, the foundation of which we have 
 been considering as connected with exchanges, is convenient for 
 all engaged in the business of transfers, and answers their pur- 
 poses very perfectly. When applied, however, to speculative 
 purposes, it labors under the disadvantage to which all practical 
 general rules are liable, when assumed as speculative general 
 principles. According to it, stock is regarded altogether, as 
 measured by money, and an amount of stock is considered, simply, 
 as an amount of money, or something that will bring money. 
 The stocks, therefore, of different countries, are viewed as differ- 
 ing merely in amount, and every increase and diminution of the 
 stock, of the same country, as a simple addition, or substraction, 
 of an homogeneous quantity. These events being so viewed, 
 have been assumed so to exist, and the general increase and 
 diminution of stock, have been treated of, as things, as simple 
 in their nature, as the rows of digits employed to mark the 
 amount of money by which they are estimated. Some of the 
 fallacies hence arising, will be presently noted ; they will, I believe, 
 be found to be the foundation of much of the contradictions, in 
 which the reasonings on these subjects are involved. 
 
CHAPTER IX. 
 
 OF THE EFFECTS RESULTrNG FROM DIVERSITIES OP STRENGTH IN THE AC- 
 CUMULATIVE PRINCIPLE, IN MEMBERS OF THE SAME SOCIETY. 
 
 The mass of the individuals composing any society, being 
 operated on by the same causes, and having similar manners, 
 habits, and to a great extent feelings also, must approximate to 
 each other, in the strength of their effective desires of accumu- 
 lation. In the view we have hitherto taken of the subject, we 
 have considered them, as not only approximating, but coinciding 
 in this respect. In reality, however, they do not do so. Though 
 the desire may be generally of nearly equal strength, throughout 
 the bulk of the society, it cannot altogether be so, but must vary, 
 in some, in degrees scarcely perceptible, in others, as in every 
 community there will be men of characters opposite to their 
 fellows, very largely. But there are nevertheless circumstances, 
 which, notwithstanding these variations, restrain and confine the 
 construction of instruments, either altogether to the same order, 
 or to orders much more nearly approximating to each other, tlian 
 vv'ould be indicated by the strength of the effective desire of 
 accumulation, in the individuals forming them. 
 
 The accumulative principle of the different individuals com- 
 posing the same society, may vary from the average strength, 
 either by being above, or below it. ' There will, in every society, 
 be some individuals not disposed to construct any instruments, 
 but such as are of orders of more quick return than those gen- 
 erally formed, as there will be others, disposed, if they have no 
 opportunity otherwise to make additional provision for futurity, 
 to expend part of their revenue in working up materials even to 
 orders of slower return, than the average of the instruments 
 already formed. 
 
OF THE NATURE OF STOCK. 199 
 
 Persons of the former class, possessing any amount of funds 
 presently available, would be inclined to apply them to the for- 
 mation of instruments, could they obtain materials, returning so 
 largely as to correspond to the estimate they make of the future 
 and the present. But they will not be able to find any such 
 materials, for they will have been previously appropriated, and 
 wrought up more laboriously than they would be inclined to do, 
 by other members of the society. If, again, the funds of an 
 individual of this class, consists of instruments whose returns are 
 future, he will gradually transfer them to other members of the 
 society, whose accumulative principle is stronger than his own; 
 for, according to his estimate of the future and the present, he 
 will receive more for them than they are worth. It thus happens, 
 that all the members of any society, wdiose accumulative princi- 
 ple is lower than the average, are gradually reduced to poverty. 
 The same persons, moving to a community where instruments 
 were of orders of quicker return than those correspondent to the 
 strength of their own accumulative principle, would acquire pro- 
 perty. Thus the artisan, or laborer, who, in England, never 
 thought of saving, is excited to accumulate property, in North 
 America. The Chinese, who, in Europe, would be very pro- 
 digals, are accounted frugal in the tropical regious of Asia, and 
 there attain to considerable wealth. 
 
 Individuals whose accumulative principle, is, on the other hand, 
 stronger than the other members of the community, would be 
 inclined to construct instruments of orders returning more slowly 
 than usual, rather than not devote a part of their present funds 
 to additional provision for futurity. But this is not necessary. 
 They are the natural recipients of the funds passing from the 
 hands of the prodigal, and their excess of providence, balances 
 his defect, and maintains the whole mass of instruments in the 
 society, at nearly the same orders. 
 
 It thus happens, that all instruments capable of transfer, are 
 in the same society, at nearly the same orders. Some instru- 
 ments, however, cannot be transferred, for many of them that 
 are of gradual exhaustion, and directly supply wants, must belong 
 to the persons exhausting them. Wearing apparel, household 
 furniture, and sometimes dwelling-houses, cannot be the pro- 
 perty of any other individuals than those in whose service they 
 
200 OF THE NATURE OF STOCK. 
 
 are exhausted. Such instruments must often, therefore, corres- 
 pond to the strength of the accumulative principle of their pos- 
 sessors. If they belong to persons in whom the strength of 
 this principle is greater than the average of the society, they will 
 not indeed vary much from the prevailing orders, the surplus 
 funds of such individuals, going, as we have seen, to the acqui- 
 sition of the stock of the prodigal. The difference is probably 
 just sufficient to indicate the character of their owners. Tiius, 
 if we inspect the dwelling-houses and furniture of rigid econo- 
 mists, we generally perceive that they have an air both of 
 durability and efficiency, distinguishing them from those of the 
 rest of the community. 
 
 When, again, individuals, in whom the strength of the effective 
 desire of accumulation is below the average of the society, have no 
 other stock but what is embodied in instruments of this sort, these 
 instruments, in their exhaustion of them, will correspond to the 
 weaker power of this principle. Such, unfortunately, is sometimes 
 the case, with what are termed the lower classes of society ; causes 
 to which we shall afterwards advert, sometimes generate a spirit of 
 improvidence among these classes, and diminishing the estimation 
 in which they hold the interests of futurity, incapacitate them 
 from expending any present funds, as a provision for these inter- 
 ests, if they do not return either very speedily, or very largely. 
 The consequence is, that the instruments of this sort which they 
 possess, have but a very small capacity for the supply of their 
 coming needs, and that they are unable to extricate themselves 
 from pressing poverty. 
 
 Thus, suppose that a man in this class, has tvi^o different bats 
 offered him, the present appearance, and immediate comfort in 
 the wear of which are nearly equal, but of which the one, from 
 its being formed of better materials, and these wrought up with 
 more care, is much more durable than the other, and cannot be 
 afforded but at a higher price than it. Let it be that four days' 
 labor is demanded for the one, and six and a half for the other, 
 but that the former will last only one year, the latter two. It is 
 evident, that, if the effective desire of accumulation of the indi- 
 vidual is very weak, not carrying him beyond the order A, he 
 will prefer the former, and at the expiration of the year will 
 consequently have to expend again an equivalent to four days' 
 
OF THE NATURE OF STOCK. gQi 
 
 labor, instead of having this want supplied by a previous ex- 
 penditure of two and a half days' labor.* 
 
 We may, in most cases, judge very accurately of the strength 
 of this principle among individuals of this order of society, pea- 
 sants, mechanics, day-laborers, and domestic servants, by the 
 qualities of the instruments of these sorts with which they pro- 
 vide themselves. By observing, for example, the kind of shoes, 
 gowns, blankets, which a woman in this rank of life purchases, 
 one may form a near guess of her character. Were she to 
 make a point of selecting such as would wear well, though some- 
 what dearer, or less showy, we might safely conclude that the 
 influence of the present, did not prevent the interests of the future 
 from being carefully regarded. On the contrary, did she choose 
 the unsubstantial, but more showy, or cheaper article, we might 
 with equal certainty infer, that the present, in her estimation, far 
 outweighed the future. All who have had opportunities of 
 making such observations, must have remarked the influence, 
 which the one line of conduct, or the other, exercises on such 
 individuals. The difference between them constitutes the main 
 distinction between thrift, and unthrift, the former of wdiich is 
 the only safe means, that persons in the lower walks of life 
 possess, through which they may give a beginning to their for- 
 tunes. The store accumulated by the exercise of the virtue 
 of providence, which, as it shows itself in them, we thus denom- 
 inate, enables them to turn the funds of their daily labor to the 
 construction of other instruments than those, and, at length, to 
 add largely to that stock which is destined to supply the future 
 wants of the whole society. What is true concerning one indi- 
 vidual, is true concerning many, and on this account, the degree 
 of strength of this principle possessed by what are called the lower 
 orders, exercises a great influence on the amount of the general 
 stock, accumulated by the society. The influence, in this re- 
 spect, of those w4io form that class, is, indeed, much more im- 
 portant than we might at first suspect. Their greater numbers 
 would alone make up for the smaller power of each, but besides 
 
 ■* It is a matter of indifference, it may be observed, to the hat maker, which 
 of the two he disposes of. Both hats are to him instruments for procuring 
 labor, or some equivalent to it. Of all his stock, it is only the qualities of 
 the one he makes choice of for his own wear, that can, in any degree, indi- 
 cate the strength of his own effective desire of accumulation. 
 
 26 
 
202 OF THE NATURE OF STOCK. 
 
 the weight which this consideration is entitled to, the amount of 
 labor that may, with advantage, be accumulated by the mere 
 working man, in instruments of this sort, is, in reality, very con- 
 siderable. His dwelling and its contents may fitly be considered 
 as a store that he possesses, for the supply of the future wants 
 of himself and family, or, what is the same thing, for the abridg- 
 ment of their future labor, and according as there is much or 
 little of this provision wrought up in them, will the one be sup- 
 plied or the other saved. First, the house itself, as the place 
 in which he and they live, and pursue many of their various 
 occupations, will not yield the advantages it ought, if the apart- 
 ments be not so roomy, and well lighted, as neither from the 
 closeness of the atmosphere to induce debility or disease, nor, from 
 their confinedness and obscurity, to cramp and retard the inmates 
 in their several labors. , Then, according to the compactness and 
 finish that is given to the walls and other parts will the inclemency 
 of the weather be more or less excluded, and a greater or less 
 quantity of fuel, be in future requisite. The cupboards, where 
 things may be readily put past, and as readily found, and where 
 they are preserved from destroying causes and accidents, the 
 cooking utensils, the bedding, and the numerous other articles of 
 the sort, that enter into the domestic economy of a frugal and 
 industrious family, are to be considered, in like manner, as so 
 many means by which future labor, or future expense may be 
 prevented or diminished. The extent of the saving which the 
 provident working man in this way effects, is sometimes very 
 great. In a rude, or imperfectly finished fabric, fuel must be 
 wasted ; in one where there are not proper conveniences for pre- 
 serving and cooking food, food must be wasted ; and where there 
 are not fit places for depositing articles of wearing apparel, they 
 must soon get dirty, and receive much unnecessary damage. In 
 a well finished, and convenient habitation, too, the inmates lose 
 no time, either from torpor in winter's cold, or languor in sum- 
 mer's heat ; they have space and comfort to pursue their various 
 labors, and unless the periods given to repose, and to their meals, 
 may employ the whole time they spend at home, in some useful 
 or agreeable occupation. The animal frame, also, it is to be 
 observed, when exposed to the extremes of heat and cold, and 
 to damp, seems to require a greater supply of nourishment, than 
 when properly sheltered and protected. This is seen in the 
 
OF THE NATURE OF STOCK. 393 
 
 inferior animals, and agreeing with them in other parts of his 
 corporeal constitution, man does not here differ from them, and 
 when comfortably lodged, is preserved in health and vigor, on a 
 diet which he would else find too scanty. The amount of pro- 
 vision for future needs, that may, in a similar manner, be embo- 
 died by a laborer or mechanic having a family, in bedding, and 
 other furniture, and in kitchen utensils, is very considerable.* 
 
 It is to be here observed, that the prevalence of a really 
 economical spirit among the working class, implies no diminution 
 of the purchases made by them. On the contrary, it being the 
 desire of the laborer, under such a supposition, to turn every six- 
 pense he can earn, to some useful employment, either to the 
 acquisition of necessaries, or other commodities, he must have 
 as many demands on the capitalist as before. The change pro- 
 duced, would be, in the articles purchased. The proportion of 
 those providing for the wants of futurity would increase, that of 
 those ministering to the gratifications of the present, diminish. 
 
 Thus, such a spirit pervading the working classes in Great 
 Britain, at the present period, would probably lead them to 
 abandon all delicacies of fare, and would occasion a diminished 
 consumption of alcoholic liquors, tea, coffee, silks, expensive 
 calicoes, and the more showy articles of apparel. It would, on 
 the other hand, increase the demand for the higher priced, and 
 more substantial cloths, cottons, blankets, kitchen utensils, and 
 articles of that sort, and for all matters used in the construction 
 of dwelling-houses. 
 
 Neither, it is to be observed, would the prevalence of a con- 
 trary spirit among those orders, and a proneness to seize on the 
 enjoyments of the present, occasion any immediate diminution 
 of their demands on the capitalist. It would merely lead to his 
 providing for them a greater amount of instruments of sudden 
 exhaustion, contributing to the gratification of the instant, and a 
 smaller amount of those of gradual exhaustion, providing for 
 the wants of futurity, and to his giving a construction to the 
 latter, that might make them correspond during the period of 
 their exhaustion, to the lower degree of the accumulative prin- 
 
 * If the reader be skeptical concerning the effects of a sufficient supply of 
 materials and utensils, in diminishing the expense of diet, I would request 
 him to read Count Rumford's Essays. 
 
204 OF THE NATURE OF STOCK. 
 
 ciple of the individuals in whose service they were to be exhaust- 
 ed ; such a circumstance, would, therefore, occasion the production 
 of a larger portion of delicacies, of articles of nourishment, more 
 grateful to the senses, but not more nutritious or more whole- 
 some than cheaper fare, of fewer substantial articles of dress 
 and furniture, and more of those that are flimsy and showy. 
 The whole stock of instruments owned by the laboring popula- 
 tion, would thus contain a smaller amount of the means of less- 
 ening future labor, or expense, as their effective desire of accu- 
 mulation diminished in strength. Even instruments that they do 
 not own, but of which they pay for the use, as dwelling-houses, 
 rented by them, are in a great measure, reduced to the same 
 order as those which they would themselves form. In the rank 
 of society above them, improvidence is long before it show on 
 the dwelling ; it attacks first other funds ; but, as they have not 
 these other funds, it necessarily shows itself in the funds they 
 have. Thus, if a family of improvident habits get the use of 
 the best finished dwelling, they soon so damage it, as to deprive 
 it of its efficiency. Some manifestation of what we call careless 
 habits, want, that is, of taking thought of the consequences of 
 what one is doing, breaks, we shall say, a pane or two of glass, 
 in some of the windows. To get these replaced is present ex- 
 pense, and trouble ; demands, perhaps, the doing without a pot 
 or two of liquor, or some other immediate enjoyment, and re- 
 quires the trouble of going for the glazier, or acting for him. An 
 old hat or two, or some bundles of rags, stuffed into the holes, 
 shifts off this denial of present pleasure, or ease, to some other 
 time, a time which, similar habits, while they render the arrival 
 of it more needful, indefinitely postpone, and the window that 
 had been formed to exclude wind and wet, and admit light, 
 serves, at last, to let in the wet and wind, and shut out the light. 
 Pursue the effects of these habits, this absorption in the present, 
 and heedlessness of the future, as they show themselves upon 
 the plaster, the floor, the ceiling, and we shall find them soon 
 doing away with the efficiency of the whole dwelling, for pro- 
 curing enjoyment, or saving toil, and reducing it^ as far as it is a 
 provision for the future wants of its inmates, to a condition little 
 superior to that of the miserable mud hut. 
 
 The presence of this evil, to a greater or less extent, is mark- 
 ed, by the high rates of interest given, for the petty sums bor- 
 
OF THE NATURE OF STOCK. 205 
 
 rowed by individuals of this class. The increase that is said to 
 have taken place in the number of pawn-brokers' shops in Eng- 
 land, and the high rate of interest there demanded, and given, 
 by mechanics, for small loans afforded to one another, would seem 
 to indicate its presence, to a degree sufficient to alarm a lover of 
 his country.* 
 
 When we come to treat of the causes that seem the great 
 agents in diminishing the stock owned by a community, the mode 
 in which the strength of the accumulative principle is weakened, 
 and extravagance introduced amons the lower classes, and the 
 effects arising from these circumstances, will present themselves 
 to our notice. It will then appear, that this diversity of the 
 orders of instruments owned throughout a community, can never 
 exceed certain limits. On this account, and because the stock 
 belonging to the lower classes, when the accumulative principle 
 is much lower with them than with the higher ranks, is always 
 inconsiderable, the orders to which instruments belong in the same 
 society, and the returns they make, or the ordinary profits of 
 stock, may be said to be nearly equal throughout every com- 
 munity. 
 
 This uniformity in the orders of instruments, and in the returns 
 made by them, in conjunction with the system of calculation, 
 by which, as we have seen, transactions relating to the transfer 
 and accumulation of capital are regulated, produces effects on 
 the conceptions of the individuals concerned, worthy of being 
 noticed. 
 
 The rules by which all persons regulate their proceedings in 
 the construction of instruments, are drawn from the returns made 
 by them, that is, the profits yielded by them. If an instrument, 
 or a series of instruments, which it is proposed to construct, 
 promise to yield the usual profits, the enterprise is undertaken, 
 and, if it make the anticipated returns, it is considered a profita- 
 ble, or gaining business ; if it do not promise to yield, and do 
 not yield the usual profits, it is considered an unprofitable, or 
 losing business. Probably, too, it is not considered, that this 
 mode of expression is correct, only as relative to a particular 
 
 * Pawn-brokers charge, I believe, about 20 per cent. The combinations 
 of the working classes in societies, or unions, have lent their members small 
 sums, if I well remember, at a rate nearly equal. I cannot, however, recollect 
 my authority for these statements. 
 
206 OF THE NATURE OF STOCK. 
 
 society, and not absolutely, to all societies, and that what in one 
 country or time, may be an unprofitable undertaking, will, with- 
 out any change of returns, be profitable in another country or 
 time, and vice versa. 
 
 Thus, suppose an English land-holder, whose income far ex- 
 ceeded his outgoings, to be asked why he does not apply his 
 means to enclosing and draining some sea marsh, his answer pro- 
 bably would be, it would not pay. It would only yield me two 
 per cent, when finished, and landed property ought to yield four, 
 I can always find estates to purchase, which will produce that. 
 Ask him, why, instead of stone fences round his fields, which 
 decay, or hedges, which require constant trimming and dressing, 
 he does not put iron railings, he will give the same answer, " it 
 would not pay." Ask the house-builder, why this is not cut 
 stone, instead of brick, that oak instead of pine, this again iron, 
 instead of oak, or that copper instead of iron, and consequently 
 the whole fabric doubly durable, he also will reply " it will not 
 pay." In all these cases, and a thousand others that might be 
 put, the answer is abundantly sufficient as regards the individual, 
 but is no answer at all as regards the society. The only answer 
 that can be given, in old countries at least, for such or similar 
 neglect of materials, is, that there, the effective desire of accu- 
 mulation is not sufficiently strong, to reach them, in the present 
 state of science and art. Were there fewer prodigal land-holders, 
 in England, estates could not be so easily got, and part of the 
 funds of those who buy estates, w^ould be laid out in improving 
 land at present unproductive, and the salt marsh might be drain 
 €d. In the same way, houses and other instruments would be- 
 come more substantial, and better finished, were the strength 
 of the accumulative principle throughout the whole society to 
 advance. 
 
 In China, precisely similar replies would be made by capital- 
 ists, concerning the draining of marshes, the erection of more 
 substantial buildings, and other enterprises requiring a large pre- 
 sent expenditure, for a remote future return. There such un- 
 dertakings would be really unprofitable, not paying the usual 
 profits of stock, and they can only in like manner become pro- 
 fitable, by the accumulative principle acquiring increased strength, 
 and instruments being wrought up generally to orders of slower 
 return. 
 
OF THE NATURE OF STOCK. 207 
 
 This, however, is not the view, which most readily presents 
 itself to practical men. To a person engaged in the practice of 
 an art, the particular mode which the circumstances of the coun- 
 try to which he belongs has rendered the most profitable, and 
 best, is considered as absolutely the best, and most profitable, 
 and if he remove to another country, he is apt to conceive not 
 only that his knowledge of the art is superior, which may per- 
 haps be true, but that the precise mode in which he applies that 
 knowledge to practice, is also the best, that can any where be 
 adopted, which is very possibly erroneous. 
 
 A English farmer, for example, who comes to North America 
 to pursue his art, almost always commences on the same system 
 which he followed in Britain. His agricultural implements, his 
 harness, his carts, waggons, &c. are all of the most durable and 
 complete, and, therefore, of the most expensive construction, 
 and his fields are tilled as laboriously, and carefully, as were 
 those he cultivated in his native land. Sometime usually elapses, 
 before he discovers that he may do better by being content with 
 more simple, and less highly finished implements, and that it will 
 be for his advantage to cultivate his land less laboriously, though 
 not less systematically. His neighbors tell him, indeed, from the 
 first, that if he expects the same profits as they have, he must 
 have less dead stock on his hands, and must give more activity 
 to his capital ; but he is slow of believing them. 
 
 Similar observations might be made, concerning almost every 
 other class of artists, who emigrate to the new world. They all, 
 at first, give a degree of finish to the materials on which they 
 employ their industry, that is unsuited to the circumstances of 
 the country. 
 
CHAPTER X 
 
 OF THE CAUSES OF THE PROGRESS OF INVENTION, AND OF THE EFFECTS 
 
 ARISING FROM IT. 
 
 Invention is the most important of the secondary agents, to 
 the influence of which man is subject. To us, it is the great 
 immediate maker of ahnost all that is the subject of our thoughts, 
 or ministers to our enjoyments, or necessities, nor is there any 
 portion of our existence, which is not indebted to its antecedent 
 forming power. Wherever it really is, it is recognised as one 
 and the same, by this its formative capacity. It is always a 
 maker, and, in a double sense, a maker. From the depths of 
 the infinity lying within and without us, it brings- visibly before 
 us forms previously hidden. These are its first works. But 
 neither does it intend to stop, nor does it, in fact, stop here. 
 The forms which its eye thus catches, and its skill " bodies forth " 
 into material shape, pass not away ; they remain. Things of 
 power, true workers, drawing to themselves, and fashioning to 
 their semblance, the changeable and fleeting crowd, that time 
 hurries down its stream, they are, in truth, the only permanent 
 dwellers in the world, and rulers of it. In this the double power 
 of his works, the mathematician is as much a maker as the poet, 
 and the poet as the mathematician, and genius in all its manifes- 
 tations, may, in so far, be considered as the same power, and as 
 excited to action by similar causes. 
 
 Our subject leads us to attend to invention, merely as it con- 
 cerns itself with the material world. But, as the motives ex- 
 citing the men in whom it is exhibited to give themselves up to 
 its requirements, must be held among the chief of the causes of 
 its manifestation, and as they, who in this department, have been 
 most extensively inventors, have in general communicated little 
 
OF THE NATURE OF STOCK. 209 
 
 of the principles that animated and sustained them in their career, 
 science and art being silent of themselves, we may be allowed to 
 give wider compass to our view, and to cite, when our purpose 
 requires it, those who have been real discoverers, in any of the 
 various regions over which the power of this principle extends. 
 
 The motives, exciting to this sphere of action, are not very 
 apparent. 
 
 Man is essentially imitative ; his instincts impel him to amal- 
 gamate with the mass. From the first moment of his existence, 
 his faculties are on the stretch, drinking greedily in surrounding 
 gestures, feelings, principles and modes of action, which he again 
 communicates ; he seems by turns a recipient of existing impres- 
 sions, and a transmitter of them to others. Nor, unless he look 
 far beyond himself, is there any evident motive for his endeavor- 
 ing to extricate himself from the ever-whirling circle of which 
 he forms a part. Hundreds of milhons have preceded him ; to 
 learn and practise, what they have left, is the direct road to his 
 goods, pleasure and honor; why then should the individual waste 
 the sweets of a momentary existence, in rashly and needlessly 
 tasking his feeble powers, to form a new path, when one already 
 exists, along which so many have trodden, and which their foot- 
 steps have beaten smooth ? One of the Jesuits having been 
 asked, why the Chinese had made no progress in astronomy, 
 beyond the rude elements of the science that they had possessed 
 from a very remote antiquity, answers, fiom the indolence, and 
 w'ant of application to these pursuits, of the men of succeeding 
 ages, and from their preferring, like those of the present day, 
 what they have esteemed their immediate and substantial inter- 
 ests, to the vain and barren reputation of having discovered some- 
 thing new. The reason, which the father Parennin assigns for 
 the stationary state of their astronomy, may be transferred to all 
 their other sciences, arts, and pursuits, which fifty generations 
 have contented themselves with learning, practising, and teaching, 
 as they received them from men of times more distant. A well 
 weighed attention to what is for their present, and as they say 
 substantial interests, has led them to do this, and forbid them to 
 do more. 
 
 In that Empire, the door to wealth and honor Is not absolutely 
 barred to any one, and In this It would seem superior to other 
 lands, that there, whoever possesses learning has a key that will 
 
 27 
 
210 OF THE NATURE OF STOCK. 
 
 infallibly open it. Let him who would raise himself superior to 
 his fellows, give his youth to study, let him carefully make his 
 own a due portion of the knowledge, the wit, the eloquence, or 
 what passes for them, stored in the volumes his masters put in 
 his hands. These acquirements will be the passports to the 
 places round which riches and distinctions cluster. Making use 
 of them industriously, prudently, perseveringly, he may certainly 
 attain the rank of a skilful physician, a learned jurist, a- practised 
 and ready speaker, or, perhaps, a man versed in the constitution 
 and policy of the empire, fit to take on him the office of a states- 
 man, and share its rewards and honors. He may be attended 
 by obsequious crowds ready to flatter his vanity, minister to his 
 pleasures, conceal his weaknesses ; alive he may be honored, 
 dead lamented, — why then abandon these sure and substantial 
 advantages, to pursue what there is but a chance of gaining, and 
 which, even if at length attained, is but empty fame, — a bieath, 
 — the filhng at the best, 
 
 " A certain portion of uncertain paper." 
 
 The practical w isdom of the Chinese, answers at once it were 
 folly. 
 
 Is that, which is sound practical wisdom among those Asiatics, 
 the reverse of it among us Europeans ? The reader may deter- 
 mine, by casting his eyes about him, to discover who are the men, 
 who have been most successful in attaining wealth, comfort, re- 
 spectability ; in avoiding dependence, misfortune, calumny. Who- 
 ever, or, wherever, he may be, certainly he will not find it is 
 they who have sought to be, or have really been men of genius. 
 
 We in vain search for any sufficient motive exciting to this 
 course of action, unless the good arising from communicating 
 good, and the consequent desire to be a benefactor in the most 
 extended possible manner.* This desire is the proper aliment 
 of genius. " Leave me not," the lay it, 
 
 " In its loneliness, 
 
 Its own still world, amid tli' o'er peopled world, 
 Hath ever breathed to love." 
 
 When very strongly felt, it irresistibly impels those who are 
 
 * This is to be received as concerns our existence, limited to the earth and 
 to time, the only light in which it can with propriety be considered, in these 
 speculations. Were we to view it as belonging to the universe, and to eternity, 
 action directed to the purposes referred to, would not be impeded from the 
 considerations thus presented, but would, on the contrary, derive from them 
 freedom and energy. 
 
OF THE NATURE OF STOCK. 21 1 
 
 conscious of capacities equal to the attempt, spite of every obstacle 
 to be overcome, or pain to be endured, to task themselves to the 
 performance of works of permanent and diffusive utility. To 
 reflective minds, and large and generous natures, the creations 
 of genius must present themselves, as of all works, those most 
 extensively conferring enjoyment and power:* and their success- 
 ful execution, as of every enterprise the noblest; nor need we 
 wonder that to such it should have a voice of mac-ical.and almost 
 resistless attraction. 
 
 When the peasant poet of Scotland seeks to recall an image 
 of his earliest self, he finds there uppermost this master passion, 
 this "boundless love" of his fellows, and his native land, urging 
 him to make it appear by something worthy of it, and marking 
 its strength. This was the wish, 
 
 "Ev'n then a wish (I mind its power,") 
 A wish that, to my latest hour, 
 Shall strongly heave my breast," 
 
 that led him to the realms of sone;. This was in truth the 
 genius, 
 
 " Sua cuique deus fit dira cupido," 
 
 who " threw her inspiring mantle over him," and awakening 
 powers else torpid, enabled him to draw from out the vulgarity 
 before hiding them, images not idly falling, and to fall, on many 
 a heart, patriotism ardent and self-devoting ; passion manly yet 
 tender ; love without the coarseness of the one class of society, 
 or the affectation or epicurism, of the other. 
 
 Who can estimate all the effects of these hasty fragments of 
 the poet's art ? If w^e consider the subject well, and weigh it 
 fairly, we shall confess, that their author has exercised an in- 
 fluence already greater, and far more abiding than any of the 
 men of his country and age. It is thus that genius manifests 
 the potency of the principle that inspires it, and that the simplest 
 Jays of the simplest bard, may have a power passing far, that of 
 the triumphs of the statesman, or the warrior. The one wakens 
 energy, otherwise dead, into action, the other merely directs that 
 action. 
 
 " But," it may be said, and not without a show of reason, 
 
 * Videtur inventorum nobilium introductio inter actiones hiimanas longe 
 primas partes tenere. Lokd Bacon. 
 
212 OF THE NATURE OF STOCK. 
 
 " vvliy, if genius is roused and moved by principles so pure, does 
 it happen, that the undoubted possessors of it, are themselves so 
 often defaced by faults, and that we speak of them, and their 
 aberrations, as if naturally conjoined ? Ambition, the desire of 
 excelhng, a much more questionable motive, would rather seem 
 its proper stimulant." 
 
 As we are not attempting to investigate the governing principles 
 of classes, but of societies, it were, perhaps, enough in answer to 
 observe, that the existence of genius among a people, implies at 
 least, the diffusion of a tincture of generous feelings, somewhere 
 throughout the mass. If we were to see an individual, periling 
 his own life, to rescue another from impending danger, it might 
 be doubtful to us whether the action proceeded from a desire of 
 saving the person in danger, or of the applause and praises fol- 
 lowing the doing of it ; but that applause, and those praises, 
 would themselves evince a general perception of the moral worth 
 of such an action, supposing it to proceed from the purest mo- 
 tives, and correspondent sympathy in the pleasure likely to be 
 experienced from it. Vanity could receive no gratification from 
 a deed of this sort, where the spectators only regarded it as an 
 incomprehensible piece of rashness. In like manner, though it 
 seem to us, that many who have eminently succeeded in the 
 pursuits of which we speak, have been actuated merely by the 
 desire of gratifying a selfish vanity, still, that the attainment of 
 these objects should be followed by the warm and sincere applause, 
 that alone constitutes genuine fame, is a proof at least, of the 
 existence somewhere, of a due appreciation of the motives from 
 which these pursuits are supposed to proceed, and of sympathy 
 with the pure gratifications their success is presumed to yield. 
 But it enters into my design to show, that, without supposing the 
 two classes actuated by different principles, there are sufficient 
 causes for those wanderings, as they are called, of genius from 
 the common path, for that contrariety of course, that seldom 
 intermitting opposition and strife, which have almost every where 
 been maintained, between the society in which they existed, and 
 the individuals, who have been ultimately the great instruments 
 of ameliorating and elevating its condition. Such an exposition, 
 removing part of the obstructions to our view, will make it appear, 
 that it is not so much from the diversity of the moving powers, 
 
OF THE NATURE OF STOCK. 213 
 
 as from the imperfections of the bodies impelled, that tliis jarring 
 and contrariety of action arises. 
 
 It is necessary to premise, that for the present purpose, two 
 classes occasionally confounded together, must be kept apart. 
 Real inventers, the men whom we have alone to consider, differ 
 from mere transmitters of things already known. The latter are 
 an acknowledged, and very useful class, in all societies, but, they 
 neither encounter similar difficulties, nor produce similar effects 
 to the former. They neither oppose, nor direct the current. 
 
 In the gradual progress of things, the media for communicat- 
 ing ideas have been changed ; types have come to do, in a great 
 measure, the office of the voice. What in ages past would have 
 formed a discourse, or harangue, is now a book, or part of a 
 book. Among the many vast consequences of the revolution, 
 we overlook the small one of its occasioning the classing under 
 one name, of those who are enlargers of the stock of knowledge, 
 and those who are merely efficient communicators of portions of 
 it. They are all successful authors, authors, that is, of books 
 which are read. Just so, the bard or bards of the elder ages 
 of ancient Greece, who first embodied in song the deeds of the 
 besiegers of Troy, and they who, in after times, repeated the 
 verses they had learned, were all chanters of heroic lays, many 
 too of the latter may have been more successful chanters than the 
 former, for they sang to ears prepared, but there was between them 
 notwithstanding, an essential difference. There is also a line 
 distinguishing the mere framers of books, from the original makers 
 of their materials ; it may not be very easily drawn indeed ; but 
 this is unnecessary for our purpose, it is sufficient to have pointed 
 out its existence. It may be observed, too, that as of bards, so 
 of authors, they who are mere compilers and repeaters, may be 
 more successful than they who are real inventers, they may better 
 suit their productions to particular times, tastes, and exigencies, 
 and, besides, they can always find an audience prepared, by pre- 
 vious training, to applaud. 
 
 The tendency of these pursuits is to withdraw those occupied 
 in them, from the daily business of society. They fill not the 
 places open for them, and which they are expected to fill ; even 
 when necessity pushes them for a time into them, and compels 
 them to mingle with the crowd, they are marked as not belonging 
 to it. Abstract and scientific truth can only be discovered, by 
 
214 OF THE NATURE OF STOCK. 
 
 deep and absorbing meditation ; imperfectly at first discerned, 
 thioLigh the medium of its dull capacities, the intellect slowly, 
 and cautiously, not wkhout much of doubt, and many unsuccess- 
 ful essays, succeeds in lifting the veil that hides it. The pro- 
 cedure is altogether unlike the prompt detertnination, and ready 
 confidence, of the man of action, and generally unfits, to a greater 
 or less degree, for performing well the part. He, again, who 
 dwells in the world of possible moral beauty and perfection, 
 moves awkwardly, rashly, and painfully, through this of every- 
 day life, he is ever mistaking his own way, and jostling others in 
 theirs. To the possessors of fortune, these habits only give 
 eccentricity ; they affect those of scanty fortune, or without for- 
 tune, with more serious ills. Unable to fight their way ably, 
 cautiously, and perseveringly, through the bustle of life, poverty, 
 dependence, and all their attendant evils, are most commonly 
 their lot. 
 
 " Toil, envy, want, the patron, and the jail," 
 
 are calamities, from the actual endurance of some of which, or 
 the dread of it, they are seldom free. These, however, they 
 share with other men ; there are some peculiarly their own. 
 
 Pursuing objects not to be perceived by others, or if perceived, 
 whose importance is beyond the reach of their conceptions, the 
 motives of their conduct are necessarily misapprehended. They 
 are esteemed either idlers, culpably negligent in turning to account 
 the talents they have got, dullards deficient in the common parts 
 necessary to discharge the common offices of life, or madmen 
 unfit to be trusted with their performance ; sliut out from the 
 esteem or fellowship of those whose regard they might prize, 
 they are brought into contact with those with whom they can 
 liave nothing in common, knaves vvho laugh at them as their 
 prey, fools who pity them as their fellows. Their characters 
 misunderstood, debarred from all sympathy, uncheered by any 
 approbation, the " eternal war," they have to wage with fortune, 
 is doubly trying, because they are aware, that, if they succumb, 
 they will be borne off the field, not only unknown, but miscon- 
 ceived. To have merely to pass without his fame, the poet 
 paints as a fate, capable of adding double gloom to the shades 
 below, 
 
 " Sed frons Iteta parum, et dcjecto lumina vultu, 
 
 * * « 
 
 Nox atra caput tristi circumvolat umbra." 
 
OF THE NATURE OF STOCK. 215 
 
 What must it be to those, then, who feel, that, ere final ob- 
 livion hides them, calumny must for a time prolong the memory 
 of their existence ? 
 
 Imperfect man is ever prompt, without any consideration of 
 the motives of the agents, to conceive of the evils he endures 
 as of wrongs received, and to be avenged, on the doers of them. 
 We need not wonder then, that the manifold sufferings of genius, 
 should sometimes place it in opposition to humanity itself, and 
 that, in the inconsistency and recklessness of passion, it should 
 turn in anger, and in scorn, as its bitterest enemy, on that of which 
 it is, in heart, the truest lover. 
 
 These are circumstances, largely affecting the possessors of 
 this faculty, even before they have succeeded in making it mani- 
 fest, before they have been able to give outward shape to their 
 inward conceptions. There are others, operating similarly, after 
 they have succeeded in producing them. What is really new, 
 has to encounter obstacles of two sorts. It is the nature of 
 men to be copiers, and, with exceedingly kw exceptions, they 
 are nothing more. Mere followers they are of rules, walkers 
 in well-beaten paths. Whatever, therefore, is in any degree 
 really new, being probably beyond these rules, is also beyond 
 their judgment. Nor is this the worst ; it is also very fre- 
 quently in opposition to it ; it disagreeably disturbs and jars the 
 existing systems, by which men guide their feelings and reason- 
 ings. Hence the works of almost all men of really inventive 
 powers, have, at first, been either slighted or decried. Cervantes, 
 one of the most powerful, and original geniuses of modern times, 
 and who ultimately operated as largely on affairs, as any man 
 whom they have witnessed, was placed by his contemporaries 
 far below the subservient taste of Lope de Vigo, and, in his 
 last days, had to turn from Don Quixote to a theme correspond- 
 ent to the bombast of his age.* It is needless to multiply ex- 
 amples, — in a similar walk Tasso, and Shakspeare ; in another, 
 Hume and Montesquieu ; in another, Bacon and Galileo, experi- 
 enced at first either comparative neglect, or partial, or general 
 opposition. Few names that now pass current, but rose with 
 
 * We cannot read the romance of Peresiles and Sigesmundi, published after 
 his death ; it had more success than any of his works. " Jamais cet homme 
 celebre," says one of his biographers, " ne fut a sa veritable place : on dedaigne 
 ses talens on meconnut ses vertus, on fut insensible a sa raisere." 
 
216 OF THE NATURE OF STOCK. 
 
 difficulty, and were nearly again submerged in their earlier pro- 
 gress, by the shock of opposing prejudices. 
 
 The practice of printing, has gradually, as it has extended the 
 circle of readers, produced effects on the productions of genius, 
 not here to be passed unnoticed. The autlior looks to what he 
 calls the public, to those, that is, who read, or rather to his own 
 talents for producing works that will find readers, for the pecun- 
 iary rewards of his productions. This circumstance has had 
 much effect, both in turning the powers of men of talents to 
 subjects that may generally interest, and in obliging them to 
 treat them in a manner, suited to the tastes, and notions of the 
 crowd. 
 
 Odi profanum vulgus et arceo, 
 
 is a sentiment tliat they neither avouch, nor act upon. That 
 their works may be popular, men of the highest original genius 
 bring it out cautiously, and in a diffused ibrm. Their experi- 
 ments are timid. Being, in their way, manufacturers, they can- 
 not afford to make such as might deteriorate the value of their 
 goods. They must not venture on a dish altogether new, they 
 confine their powers to the discovery of something that may 
 give piquancy to the old. If the practice be not prejudicial to 
 the progress of invention itself, it is fatal to the lasting fame of 
 the inventers. The mass keeps swelling, from generation to 
 generation, but how, cannot well be noted. This result has, 
 however, little to do with our subject; there is another which 
 has much. 
 
 It being conceived to be within the compass of talent, to pro- 
 cure, in this way, its own reward, genius of the highest order, if 
 its productions are not of a sort to bring a price from a book- 
 seller, receives now less recompense than even in ages not so 
 able to appreciate the benefits conferred by it ; and, from the same 
 causes, the propensity to neglect it is greatest where the reading 
 public is the most numerous. The promoters of the abstract 
 sciences, and the arts, are no where less efficiently aided, than 
 in Great Britain. There, the observations of Lord Bacon apply 
 nearly as forcibly as ever. " It is enough to restrain the increase of 
 science, that energy and industry so bestowed, want recompense. 
 The ability to cultivate science, and to reward it, lies not in the 
 same hands. Science is advanced by men of great genius alone, 
 while it can only be rewarded by the crowd, or by men high in 
 
OF THE NATURE OF STOCK. 217 
 
 fortune or authority, wlio have very rarely themselves any pre- 
 tensions to it. Besides, success in these pursuits is not only 
 unattended by reward or favor, but is destitute of popular praise. 
 They are, for the most part, above the conceptions of the com- 
 monalty, and are easily overthrown, and swept away, by the wind 
 of popular opinion."* 
 
 Without speaking of the sciences, and, in the arts, confining 
 our attention to those exertions of the inventive faculty, the bene- 
 fits of which, obstructed by no unforeseen obstacle, have been very 
 largely felt, how many, even of the most successful of these, 
 have been adequately rewarded ? How many of them have 
 left their authors in poverty, or brought them to it ! The per- 
 sonal history of most men, who, in modern times, have brought 
 into being those arts by which human power has been so largely 
 advanced, is little else than a narration of misfortunes, and in- 
 gratitude. 
 
 Nor are the sweets of success itself, in any department of in- 
 vention, even if tasted, uncontaminated by much of bitterness. 
 It is chiefly felt at the time, as superiority, on which wait envy 
 and flattery. Malice, and insincerity, the great separators of 
 man from man, and poisoners of the pleasures of existence, 
 follow close after. He who gains it, attains an elevation com- 
 manding, but joyless, and unsafe. 
 
 " Though high above the sun of glory glow, 
 
 And far beneath the earth and ocean spread, 
 
 'Round him are icy rocks, and loudly blow, 
 
 Contending tempests on his naked head. 
 
 And thus reward the toils, which to those summits led."t 
 
 It is death alone that can give him to the full sympathies of 
 his fellows. When the earth wraps her noblest, none any longer 
 envy him, all lament the benefactor, no one sees the rival, or the 
 master. 
 
 These are circumstances disturbing the course of genius, com- 
 
 *" Satis est ad cohebendum augmentum scientiarum, quod hujusmodi co- 
 natus et industrias praemiis careant. Non enim penes cosdem est cultura sci- 
 entiarum, et prseniium. Scientiarum enim augmenta a magnis utique ingeniis 
 proveniunt ; at pretia et prsemia scientiarum sunt penes vulgus aut principes 
 viros, qui (nisi raro admodum) vix mediocriter docti sunt. Quinetiam hu- 
 jusmodi progressus, non solum praemiis et beneficentia hominum, verum 
 etiam ipsa populari laude destituti sunt. Sunt enim illi supra captum maximse 
 partis hominum, et ab opinionwm vulgarium ventis facile obruuntur et ext'"- 
 guuntur." 
 
 t Childc Harold. 
 
 28 
 
218 OF THE NATURE OF STOCK. 
 
 ing mainly from misapprehensions from without ; there are others 
 flowing from weaknesses, and imperfections, within. 
 
 There are, in every society, rules of conduct, and practices of 
 life, which tlie progress of events has gradually niaiked out, and 
 general observance hallowed. Of these, some are founded on 
 the principles of morality and religion, some on caprice, some on 
 prejudice. The breaking of any of them is always esteemed a 
 crime against society, and in reality is so ; the observance of 
 them constitutes a character, in public estimation, perfect. The 
 mere man of society, that is, the man of merely imitative action, 
 learns them all uninquiringly, and diligently : they make up in- 
 deed, almost all he knows, and all the interests of himself and 
 family requires he should know, of right and wrong. If he 
 transgress them, it is secretly, and cautiously. He makes amends 
 by unscrupulously, and unsparingly gratifying, whatever is not 
 forbid by the letter of his code, or by his own convenience. The 
 inquirer into principles, again, takes a wider range, it is not the 
 morality or religion of Italy, of France, of Britain, of North 
 America, after which he seeks, but religion and morality in gen- 
 eral. He attempts to learn, not what is delivered, but what is. 
 The consequence is, that, while the mere man of the world 
 is never at a loss, but proceeds securely in the direct path to 
 general approbation, the man of speculation very frequently 
 wanders from it. To say nevertheless, either that he knows not 
 what is good or fit, or that he is not desirous of observing it 
 were untrue. The eye of the rider glances over hill and 
 dale, marks the streams, the woods, the hamlets, that diversify 
 the prospect, and the whole configuration of the country he 
 traverses, and so he knows the road. The animal he rides 
 knows it too ; he knows it as giving exercise to his limbs, and 
 bringing him, by every step he makes, forward, or right, or left, 
 nearer to some stable-door. Ten to one, that, practically, the 
 latter has a more accurate knowledge of it than the former, and 
 that, while the irrational shall sagaciously and unhesitatingly 
 follow it out, without missing a single turnino;, or makina; one 
 blunder, the rational, especially if the fancy take him to pre- 
 serve something of a straight line, shall have to pass from track, 
 to track, to leap many a hedge and many a ditch, and having 
 been obliged after all, to make detours in abundance, come out 
 at last weary, jaded, and bemired. 
 
OF THE NATURE OF STOCK. 219 
 
 The ills, which men of genius thus occasion and endure, from 
 seeking for their rules of action, altogether from the relations, 
 wliich they perceive they have to the general system of human 
 society, without sufficiently regarding those, which necessarily 
 connect them to the little system of some particular society, are 
 merely errors in the actual course pursued, not in the motives 
 from which that course was adopted. There are others more 
 fatal, coming, not from mistakes in action, but from errors in the 
 motives to action, and from the imagination that it may be allow- 
 able willingly to do a small evil, if a large amount of good fol- 
 low it. This is unquestionably a moral error, to ^vhich men of 
 high powers must, from the consciousness of these powers, be 
 peculiarly liable. It were painful to bring forward instances of 
 their succumbing to the temptation.* 
 
 It is thus that a power, which seems to be at first wakened to 
 life, and to draw its earliest aliment, from the promptings of 
 strong desires in man, to unite himself extensively with his fellow 
 men, to exist with them, and for them, rather than in himself, 
 
 * It is strange that Cicero, as in the following passage, should seem to coun- 
 tenance this most common and dangerous of moral sophisms. "Quid? si 
 Phalarim, crudelem tyrannum et immanem, vir bonus, ne ipse frigore confi- 
 ciatur, vestitu spoliare possit ; nonne t'aciat ? Hepc ad judicandum sunt facil- 
 lima. nam, si quid ab homine ad nullam partem utili, tuaj utiJitatis causa de- 
 traxei is : inhumane feceris, contraque naturae legem : sin autem is tu sis, qui 
 multam utilitatem reipublicas atque hominum societati, si in vita remaneas, 
 afferre possis, si quid ob earn causam alteri detraxerls, non sit reprehenden- 
 dum. — Communis utilitatis derelictio contra naturam est, est enim injusta. 
 itaque lex ipsa naturae, quae utilitatem hominum conservat et continet, de- 
 cernit profecto, ut ab homine inerti atque inutili, ad sapientem, honum, for- 
 temque viruni transferantur res ad vivendum necessariae : qui si occiderit, 
 multum de communi utiUtate detraxerit." — De Officiis L. III. 
 
 Such reasoning, followed fairly out, would not stop until it assumed the 
 form which Sir Walter Scott has given it, in the speech of Anselmo. 
 
 " You are to distinguish, my son, replied the alchymist, betwixt that which 
 is necessarily evil in its progress and in its end also, and that which being 
 evil, is, nevertheless, capable of working forth good. If, by the death of one 
 person, the happy period shall be brought nearer us, in which all that is good 
 shall be attained, by wishing its presence, — all that is evil escaped, by de- 
 siring its absence, &c. If this blessed consummation of all things can be 
 hastened by the slight circumstance, that a frail earthly body, which must 
 needs partake of corruption, shall be consigned to the grave a short space 
 earlier than in the course of nature, what is such a sacrilice to the advance- 
 ment of the holy milleniuni." — KeniIv\'orth c. XXII. 
 
 A living author, in the character of Eugene Aram, gives also a striking 
 picture of the dangerous tendency of the same sophistry. 
 
220 OF THE NATURE OF STOCK. 
 
 as it gathers strength, and predominates in any individual, gen- 
 erally renders him so dissimilar to other men, in his feelings, 
 habits, motives, and modes of action, that it in a great measure 
 separates him from them. Whatever he may be, or may hope 
 to be as an inventer, or author, as a man he is misconceived 
 and misapprehended. Among the men with whom he lives, 
 he lives as not of them, a magic circle is drawn round him 
 which neither he can pass without, nor they, within. Like the 
 attractive and repulsive powers, which one magnetic influence 
 communicates to matter of the same sort, the different direction 
 in which the great moving and cementing principle of society 
 has been made to flow in him, and in them, incessantly repels, 
 and keeps him at a distance from them. 
 
 This disjunction and isolation affect various natures variously. 
 Some cannot endure it ; they cannot live but in the constant and 
 intimate sympathy and communion of their fellows. They feel 
 all the loneliness, and little of the grandeur of the desert. They 
 pant for the land of life, and either turning to it, are lost in it, 
 their former existence being remembered but as the wanderings 
 of a dream ; or they perish, from their incapacity to mingle with 
 it. Their finer and gentler natures fed, but not strengthened by 
 contemplation, recoil from the coarse and boisterous spirits, with 
 whom they are brought into contact. They sink in the conflict 
 and pass from life itself, 
 
 " A precious odour cast 
 On a wild stream, that recklessly sweeps by ; 
 
 A voice of music uttered to the blast. 
 And winning no reply." 
 
 To Others of firmer mould, the action of these alternately 
 attracting and repelling powers, the passing from one state of 
 being to another completely opposite, from the turmoil of spirit 
 exched by braving and bearing back a world opposed, to the 
 concentration of contemplative solitude, though wasting, is in- 
 vigorating. Like steel which is first made to glow in fire, and 
 then plunged in water, the fineness of their temper is brought 
 out by the play of opposing elements. It is observed by Mr. 
 Moore, in his life of Lord Byron, that but for the opposition he 
 encountered, the noble poet had never stood forth in might ; that . 
 persecution found him, as Rousseau, weak, left him strong. 
 
 Some, again, the world without affording no resting place, en- 
 
OF THE NATURE OF STOCK. 221 
 
 trench themselves in the world within. Their excursions out- 
 wards, are carried on, as into a country permanently hostile. To 
 insult, to attack, to overthrow, not to subdue, or establish, is their 
 aim. These are the skeptics, men seemingly abandoning every 
 other hope but that of making manifest their power, a power 
 that has often been greater than they themselves have conceived, 
 and which, doubtless, would many times have been more happily 
 exerted, had they found themselves in happier circumstances. 
 When we read, for instance, the speculations of Hume, we do 
 not always recollect that he had been a needy dependent brother 
 of a scotch land-holder, had failed in the only attempt he had 
 ever made to establish himself in the world, by entering on busi- 
 ness, and had come to middle life, known only as a bookish re- 
 cluse, unable to do good, and only to be tolerated, because he 
 was too inoffensive to do harm to any one. Such an existence 
 may well account for much of that shrinking within himself, that 
 absence of all heart, that habitual distrust, rather rejoicing to 
 overthrow, than hoping to establish, which characterize his phi- 
 losophy. Who can tell how great has been the influence of 
 that philosophy, in producing what has been, what is, and what 
 is to be, in Britain, and in Europe ? Of this we may be assured, 
 that they are least aware of it, who are most affected by it. 
 
 There are yet others of higher minds, who, through hopes 
 disappointed, and errors committed, over the waste of the world, 
 and the ruins of their own hearts, can look confidently and cour- 
 ageously forward, to a brighter, though far distant prospect. It 
 is in this spirit that Lord Bacon bequeaths his fame to posterity, 
 and it is through it, that he, who has been to us so notable a 
 benefactor, yet holds converse with us. The manly and gener- 
 ous confidence with which he relies on the better parts of human 
 nature, and, in the midst of so many discouraging circumstances 
 looks forward to the ultimate reign of truth and happiness, con- 
 stitutes indeed, I may be allowed to remark, no small part of the 
 charm, and perhaps of the utility of his speculations. 
 
 But, however, the opposition between men of practice, and 
 men of speculation and invention may operate, it certainly exists, 
 and there are perhaps few of the latter, who have been gifted 
 .with dispositions so happy, or fallen in times so fortunate, as not 
 to have experienced some of its evils. Nevertheless, if the 
 view which has been presented be correct, this opposition between 
 
222 OF THE NATURE OF STOCK. 
 
 the two classes, the one engaged in the application of what is 
 already known to the production of tlie means of supplying 
 future necessities or pleasures, the other, in the discovery of some- 
 thing yet unknown and which may serve the same purposes, 
 arise?, not so much from a difference in the motives to action, as 
 from a diversity in the modes of action, and the principles of our 
 nature exciting to the advance of invention, would seem to be 
 nearly identical with those giving activity to the effective desire 
 of accumulation. 
 
 The difference between the two is rather in degree than in 
 kind. He who labors to provide the means of enjoyment to 
 wife, children, relations, friends, pursues an end in some degree 
 selfish. It is his own wife, his own children, his own relations, 
 whom he desires to benefit. The fruits of the labors of genius, 
 on the contrary, are the property of the whole human race. On 
 this account, though, in the individual, manifestations of the in- 
 ventive faculty imply a superiority in some of the intellectual 
 powers, they rather imply, in the society, a preponderance of 
 the social and benevolent affections. It is this general acuteness 
 of moral sensation, and lively sympathy consequently with the 
 pleasures arising to the individual, from the success of exertions 
 for purposes of general good, that can alone excite, and nourish, 
 the enthusiasm of genius. 
 
 But, though there are two of the circumstances giving strength 
 to the principle of accumulation, on which the progress of the 
 inventive faculty is equally dependent, there are yet a set of 
 causes, the effects of which, while they paralyze the exertions of 
 the one, rouse the other to activity. Whatever disturbs, or 
 threatens to disturb, the established order of things, by exposing 
 the property of the members of the society to danger, and di- 
 minishing the certainty of its future possession, diminishes also 
 the desire to accumulate it. Intestine commotions, persecutions, 
 wars, internal oppression, or outward violence, either, therefore, 
 altogether destroy, or, at least, very much inqjair the strength ot 
 the effective desire of accumulation. On the contrary, they 
 excite the inventive faculty to activity. The excessive propen- 
 sity to imitation, which is natural to man, seems the only means 
 by which we can account for this diversity of effects. Men are 
 so much given to learning, that they do not readily become dis- 
 coverers. They have received so much, that they do not easily 
 
OF THE NATURE OF STOCK. 223 
 
 perceive the need of making additions to it, or readily turn the 
 vigor of their thoughts in that direction. '■ They seem neither 
 to know well their possessions, nor their powers ; but to believe 
 the former to be greater, the latter less, than they really are.''* 
 Whatever, therefore, breaks the wonted order of events, and 
 exposes the necessity, or the possibility, of connecting them by 
 some other means, strongly stimulates invention. The slumber- 
 ing faculties rouse themselves to meet the unexpected exigence, 
 and the possibility of giving a new, and more perfect order to 
 elements not yet fixed, animates to a boldness of enterprise, which 
 were rashness, had they assumed their determined places. Hence, 
 as has often been remarked, periods of great changes in king- 
 doms or governments, are the seasons when genius breaks forth 
 in brightest lustre. The beneficial effects of what are termed 
 revolutions, are, perhaps, chiefly to be traced, to their thus 
 wakening the torpid powers ; the troubling of the waters they 
 bring about, undoes the palsy of the mind. 
 
 On this account courafre 'disting-uishins; well between things 
 difficult and things impossible, and calmly estimating them not 
 as they appear to vulgar prejudices, but as they are, seems to be 
 a necessary element in the composition of genius of a high order. 
 Without the possession of such a faculty, it is impossible clearly 
 to discern the things which changes have brought to liglit or pro- 
 duced, or to make free use of them. The comparison which Lord 
 Bacon makes between Alexander the Great and himself, is far 
 from being forced. Neither could have accomplished what he did, 
 had he not been able to despise what had only a vain show, and 
 to discover and trust to real though underrated powers.f 
 
 Besides the circumstances determining the progress of inven- 
 
 * Novum organum. 
 
 t '' Atque hac in parte nobis spondemusfortunam Alexandri Magni : neque 
 quis nos vanitatis arguat, antequam exitum rei audiat, qufe ad exuendam om- 
 neiu vanitatem spectat. 
 
 " Elenim de Alexandre et ejus rebus geslis ^schines ifa loquutus est : 
 Nos certe vitani mortaleni non vivimus ; sed in hoc nati s;umus, ut postetitas 
 de nobis ponenia narret et prcedicct : peiinde ac si Alexandri res gestas pro 
 miraculo habuisset. 
 
 " At eevis sequentibus Titus Livius melius rem advertit et introspexit, atque 
 de Alexandre hujusmodi quippiam dixit: Eutn non aliud quam bene ausum 
 vana contemnere. Atque simile etiam de nobis judicium futuris temporibus 
 factum iri existimamus : Nos nil magni fucisse, sed tantum ea quse pro magnis 
 habentur. minoris fecisse." 
 
224 OF THE NATURE OF STOCK. 
 
 tion arising from the nature of man, the inventer, there areothers 
 depending on the modes on which the principles of that nature 
 are excited- to exert themselves in this sphere of action, and. 
 gradually to discern and develope the qualities and powers, of 
 the various divisions of the material world. 
 
 The surface of the earth presents a vast variety of materials. 
 Soils, climates, minerals, vegetables, the fish of the waters, the 
 birds of the air, and the beasts of the field, are endlessly diversi- 
 fied, and, could we bring' back the surface of the globe to the 
 state in which it existed when man first made his appearance on 
 it, we should probably scarcely find any two points in all respects 
 alike. 
 
 This diversity of materials seems to have been the great ex- 
 citing cause to the progress of art and science, men having been 
 every now and then compelled or induced to adopt new materials, 
 and, as they changed from the one to the other, to have been 
 gradually led from the knowledge of the most simple and obvi- 
 ous qualities, and powers, to a perception of those which are 
 more complex, and difficult to discern. 
 
 Tracing any invention upwards to its first beginnings, we shall 
 discover, that these have been exceedingly rude and imperfect, 
 proceeding from the simplest, and what would seem to us, the 
 most obvious observations ; and that it has advanced towards 
 perfection, by having been led to change the materials with which 
 it originally operated, and passing from one to another, has at 
 each step of its progress discovered new qualities and acquired 
 new powers. 
 
 1 believe a lengthened inquiry into the history of inventions 
 would lead to the following conclusions : — 
 
 1st. Arts change materials. It havino- become difficult or 
 impossible for men to obtain the materials with which they had 
 been accustomed to operate, they have been led to adopt others, 
 and, retaining the knowledge of the qualities and powers of the 
 old, have added to them those of the new. 
 
 2d. Different arts adopt the same materials. Men have been 
 encouraged to operate with new materials, from materials being 
 presented to them, evidently better suited to their purposes than 
 the old, could they be niade submissive to their art. 
 
 3d. The operation of these circumstances, has slowly dimin- 
 ished the propensity of mankind to servile imitation, and given a 
 
 i 
 
OF THE NATURE OF STOCK. ^HS 
 
 begifining to science, by bringing to ligiit the qualities and pow- 
 ■ ers common to many materials ; the general principles of thino-s. 
 
 The limited objects of the pi'esent inquiry, however, forbid 
 our entering into the lengthened train of speculation, that would 
 be necessary fully to establish jjiese conclusions by an adequate 
 investigation of the progress of inventions. I shall content my- 
 self with adducing a sufficient number of instances to show, that 
 this continual change has been a circumstance operating very 
 beneficially and efficiently, in enlarging the bounds of human 
 knowledge and power. 
 
 When men are deprived of the materials with which they 
 used to operate in the production of Necessaries, and between 
 them and want have only such as are similar, but not the same, 
 one of two things must happen. They must either conquer the 
 difficulties of the new matter, or must perish. In the earlier 
 ages of the world, it is scarce to be doubted, that the latter event 
 was of not unfrequent occurrence. Tribes forced from tlieir 
 homes by more powerful tribes, must have been often led by hope, 
 or driven by despair, into regions that had not before yielded to 
 the dominion of man. But, the materials which different regions 
 present to human industry, are very seldom precisely alike. The 
 new would differ from the old, in being in some respects worse, 
 in otherS better adapted to its purposes, than they. The difficul- 
 ties are much more apparent than the benefits, the former havin^ 
 generally to be overcome, before tl^e latter be apprehended, or 
 distinctly perceived. The attempt, then, would probably never 
 be made, but for the promptings of necessity. Its success has 
 two advantages. The subjection of the obstacles carries the 
 inventive faculty a step farther forward ; the larger returns made, 
 owin^ to the circumstances in which the new material is superior, 
 iocrease the rewards of industry. As the success of the attempt 
 would advance the skill and the power of those who made it, so 
 its failure would abandon them to famine. In the former case, 
 the individuals whose intelligence and courage overcame the 
 obstacles, would be exalted by posterity into gods, and demi- 
 gods, in the latter, the field would remain open to more success- 
 ful essays, in other times, and by other races. An inquiry, 
 however, into the progress of the arts essential to the existence 
 of man in any form of society, would carry us back to ages too 
 remote, and involved in an obscurity too deep to penetrate. 
 
 29 
 
226 OF THE NATURE OF STOCK. 
 
 None of the arts which are not necessary to the preservation 
 ol' human existence itself, has probably had greater influence on 
 the modes which that existence has assumed, than metallurgy. 
 Without the metals, it would be impossible for the series of in- 
 struments to be continued from which the wants of civilized 
 society are supplied, and without them, consequently, mankind 
 could never have emerged from barbarism. There are few arts, 
 either, in which the processes have probably at first been more 
 rude, in which they have ultimately attained greater perfection 
 of skill, or in which the progress has been more gradual, and 
 more dependent for its advance on the variety of the materials 
 operated upon. Some metals are found in quantity pure, the ores 
 of some are easily reduced, of others with great difficulty. Of all 
 the substances he attempts to classify, none, from their number and 
 variety, give greater trouble to the mineralogist. The discovery of 
 the qualities of such portions of these metals as were found pure, 
 would soon make them be considered as the most useful of substances, 
 and occasion their being sought after with avidity. The supply 
 of them in this state being exhausted, or they who had employed 
 them moving into regions where they could no longer be found, 
 recourse would gradually be had to the more pure and more 
 easily reduced ores, and from thence to metals, and ores wrought 
 with greater difficulty. Thus we find that gold, silver, and copper, 
 the metals that most frequently occur native, were those first in 
 use ; iron came last, and was probably then esteemed the most 
 precious. Weapons of gold and silver were edged with it, in 
 the same manner as were wooden implements, such as the old 
 English spade, in more recent days. But for the gentleness of 
 the ascent, it is altogether likely, that the art would never have 
 attained the eminence it has gained. Had the earth, for instance, 
 possessed no metallic stores but the more abundant ores of iron, 
 by far the most useful in the present days, it seems not unlikely, 
 that no metal would ever have been wrought. The steps by 
 which it rose, were, however, too numerous, and the vestiges 
 left of them are too indistinct, for me to attempt here to trace 
 them, were 1 even prepared so to do. I prefer rather, in illus- 
 tration of the subject, to refer to an art which has been in prac- 
 tice for thousands of years, and to an implement in daily use. 
 
 The plough, in its most simple form, is an instrument, the in- 
 vention of whicli would naturally follow the domestication of the 
 
OF THE NATURE OF STOCK. 227 
 
 OX species. Men accustomed to loosen, and stir the earth, with 
 the inefficient implements of that ancient period, could scarce in 
 time, fail to remark, that the sluggish strength of this animal 
 might aid them in the operation. They seem to have turned it 
 to this purpose, by a very simple contrivance. A long crooked 
 sapling, similar to the clubs used by boys in some of their games, 
 but larger, had its thick, curved end, sharpened to a point, and 
 its other extremity attached to something like what is now called 
 a yoke, coupling two oxen by the neck. The long straight part 
 of the implement, passed between the animals, the part turned 
 downwards rested on the earth behind them, and when they 
 moved forward, along soil very easily impressed, would mark it 
 with a furrow, which might be deepened by a man walking close 
 after, and pressing it downwards. He was assisted in this ope- 
 ration, by the addition of a handle projecting upwards, the point 
 was hardened by the action of the fire, and another person guided 
 the oxen. Such was probably the earliest plough, and those that 
 are used in many parts of the east, to this day, differ not much 
 from it, with the exception of the point being defended by a sort 
 of iron tooth, and the wood not having a natural, but an artificial 
 curvature. In Java, a man, when he has done his day's work, 
 carries home his plough on his shoulder, as a woodman does his 
 axe. The defects of such an implement are to us very plain. 
 It only scratches the soil, it cannot make what we call a furrow, 
 and it is only very light, sandy soil, or the sort of mud, in which 
 rice is cultivated, on which it is at all capable of acting. As the 
 quantity of this sort of soil is, in all parts of the world limited, 
 men were gradually forced to attempt the tillage of land more 
 difficult to subdue. Over the greater part of Asia, they have 
 done so, by a simple enlargement and strengthening of the first 
 rude implement. The model immediately before their eyes 
 seems to have so confined their powers of invention, that they 
 attempted no change but this. In that part of the world, if we 
 except China, and the countries bordering on Europe, the earth 
 is consequently scratched, or at best stirred, it is not in our sense 
 of the word ploughed. The improvements which we have made 
 in the operation are two fold ; the first concerns the effect pro- 
 duced on the soil, and the second, the ease with which it is pro- 
 duced. The furrow we form makes each portion of soil operated 
 upon, describe about one third of a cji"'"'e. thu"? blending all the 
 
228 OF THE NATURE OF STOCK. 
 
 parts of the surface together, leaving it very open, and placing 
 the vegetable fibres in the position best suited to induce decay. 
 The turn too, thus given, to each portion, puts it out of the way 
 of the next, which is therefore, with comparative ease, moved 
 into its proper position. 
 
 It seems not to have been, until the instrument got to Europe, 
 that it assumed a form capable of executing such an operation. 
 Such was probably the Roman plough, the wood-work of which 
 is thus described by Virgil. 
 
 " Continuo in sylvis magna vi flexa domatur 
 In burini, et curvi formam accipit ulmus aratri, 
 Huci a stirpe pedes teino protentus in octo, 
 Binse aures, duplici aptantur dentalia dorso. 
 Caeditur et tilia ante jugo levis, altaque fagus, 
 Stivaqae, quae currusa tergo torqueat iinos ; 
 Et suspensa focis explorat robora fumus. 
 
 " An elm bent with great strength in the woods, is forced into 
 a buris and receives the form of the crooked plough. To it 
 are fitted the temo stretched out eight feet from the lower end, 
 the two aures, the dentalia with the double back, and the stiva 
 which bends the lower part of the plough behind. The light 
 elm tree is fitted beforehand, for the yoke, and the lofty beech 
 for the other parts, and the smoke seasons the wood hung up 
 above the fire."* 
 
 I see not that this buris, which has given some of the 
 commentators a little trouble, can be any thing else than the 
 original crooked sapling, here swollen to a large elm knee, form- 
 ing the body of the plough, '' inflexi grave robur aratri, and 
 to which, all the other parts are appended. From it, instead of 
 the longer straight part of the sapling, stretched forward, a sepa- 
 rate piece, termed the temo or pole, and the stiva, or handle, was 
 retained. So far there was very litde difference from the ori- 
 ginal instrument, but in the aures, the ears, we have the begin- 
 nings of the mould board, and there is a place for the reception 
 of the vomer, the large cutting iron share. These appendages, 
 the more difficult soil of some parts of Italy probably introduced, 
 and when adopted in one part, they could scarce fail to spread 
 over it all. 
 
 The plough thus changed into an instrument for turning over, 
 
 ^ George I. 170. tranislated by Dickson, ancient husbandry. 
 
OF THE NATURE OF STOCK. 229 
 
 not merely stirring the soil, was carried by the Romans into 
 other, and more northern regions, and transmitted to other races. 
 These and subsequent revolutions, obliterated the imitation of 
 the original curved sapling. The curve became an angle, form- 
 ed by a short downright beam or pillar, the sheath or forehead, 
 fitted into the shortened pole or temo, and bearing, as before, the 
 chief stress of the draft. Greater symmetry and lightness were 
 thus given to it. The mould board gradually attained its present 
 form, the coulter and another handle were added. In recent 
 days, it has been made nearly altogether of iron. In Britain, 
 where this revolution in the material was introduced, it is de- 
 serving of notice that the metal implement, only that its parts 
 are slenderer, is an exact copy of the wooden one. There is 
 yet too the sheath. In some, at least, of the American iron 
 ploughs, the sole connexion between the upper and lower parts, 
 unless that given by the mould boards themselves, is a strong 
 bolt screwing tight. For a plough of such materials, this last 
 metamorphosis of the original sapling or buris, would seem the 
 better construction. 
 
 Thus, the moving of this implement from one region and 
 people to another, the consequent adaptation of it to different 
 and 'more difficult soils, and the change of the materials of which 
 it is formed, seem to have been the occasions of its successive 
 improvement. They have stimulated the faculty of invention, 
 and weakened the propensity to servile imitation. The instru- 
 ment, so changed, it may be remarked, is on its return to coun- 
 tries in which, perhaps, it first assumed form. English ploughs 
 are to be seen in India, and some modification of them, must, in 
 time, become the general plough of the country. 
 
 Our next example, of the effects of these circumstances on 
 the developement of the inventive faculty, will be taken from the 
 progress of sacred architecture. It conspicuously exhibits the 
 strength of the principle itself, and the trammels by which its 
 energies are sometimes confined. 
 
 When men worship the deity, they find their devotional 
 dispositions assisted by the presence of external objects, par- 
 taking of his attributes. Thus, whatever brings sensibly be- 
 fore us the ideas of very great power, and unlimited duration, 
 fills the mind with thoughts that are very near akin to devotion. 
 Hence, men in almost all ages and countries, have either made 
 
230 OF THE NATURE OF STOCK. 
 
 choice of particular natural objects, inspiring such ideas, as con- 
 comitants of their devotions ; they have worshipped turning to 
 the sun, or in groves, or on the tops of mountains ; or they have 
 formed things, having in their conceptions a sort of unison, in 
 this way, with the object of their worship. 
 
 Of all the people who have employed themselves in forma- 
 tions of this sort, and devoted a portion of their industry to the 
 construction of instruments serving, in some degree, to satisfy 
 those natural longings of the human mind after somethins; brino;- 
 ing before it the perfections of the deity, none have been more 
 eminently successful than the Egyptians. The suddenness with 
 which the art there attained an excellence, that even now com- 
 mands our fullest admiration, is a phenomenon well deserving 
 the attention of speculators on the extent ef the human powers 
 when roused to free and active exertion. 
 
 Several circumstances seem to have contributed to determine 
 the form, which architecture there assumed, and to carry it at 
 once from infancy to maturity. 
 
 One of the manifestations of power most apt to attract the 
 notice of men in the early stages of society, as very great, is the 
 moving of large blocks of stone. To men altogether ignorant 
 of the n)echanic powers, however strong and numerous, to move 
 a cubic stone of the weight of only two tons would be impossi- 
 ble ; for, enough of them could not get hold of it. To men 
 again, having made a progress in art, aware of the advantage, 
 for instance, of the lever, though it might be practicable to move 
 into an upright position, pillars of even a few tons weight, such 
 objects would seem very striking displays of power. They 
 would also impress them with the ideas of extended duration, 
 which the indestructible nature of the material, is calculated to 
 produce. Accordingly we find that the erection of such columnar 
 masses, has been a very common act of men, in rude states of 
 society, in their efforts to draw themselves near to some concep- 
 tion they have had of the great first cause. 
 
 But it is not mere blind power, and eternal duration, that is 
 attributed to the deity, besides this, all men ascribe to him un- 
 erring wisdom, and most men, boundless benevolence. Regu- 
 larity of design, then, especially if combined with visible utility, 
 renders any object of great and changeless power, more fitting 
 to inspire religious sentiments. On this account the sun, of all 
 
OF THE NATURE OF STOCK. 331 
 
 objects continually before our eyes, is that most generally turned 
 to with religious feelings. 
 
 Symmetry of design may be given to collections of columns, 
 by preserving them at regular distances, and forming them into 
 circular, or straight lines. The circles of the Druids in Scotland, 
 and in other parts of Europe, are examples of this sort of form. 
 Greater unity would be given to an erection of this sort, by the 
 addition of horizontal pieces, stretching from the top of the 
 one pillar to that of the other, and partially roofing in the fabric. 
 Such an addition would also heighten the motion of power em- 
 bodied in the work. The poising large masses of stone on the 
 summits of elevated columns, must have appeared a stupendous 
 exertion of power, to those w^ho first contemplated it. Such 
 seems to have been the character of the famous druidical tetnple 
 of Stonehenge. A form similar to this, would therefore seem 
 likely to be that, which the ancient Egyptians must have been 
 inclined to give the religious edifices they constructed, when 
 leaving the higher grounds, they began to descend and occupy 
 the plains, and such is, in fact, the general outline which the ruins 
 of their edifices yet present. But they possessed arts, which" 
 enabled them to give their edifices a degree of grandeur, far 
 superior to the rude structures of the ancient Britons. 
 
 They were probably either themselves workers of stone, or 
 had the means of knowing how stone may be wrought. The 
 more ancient Troglodytes w^ere perfect in the art of cutting stone. 
 Their labors were confined, however, to forming excavations in 
 rock, they do not seem to have ever thought of dividing these 
 rocks into fragments, and again reuniting them into some required 
 form. Indeed, this is an idea, that could not very readily occur 
 as a means of facilitating the formation of structures of the sort. 
 Here, as in other instances, the beginnings of art are simple, but 
 laborious. It is invention that abridges the amount of labor 
 necessary for attaining the end, and substitutes skill and contriv- 
 ance, for toil and perseverance. A sort of necessity, brought 
 about by the occupation of a new region, and the desire to have 
 rocky edifices on the alluvial plane, probably led the Egyptians 
 to effect this revolution. 
 
 The possession of another art, made it of less difficult execu- 
 tion. Egypt, a long level valley periodically overflowed, afford- 
 ed peculiar facilities for the transport by water, of even the 
 
232 OF THE NATURE OF STOCK. 
 
 heaviest articles. The largest masses separated from the rocks 
 that bordered the great canal, into which it was transformed dur- 
 ing the time of the inundation, iiad only to be moved to rafts 
 stationed close by, when they could be transported to any required 
 situation. The riches also of that celebrated valley, then proba- 
 bly recently exposed to human industry by the retiring waters, 
 and which the efforts of fifty centuries have not yet exhausted, 
 gave the inventive faculty as hs instrument, an almost unlimited 
 command of labor. Genius was not wanting to reach lofty con- 
 ceptions, or to apply the means put in its hands so as to give them 
 an adequate form. The works it produced, were the admiration 
 of antiquity, and are the astonishment of modern times. 
 
 Architecture, with the other arts of Egypt, was carried to 
 Greece. It retained, nevertheless, the same essential character, 
 the effects it produced arising from the magnitude and propor- 
 tions of massive blocks, arranged in columns and transverse pieces. 
 A comparison of the two, does not give the one much superiority 
 over the other. Both possess sublimity and unity of design, 
 and beauty of execution, and if the Grecian has greater elegance, 
 the Egyptian has greater grandeur. But if the colony did not 
 much excel the parent country in architecture, there is no 
 comparison between them in the sister art of sculpture. Archi- 
 tecture and statuary were combined by the ancient Egyptians. 
 The earliest human figures cut in stone, that have come down 
 to us, are those executed by them, on their columnar fabricSr 
 They represent the human body, in one position. The arms 
 close to the trunk, the legs close to each other, the back 
 applied to the block, of wdiich the statue is a part. This 
 position of the body forms evidently the most easy design, 
 which a novice in the art, when first attempting to shape in 
 stone some representation of the human figure, could conceive. 
 That the Egyptian artists should have commenced with such 
 figures, seems natural enough, but that, after having learned 
 to execute the prodigious and highly finished works in statu- 
 ary, which they have left, they should still have adhered to 
 this position, can only, I appreh&nd, be explained from the in- 
 fluence of the spirit of imitation. The achievements of the 
 ancient Egyptians, in the whole art of shaping stone into forms 
 giving the ideas of sublimity and beauty, may well be supposed 
 to have filled the minds of their descendants with awe and admi- 
 
OF THE NATURE OF STOCK. 233 
 
 ration, since their remains so powerfully affect even men of the 
 present day with these sentiments. It is scarcely in human 
 nature greatly to admire any productions of genius, and to form 
 others much surpassing them. Under the influence of such a 
 sentiment, men are rather inclined to confine their efforts to 
 making additions, than to exert them in attempting alterations, 
 prudence whispering, that the former will be received as sufKcient 
 proof of their capacity, while the latter might be censured as 
 proceeding from their arrogance. When a certain point has 
 once been gained, future artists seek the principles of their ope- 
 rations, not in the powers of nature and of man, but, in what 
 they term the rules of art. These rules seem to have effectu- 
 ally confined the art of statuary, as far as the human figure was 
 concerned, to the limits marked out by the first essays. Even 
 figures in porcelain had the same character, an appendix being 
 put to the back, indicative of the original stone block. The 
 restraining influence of the spirit of imitation, is rendered more 
 remarkable, from the figures of the inferior animals being execut- 
 ed with considerable spirit. 
 
 When the art was transferred to Greece, the chanse of coun- 
 try undid its trammels, and its productions assumed all the life, 
 grace and beauty, which varying and natural attitudes bestow. 
 
 The mechanical part of architecture underwent a revolution 
 among the nations that were finally consohdated into the Roman 
 Empire, by the adoption of the arch, and the employment of 
 cement. The Egyptians and Grecians were stone-cutters ; the 
 Romans, masons. The spirit of imitation prevented this change 
 in the material part, from producing, immediately, a correspond- 
 ent change in the ideal. Under the Romans, the arch and the 
 column were combined. It was not until after the ruin of the 
 Empire, when architecture recommenced among other races, that 
 it assumed a new form, correspondent to the change in the 
 mechanical part, and suited to the purposes and times. 
 
 AVhen arts, other than those of their native wilds, first began 
 to be any thing to our rude ancestors, the art of the mason, re- 
 cei-ved by them from the Romans, was properly the capacity of 
 shaping a stony mass into a form, realizing some of their ima- 
 ginations, from materials, which could be easily transported to 
 the point required. While the Egyptians and Grecians had had 
 to apply their powers to, cnanging the figures and positions of 
 
 30 
 
234 OF THE NATURE OF STOCK. 
 
 masses of rocks, they possessed the art of constructing a rocky 
 mass. The instrument of the former was the chisel, to carve 
 into shape, of the latter, lime, to work out to shape. The be- 
 ginnings of the former art in Africa, and of the latter in Europe, 
 are marked by the same lavish expenditure of human labor, 
 though in different modes. In the former, the human hand, 
 slowly, by dint of strokes intermitted not for generations, dug 
 out caves, or carved pillars. In the latter, also, the human hand 
 cemented small fragments of rock to small fragments, till in the 
 lapse of years, the mass gradually swelled out into some desired 
 form. The extent of the operations of the one was limited, 
 by the powers of industry, to put large blocks and columns of 
 stone into the requisite positions, and by the strength and dura- 
 bility of these materials. The operations of the other again, 
 were limited, solely, by the cohesive qualities of the mass it 
 formed. The effect at which both aimed, grandeur, the union 
 of power, durability, and useful design, was mainly produced in 
 the former, by the vastness and symmetry of the several parts, 
 in the latter, by the same qualities combined in a whole. 
 
 The art was probably at first applied in modern Europe, to 
 the construction of places of strength. Solidity to resist the 
 battering engines, height to prevent the fortress being scaled, and 
 the advantage of having scope to annoy the besiegers, produced 
 the massive battlemented towers and castles of the ancient 
 barons. As its materials were the most durable, principles to 
 which we have already adverted, soon led to its application to 
 structures devoted to the purposes of religion. 
 
 A plain wall of small stones and lime may convey the idea of 
 durability, but only in a slight degree, that of power or design. 
 A circular or angular column of the same materials, if very ele- 
 vated, is better fitted for these ends, but still, is far inferior to one 
 composed of a solid block. A lofty stone arch, again, is one of 
 the most striking displays of power that human art exhibits. 
 The aspect of a mass so ponderous, hanging thus securely in 
 high air, fixes the attention, and fills the mind with awe. It is, 
 accordingly, by a skilful management of the arch, that the gran- 
 deur of effect of what we term the Gothic architecture, is chiefly 
 produced. All the other parts are subordinate to it, and confined 
 within the smallest limits sufficient to bring out its powers. In 
 the more perfect specimens, there is no dead wall ; a congeries 
 
OF THE NATURE OF STOCK. 235 
 
 of lofty arches, supported on short, or slender pillars, is wrought into 
 a mafrnificent and beautiful whole. The feehng of admiration here 
 springs from the consideration of the power manifested, in main- 
 taining in its place the whole high and hanging fabric ; whereas, 
 in the Grecian architecture, it rather arises from a perception of 
 that displayed in the formation and elevation of each separate 
 member. 
 
 The progress towards perfection, of this order of architecture, 
 was much more slow, considering that it scarcely ever remained 
 wholly stationary, than was that of the Grecian, for it is, in reality, 
 far more difficult. Several causes contributed to its advance. 
 The great extent of country over which its elements were dif- 
 fused, occasioned the use of various sorts of stone, and produced 
 the advanta2;eous effects arising from a continual change of ma- 
 terials. The art of the mason improved, strength was obtained 
 by joining stones into one another, rather than by cementing them 
 together. The use of freestone, a rock easily brought into shape, 
 probably had considerable effect in producing this improvement. 
 The architect was thus enabled to bring out, in greater fineness, 
 all the parts of his fabric. The feelings of men, also, set towards 
 the pursuit. Kings, nobles, a proud and powerful priesthood, 
 stood ready to reward and applaud its successfal creations, and 
 assembled multitudes gazed on them in silent and deHghted 
 admiration. It has been truly said, that it formed much of the 
 poetry of the age. In the want of other species of intellectual 
 excitement, men were needs very strongly moved by an art, that 
 thus wrought on stone and lime, they knew not how, to pourtray 
 some of the deepest feelings of their hearts. It seems to have 
 been only slightly retarded, by a propensity to servile imitation. 
 The various kingdoms into which Europe was split, and the dif- 
 ficulty of intercourse amongst them, gave courage to the artists, 
 who were themselves the greatest travellers, to attempt works 
 firom which they would have shrunk, had those who were to 
 judge of them had easy access 'to established models. Never- 
 theless, there is a fact, which shows that the oppressive influence 
 of this principle was far from inert. The epochs of the most 
 rapid advances of the Gothic architecture, were the periods suc- 
 ceeding the conquest of kingdoms by new races. This circum- 
 stance has given occasion, to several, to conjecture, that it stands 
 indebted to the knowledge of its principles, which some of these 
 
236 OF THE NATURE OF STOCK. 
 
 conquerors brought with them. The supposition is improbable ; 
 we have no reason to beheve that they brought any thing else, 
 than what necessarily belonged to such men, a bold and untram- 
 meled spirit. This, indeed, is an essential element, and one, as 
 we have seen, of great power in the composition of genius. It 
 was thus, that the prominent defects of the art under the Anglo 
 Saxons, an exuberance of dead wall, and want of elevation, were 
 remedied by the Normans. The Saracens in Spain, wrought 
 also a similar change. 
 
 At no preceding period, did there exist men, so much given 
 to the erection of permanent structures as modern Europeans, 
 and their American descendants. Their command of materials, 
 their resources of power, are by much superior to those possess- 
 ed by any antecedent people. It is certainly, then, surprising, 
 that they should be servile copyists, of the arts of those whom 
 they fitly look on, compared with themselves, as barbarians. I 
 apprehend we can only explain the phenomenon, from the influ- 
 ence of the instinct of imitation. The extended intercourse 
 between all parts of the world, the diffusion of the products of 
 book-making, and of picture-making, render us familiar with 
 existing models of all sorts. An artist, therefore, who has to 
 construct any great edifice, finds it safest to copy from some 
 one whose merits have been acknowledged, and takes the measure 
 of a Grecian temple, or Gothic church. Thus, at least, he covers 
 himself from censure. Hence it is, that we so often see, in the 
 cold foggy climate of Britain, or in the boisterous one of North 
 America, an imitation of some structure that had been admired 
 in Greece. The claims to admiration which the copy possesses, 
 fall, however, far short of the original. In the first place, it 
 wants that evidence of perfect design, which arises from the 
 complete, and easy accomplishment of a purpose. What an- 
 swered the mild climate, and serene skies of Greece, is felt to 
 be inconvenient, and therefore defective, elsewhere. Next, it is 
 most probably a very deficient copy. The effect of the Grecian 
 structures, depends, as we have seen, in their consisting of large 
 masses of stone. Our imitations are probably the work of the 
 mason, or possibly the plasterer, and convey, therefore, no idea of 
 power, the very essence which it is desired to embody. There 
 is hence, also, generally, a failure in the execution. When the 
 mind is full of any great idea, it knows when it has got an ade- 
 
OF THE NATURE OF STOCK. 237 
 
 quale expression for it, and rests not satisfied until it has fitly, 
 and accurately embodied it. But, if this great presiding idea 
 be wanting, there is nothing within, distinguishing the right from 
 the wrong, or preventing the commission of the greatest errors. 
 Our mason-work and plastered fabrics, are consequently, often 
 masses of incongruities. 
 
 Our choice of Gothic models, for similar reasons, generally fails 
 as completely. A large cathedral, indeed, must be admired any 
 where, but this is too great a work to be attempted. A' copy is 
 probably taken, from some chapel. We forget, that what was ad- 
 mirable for its purpose in some small ancient rustic hamlet, is out 
 of place in our cities ; that the arches, which, to simple peasants, 
 living in huts, seemed magnificent, to the chieftain, issuing for a 
 time from his naked fortalice, elegant, must appear mean, and 
 insignificant, to those, whose halls are nearly as lofty ; and, that 
 the whole pinnacled and buttressed structure, crowded on and 
 perhaps overtopped, by square unseemly buildings, devoted to 
 meaner uses, shows among them, trifling, and fantastic, like a toy 
 erected to please children. 
 
 II. The examples we have hitherto considered, are of the 
 same arts changing materials. Those which we have now to 
 attend to, are of different arts adopting the same, or similar ma- 
 terials. When arts are brought together, they borrow from each 
 other. Men perceive that some materials, or instruments, or 
 processes, employed in the one, could they be transferred to the 
 other, would be the cause of its yielding larger returns. They 
 are encouraged, therefore, to attempt the change, and experi- 
 ence shows, that such attempts perseveringly pursued, are gen- 
 erally successful. 
 
 Efforts of the inventive faculty, succeeding in effecting such 
 transfers, are more important than those in which it accomplishes 
 simply, a change of materials, for they tend more than they to 
 weaken the powers of the propensity to imitation, and establish 
 general principles, applicable to all arts. Hence we observe, 
 that, in countries where many arts flourish, there are most general 
 principles, least servile imitations, and very often, a continual 
 onward progress. Barren apart, they show generative virtues 
 when brought together. I take it, that it is chiefly from this 
 circumstance, that the seats of commerce have been so generally 
 the points, from whence improvements in the arts have emanated. 
 
238 Of" THE NATURE OF STOCK. 
 
 Thus, also, countries where various different races, or nations, 
 have mingled together, are to be noted, as coming eminently 
 forward in the career of industry. Great Britain is a remarka- 
 ble instance of this ; so are the United States of America. When 
 individuals meet from different countries, they reciprocally com- 
 municate and receive the arts of each, adopt such as are suited 
 to their new circumstances, and probably improve several. Ser- 
 vile imitation can there have no place, for there is no common 
 standard to imitate. Countries again, where only one art is prac- 
 tised, and where the population is composed of one unmingled 
 race, are generally servilely imitative. Such are some purely 
 agricultural countries. Experience shows, that, from the influ- 
 ence of this propensity, improvements, in these, always introduce 
 themselves very slowly. Leaving, however, these general re- 
 flections, we should now turn to particular instances of passages 
 in this way, of processes and inventions, from art to art, and 
 consequent improvement of old, and generation of new arts. 
 But, as these will be chiefly recent, and European, there are one 
 or two circumstances, affecting generally their progress in this 
 part of the globe, to which it may be- as well previously to 
 advert. 
 
 The rough and variable climate of Europe, compared with 
 the regions that have given origin to most of the arts now pre- 
 vailing in it, renders the necessary cost of subsistence much 
 greater. To live at all, in most parts of Europe, men must con- 
 sume a greater quantity, and better quality of food, or they must 
 be more warmly clothed, and comfortably lodged, than in regions 
 nearer the equator. The influence of this circumstance, has 
 probably been somewhat increased by another. Along the Med- 
 iterranean, civilization seems to have gained great part of its ad- 
 vance by colonization, and it is to be observed, that this movement 
 of men from one region to another, proceeds from different mo- 
 tives, than others impelling them to a change of seat. Men are 
 often compelled by necessity to migrate in tribes and nations, but 
 emigration in small parties, proceeds from choice. 
 
 They cannot well be induced to leave, not only their homes, 
 but their kindred and nation, unless from the hope of bettering 
 their condition, and, if their project miscarries not, they do in fact 
 better their condition, and are indemnified for the pains of emi- 
 gration, by a greater command of the necessaries and comforts 
 
OF THE NATURE OF STOCK. 239 
 
 of life. Thus habits of larger consumption are introduced, than 
 absolute necessity might demand. Both circumstances would 
 have the effect of augmenting the expense, or the wages of labor, 
 and of creating an additional difficulty, to the passage of the arts 
 of warmer climates, into these more northern regions. It is very 
 evident, for example, that an European workman could never 
 have sat down to a Hindoo loom, for the purpose of fabricating 
 a garment to himself: it would have been much better for him 
 to keep to his sheepskin jacket. Before the transfer of any art 
 could be effected, invention had to supply it with additional 
 facilities. Stimulated by its wants, by the new scenes in which 
 it found itself, and by the new materials submitted to it, it accord- 
 ingly seems always to have succeeded in doing so. There is, 
 perhaps, scarcely an implement, in general use in Africa, or in 
 Asia, excepting from it China, that has not passed with improve- 
 ment into Europe. 
 
 In modern Europe, too, the strength of the effective desire of 
 accumulation, seems to have been always greater, than in any 
 other part of the old world. This circumstance has much facil- 
 itated the passage into it, of the several arts, and balancing the 
 higher rates of wages, and more stubborn materials, has rendered 
 the formation of very many instruments there practicable, which 
 the weaker accumulative principle of the Asiatics, or Africans, 
 would have left unattempted. 
 
 It is worth while to remark, that there is a considerable analogy 
 in this particular, between the different conditions of society in 
 that continent and Asia then, and what exists between them now, 
 in Europe and North America. The general wages of labor 
 seem always to have been higher in Europe, than in Asia, in the 
 same way as the wages of labor in North America, are now 
 higher than in Europe. The same process, too, that carried the 
 arts to Europe, seems now aiding their passage across the Atlan- 
 tic. As flame often sets against the wind for that it is fed by it, 
 so invention seems to hold its course against opposing obstacles, 
 for these obstacles excite its powers and minister materials to 
 their action. 
 
 The progress of the knowledge of the natures and qualities 
 of particular substances, gradually introduced a knowledge of the 
 properties and natures of substances in general. Men first see 
 in the concrete, afterwards in the abstract. Thus, the discovery 
 
240 OF THE NATURE OF STOCK. 
 
 of the several mechanical powers, and the knowledge acquired 
 of the nature of each, led in time to the general principles of 
 mechanics. A knowledge of the mathematical properties of 
 substances, as in land-measuring, and in the regular figures of 
 architecture, led to a perception of the general properties of figure, 
 or of space as an affection of matter, and, at last, to the doctrine 
 of pure space and motion. 
 
 In the ancient world, science, as founded on a generalization 
 of the experiences of art, was little prosecuted. It is only in 
 modern times, that the science of experience has come to form 
 an element of importance, in the general advance of invention. 
 
 It is clearly on the antecedent progress of art, that the foun- 
 dation of the hopes of Bacon, for the future progress of science, 
 rested. His philosophy may be fitly described, as a plan to reduce 
 to method the chance processes that had been going on before, 
 by which men, as we have seen, happening on one discovery 
 after another, grope their way, as he expresses it, slowly, and in 
 the dark, to fresh knowledge and power. The progress of the 
 philosophy to which he has given his name, as well as that of 
 the science of mathematics, have uncpestionably discovered to 
 us many general truths, and theorems of art, and form therefore 
 a new element influencing its progress. The great moving pow- 
 ers will, however, still, I apprehend, be found to proceed from 
 the principles, the action of which we are now to attempt farther 
 to trace through particular instances. 
 
 Men must have been very early led to the use of some of the 
 farinaceous plants, and other vegetable matters, which, before 
 they are fit for food, require to be reduced to small fragments. 
 To effect this, they must either have rubbed them, or beat them, 
 between some two substances. If stone were the material, they 
 would rather prefer rubbing them, from the liability of that sub- 
 stance to break, and from its weight. It is thus that the rude 
 tribes of southern Africa, to this day, lay their corn on one flat 
 stone, and grind it by the help of another. An improvement on 
 this instrument, is to have the lower stone a little hollowed, and 
 perhaps marked with transverse notches. In one form or other, 
 this is a very general and ancient instrument, and, it may be ob- 
 served, is probably the first machine in which a circular motion 
 was introduced. 
 
 If wood be the material, then, to produce any effect, the sub- 
 
OF THE NATURE OF STOCK. 241 
 
 Stance to be comminuted must be laid on one piece, and an- 
 other be struck against it. But, thus, a large portion of the 
 matter operated on would fly off, and be lost. The most natural 
 mode of preventing this, is, to hollow out the lower piece. The 
 Indians of North America make an instrument of this sort, very 
 easily, by taking a portion of the trunk of a tree of hard wood, 
 setting it upright, and burning and scraping out a hole in the upper 
 end. They have then a large mortar, to which adjusting a 
 wooden pestle, they produce the implement with which they 
 pound all their corn. Such an instrument seems, Hke its fellow 
 of stone, to have been in very general use, at one time or other, 
 in most parts of the world.* 
 
 Tribes having learnt the use of such an instrument, on sub- 
 stances most easily comminuted, would be urged on to essay 
 its powers on more cohesive matters. They might succeed in 
 the attempt, at first, by simply increasing tlie size of the imple- 
 ment, and searching out the hardest and heaviest woods to con- 
 struct it of, but, even these improvements would at length be 
 insufficient for the enterprizes to which their confidence in their 
 powers, or their necessities, might excite them. To overcome 
 these increasing difficulties, it would require no great stretch of 
 the inventive faculty, to hit on the expedient, of placing a firm 
 transverse bar, with a hole in it, for the passage of the handle of 
 the pestle, across the top of the mortar, from side to side. Such 
 a change in its construction, seems accordingly, to have been very 
 generally effected. Simple as it is, it contained the germ of very 
 many subsequent improvements. The force employed, acting 
 thus not directly, but through the intervention of a fulcrum, may 
 be so applied as to give either increased velocity, or increased 
 power, and the regulated movement introduced renders mere 
 power almost all that is necessary. The size of the mortar, and 
 weight of the pestle, might, therefore, be increased indefinitely, 
 and the instrument might be put in motion by men, or by cattle. 
 The expression of the vegetable oils, was found to be the most 
 difficult operation to be performed, by instruments of this sort, 
 and it is probable, that it was to effect it, that machinery, by which 
 
 * In a Scotch ballad, I believe, in Allan Ramsay's collection, containing a 
 catalogue of a peasant's furniture, perhaps two centuries since, " A timmer 
 mell the bear to knock," is among the utensils enumerated. We yet speak 
 of striking barley. 
 
 31 
 
242 OF THE NATURE OF STOCK. 
 
 increased force might be employed, was first made use of. Oil 
 mills, of this sort, are yet common in the east. 
 
 This constraction rendered the union of the wooden mortar 
 and pestle, with the parallel instrument of stone, almost inevita- 
 ble. Hardness and heaviness, being the requisites in the pestle, 
 and an equal resistance being necessary in the mortar, to bring 
 about the junction, it would seem to have been only requisite, 
 that the two machines should have met where there w^as a scarcity 
 of wood of proper quality. The handle of the pestle, through 
 which a cross bar was then thrust, became the axle of the upper 
 mill stone, and the lower mill stone formed the bottom of the 
 mortar. The movement then became altogether circular, and 
 required small absolute force, but as much swiftness as could be 
 given to it. The machine thus generated, by the passage of the 
 one instrument into the other, was then a regular mill, to work 
 which was the employment of cattle or slaves. As it united the 
 advantages of the two original instruments, the capacity of the 
 wood to receive and modify motion, and of the stone to bruise 
 and comminute hard vegetable matters, its invention seems to 
 have had considerable effect in advancing art still farther. The 
 moving power, in one of the most laborious and common opera- 
 tions, was thus reduced to a simplicity of action, that paved the 
 way for its being performed by an inanimate agent ; such an agent 
 was introduced into the process, through the intervention of an- 
 other art. 
 
 In hot regions, water is very abundantly consumed, both as a 
 necessity and luxury, for immediate use, and as the great fertilizer 
 of the soil. In such regions, the raising it from wells and rivers 
 has always been a very common and laborious process, and to 
 facilitate it has given occasion to some of the earliest efibrts of 
 ingenuity. One of these consisted of a large wheel, placed up- 
 right, and to the circumference of which small buckets were 
 affixed. It was put in motion by treading on it, and the buckets 
 and it Avere so so arranged, that they sliould just dip beneath the 
 stream, in the low^er part of their circumvolution, and, at the 
 height of it, should empty themselves into a reservoir placed 
 above. A considerable saving of labor was thus produced. An- 
 other improvement did entirely away with the necessity of em- 
 ploying it, in many situations. To the outside of the wheel, 
 where there was a sufficient current, were affixed broad plates of 
 
OF THE NATURE OF STOCK. 343 
 
 wood, or other material, on which the strength of the stream 
 acting, forced it round, and performed the office of the laborer. 
 Such engines are of common use in China, at present. They 
 were known in Italy, in the time of Julius Caesar, to which they 
 probably found their way from Asia. They presented to the 
 Romans a means of employing the power of water in the labo- 
 rious operation of grinding,* which they had sufficient discern- 
 ment to adopt. The motion of the water-wheel, was communi- 
 cated to the mill, by the intervention of a toothed wheel. 
 
 Thus, from the union of the productions of the inventive 
 faculty exercised on at least three arts, came the rude model 
 of the present water-mill. Its progress was at first slow. Such 
 mills, seem only to have been constructed, when there was a 
 current of water suited to the purpose. The expense of form- 
 ing artificial falls, seems to have been too great for the improvi- 
 dence of the age. Though abundant materials existed, the 
 accumulative principle of the people was too weak to work upon 
 them. Cattle-mills, and mills driven by slaves, continued there- 
 fore to be generally preferred. f It was owing to an invention, 
 like so many others, the result of necessity and genius united, 
 that the use of water-mills became more general. When Rome 
 was besieged by the Goths, in the time of Belisarius, they cut 
 off the supply of water by the aqueducts. Among the other 
 inconveniences arising from the measure, it stopped the mills 
 
 * Fiunt etiam in fluminibus rotae eisdera rationibus, quibus supra scriptum 
 est. Circa earum frontes affiguntur pinnae, cjuee cum percutiuntur abimpetu 
 fluminis, cogunt progredientes versari rotam ; et ita modiolis aquam haurientes 
 et in summum referentes, sine operarum calcatura, ipsius fluminis impulsa 
 versatae, praestant quod opus est, ad usum. Eadem ratione etiam versantur 
 liydraulse, in quibus eadem sunt omnia, praeterquam quod in uno capite axis 
 habet tympanum dentatum et inclusum ; id autem ad perpendiculum colloca- 
 tum in cultrum, versatur cum rota pariter. Secundum id tympanum, majus 
 item dentatum planum est collocatum, quo continetur axis,habens in summo 
 capite subscudem ferreum qua mola continetur. Ita dentes ejus tympani, 
 quod est in axi inclusum, impellendo dentes t3'mpani plani, cogunt fieri mo- 
 larum circinationem, in qua machina impendens infundibulum subrninistrat 
 molis f'rumentum, et eadem versatione subijitur farina. — Vitruvius, Lib. X. c. 
 10. as quoted by Beckman, Vol. I. 
 
 Si aquae copia est, fusurus balnearum debent pistrina suscipere ; ut ibi 
 formatis aquariis molis, sine animalium vel hominum labore, frumenta fran- 
 gantur.— Pallad de re rust. lib. I. 42. edit. Gesn. II. p. 892.— Ibid. 
 
 t Three hundred years after Augustus, the number of cattle-mills in Rome 
 amounted to three hundred. — Beckjian. 
 
244 OF THE NATURE OF STOCK. 
 
 driven by the water from these aqueducts. To remedy the 
 evil, that general devised the scheme, of anchoring barges in the 
 river, in which he placed mills driven by tlie current. The 
 plan met the immediate exigence, and, as such a construction 
 suited the low strength of the accumulative principle of the age, 
 it was generally adopted elsewhere. In the present times, such 
 a plan would be rejected, because, though the first expense is 
 comparatively small, the durability of the instrument is too short. 
 We prefer the greater expense of making dams, and sluices, on 
 account of their greater durability. The cause leading to the 
 construction of the one or the other, is the same as that deter- 
 mining the Chinese to the formation of floating gardens, where 
 the Dutch would build dams. 
 
 The invention maintained itself through the dark a^es, and 
 followed the improvement and extension of agriculture, and 
 facility of communication, which returning civilization and tran- 
 quillity gradually diffused. It seems to have spread very gen- 
 erally over Europe, about the beginning of the sixteenth cen- 
 tury. The force of water being, by it, turned to the service 
 of man, wind also was made to employ its powers to a similar 
 purpose. 
 
 Important as these engines were in themselves, from their 
 immediate utility, they were more so in their effects. Men's 
 minds were directed to the advantage of what is termed machin- 
 ery, instruments that is giving new velocity and direction to 
 motion, and to the power of inanimate agents, generative of 
 motion, of both which the mill afforded the first eminent instance. 
 Examples of the possibility of executing by other powers than 
 the human hand, or the strength of the inferior animals, one of 
 the most difficult of the operations that the necessities of man- 
 kind called for, being brought freshly before the eyes of almost 
 all Europe, naturally prompted the genius of reflective men to 
 conceive the idea of applying them to other, and even less easy 
 processes. This general stimulus to the inventive faculty, con- 
 joined with others, acting vigorously, but occasionally and par- 
 tially, and already referred to, carried the improvement through 
 a great variety of operations. Mills of all sorts, came to be 
 constructed, driven commonly by water, as the more forcible, and 
 manageable power. To trace the course of invention through 
 these, were not to mark the principles regulating the progress of 
 
OF THE NATURE OF STOCK. 245 
 
 that faculty, but to enter on a description of European art. It 
 may be sufficient to observe, that, in conformity to these princi- 
 ples, not only was each difficulty o\ercoine by it, a benefit to 
 the particular art it was meant to serve, but to ait in general, 
 each conquest extending its authority, not alone over the prov- 
 ince where it was achieved, but over the whole region which it 
 was its object to gain. If, for instance, comparing the ingenious 
 and complete machinery of a well-constructed flour-mill of the 
 present day, with a model of the rude and imperfect engines of 
 the sort that existed two hundred years ago, we ask the cause 
 of the difference, we shall probably be told, the improvement 
 of mechanics ; but, if we trace the progress of this improve- 
 ment carefully, we will find, that it was the fitting of the ma- 
 chinery of this very engine, to other arts that was one of the 
 main producers of it. The productions of the union of arts 
 also propagating others, like all generators, their increase goes 
 on, to borrow a phrase of common use in inquiries connected 
 with these, when there are no retarding checks, not in a simple 
 arithmetical, but in a geometrical progression. 
 
 The effects, produced, by the passage through different 
 arts, of this improvement on a very ancient engine, import- 
 ant as they were, have been far exceeded in extent of con- 
 sequences, by one of altogether modern invention. I allude to 
 the steam engine, the progress of which, we T\'ill find to have 
 regulated itself almost altogether according to the above prin- 
 ciples. 
 
 As the progress of order, civilization, and art, covered the 
 island of Great Britain with a numerous population, the stores of 
 fuel which its cold and moist climate required, and its forests had 
 at first afforded, were by degrees exhausted. Its situation pre- 
 vented its receiving the supplies, which, had it made a part of 
 the continent, might have been brought down rivers, issuing from 
 interior regions. Necessity thus taught its inhabitants the gen- 
 eral use of coal, in which, happily, its territory abounds. But 
 what of this material lay close to the surface, and the fields im- 
 mediately beneath, having been wrought out, the miner was urged 
 on by the increasing wants of his countrymen, and the abundant 
 materials before him, to penetrate still deeper, and the labors of 
 generations formed large excavations, in regions far beneath the 
 surface. Here, however, he was met by an enemy continually 
 
246 OF THE NATURE OF STOCK. 
 
 gathering strength as he advanced on him, and threatening com- 
 pletely to bar his future progress. The farther he penetrated, 
 water poured in upon him in greater quantity, while to free him- 
 self of it he had to elevate it to a greater height. A period 
 seemed approaching, when very many of tlie mines must be 
 abandoned. In this extremity, it was natural to the men en- 
 gaged in this occupation, to cast about, and endeavor to dis- 
 cover some devise, through help of which they might success- 
 fully continue its pursuit. The resources of all powers hitherto 
 known having been tried, as far as in such situations they could 
 be effectually employed, and seeming to be on the point of yield- 
 ing, it could not but occur to attentive thinkers, that, if they 
 w^ere to succeed, the probability was it would be through some 
 one hitherto unemployed. Of those, steam was perhaps the most 
 apparent, and manageable. Its force must have been at least in 
 some measure, known to many, and had been previously pointed 
 out by one distinguished individual, as capable of producing the 
 greatest effects. The operation to be performed by it, too, seemed 
 peculiarly fitted for its action. Water is moved in pipes, and, 
 it is only in confinement that the power arising from the rarifica- 
 tion, and condensation of steam becomes sensible. It appeared 
 then by no means impracticable, to manage the condensation 
 and rarification within metal pipes, so connected with those in 
 which the water had to be raised, as to supply the force neces- 
 sary to produce its elevation. On this principle the attempt was 
 made, and succeeded, in first practically establishing the power 
 ■of an agent, destined, we cannot doubt, to produce effects, far 
 greater than any wdiich has hitherto been placed within the hands 
 of man. 
 
 The various circumstances conjoining to bring about this im- 
 portant event, are deserving our attention. 1st. The urgent 
 demand for some powerful agent, however rude and unwieldly 
 in action. Had the operation to be performed, been in any 
 degree complicated and nice in its nature, it would never pro- 
 bably have occurred to any one, that the expanse and collapse 
 of a vapor, shut up in iron vessels, could be brought to execute 
 it. 2d. The materials, metal, coal, and water, being in these 
 situations abundant. 3d. The previous improvement of ma- 
 chinery in general. 4th. The want occurring to men of pro- 
 perty, and of a class in general bold in enterprise, and accus- 
 
OF THE NATURE OF STOCK. 247 
 
 tonied to stake their funds freely. Had any of these been want- 
 ing, this extraordinary invention might yet have slumbered, 
 veiled in the darkness which had covered it for so many thousands 
 of years. Perhaps it might have been stifled at its birth, for its 
 first appearance gave but slight token of its inherent capabilities. 
 The expenditure of fuel and of labor, necessary to the discharge 
 of its functions, was excessive. It having, however, been thus 
 established, that it was an agent, within the compass of man's 
 abihty, to make a partner in the series of his operations, there 
 was a strong stimulus to endeavour to render it a more econom- 
 ical agent. This was effected by a change in the construction 
 of the apparatus, the leading feature of w-hich, is, the causing 
 the steam to perform its operations, through the intervention of 
 a piston. The instrument thus produced, was an effective and 
 economical operator in the purpose designed. The improve- 
 ment was important in itself, and far more so in its consequences. 
 Had the machinery of simple pipes and valves been contmued, 
 under some improved form,* it might have appeared only fitted 
 for propelling fluids, and been confined to that purpose, as through 
 the aid of sails of some sort, wind has been made to propel 
 vessels, from very early ages, though it is only of comparatively 
 recent times, that it has been applied to give motion to mills. 
 But, the introduction of the piston, and its adjuncts, showed the 
 power in a familiar form ; the handle of a pump was a thing well 
 known as put in motion by machinery, and it was obvious that 
 the movement had only to be reversed, to communicate motion 
 to any machinery. Under this form, therefore, its progress as a 
 power through all other machinery, may be said to have been 
 inevitable. It possessed the important advantages of being 
 always at command, uniform in action, and unbounded in force. 
 In this progress it was assisted in one important step by science. 
 The discovery of the doctrine of latent heat enabled it at once 
 to surmount a great obstacle, which might otherwise have long 
 limited the extent of its operations. It is perhaps not to be 
 supposed, but that the general truth would have been itself at last 
 made known by the continual groping after improvement, which 
 the existence of such an instrument in the hands of men would 
 
 * The formation and condensation of the steam, might have been man- 
 aged in chambers, separate from the system of pipes and reservoirs elevating 
 the water. 
 
248 OF THE NATURE OF STOCK. 
 
 of itself have occasioned ; if however science advanced it by only 
 a few years, the beneficial effects of such an anticipation, will be 
 allowed to have been very great.* 
 
 In its course, two things seem specially worthy of notice, the 
 additional freedom which it gave the inventive faculty, and the 
 circumstances which existed to facilitate the progress of that 
 faculty, and which it seized on for the purpose. The conscious- 
 ness of the possession of an agent, of unlimited and perfectly 
 manageable power, which had escaped the attention of all pre- 
 ceding ages, seemed to have immediately more effectually broken 
 the constraining and retarding influence of the propensity to 
 imitation, than any preceding event. Whatever mere motion 
 could do, if the sphere of its action could be contracted into 
 small space, was conceived within the power of steam, and in- 
 vention set to work with a determination progressively to supply 
 the means of its application. In these essays, it has been always 
 ultimately successful. It is not necessary here to enlarge on the 
 great changes it has hence effected, or on the important improve- 
 ments it has introduced. It is to be observed, however, that, 
 whatever it has performed, has proceeded in the order we have 
 indicated, and which, I believe, almost all inventions have fol- 
 lowed. The diversity of climates, territories, productions, and 
 other circumstances of different regions and nations, has helped 
 it, as them, forward, and been to it as it were steps, by which it 
 has gained the rank it holds in the modes of human industry. 
 
 Thus the peculiar circumstances of the North American conti- 
 nent, may, with propriety, be said to have been the exciting cause 
 producing steam navigation, one of the most important of these 
 steps. That country is full of great lakes and rivers, affording the 
 easiest, and often the only means for the transport of the larger 
 quantities of agricultural produce, that its interior sections yield. 
 Such inland navigation is always exceedingly tedious ; there were 
 therefore peculiar reasons for the devise of some new agent to 
 facilitate it. An agent like steam too, might evidently be em- 
 ployed with more safety and chance of success, in calm inland 
 waters, than in the great ocean. If we consider, in addition to 
 this, the greater play which, from circumstances already enume- 
 
 * Since the above was written, 1 have seen it stated, that Watts did not 
 take the idea of his great improvement from Dr. Black's discovery, but that 
 it was entirely the result of his own inventive powers. 
 
OF THE NATURE OF STOCK. 049 
 
 rated, the inventive faculty enjoys in that continent, we shall see 
 that it was there, so to say, that this improvement ought to have 
 taken place. The point, too, in North America, where it did 
 first actually take place, is also, as it were, particularly marked 
 out for it. The transport between New York and Albany, by 
 sailing vessels on the Hudson river, was both very expensive, 
 and pecularily tedious. Steam has there changed a voyage of 
 days, or weeks, into one of less than sixteen hours.* 
 
 The circumstances leading on to the invention of steam land 
 carriage, may also be noted as exemplative of this view of the 
 subject. There were first simply railroads, to facilitate heavy drafts 
 for short distances, from coal mines ; then there was a more general 
 use of them in all heavy drafts; finally, there was the general 
 application of steam, as the power to effect transport of all sorts, 
 and with all velocities, along the smooth surface they afforded. 
 All that was wanted for the last step was, that the mechanism 
 should be rendered less heavy and cumbersome, and, it may be 
 remarked, so great confidence had been generated of the power 
 of the inventive faculty, that the undertaking was commenced 
 with full assurance that it would accomplish the desired improve- 
 ment, although the manner how was not known. The result 
 showed that the confidence was not misplaced. 
 
 Thus, such are the steps by which invention advances, that it 
 would seem, had there been no country like Great Britain, the 
 steam engine might not yet have been produced ; had there been 
 none like North America, steam navigation might not yet have 
 been practised ; and again, had not Great Britain existed, metal 
 railways and steam carriage might have been still only in the 
 category of possibilities. 
 
 The invention of printing has often been cited as one of the 
 most important of modern times. The steps by which it ad- 
 vanced were also of that gradual and easy nature, one leading on 
 to another, and surrounding circumstances prompting to essay the 
 ascent, as to take away all admiration of its progress, were it not 
 that the constitution of man's nature renders the passing of any 
 individual, coolly and deliberately, the least out of the circle of 
 imitation, very often a proof of the strongest powers of mind. 
 There was first the stamping with signets ; then the transfer of 
 this initial art, to stamping, instead of painting, playing cards ; 
 
 ■" Note H. 
 
 32 
 
250 . OF THE NATURE OF STOCK. 
 
 then the existence of a great and unceasmg demand for one book, 
 the Bible, the excessive cost of transcription, and the transfer of 
 the art of stamping cards to stamping pages, first of the sacred 
 volume, and afterwards of others ; lastly, there was the passage of 
 another art, that of casting dies for coining, to facilitating the 
 formation of metallic types.* The art, thus perfected, was dis- 
 seminated by the tyranny of a petty prince.-j- 
 
 The art which has most immediate connexion with the increase 
 of wealth, the business of banking, is itself in some measure illus- 
 trative of the influence of change in producing improvements in 
 all arts. It commenced in countries where exchanges for large 
 amounts were numerous. Venice, Florence, Genoa, Amster- 
 dam, the great marts of commerce, were the first banking com- 
 munities. In them, however, its operations were confined to 
 transfers of specie, and the benefits derived from them consisted 
 chiefly in security given, and trouble avoided. It passed, at last, 
 into countries where there w-ere comparatively few actual ex- 
 changes^ and where, in order to eftect the passage, invention was 
 obliged to develope its capacities for facilitating, and thus exciting 
 and increasing exchanges. The following extract from the Wealth 
 of Nations will render this apparent. 
 
 " The commerce of Scotland, which at present is not very 
 ereat, was still more inconsiderable w^hen the two first banking 
 companies were established ; and those companies would have 
 had but little trade, had they confined their business to the dis- 
 counting of bills of exchange. They invented, therefore, another 
 method of issuing their promissory notes ; by granting what they 
 called cash accounts, that is, by giving credit to the extent of a 
 
 • In asciibino- the invention of printing not to chance, but to the gradual 
 progress of event's, I am supported by the authority of Condorcet, and appa- 
 rently also by that of Dugald Stewart. " L'invention de I'imprimerie a sans 
 dout avance le progres de I'espece humaine; mais celle invention etoit elle- 
 meme une suite de Tusago de la lecture repandu dans un grand nombre de 
 pays." Vie du Targot. I'ref. to tirst dissertation to Enc. Brit. 
 
 t On sait comment I'impriraerie s'est repandue depuis 14G2 par la revolu- 
 tion que Mayence eprouva cette meme annee. Adolphe, comte de Nassau, 
 soutenu par la Pape Pie II. ayant surpris cotte ville imperiale, lui ota ses lib- 
 ertes et privileges. Alors, tous les ouvriers, qu'elle avoit dans son sein a 
 I'exception de Guttenburgh s'enfuirent, se disperserent et porterent leur art 
 dans Ics lieux et les pays ou il n'etoit pas connu. C'est a cet evenement que 
 tous les bistoriers reunis a Jean Schosffer fib de Pierre et petit-fils de Faust, 
 placent I'epoque de la dispersion dont I'Europe profita. (Encyclopedic art 
 Jmprimeriei.) 
 
OF THE NATURE OF STOCK. 251 
 
 certain sum, (two or three thousand pounds for example), to any- 
 individual who could procure two persons of undoubted credit 
 and good landed estate to become surety for him, that whatever 
 money should be advanced to him, within the sum for which the 
 credit had been given, should be repaid upon demand, together 
 with the legal interest. Credits of this kind are, 1 believe, com- 
 monly^ granted by banks and bankers in all different parts of the 
 world. But the easy terms upon which the Scotch banking 
 companies accept of repayment are, so fur as I know, peculiar to 
 them, and have perhaps been the principal cause, both of the 
 great trade of those companies, and of the benefit which the 
 country has received from it." 
 
 If we may judge of the progress of an art from its general 
 success, the transfer of the business of banking to Scotland would 
 furnish another proof of the benefits accruing to arts themselves, 
 from their passages from country to country. No where has 
 banking been productive of more acknowledged advantages, 
 and no where have the evils occasionally attendant on it been 
 fewer.* 
 
 As also illustrative of the subject, I may call the attention of 
 the reader to a fact often noted, — the small progress of the 
 aborigines of the new world in art, when compared with that 
 attained by the inhabitants of the old. 
 
 If we are to search for natural causes of the phenomenon, in 
 my opinion we may find them, in the greater extent of continent 
 in the eastern than in the western hemisphere, and, especially, 
 of continent lying under the equatorial regions, the birth place in 
 both of the arts they possessed. This extent of country, and 
 diversity of materials, must have increased very much the cliance 
 of discovery in the arts, and tended greatly, on the principles we 
 have just been considerrag, to push forward their improvement. 
 To take as an example an art which has been particularly referred 
 to.f that of domesticating the ox, and teaching him labor. To 
 suppose that men, while the whole of that species of animals 
 were yet wild, conceived the project of domesticating them, in 
 order that they might apply them to the various purposes they 
 now serve, were a conjecture altogether unwarranted by any 
 event in the history of mankind and of art. We have rather 
 
 * Note G. 
 
 t Dr. Robertson's History of America, vol. II. 
 
252 OF THE NATURE OF STOCK. 
 
 reason to believe that in this, as in other instances, they must 
 have been led on to the object gradually, by the intervention of 
 circumstances, each carrying them a certain way towards this 
 great end. But there must evidently have been a greater chance 
 for the existence of such circumstances, in the great range of 
 continent lying within, or not far from, the borders of the torrid 
 zone in Asia, Africa, or Europe, than in the small part similarly 
 situated in America. Without pretending to say what those 
 circumstances were, it is at least probable that one may have 
 been the keeping these animals in enclosures, merely to satisfy 
 the curiosity, or to afford the amusement of hunting to the chiefs, 
 or kings, of the agricultural nations. This we know, in more 
 recent times, to have been a custom in some eastern countries.^ 
 There they would in time lose great part of their natural ferocity, 
 and become, like deer in our parks, half tame. Now, it is evi- 
 dent enough, that the chances for this important step towards the 
 accomplishment of the object being imdertaken, would be directly 
 in proportion to the number and extent of the agricultural countries 
 of those ages, that is, to the extent of continent lying near the 
 equator. 
 
 The period when the event took place marks a great change 
 in the condition of man, for, independently of its immediate effects, 
 it necessarily brought about the existence of a race of herdsmen, 
 occupying regions, in the state of art at the time, not coming 
 within the range of the strength of the effective desire of accu- 
 mulation of the neighboring people, as tillable land. Herdsmen 
 once existing, it could scarce be but that they would spread 
 themselves wherever they could find support for their cattle, and 
 gradually exterminate the hunting tribes. There is, I think, 
 reason to suppose that such a revolution occurred in Europe 
 many ages previous to the time of recorded history. Its import- 
 ance may be estimated from the observations that are made in a 
 preceding part of this volume.f 
 
 We may, on similar principles, in part, account for the low 
 
 * Xenophon. Cyrop. 
 
 t Page 148. Were this the place to enlarge on the subject, many circum- 
 stances confirmatory of such an event might be enumerated ; as the traces of 
 the existence of a race of mere hunters over all Europe, the roots of European 
 languages being the same as those of central Asia, the form and constitution 
 of the present domestic ox species, and of sheep, marking their gradual migra- 
 tion from a warm cl'iiiate, into colder regions and more abundant pasture. 
 
OF THE NATURE OF STOCK. 253 
 
 rank in the scale of humanity occupied by the aborigenes of 
 Austraha, that- fifth and yet but partially explored continent. 
 The uniformity of soil, climate, and natural productions, of that 
 whole region is very great. This limited variety of materials 
 would seem to have diminished the number of arts generated, 
 and that of improvements arising from effects of changes, among 
 those having obtained existence. 
 
 In conclusion I may observe, that I believe it will be found, 
 that there is no art in existence which we may not find means to 
 trace, with greater or less certainty, to the rudest and most simple 
 principles, and which may not be shown to have attained perfec- 
 tion by continual changes from place to place, and material to 
 material, and by encountering consequently alternate difficulties 
 and facilities, the former developing its powers, the latter extend- 
 ing their field of action, and both, by helping to introduce general 
 principles, weakening the restraining power of the tendency to 
 servile imitation, and advancing the progress of science. This 
 successive passage of the same arts from country to country, and 
 from one into another, seems to be the great exciting cause of 
 the progress of them all. The greatest improvement of British 
 manufacture in recent times is, I may remark, a passage of this 
 latter sort. The cotton manufacture is a passage of the art of 
 fabricating woollens, into that of fabricating cottons. It was the 
 perfection of the former more easy art that showed the possibility 
 of the existence, and eventually brought about the existence of 
 the latter, invention in this case, being excited by the higher 
 wages of labor in Europe than in Asia. Improvement was the 
 consequence. The peculiar difficulties the material presented 
 being overcome, the facilities it possessed were experienced. 
 
 This view of the subject seems somewhat to illustrate the fol- 
 lowing reflections of Lord Bacon, concerning the early progress 
 of art, and may satisfy us, that, even yet, they are not altogether 
 inapplicable. He observes, that, " although, when we first begin 
 to consider the variety of necessaries, conveniences, and elegances, 
 which the mechanical arts minister to life, we are rather struck 
 with a feeling of admiration at the abundant wealth which man- 
 kind inherit, than with a sense of their poverty ; yet, when we 
 examine every thing, and consider through how many chances 
 and revolutions these arts have been brought to their perfection, 
 and through what simple and easy reflections they have been 
 
254 OF THE NATURE OF STOCK. 
 
 discovered, such sentiments will soon leave us, and we shall be 
 inclined to commiserate the penury and barrenness of invention 
 of tlie human race, which have taken so many ages to accom- 
 plish things deducible without difficulty, from facts neither very 
 numerous, nor very hard to be ascertained." * It is indeed true 
 that the philosophy, in the introduction of which he bore so 
 eminent a part, has, in these latter ages, been a very effective 
 promoter of the dominion of man, and, mixing with art, has much 
 purified and dignified its spirit, and greatly increased its powers, 
 turning invention in this department from particulars to generals, 
 and converting art into science. This has more especially hap- 
 pened in the chemical sciences, and those connected with them, 
 a sphere to which, I may be allowed to observe, his system seems 
 particularly applicable. There, science begins to lead and direct 
 art ; in other departments she rather follows and assists it. But, 
 with regard to the general progress of art, even its recent history 
 evinces the justice of these observations, and shows that " men 
 estimate falsely both their possessions and their powers, deeming 
 of the first more highly, and of the last more lightly, than they 
 ought."! We shall admit this, if we consider the vast number of 
 qualities and powers, and of new practical combinations of them, 
 that, in our days, have been discovered and applied to use, and 
 reflect on the long series of ages during which they were hid in 
 darkness, on the proximity of men to them, and the ease with 
 which they might have lighted on them, would they have turned 
 their eyes, ever so little, out of the busy circle of actual life and 
 occupations. If, too, the history of the past tell us truly what 
 the future will be, we may feel assured that, as it is not the powers 
 of nature or of man, but the application of them, that is limited, 
 if individuals be inclined by their own dispositions to apply them- 
 selves to purposes conducive to the general good, and if they be 
 incited to do so by causes similar to such as have before operated, 
 art and science will still stretch their capacities, until they may 
 at length reach an extent of which it is impossible for us now to 
 form any conception. 
 
 An attentive consideration of the history of art might also give 
 rise to a series of reflections of another sort. It would show a 
 purpose, which does not strike us on a first view of the creation. 
 Pv'ature, it would seem, if I may be allowed so to express myself, 
 
 ** Nov. Org. L. 1. LXXXV. t Idem. 
 
OF THE NATURE OF STOCK. O55 
 
 sensible of the combined pride and imbecility of man, has so 
 arranged the world she has provided for him, as to make it the 
 means of urging him on, in a continual progress, towards higher 
 and higher attainments. Neither the defects of his limited and 
 cloudy faculties, nor the intoxication of the vainglory, that, fed 
 by his imitative propensities, is ever representing him to himself 
 as having reached the summit of terrestrial perfection, can pre- 
 serve him stationary. He is now impelled by necessity, now 
 excited by hope, to attempt the amelioration of his condition, and 
 thus gradually to develope the latent capacities of his own being, 
 and of the sphere of existence in which he moves. By a diver- 
 sity of climates, soils, and nations, steps are, as it were, arranged 
 for him, up which he is gradually enticed, or compelled to mount, 
 to fresh acquisitions of knowledge and power. He is never allowed 
 to remain stationary. A portion, indeed, of the race may, and 
 for a limited time, but ultimately they either improve, or yield 
 their place to surrounding peoples who have improved. 
 
 Some philosophers urge it as an objection against the world's 
 having been formed by a designing cause, that so large a portion 
 of its surface is useless to man. According to them, had it been 
 formed by perfect and beneficent reason, it should have been such 
 a level garden, as a certain theorist supposed it originally to have 
 been. Had it been so, we may safely assert, that man, as man, 
 could never have inhabited it. He must either have been formed 
 above, or sunk below, his present condition. Because we do not 
 turn to any account the sandy desert, or rugged mountain, we are 
 not entitled to look on them as blots on the general utility of the 
 creation, or suppose, even, that they may not be put to use by 
 succeeding generations. The savage of New Holland conceives 
 every tree useless that does not soon rot, and so breed maggots 
 for him. The ancient Romans scarcely conceived that the woods 
 and morasses of Caledonia would, at any time, be abundantly 
 useful. We judge rashly, then, in condemning as useless any 
 portion of the earth. Even the barren deserts of Africa may, in 
 after ages, be fertilized. Art and industry may, in time, draw 
 water plentifully from the depths of the earth, and cover them 
 with treple harvests. To do so, human art must make great 
 advances, and these and the other obstacles it has met with, and 
 will meet with, are stimulants to its advance. 
 
 War itself, so great an evil to the individuals within the scope 
 
256 OF THE NATURE OF STOCK. 
 
 of its ravages, is evidently tlie only manner by which, in certain 
 states of society, an amelioration can be induced. The destruc- 
 tion of the Roman Empire, and almost of the Roman race, by 
 the barbarians, was, perhaps, ultimately, the most beneficial revo- 
 lution ever brought about. Even in its minor consequences, this 
 apparent evil produces also much of real good. Without it, many 
 of the most useful inventions might never have been either pro- 
 pagated, or improved. 
 
 We are ever ready to forget the part which nature thus bears 
 in our operations, and to lay the whole credit of our skill and 
 industry to our own discernment. The slow and gradual manner 
 in which she has led us on to the acquisition of every art, 
 acting all along the part of the sagacious teacher, w"ho puts 
 before his scholar, at first, the most simple and easy lessons, and 
 on his mastering these, by degrees, through the influence of suit- 
 able rewards and penalties, conducts him to more diflicult efforts, 
 meets not our notice, and rises not to our thoughts. 
 
 Were these or similar reflections fitly placed here, the subject 
 might give occasion to many more of the sort. But, it seems to 
 me, that we act always rashly and imprudently in bringing in such 
 disquisitions into inductive inquiries. They belong to another 
 subject. 
 
 The aim of science may be said to be, to ascertain the manner 
 in which things actually exist. The doing so, indeed, has been 
 generally found to bring to light some useful purpose in their 
 arrangement, and the proofs of benevolent design thus exhibited, 
 are exceedingly interesting in relation to the evidence they afford 
 us of the attributes of the great first cause. But, as science is 
 only progressive, we are never certain of having ascertained the 
 exact manner of the existence of any thing, and, therefore, we 
 must often be mistaken in the ends for which we may conceive 
 that the things we see are formed. The confident assumption, 
 then, that we have exactly ascertained, in any case, the precise 
 end, and the application of this assumed purpose, as a guide to 
 scientific inquiry, has a decided tendency to retard the progress 
 of science. For, the supposition that the actual arrangement is 
 different from what it was conceived to be, is held to be inadmis- 
 sible, as it would imply some deviation from the design for which 
 we assumed it was devised. It is, as Lord Bacon expresses it, 
 an improper blending of things human and divine, and a mode of 
 
OF THE NATURE OF STOCK. 257 
 
 reasoning which he, in my opinion, with much propriety repeat- 
 edly cautions his followers to avoid. 
 
 The reflections, therefore, as to the probable designs of nature, 
 in the constitution of the world as the abode of man, which I have 
 here introduced, would have been excluded, had it not been that 
 Adam Smith, and many other popular writers on these subjects, 
 sometimes indirectly, in their application of terms, sometimes 
 directly, in their reasonings, assume, that the designs of nature 
 are quite opposite to what I have represented, and make their 
 conceptions of her purposes an argument in favor of their par- 
 ticular theoretical views. 
 
 The embryo doctrine is to be found in Virgil. 
 
 " Nonne vides, croceos ut Tmolus odores, 
 India inittit ebur, molles sua thura Saboei ? 
 ^ At Chalybes nudi ferrum, virosaque Pontus 
 Castorea, Eliadum palmas Epirus equarum ? 
 Continue has leges teternaque foedera certis 
 Imposuit natura locis, quo tempore primum 
 Deucalion vacuum lapides jactavit in orbera." 
 
 " Thus Tmolus is with yellow saffron crowned ; 
 India black eben and white ivory bears ; 
 And soft Idume weeps her odorous tears. 
 Then Pontus sends his beaver stones from far, 
 And naked Spaniards temper steel for war : 
 Epirus for the Elean chariots, breeds 
 (In hopes of palms) a race of running steeds. 
 This is the original contract ; these the laws 
 Imposed by Nature and by Nature's cause 
 On sundry places, when Deucalion hurled 
 His mother's entrails on the desert world." * 
 
 In the same manner as by the poet, the products of different 
 re"ions are spoken of by political economists, as bestowed on 
 them by nature, are termed natural productions, and the attempt 
 to transfer them to other sites, is held to be a procedure in oppo- 
 sition to the designs of providence, whose intentions, it is asserted, 
 in giving them these productions, were, that the inhabitants of 
 different countries should exchange the products of their several 
 territories with one another. 
 
 There are, I conceive, two objections to this view of the sub- 
 ject, the first referring to the term, natural productions ; the 
 second to the purposes assumed to be the ends designed by na- 
 ture. 
 
 * Georgic I. Dryden's Translation. 
 
 33 
 
258 OF THE NATURE CF STOCK. 
 
 If by the term, natural productions, we mean things produced 
 without the aid of art, then no civihzed country can be said to 
 have any natural productions, for to all that it produces art lends 
 its aid. It were, therefore, I think, better to substitute for the 
 term, natural productions, that of actual productions. 
 
 But, because one country alone now produces particular 
 commodities, we are by no means warranted to conclude that 
 nature intended they should be produced only there. On the 
 contrary, if we may judge of a scheme by the mode in which 
 its parts are arranged, and in which tliey act, her intentions 
 were, that the variety of materials placed before man should 
 generate the rudiments of arts at different points, but that these 
 arts should be advanced from their first rough simplicity, and 
 carried to greater and greater excellence, by passing from one 
 region and people to another. If, therefore, we find any art con- 
 fined to a particular region — the actual production of only partic- 
 ular communities, the presumption is, that it is yet in its infancy, 
 and that it will only be as it is carried to new countries and other 
 men, and generally diffused over the whole globe, that it will ad- 
 vance towards maturity. Time has shown that the supposed 
 laws and decrees of nature, which the poet declared to be of 
 eternal power, are already abrogated by the progress of art, in most 
 of the instances he adduces. The natural productions of Great 
 Britain, serviceable to man, are certainly very few. The catalogue 
 of her actual productions, even of those alone in which she preemi- 
 nently excels, is greater than that of any region of equal extent. 
 Were Virgil now alive he certainly would not cite Albania for 
 horses, or Spain for iron. These results are entirely the work of 
 art, to the operations of which it is impossible to put any bounds. 
 Who can positively say what fifty years hence will be the produc- 
 tions of any country? 
 
 It is the intention of the inventive faculty, when it applies 
 itself to the arts ministering to the necessaries, conveniences, or 
 superfluities of life, — to the wants of our nature that the subject 
 we treat of considers, to increase the supplies which it is the 
 aim of each to procure. If when it gains the ends it purposes, 
 it really produces this increase, in doing so, it must render the 
 labor of the members of the society in which it operates more 
 effective, and enable them from the same outlay to produce 
 
OF THE NATURE OF STOCK. 259 
 
 greater returns, or from less outlay to produce the same returns. 
 An improvement in the construction of a plough, enables the 
 individuals employing that instrument to plough a greater quantity 
 of land with the same cattle and labor, or an equal quantity of 
 land with fewer cattle and less labor. The use of water as a 
 power diminishes very greatly the labor necessary to perform the 
 operations in which it is employed, and, therefore, from a less 
 outlay, produces equal returns. Were the assumption correct, 
 on which we have been all along proceeding, that instruments 
 compare with each other by the physical effects they produce, 
 and, that, in proportion as the same effects result from less outlay, 
 or greater effects from the same outlay, the ratio of the capacity 
 of the instrument to its cost will be increased, and it moved to 
 an order of quicker return, then the successful exertions of the 
 inventive faculty would always be effective, and every discovery, 
 directly or indirectly, lead to real improvement. This, as we 
 shall presently see, is not always the case, because many com- 
 modities are not estimated by their physical effects ; but continu- 
 ing for the present the assumption, which, for the sake of simplicity 
 of exposition we have made, improvement, in this case, must carry 
 the instruments improved by it to more speedily returning orders. 
 
 It is here also to be observed that, although any particular im- 
 provement, unmediately, and at first, affects only the instruments 
 improved, it v^ry shortly diffuses hself over the whole range of 
 instruments owned by the society. The successful efforts of the 
 inventive faculty are not a gift to any particular artists, but to the 
 whole community, and their benefits divided amongst its members. 
 If an improvement, for instance, in the art of baking bread were 
 effected, by which, with half the labor and fuel, equally good 
 bread could be produced, it would not benefit the bakers exclu- 
 sively, but would be felt equally over the whole society. The 
 bakers would have a small additional profit, the whole society 
 would have bread for the product of somewhat less labor, and 
 all w^ho consumed bread, that is, every member of the society, 
 would from the same outlay have somewhat larger returns. The 
 whole series of instruments owned by the society would be some- 
 what more productive, w'ould be carried to an order of quicker 
 return.* 
 
 In this manner, all improvements, by moving the whole stock 
 
 * This follows from the nature of exchange, see page 1C6, 
 
260 OF THE NATURE OF STOCK. 
 
 of instruments belonging to any society, to more productive orders, 
 increase proporlionably its absolute capital and stock. Should 
 a naturalist, in examining the nature of the surface, on the farm 
 of an individual in a small agricultural society, make the dis- 
 covery, that beneath it there was a quantity of plaster of Paris ; 
 and should the farmer, in consequence of his recommendation, 
 sprinkling a little of this reduced to powder on some of his fields, 
 find that it caused them to yield double returns, his farm or the 
 lease he held of it, might in his eyes be doubly valuable, and he 
 might demand in exchange, and perhaps receive two other farms 
 of equal size in its place. Were it, however, found, that a stra- 
 tum of this substance extended over the whole range of country 
 possessed by the society, and was equally efficacious when ap- 
 plied to any portion of the surface, his farm would not be more 
 valuable than other farms. The supply, however, for future 
 wants, possessed by the whole society, w^ould be largely increased, 
 and the strength of their effective desire of accumulation remain- 
 ing undiminished, their absolute capital would be proportionably 
 auo-mented. But, as the whole stock of instruments remained 
 the same, with the exception of the difference made, by the sur- 
 face having been sprinkled with a quantity of this mineral powder, 
 their amount, as measured by one another, would be the same 
 as before. Some instruments might possibly exchange for a 
 greater amount of instruments of another sort, than formerly, but 
 this chano-e could no more be considered an increase in the total 
 
 O 
 
 value, than the fact of the latter instrument exchanging for a less 
 amount, could be considered an indication of a diminution of the 
 total exchangable value of the stock of the society. The rela- 
 tive capital and stock would thus remain unchanged. But, 
 though this relative or exchangable value of the society's stock 
 might remain unchanged, its absolute capital and stock would be 
 increased. The reality of such increase is marked, in all similar 
 cases, by at least three circumstances. 
 
 1. The members of the society possess, in general, a more 
 abundant provision for future wants, the revenue of the whole 
 society, and of each individual composing it, is increased. 
 
 2. The whole society, as a separate community, becomes 
 more powerful, in relation to other communities. It can support 
 the burdens of war, and the expense of all negotiations and na- 
 tional contracts with foreign powers, with greater ease. It can 
 
OF THE NATURE OF STOCK. 261 
 
 also, without inconvenience, execute a greater number of useful 
 works and undertakings. The imposts which the state levies for 
 such purj30ses, in a society where the stock of instruments is 
 wrought up to an order correspondent to ilie average effective 
 desire of accumulation of its members, must almost always occa- 
 sion some diminution of that stock. The returns comino; in 
 from tl)eir industry, being only sufficient to reconstruct the instru- 
 ments as they are severally exhausted, an additional drain made 
 upon their funds must, in most cases, prevent the reconstruction 
 of many of them, and consequently occasion a disappearance, to 
 that amount, of a portion of the general stock. But, when instru- 
 ments are of more productive orders than the effective desire of 
 accumulation of the society demands, the abstraction of a part of 
 their retuins by the state, to supply its exigencies, only carries 
 them nearer, or brings them altogether to an order corresponding 
 to the strength of that desire, and, therefore, interferes not with 
 their reconstruction. Taxation is paid out of revenue, not out of 
 capital. 
 
 3. As it is the effect of improvement, to carry instruments 
 into orders of quicker return than the accumulative principle of 
 the society demands, a greater range of materials is brought 
 within reach of that principle, and it consequently forms an ad- 
 ditional amount of instruments. The various agricultural im- 
 provements with which invention enriched that art in Biitain 
 towards the conclusion of the last, and commencement of the 
 present century, occasioned a great amount of materials to be 
 wrought up, which before lay dormant. The construction of the 
 plough in Scotland, and generally over the island, was so im- 
 proved that two horses did t.he work of six oxen. The diminu- 
 tion of outlay thus produced, giving the farmer, from a smaller 
 capital, an equal return; he was encouraged and enabled to apply 
 himself to materials, which he would otherwise have left, as his 
 forefathers had done, untouched. He carried off stones from his 
 fields, built fences, dug ditches, formed drains, and constructed 
 roads. — Lime was discovered to be a profitable manure. The 
 additional returns, which the hard clay thus converted into a 
 black loam yielded, were spent in the cultivation of land before 
 waste, in levelling and reducing to regularity, the rude ridges of 
 antecedent periods. — Tiie culture of turnips was introduced ; and 
 instead of useless fallows the farmer had a large supply of a nutri- 
 
262 OF THE NATURE OF STOCK. 
 
 live food for his cattle. He erected better buildings for the 
 reception of his stock, he improved their breed, he transported 
 manure from great distances, he had his fields trenched deeply 
 with the spade, fresh soil brought up, and all useless or prejudi- 
 cial matters buried beneath. Each succeeding improvement 
 gave a fresh stimulus to industry, and brought new materials 
 within the compass of the providence of the agriculturist. Nor 
 was this all ; the stimulus reacted also on the inhabitants of the 
 towns, and their industry was augmented by the increased returns 
 yielded by the country, and by the new demands made by it. 
 Improvements, too, in the branches of industry in which they 
 were themselves engaged, of at least equal extent, carried them 
 forward in a like career. Rocks were quarried ; forests were 
 thinned ; lime was burned ; the metal left the mine ; large manufacr 
 luring establishments arose ; wharfs, docks, canals, and bridges 
 were constructed ; villages were changed into towns, and towns 
 into cities. 
 
 It is thus that exery improvement animates industry, and 
 though it cannot increase the amount of instruments immediately 
 possessed by the society, or the sum of the values produced by 
 measuring the one with the other, shows that the members of the 
 society really estimate them higher than they would thus be rated, 
 by their instantly commencing to work up, into analogous instru- 
 ments, inferior or more stubborn materials, or by their working up 
 similar materials more laboriously. The amount thus wrought 
 up, until the process stops, by the total instruments constructed 
 arriving at an order correspondent to the effective desire of ac- 
 cumulation of the society, must depend entirely on the nature of 
 those iTiaterials, and is, therefore, always a variable quantity, and 
 one never to be ascertained previous to the event. Sometimes 
 a very small improvement may put a large range of materials 
 within reach of the accumulative principle, sometimes a very 
 considerable improvement may not enable it to make much ad- 
 dition to the stock of instruments before constructed. 
 
 When misfortunes befal the general industry of a community, 
 improvements, though they may not add to the national capital, 
 prevent or lessen the threatened diminution of it. In agricul- 
 ture, the introduction of the drill husbandry for grain crops, and 
 the discovery of new manures ; in manufactures and trade, the 
 improved construction of steam engines, the discovery of railroads^ 
 
OF THE NATURE OF STOCK. 263 
 
 and many other recent improvements, have taken off part of the 
 weight of the iieavy burden, that has of late years been imposed 
 on the resources of Great Britain. 
 
 The high rate of profit, which, unless when counteracting causes 
 intervene, follows the introduction of improvement, is indicative 
 of an immediate proportional augmentation of the absolute capi- 
 tal of the society, and produces a subsequent addition to its rela- 
 tive capital, the amount of which is determined by the additional 
 capacity which the materials in possession of the community can 
 receive, and by the quantity of materials of the next lower grades 
 owned by it. That high rate of profits, again, which arises from 
 a deficiency in the strength of the effective desire of accunuilation, 
 is essentially different. It indicates no increase of the absolute 
 capital of the society, no recent increase of the revenue of its 
 members, no greater abihty to support public burdens, and no 
 approaching increase of relative capital. The want of a clear 
 perception of this distinction, seems to have led Adam Smith, and 
 some other writers, to speak of high profits as generally preju- 
 dicial. 
 
 In countries where the effective desire of accumulation is low, 
 profits are of necessity high. Such countries, too, from their 
 inability to work up into instruments the same materials, must 
 always be poorer than their neighbors. Hence high profits have 
 been regarded as indicating, and producing poverty. This pre- 
 judice is one source of the errors of Sir Joshua Child on this 
 subject, and it seems to have given rise to one or two rather de- 
 clamatory passages in the Wealth of Nations. " Our merchants 
 and master manufacturers complain much of the bad effects of 
 high wages in raising the price, and thereby lessening the sale of 
 their goods, both at home and abroad. They say nothing »con- 
 cerning the bad effects of high profits ; they are silent with regard 
 to the pernicious effects of their own gains; they complain only 
 of those of other people." * Now I apprehend that high 
 profits springing from improvement, can never lessen the sale of 
 goods either at home or abroad, for they do not occasion a rise in 
 their price, but rather a fall in it. — " In countries which are just 
 advancing to riches, the low rate of profit may, in the price of 
 many commodities, compensate the high wages of labor, and 
 
 * Wealth of Nations, Book 1. c. ix. The paradox contained in the passage 
 preceding this quotation is exposed by Mr. Ricardo. 
 
264 OF THE NATURE OF STOCK. 
 
 enable ihose countries to sell as cheap as their less thriving neigh- 
 bors, among whom the wages of labor may be lower,"* In 
 countries rising to riches, I conceive, that profits will commonly 
 be high. They will be higher than where, the principle of ac- 
 cumulation having had time to work up all the materials within 
 reach of its strength, a slop is put to its farther advancing the 
 stock of existing instruments, and the state of the society becomes 
 stationary. If they be lower than in other countries, during the 
 progress, it is from the greater strength of this principle. 
 
 In North America, profits and labor have been permanently 
 hioh, from the unintermitting transfer to that continent of Euro- 
 pean arts, and from the generation of new arts in the country 
 itself. In Russia the passage, in like manner, of new arts has 
 kept the rate of profits high. But, of all civilized countries of 
 the present day, these, probably, are the most rapidly advancing 
 to riches. 
 
 It thus appears, that it is through the operation of two princi- 
 ples, — the accumulative, and inventive, that additions are made 
 to the stocks of communities. It would contribute something to 
 accuracy of phraseology, and therefore to distinctness of con- 
 ception, to distinguish their modes of action by the following 
 terms : 
 
 1. Accumulation of stock or capital, is the addition made to 
 these, through the operation of the accumulative principle. 
 
 2. Augmentation of stock or capital, is the addition made to 
 them, through the operation of the principle of invention. 
 
 3. Increase of stock or capital, is the addition made to them, 
 by the conjoined operation of both principles. 
 
 Accumulation of stock diminishes profits ; augmentation of 
 stock increases profits ; increase of stock neither increases nor 
 diminishes profits. 
 
 * Wealth of Nations, Book I. c. ix. 
 
CHAPTER XI 
 
 OF LUXURY. 
 PART I. 
 
 The general tendency of all the circumstances, the nature and 
 causes of which it has been our aim hitherto to investigate, is to 
 advance the wealth of society, the capital and stock of commu- 
 nities. Were the operation of the principles of invention and 
 accumulation to go on unchecked, the amount of the stock of all 
 nations would be gradually and uninterruptedly increased ; the 
 one furnishing the means of providing additional supplies for the 
 wants of futurity, the other giving the motives to make the pro- 
 vision. But there are opposite principles, the tendency of which 
 is either to retard the progress of the general stock, or actually 
 to diminish the amount already existing. To some of these we 
 have now to attend. 
 
 As the prevalence of the benevolent and social affections, and 
 the strength of the intellectual powers, are the great springs from 
 which the increase of the wealth and prosperity of communities 
 arise, so it might be expected, as I believe it will be found, 
 that the diminution of that wealth is chiefly occasioned by the 
 spread of contrary principles, by the ascendency of the purely 
 selfish, and debasement of the intellectual and moral parts of our 
 nature. 
 
 The first of these principles, of which we have to consider the 
 operation, is vanity ; by which term I understand the mere desire 
 of superiority over others, without any reference to the merit of 
 that superiority. A perfect being may be desirous of superiority 
 in well-doing, not on account of surpassing others, but from 
 pleasure in the good he does. A very evil being may derive 
 satisfaction from a superiority in evil-doing, simply from the 
 pleasure which the certainty of having been the cause of very 
 great misery may give him. But there seems to be a feelin?,^ that 
 
 34 
 
266 OF THE NATURE OF STOCK. 
 
 finds its proper gratification in merely going beyond others, with- 
 out reference to the path taken. It would be gratified by excel- 
 ling in vice, were it not that the moral feeling restrained it ; it 
 would be gratified by excelling in virtue, were it not that immoral 
 propensities incapacitate it from attaining an eminent degree of 
 it. It is this which, for want of a better word, I distinguish by 
 the term vanity. It is a purely selfish feeling ; its pleasures centre 
 in the individual ; and if it does not endeavor to diminish the 
 enjoyments of others, it is never directly its object to increase 
 them. When, in the course of its action, pleasure is communi- 
 cated to others, this arises from its being then blended with other 
 feelings. 
 
 Its aim, in all cases that concern our subject, is to have what 
 others cannot have. One of the most perfect instances of it ever 
 exhibited was when Cleopatra caused a very precious pearl to be 
 dissolved, that she might consume it at a draught. There could 
 be here no pleasure in the taste of tlie liquor, that must have 
 been rather disagreeable ; the gratification consisted in having 
 drank what no one else could afford to drink. The son of the 
 famous Roman actor performed a similar feat.* 
 
 We learn from Pliny f that it became a sort of fashion at 
 Rome as it seems to have been in the East.| 
 
 But it is seldom that this feeling fixes itself upon objects that 
 gratify it alone, on objects solely desirable from the difficulty of 
 obtaining them, and from the consequent superiority which their 
 possession implies. It rather prefers such as have also qualities 
 capable of gratifying other desires, or ministering to other pleasures. 
 The amount, however, of these other wants supplied by the objects 
 it covets is often very small ; if this be large enough to distinguish 
 them from matters altogether useless, it seems very frequently 
 sufficient for its purpose. The extravagances of the table in 
 which the Romans indulged were of this sort. The enjoyment 
 afforded by the articles consumed must evidently have arisen, 
 almost altogether, from the high price they cost. A dish of 
 nightingale's brains could scarcely be a very delicious morsel, yet 
 
 * Filius iEsopi detractam ex aure Metclla; 
 Scilicet ut decies solidum exsorberet, aceto 
 Uiluit insignem baccam. 
 [lor. Sat. 11. IV. The value, 1,000,000 sestertii, was equalto about £5,000. 
 t FHn. IX. 59. 
 i Vis margaritarum aceto subactu. Quintus Curtius. 
 
OF THE NATURE OF STOCK. 357 
 
 Adam Smith quotes from Pliny the price paid for a single 
 nightingale as about £66. £80 were given for a surmullet. 
 According to Suetonius, no meal cost Vitellius less than £2000. 
 The enormous prices paid for various articles of dress and furni- 
 ture could have proceeded alone from the promptings of similar 
 desires. Thus Adam Smith reckons the cost of some cushions 
 of a particular sort used to lean on at table, at £30,000. 
 
 The things to which vanity seems most readily to apply itself 
 are those of which the use or consumption is most apparent, and 
 of which the effects are most difficult to discriminate. Articles 
 of which the consumption is not conspicuous, are incapable of 
 gratifying this passion. The vanity of no person derives satis- 
 faction from the sort of timber used in the construction of the 
 house he occupies, because the wood work is usually concealed 
 by paint or something else. Again : if the effects produced by 
 it can be ascertained with accuracy, the object seldom affords the 
 means of sufficiently marking superiority. Thus coal is con- 
 sumed for the heat given out by it, and the different quantities of 
 heat yielded by different qualities of coal are easily ascertained. 
 One scarcely, therefore, prides himself on burning one sort, in 
 preference to another. It is not equally easy to ascertain how 
 much the marble of which his chimney is composed exceeds, or 
 comes short, in the beauty, the variety, and arrangement, of its 
 colors, the same sort of material made use of, for similar purposes, 
 by his neighbors. Fancy here, stimulated by vanity, may raise 
 the one more or less over the other, and according, therefore, to 
 the strength of the passion will the assumed superiority be greater 
 or less. Few things have qualities belter fitted for the gratifica- 
 tion of this passion than liquors. Their peculiar flavors and 
 tastes are sufficient to distinguish them, and yet afford no room 
 to determine how much the one exceeds the other. The imao^in- 
 ation, also, seems to have a peculiar power over the organs of 
 taste and smell, and to be able, through the instrumentality of 
 habit, to bring them to receive pleasure from what at first was 
 indifferent, perhaps even disagreeable. Hence it is impossible 
 to set any bounds to the superiority which one may acquire 
 over another, from the influence of this passion ; and it may 
 almost be laid down as a general rule with regard to them, that 
 any one that is at all drinkable, becomes fit for being placed at 
 the tables of the luxurious, by being carried a sufficient distance 
 
268 OF THE NATURE OF STOCK. 
 
 from the place of its manufacture. Thus, during the peninsular 
 war, London porter was largely consumed in Spain by the very 
 classes who, in England, reckon it a mark of vulgarity to drink it 
 at all. 
 
 It is not, indeed, to be disputed, that the rarity and costliness 
 of the liquors, and other similar commodities consumed by an 
 individual, may heighten greatly the absolute pleasure he derives 
 from them. This arises from a trait in the character of man, 
 which we have every day opportunities of observing. The 
 attention is always roused in a greater degree by an object, when 
 it excites more than one faculty. Two flowers together, the one 
 having the beauty without the scent of the rose, and the other 
 its scent without its beauty, would not afford so much pleasure as 
 that plant. We prefer fruit that has a fine color ; it absolutely 
 tastes better. The taste is quickened by the additional stimulus 
 which the eye's being caught by the beauty of the color gives to 
 the sensation, in the same way as a blow, long expected, is felt 
 more than one coming unawares. In a similar manner, the mere 
 costliness of wines, or meats, rouses the sense to a keener percep- 
 tion of pleasure, by awakening the vanity ; and, w4ien the indi- 
 vidual is conscious of being a connoisseur in such matters, this 
 very potent mover of our thoughts and sentiments is, besides, 
 excited by the discernment shown in the discrimination, and by 
 the familiarity thence implied with rare wines and meats, and, 
 consequently, with what is called the best society. The slight, 
 and, to another person perhaps, scarcely perceptible relish which 
 the contents of the glass, or the dish, leaves on the palate, is 
 seized and dwelt upon, and being associated and wrought up with 
 more exciting and intellectual delights, is fixed in the mind of the 
 sentimental epicurean as something infinitely surpassing what he 
 would otherwise have conceived of it. Had pearls, when dis- 
 solved in vinegar, produced a beverage that the imagination could 
 possibly have transformed into a delicacy, how would it not have 
 been extolled by the Romans ! 
 
 The general consumption of any commodity by the vulgar 
 lessens, on the contrary, in many minds, the pleasure it would 
 otherwise give. It brings down the individual, in this particular, 
 to a level with the lowest. This feeling gave rise to the excla- 
 mation of a once celebrated northern Dutchess, " What a pity 
 that eggs were not a sixpence the piece." 
 
OF THE NATURE OF STOCK. 269 
 
 The Roman moralists and satirists ground many of their invec- 
 tives against the extravagance of the times, on the want of con- 
 nexion between the quahties of the articles and the estimation in 
 which they were held.* Heliogabalus confessed, that it was the 
 relish which the dearness of the dishes gave to them, that led to 
 the evtravagance of his table, and liked to have the price of his 
 food overrated, because this sharpened his appetite. 
 
 Were proofs wanting of how very slight grounds the taste has 
 for its judgment, in declaring this to be delicious, and that beneath 
 notice, we might find them in its variations in different times and 
 places. It seems only content in preferring what is expensive. 
 Yet, however different, each society in perfect sincerity believes 
 its system the best. Who could relish now-a-days a Roman 
 feast? Certainly, however, they believed that in cookery, as in 
 other arts, they had attained the summit of real perfection. Of 
 their good faith in this belief they gave a singular instance. A 
 very expensive and much esteemed sauce was made by them 
 out of the probably half rotten entrails of certain fish.f So con- 
 vinced, however, were they of its superlative delicacy, that they 
 had the care to make a formal law specially prohibiting its being 
 given or sold to the barbarians. J They were seriously fearful 
 lest, should these rude M'aniors only taste it, it might so highly 
 gratify their appetite, as to bring them down at once upon the 
 empire. They came, notwithstanding, but neither they nor their 
 more polished descendants seem to have found particular charms 
 in the garum. 
 
 We find the estimation of every article, whether of dress, of 
 
 * Laudas, insane, trilibrem 
 Mullum : in singula quem minuas pulmenta necesse est. 
 Ducit te species, video. Quo pertinet ergo 
 Proceros odisse lupos ? quia silicet illis 
 Majorem natura modum dedit, his breve pondus. 
 
 Hor. Sat. II. L. II. 
 
 ' Interea gustus elementa per omnia quseront, 
 
 Nunquam animo pretiis obstantibus ; interius si 
 Attendas magis ilia juvant quae pluris emuntur. 
 
 Juvenal, XI. Sat. 
 t Aliud etiamnum liquoris exquisiti genus, quod garon vocavere, intestinis 
 piscium casterisque quas abjicienda essent, sale maceratis ut sit ilia putrescen- 
 tium sanies. — Nee liquor ullus psene praeter unguenta, majore in pretio esse 
 caepit. Plin. lib. 31. c. 8. Nat. His. 
 
 X The edict was in the time of the Emperors Valens and Gratian. Gold 
 and wine were laid under a similar prohibition. 
 
270 OF THE NATURE OF STOCK 
 
 furniture, or of equipage, if to be seen by many, regulated also, 
 in a very great degree, by the gratification it affords this passion. 
 " With the greater part of rich people, the chief enjoyment of 
 riches consists in the parade of riches ; which, in their eyes, is 
 never so complete as when they appear to possess those deci- 
 sive marks of opulence which nobody can possess but themselves. 
 In their eyes, the merit of an object, which is in any degree 
 either useful or beautiful, is greatly enhanced by its scarcity, or 
 by the great labor which it requires to collect any considerable 
 quantity of it; a labor which nobody can afford to pay but them- 
 selves. Such objects they are willing to purchase at a higher 
 price than things more beautiful and useful, but more common.'' * 
 Though its influence now, perhaps, is not so great as it was among 
 the ancients, it is yet more apparent. The progress of art has 
 been such, that there is scarcely any material, or fabric, or color, 
 the production of which it does not so much facilitate as to bring 
 it within the reach of a large mass of consumers. It then loses 
 its value as a distinction, and ceases to serve the purposes of 
 vanity. Hence arises the necessity for the variety, and seeming 
 caprice, of fashion. What Adam Smith applies to one class of 
 articles, will apply, in a great measure, to the whole expenditure 
 of the opulent. " When by the improvements in the productive 
 powers of manufacturing art and industry, the expense of any 
 one dress comes to be very moderate, the variety will naturally 
 be very great. The rich, not being able to distinguish themselves 
 by the expense of any one dress, will naturally endeavor to do 
 so by the multitude and variety of their dresses." f 
 
 To attempt to enumerate the modes in which fashion varies 
 the fitness of things for the purposes of its votaries, were little 
 profitable, and is, I apprehend, superfluous, its extended influ- 
 ence will hardly be disputed. " What is the cause," demands 
 Mr, Storch,! " that gives so high a value to the rare jewels with 
 which opulence loves to deck itself? Is it the pleasure they 
 give the eye, by the brilliancy of their reflected light ? No ; 
 that slight enjoyment has no relation to their value ; it is because 
 they attest the wealth of him who wears them. Such are all the 
 objects of this sort of luxury : the amount of enjoyment they give 
 
 * Wealth of Nations, B. I. c. XI. 
 
 1 Idem. B. IV. c. IX. 
 
 t Cours d'Economie Politique, liv. VII. c. V. 
 
OF THE NATURE OF STOCK. 271 
 
 through the direct medium of the senses is nothing, in compari- 
 son of that which they yield by the display that can be made of 
 them to others — even objects which seem by their nature to 
 have no other end but to please the senses, are almost altogether 
 estimated by the gratification this display produces. Consider a 
 sumptuous repast given by opulence, separate from it, in thought, 
 every thing that serves only to show the riches of him wdio gives 
 it, and leave nothing absolutely on the table but what may gratify 
 the appetite of the individual : what would remain ? In short, 
 if we take a general survey," continues the same author, " of all 
 that expenditure which is made after the natural desires are satis- 
 fied, we will perceive that it is almost altogether occasioned by 
 the desire to appear rich." * This desire of appearing superior 
 to others thus keeps a vast number of things in a state of cease- 
 less revolution. All this domain is under the rule of fashion. 
 
 Diruit, sedificat, mutat quadrata rotundis. 
 
 It destroys before its time, as IVIr. Say complains, whatever it 
 lays its hands on. " Any thing which a person has provided 
 himself with, to serve some useful purpose, is preserved as long 
 as possible, its consumption is gradual. An object of luxury is 
 of no use fi'om the moment it ceases to gratify either the senses, 
 or the vanity, of its possessor. It is destroyed, at least in greater 
 part, before having ceased to exist, and without having supplied 
 any real want ; — luxury has in abhorrence every profitable 
 expense." 
 
 The expenditure occasioned by this desire falls on all classes 
 of society. To supply it takes a large portion of the revenue of 
 Avhat are called the middle classes, of those who have difficulty 
 to prove their claim to be so ranked, of those who are comfort- 
 able in the lower classes, and even of those who have difficulty 
 in procuring absolute necessaries. " In all classes," says Mr. 
 Storch, " the desire of show (le luxe (T ostentatioii) has been 
 able to identify itself with whatever serves the comfort or the 
 conveniences of hfe. It is this which borders with a narrow lace 
 the head dress of the country girl, and gives to her whole attire 
 colors and a shape foreign to its utility."! 
 
 I should wish to apply, to the expenditure occasioned by the 
 
 * Traite d'Economie Politiqae, liv. VII. c. IV. 
 t Liv. VII. c. V. 
 
272 OF THE NATURE OF STOCK. 
 
 passion of vanity, the term luxury. Though that word has pro- 
 perly a wider signification, it is perhaps the one that comes nearest 
 to mark the thing we speak of. 
 
 It is somewhat difficult to define precisely how far the limits 
 of luxury, so understood, extend. It is a point which, probably, 
 different people would fix differently. Whatever amount of 
 pleasure any thing gives, that is entirely distinct from its rarity, 
 or any association with that circumstance, certainly is not luxury. 
 There is a pleasure in the sight of certain shapes and colors, and 
 arrangements of them, which is quite independent of their cost ; 
 there is a fitness, also, in the texture of certain fabrics, to pre- 
 serve from the extremes of heat and cold, to add to the beauties 
 of feature or form, and to correct their defects, that, of itself, gives 
 pleasure ; there are pleasures, too, which the mind creates to 
 itself, out of the associations of these. We feel pleasure, in a 
 cold day, in looking at a person well wrapped up in warm furs, 
 as in a hot day, in seeing that one has no lack of clean linen. 
 A nobleman of a right mind experiences gratification from seeing 
 the clean sheets and warm blankets of the peasant, as well as 
 when he enters and looks round his own sedulously arranged 
 chamber. It is this feeling we experience when we say that 
 such a house, or dress, has an air of comfort about it. The term 
 has properly reference to the sensual, and to the benevolent, not 
 to the selfish feelings. The sight of statues, paintings, flowers, 
 is also capable of affording a high degree of gratification to many 
 minds. The degree of pleasure thus experienced is different in 
 different individuals, and it is scarcely possible to ascertain what 
 its exact amount is in any one ; hence the difficulty, in most 
 cases, of determining what is, or is not, luxury. Mr. Storch, in 
 a chapter of his system from which I have already quoted, ob- 
 serves : " All the ornaments which decorate the apartments of 
 the rich, that gilt work, those sculptures which art and taste 
 seem to have formed solely to delight the mind, are nothing but 
 a sort of magical characters, presenting every where this inscrip- 
 tion : Admire the extent of my riches." Vanity, there can be 
 little doubt, is the predominating feeling prompting to the con- 
 struction of sucli apartments ; it is not, however, the only one. 
 Well executed statues, even elegant gilding, have certainly some- 
 thing in themselves pleasing to the eye, and to the mind, of the 
 beholder, whether owner or guest. The larger part of the grati- 
 
OF THE NATURE OF STOCK. 273 
 
 fication derived is drawn probably in most cases from vanity, and 
 we occasionally meet with a character whose pleasures are alto- 
 gether those of ostentation ; like Pope's prodigal, 
 
 Not for himself he sees, or hears, or eats, 
 Artists must choose his pictures, music, meats: 
 He buys for Topham drawings and designs, 
 For Pembroke, statues, dirty gods, and coins; 
 Rare monkish manuscripts for Hearne alone, 
 And books for Mead, and butterflies for Sloane. 
 
 But, in most cases, real enjoyment mixes largely with mere 
 vanity, in every expenditure of the sort. 
 
 Adam Smith remarks, that " It is not by the importation of 
 gold and silver that the discovery of America has enriched 
 Europe. By the abundance of the American mines those metals 
 have become cheaper. A service of plate can now be purchased 
 for about a third part of the corn, or a third part of the labor, 
 which it would have cost in the fifteenth century. With the 
 same annual expense of labor and commodities, Europe can 
 annually purchase about three times the quantity of plate which 
 it could have purchased at that time. But when a commodity 
 comes to be sold for a third part of what had been its usual price, 
 not only those who purchased it before can purchase three times 
 their former quantity, but it is brought down to the level of a 
 much greater number of purchasers, perhaps to more than ten, 
 perhaps to more than twenty times the former number. So that 
 there may be in Europe, at present, not only more than three 
 times, but more than twenty or thirty times the quantity of plate 
 which would have been in it, even in its present state of improve- 
 ment, had the discovery of the American mines never been made. 
 So far Europe has, no doubt, gained a real conveniency, though 
 surely a very trifling one. The cheapness of gold and silver 
 renders those metals rather less fit for the purposes of money 
 than they were before. In order to make the same purchases, 
 we must load ourselves with a greater quantity of them, and 
 carry about a shilling in our pocket, where a groat would have 
 done before. It is difficult to say which is most trifling, this in- 
 conveniency, or the opposite conveniency."* I suspect there is 
 also a little exacrg-eration here, as the words of the author in 
 another place would prove. " If you except iron, the precious 
 
 * Wealth of Nations, B. IV. c. I. 
 
 35 
 
274 OF THE NATURE OF STOCK. 
 
 metals are more useful than any other. As they are less liable 
 to rust and impurity, they can more easily be kept clean ; and 
 the utensils, either of the table or the kitchen, are often, upon 
 tliat account, more agreeable when made of them. A silver 
 boiler is more cleanly than a lead, copper, or tin one ; and the 
 same quality would render a gold boiler still better than a silver 
 one." * But, if we should admit that silver, as a commodity 
 possessing many useful qualities, is valuable on other accounts 
 than its scarcity, we must also grant that a very large share of 
 other departments of the expenditure of the wealthy consists of 
 mere luxuries, — articles, the sole gratification afforded by which 
 is, that they alone can afford to possess them. It is then, I appre- 
 hend with some truth, that, in another part of the Wealth of Na- 
 tions, the author, in tracing the causes which brought on the 
 diminution of tlie power of the great feudal lords, and ascribing 
 them chiefly to their expending their revenues on the produce of 
 foreign commerce and manufacture, instead of maintaining a large 
 retinue, characterizes the bulk of the articles constituting this 
 expenditure as useless for any other purpose than the gratifica- 
 tion of a selfish vanity. " All for ourselves, and nothing for 
 other people, seems, in every age of the world, to have been the 
 vile maxim of the masters of mankind. As soon, therefore, as 
 they could find a method of consuming the whole value of their 
 rents themselves, they had no disposition to share them with any 
 other persons. For a pair of diamond buckles, perhaps, or some- 
 thing as frivolous and useless, they exchanged the maintenance, 
 or what is the same thing, the price of the maintenance, of a 
 thousand men for a year, and with it the whole weight and 
 authority which it could give them. The buckles, however, 
 were to be their own, and no other human creature was to have 
 any share of them ; whereas, in the more ancient method of 
 expense, they must have shared with at least a thousand people. 
 With the judges that were to determine the preference, this dif- 
 ference was perfectly decisive ; and thus, for the gratification of 
 the most childish, the meanest, and the most sordid of all vani- 
 ties, they gradually bartered their whole power and authority. 
 Having sold their birthright, not like Esau, for a mess of pottage 
 in time of hunger and necessity, but, in the wantonness of plenty, 
 
 * Wealth of Nations, D. I. c. XI. 
 
OF THE NATURE OF STOCK. 275 
 
 for trinkets and baubles, fitter to be the ^playthings of children 
 than the serious pursuits of men, they became as insignificant as 
 any substantial burgher or tradesman in a city." * Even here, 
 too, there is some exaggeration ; the seat of a wealthy modern 
 nobleman exceeds the rude castle of his half barbarous ancestor, 
 not only in the gratification it gives to the personal vanity of its 
 possessor, but also in the refined enjoyments it affords its inmates. 
 The exact proportion between the mere luxuj'ies and the absolute 
 enjoyments, in this as in other cases, is indeed impossible to 
 ascertain. The former, however, undoubtedly make a very large 
 portion of the total amount. 
 
 As we descend in the scale, from the persons and mansions of 
 those who have the fortune to possess hereditary wealth and 
 hereditary claims to good society, to those who have themselves 
 accumulated, or are employed in accumulating riches, and raising 
 themselves to distinction, from thence to the lower grades of life, 
 and, at last, to the mere drudges of the community, we shall find 
 every step we take marked by a greater prominence in two cir- 
 cumstances. The amount expended on what are neither the 
 necessaries nor conveniences of life becomes less, but that expen- 
 diture is more decidedly mere luxury. Taste gives enjoyment 
 even to the wildest extravagance of those whose chief occupation 
 has been to devise means to enjoy life, and to make it agreeable 
 to others ; but he whose business has been, or is, to discover the 
 best means of gaining wealth, though he may yield less to the 
 desire of show, does so more thoroughly. He becomes a mere 
 imitator, and, like most imitators, is apt to retain all the defects 
 and to drop much of the graces of his copy. 
 
 Vanity is combated by the strength of the social and benevolent 
 affections and intellectual powers. The former represent its 
 excesses as hurtful, the latter as absurd. The same principles, 
 therefore, which give strength to the effective desire of accumu- 
 lation, diminish the sway of this passion. Hence, in all societies, 
 where the effective desire of accumulation is high, and instruments 
 consequently at orders of slow return, or only kept at orders of 
 quick return from the progress of improvement, vanity and luxury 
 will prevail but little ; while, in societies where the effective 
 desire of accumulation is low, and instruments, not in conse- 
 
 • Wealth of Nations, B. III. c. IV. 
 
276 OF THE NATURE OF STOCK. 
 
 quence of superabundance of materials or recent improvements, 
 but of the inability of the community to work up any but the 
 best materials, are at orders of very quick return, such a state 
 of things, indicating a weakness in the social and benevolent 
 affections, and in the intellectual powers, is generally accom- 
 panied by great strength, and the general prevalence of vanity 
 and luxury. 
 
 Savages, in general, are remarkable for the influence which 
 vanity has over them, and for their propensity to give up any 
 provision they may have made for the future, or to suffer severe 
 privations, to have the means of decking their persons or habita- 
 tions with something rare and costly, distinguishing them from 
 others. Beads, bones, plumes of feathers, porcupine quills, gay 
 colors, and all the rarities of their native abodes, are sought out, 
 and wrought up by them with great labor. They besides cut 
 their flesh, or tattoo their skin, the operation costs severe pain, and 
 requires some skill, and the bearing the testimony of this outlay 
 about with him is as real a gratification to the vanity of the savage 
 as a diamond ring to that of an European. Their intercourse 
 with civilized nations turns their desires towards fineries of Euro- 
 pean manufacture. Glass beads, trinkets of silver, or, if it be not 
 to be had, of tin, fine cloths, showy cottons and silks then make 
 up a large part of their expenditure.* 
 
 All travellers speak of the vanity of the Chinese, and of their 
 propensity to show. Their ghttering gilding, variegated silks, 
 and crispy cows' hair dyed red, with them the most splendid of 
 ornaments, catch the eye of every stranger, and contrast strongly 
 with the squalid poverty and misery that is the constant portion 
 of a considerable part of the population, and occasionally invade 
 the whole mass. One of the father Jesuits, in speaking of the 
 necessity of his brethren's changing their habits and style of 
 living, observes, that, " besides other reasons, they are obliged to 
 conform to the general custom of the country ; that even indi- 
 viduals of the common people, when they go to visit any one, 
 dress themselves in silk, and have themselves carried in a chair. 
 This does not pass with them for vanity, or affectation of gran- 
 deur, but for an evidence that they esteem the persons whom 
 they visit, and that they themselves are above absolute want, 
 and are not in a despicable condition.'' f This attention to a 
 
 * See note I. t Lettres Edificantes, vol. IX. p. 531. 
 
OF THE NATURE OF STOCK. 277 
 
 showy exterior seems to have led Mr. Ellis to form too high an 
 estimate of the general opulence and comfort of the people. " I 
 have been much struck," he says, " in all Chinese towns and 
 villages with the number of persons apparently of the middling 
 classes ; from this I am inclined to infer a wide diffusion of the 
 substantial comforts of life, and the consequent financial capacity 
 of the country." * 
 
 The Romans are still more conspicuous instances of the ex- 
 travagance into which this passion betrays nations. Vanity 
 reigned throughout their expenditure. The decorations of their 
 persons and mansions were a show of the most costly luxuries. 
 
 " Gemmas, marmor, ebur, Tyrrhena sigilla, tabellas 
 Argentum, vestes Gaetulo murice tinctas." 
 
 The head, the neck, the arms, the fingers, of a Roman lady were 
 loaded with jewels. Pliny relates that the jewels which Lollia 
 Paulina, the wife of Caligula, even after her repudiation, carried 
 on her person when attired simply for paying visits, were worth 
 forty millions of sesterces, upwards of two hundred thousand 
 pounds sterhng. According to the same author, women of the 
 greatest simplicity and modesty durst no more go without dia- 
 monds than a consul without the marks of his dignity. The 
 men, also, he tells us, wore on their fingers a variety of the most 
 expensive rings, rather loading than adorning them. It was 
 common to have tables and other articles of ivory, or of the 
 precious metals. The plate and tables of Heliogabalus were of 
 pure gold. Examples of their excessive luxury in articles for the 
 table have been already given, and many more might be added, 
 were it necessary to repeat what has been often narrated. f 
 
 The magnificence of the eastern Empire was perhaps even 
 greater than that of Rome itself. It reflected something of the 
 excessive splendor of the Babylonish and other Asiatic monarchies. 
 Chrysostom thus describes the palaces of the nobles. " The roofs 
 made of wood were gilt. The doors, even the long folding doors, 
 were of ivory. In all the chambers the walls were incrusted with 
 marble. If they were only of common stone, it was covered with 
 plates of gold. The beams and ceilings were gilt, and the apart- - 
 
 * Embassy to China, Phil, edition, 1818, p. 237. 
 
 t The reader may consult Gibbon, or the work of M. d'Arnay sur la vie 
 privee dee Remains. 
 
278 OF THE NATURE OF STOCK. 
 
 ments were Inlaid with small stones, and often with precious stones. 
 Over the floors were sometimes spread very rich carpets. Their 
 taste for magnificence could bear nothing of the ordinary kind. 
 In the rooms were great pillars of marble, with their chapiters 
 gilt, and sometimes the whole pillars were gilt, statues by the 
 most excellent artists, pictures and mosaic work. The beds 
 were usually of ivory or of wood, gilt or covered with silver 
 plates, and sometimes of solid silver decorated w^ith gold. All 
 the furniture was surprisingly rich. The chairs and benches 
 were of ivory ; the pots and other vessels, even for the meanest 
 uses, were of gold and silver." * 
 
 Mr. Say has remarked, that there is a large part of the con- 
 sumption of the French, which is occasioned by their excessive 
 attention to mode and fashion, and that, in this respect, they con- 
 trast disadvantageously with the English, who pay more attention 
 to comfort and convenience, and less to the changing fancies by 
 which vanity seeks to distinguish itself. Instruments have never, 
 in France, been wrought up to orders of so slow return as in 
 England. 
 
 I believe it will be found that the strength of the effective de- 
 sire of accumulation, is higher among the workino; classes in 
 North America, than in Europe. The influence of vanity in 
 many cases, is certainly less. The consumption, for instance, of 
 coarse unbleached cotton, for shirting, is very great; this is cer- 
 tainly a more comfortable wear for a working man than the finer 
 sorts. It washes more easily, and endures more fatigue.f The 
 finer cottons, also, of American manufacture, are of a stouter 
 and more substantial fabric, indicating that the American pur- 
 chaser looks more to the wear of the article, the European to the 
 delicacy of the fabric. The same thing may be said of woolens. 
 A substantial farmer in England would scarcely, as one of the 
 same class in North America, think himself decently clad in a 
 winter's suit of which the cloth cost only a dollar per yard, though 
 a comfortable and durable dress. 
 
 * Chrysostom quoted by Jortin, Ecclesiastical History, vol. H. p. 359. 
 
 t Until about two years since almost all Upper Canada and the eastern 
 townships of Lower Canada, were supplied with American cottons of this 
 sort smuggled over. Patterns were sent to Manchester, and imitation Ameri- 
 can cottons got out, which now supply the Canadian side of the line ; they 
 do not, however, as far as 1 have been able to learn, pass to tlic other. 
 
OF THE NATURE OF STOCK. 279 
 
 It is to be observed, that, as vanity is opposed by the social 
 and benevolent affections and intellectual powers, according as 
 the one or the other of these preponderates, the manifestations 
 of that luxury which yet remains, are modified into some resem- 
 blance to what it approves. When the intellectual powers are 
 strong, this passion endeavors to elude them by attaching itself to 
 objects that it can represent as of permanent excellence. When 
 the benevolent affections are powerful, it endeavors to gain its 
 ends, by representing them as proceeding from a wish to gratify 
 others, and to share with them things, which are at least gener- 
 ally esteemed rare and valuable. In the former case it escapes 
 opposition, and finds vent in expensive buildings and decorations ; 
 in the latter in sumptuous entertainments, and luxuries of the 
 table. " In Holland," says Mandeville, "people are only sparing 
 in such things as are daily wanted and soon consumed ; in what 
 is lasting they are quite otherwise ; in pictures and marble they 
 are profuse ; in their buildings and gardens they are extravagant 
 to folly. In other countries you may meet with stately courts 
 and palaces of great extent that belong to princes which nobody 
 can expect in a commonwealth, where so much equality is ob- 
 served as there is in this; but in all Europe you shall find no 
 private buildings so sumptuously magnificent, as a great many 
 of the merchants' and other gentlemen's houses are in Amster- 
 dam, and some other great cities of that province, and the gener- 
 ality of them that build there, lay out a greater proportion of 
 their estates on the house they dwell in, than any people upon 
 the earth." * Something of the same genius may, I think, be 
 observed in the expenditure of the North Americans. Their 
 houses are frequently larger than they have use for, so that part 
 of them remains unoccupied. They are, also, often built with a 
 greater regard to show than comfort. There is little substantial 
 difference between a gold and silver watch, but that the former 
 costs double of the latter. Gold watches are perhaps more com- 
 mon in North America, than in any other part of the world. It 
 is pure vanity that leads to so general an adoption of this luxury, 
 by classes who in England would not think of it, but it is a vanity 
 that fixes itself on something permanent. In the end, there is 
 no cheaper way in which a man can write, " I am rich, or at least, 
 
 * Remark Q Fable of the bees. 
 
230 OF THE NATURE OF STOCK. 
 
 I am not absolutely poor," than to carry a gold watch. It is 
 ready to meet all occasions, and all persons.* In Britain, on the 
 other hand, the luxuries that mix themselves with the virtues of 
 hospitality are more apt to prevail. There rare wines, and refine- 
 ments in the dainties of the table are more common. 
 
 Besides the varied character with which the various strength 
 of the passion stamps different people, there is a difference, in 
 this respect, in the same people, between the agricultural popula- 
 tion and the inhabitants of cities, which the following sagacious 
 remarks of Montesquieu seem to me sufficiently to explain. 
 " The extent of luxury farther depends on the size of towns, 
 and especially of the capital. In proportion to thejDopulousness 
 of towns, the inhabitants are filled with notions of vanity, and 
 actuated by an ambition of distinguishing themselves by trifles. 
 If they are numerous, and most of them strangers to one another, 
 their vanity redoubles, because there are greater hopes of suc- 
 cess. As luxury inspires these hopes, each aiiian assumes the 
 marks of a superior condition. But, by endeavoring thus at dis- 
 tinction, every one becomes equal and distinction ceases ; as all 
 are desirous of respect, nobody is regarded." f 
 
 In the country it is different ; every one is known, and no one 
 can succeed in passing himself off for other than he is. In town 
 Molly Seagrim would have been admired as a fantastical fine 
 lady ; in the country she got herself mobbed. To account for 
 the difference, which we every where see between the dissipa- 
 tion of the town and the economy and frugality of the country, 
 we have only to consider, in addition to this, that in the country 
 there are always considerable facilities and encouragements, for 
 even the poorest to form instruments, unless in very anomalous 
 cases, such as that which the abomination of the poor laws has 
 introduced into England. In the country the poor man can de- 
 vote all his spare time, perhaps his only disposable fund, to the 
 cultivation of some plot of ground, to repairing his house, working 
 in his garden, and procuring food for his cow or his pig. He is 
 induced and enabled to place out all his little savings, as they 
 come in, on some profitable investment.^ Similar circumstances 
 
 * These observations apply to the population of British descent or birth on 
 both sides of the line. 
 
 t Esprit des Lois, B. VII. C. 11. 
 
 t One who has happened to reside in any part of Scotland, where facilities 
 
OF THE NATURE OF STOCK. ^Ql 
 
 operate similar effects on the man in middling circumstances, and 
 even on the rich man. It is the town, especially the metropolis, 
 that is the ruin of landed proprietors. 
 
 We may also, in a similar manner, explain the tendency of 
 new countries to engender industry and frugality. The very 
 scattered state of the population effectually keeps down vanity ; 
 the absolute necessity of working up the materials within reach, 
 rouses the accumulative principle to action, and the abundance 
 of these materials stimulates it to unremitting exertion. There 
 is hence no better school for the dissolute European than the 
 back woods. After a dozen years' residence in them, or in the 
 clearings to which he has helped to convert them, he comes out 
 a completely altered man. 
 
 It is perhaps proper to observe here, that no blame can attach 
 to individuals, for compliances with the follies to which the passion 
 of vanity prompts. It were a great mistake to imagine that even 
 its absurdities are easily avoidable. It is in vain for any one man 
 to oppose general opinions and practices, however ridiculous. If 
 he does so, he is sure to encounter greater evils than a compli- 
 ance with the customs of the society would inflict. It is the 
 business of the poor man to stand well with the world, else he 
 will scarcely make his way through it. It is his business, too, to 
 avoid a display of poverty. One is sure to have most friends 
 when they least need them. " Pour s'etablir dans le monde," 
 says Rochefoucauld, " on fait tout ce qu'on pent pour y paroitre 
 etabli." 
 
 " Notwithstanding my poverty," writes a Jesuit missionary 
 from China, " I have yet been able to relieve the extreme misery 
 of two poor Christians. The one had his house, his furniture, 
 and his implements of trade, destroyed by fire. The other was 
 by profession a physician, and some thieves had in the night 
 carried off his silk dresses ; they might as well have stolen his 
 
 of this sort exist, must have had opportunities of observing very remarkable 
 instances of the indefatigable industry they excite. Tracts of land, so very 
 barren and impracticable as to seem condemned to perpetual sterility, may 
 be seen in process of being converted into fertile soil, by being let out in 
 small patches at very long or perpetual leases. A portion of the estate of 
 Pilfoddles, near Aberdeen, almost a continuity of rock, was, I recollect, 
 so reclaiming about fifteen years ago. Those small feus, as they are termed, 
 are taken by laborers, who work on tliem at spare hours when their other 
 occupations fail them. 
 
 36 
 
282 OF THE NATURE OF STOCK, 
 
 profession and his reputation ; for here a physician, unless dressed 
 in silk and cow's hair, passes for ignorant, and is employed by no 
 one." The doctor who had lost his silken robes was probably 
 worse off than the mechanic ; the former was still in a condition 
 to find work, the latter was not. He probably, indeed, had 
 nankin left; but had he dressed in it, especially had he pretended 
 to say it was the more comfortable wear, he would have acted 
 about as wisely as would a poor young M. D. in England who 
 should, in cold winter days, attire himself in dreadnought. Who 
 would trust a case to so absurd a mortal ? 
 
 The man of independent fortune, again, though he need fear 
 no very serious evils from setting himself in direct opposition to 
 received modes of extravagance, will yet certainly incur the 
 charge of eccentricity, perhaps of niggardly parsimony. These 
 are small inconveniences, but he consults his ease in avoiding 
 them. 
 
 A person is then only properly guilty of inflicting an injury on 
 the community, when he runs into both acknowledged extrava- 
 gances and real luxuries. He is censured by some, but envied 
 and followed by others. An individual may, on the other hand, 
 somewhat advance the prosperity of the whole society, or at least 
 of the order in it in which he is himself ranked, by checking his 
 vanity when it urges him to adopt luxuries, permitted to his for- 
 tune, though not demanded by it. The nobleman who, in equi- 
 page and lackeys, keeps somewhat within the limits which his 
 revenues w^ould afford ; the tradesman's wife, who dresses in 
 calico instead of silk, are both, to a small extent, public benefac- 
 tors. Luxury, indeed, generally advances or recedes slowly, 
 and can scarce be successfully encouraged or opposed but by 
 degrees. There is always, and in every society, one line, to go 
 beyond which is acknowledged extravagance, and another, not 
 to come up to which is accounted sordid parsimony. Crassus 
 was ashamed to use some of his plate, the cost, even to him, 
 appeared too great.* It is invidious to run to expenses which 
 others cannot follow, and his guests would have felt themselves 
 too much outshone. He would have been more severely cen- 
 sured, had he ventured to entertain them in the simple style of 
 their ancestors. 
 
 * L. vero Crassus orator duos scyphos Mentoris artificis raanu ccelatos — 
 scstertiis C. — Confessus tamen est, nunquam se his uti propter verecundiara 
 ausum. Plin. Hist. Nat. 1. XXXUI. c. 11. 
 
OF THE NATURE OF STOCK. 233 
 
 It were very difficult to discover a society where vanity does 
 not more or less direct the necessary expenditure. Could this 
 be done, we should there find things estimated solely by their 
 physical qualities, and as these differ greatly, there would be 
 great differences in the estimate made of each. Whatever could 
 really set forth to advantage the beauty or grace of form or 
 feature, would be proportionally prized, as would real beauty in 
 articles of furniture, and in the form and decorations of apartments. 
 But under this supposition, other circumstances being equal, that 
 would always be prefeiTcd which was cheapest. If two articles, 
 therefore, were presented, of which the one w^as of much greater 
 real beauty than the other, but also much more expensive, though 
 it might be that the former would be preferred, its high cost 
 would be esteemed a defect, and would proportionally diminish 
 the pleasure yielded by it. Very expensive articles would, if 
 possible, be avoided. A very costly dress, for instance, would 
 affect the mind of such spectators disagreeably, as auguring either 
 a want of taste, or want of beauty in the wearer, requiring much 
 adventitious aid to help out the deficiency. It would produce a 
 disagreeable feeling, somewhat similar to that caused by the view 
 of a profuse expenditure of animal power, bringing about only a 
 small effect, and impressing, therefore, with an idea of defective 
 mechanism. In such a society the notions of most people, and 
 therefore the general rules of conduct, would in this respect be 
 completely different from what they generally are. 
 
 Sometimes, though rarely, this passion instead of leading to dis- 
 sipation, has an effect similar to an enlarged providence, and causes 
 the formation of instruments of slowly returning orders. This is 
 chiefly remarkable in buildings intended to be permanent. If the 
 materials and workmanship of these are not substantial, and such 
 as insure durability to the edifice, the defect is commonly per- 
 ceptible, and is ridiculed as proceeding from poverty, or from 
 dread of expense. The vanity of the rich man, therefore, here 
 excites him to work for succeeding generations, that he may give 
 the present a high idea of the extent of his resources. He 
 besides, in this way, hopes to make it apparent to his cotempo- 
 raries, that a monument of his prosperity and magnificence will 
 descend to future times. The same observation will apply to 
 public works undertaken by a proud and extravagant govern- 
 ment. Vanity is always an operator in their formation, and 
 
284 OF THE NATURE OF STOCK. 
 
 therefore their construction is never altogether regulated by the 
 strength of the accumulative principle, nor are they instruments 
 of the orders which it would indicate. " The proud minister of 
 an ostentatious court may frequently take pleasure in executing 
 a work of splendor and magnificence, such as a great highway, 
 which is frequently seen by the principal nobility, whose applause 
 not only flatters his vanity, but even contributes to support his 
 interest at court. But to execute a great number of little works, 
 in which nothing that can be done can make any great appear- 
 ance, or excite the smallest degree of admiration in any traveller, 
 and which, in short, have nothing to recommend them but their 
 extreme utility, is a business which appears in every respect too 
 mean and paltry to merit the attention of so great a, magistrate. 
 Under such an administration, therefore, such works are almost 
 always entirely neglected." * It is, however, to be observed, 
 that in regulating public works, and other public affairs, men 
 ought to pay more attention to the concerns of a distant futurity 
 than in the management of their private affairs. A century is a 
 small part of the existence of a nation, though it includes that of 
 several generations of individuals. In statesmen, therefore, in 
 the affairs of states, the accumulative principTle should be strong. 
 Great durability, consequently, in public works, is always desira- 
 ble. In like mannfer governments should borrow on different 
 principles from individuals. No one, for instance, now disputes 
 that it should have been the policy of Great Britain to have bor- 
 rowed as much on long annuities as possible. The misfortune 
 is, that statesmen generally think of themselves more than of 
 their country, and instead of grappling with present evils, let 
 them grow, content if they grow quietly and imperceptibly, and 
 do not threaten to deprive them of the gratification of maintaining 
 the pride of their power for a few years' political triumph. This 
 consideration may in part explain the cause of the great durability 
 of public works in China. It shows that the paternal charac- 
 ter of the government is in some measure a reality. I suspect, 
 however, that the contrast between the construction of public 
 and private works there, is more apparent from the diminishing 
 strength of the accumulative principle in that great Empire. I 
 shall presently have occasion to adduce some reasons for this 
 conjecture. 
 
 * Wealth of Nations, B. V. c. I. 
 
OF THE NATURE OF STOCK. 335 
 
 It is perhaps here worthy of remark, as serving to show that 
 ostentation and extravagance have very httle connexion with 
 any other species of enjoyment, but that which places its gratifi- 
 cations in some superiority over others, that in proportion as 
 nations are addicted to vanity and luxury, their range of bodily 
 enjoyments seems to become less. Cleanliness, for instance, 
 may be said to be a refined sensuality ; it is a real enjoyment, on 
 which the self-mortified ascetic wastes not his care ; and we find 
 that least attention is paid to it by the vain, and most by the 
 provident, so that other things being equal, where the effective 
 desire of accumulation is high, there it is most scrupulously ob- 
 served ; where it is low, it is little regarded. 
 
 The North American Indians seem really not to have any 
 notion of its existence. It appears to them, in other people, as 
 an affected and unaccountable scrupulosity,* The Chinese are 
 described as disgustingly filthy. The Romans were certainly, 
 as may be gathered from various passages in the Latin writers, 
 far from being what we would esteem cleanly. An English 
 gentleman would not think of writing to his friend that if he 
 dined with him he should find well-washed dishes. 
 
 Ne non cantharus et lanx 
 
 Ostendat tibi te ; t 
 
 Horace introduces a fanciful epicure, complaining of unwashed 
 goblets, want of table napkins and saw dust, as taking away from 
 the pleasures of a sumptuous feast. J In modern times Holland has 
 been esteemed the country of cleanliness ; England perhaps 
 ranks next. 
 
 Improvement can never facilitate the production of mere luxu- 
 ries. It cannot do so because it is not the thing itself, but merely 
 the quantity of labor embodied in it that vanity prizes. Diminish 
 the labor necessary for its production, and you take away what 
 this passion covets. It will, therefore, either consume a propor- 
 tionally larger quantity of the commodity, or will turn itself for 
 its gratification to other commodities of greater rarity, which a 
 greater amount of labor that is, or some equivalent to it is neces- 
 sary to purchase. 
 
 * See note J. 
 t Hor. Epist. Liv. I. V. 
 
 X Sat. IV. L. II. The Romans, it is true, bathed frequently, but then they 
 had neither soap nor linen, and woollens were high priced. 
 
2S6 OF THE NATURE OF STOCK 
 
 Pearls, as ornaments, probably derive nearly their whole value 
 from their scarcity. Reduce their price to one half, and the 
 quantity worn to produce the same effect would require to be 
 doubled. Render them obtainable • for a trifle, and they could 
 be no longer worn. It has been more than once attempted to 
 cultivate them, that is to make the oyster that produces them, 
 bear them universally and plentifully. Linneus conceived it 
 practicable by pricking the animal, and other managements, but 
 the scheme has never succeeded. Had it done so fully, it had 
 certainly been useless. Suppose it had diminished the labor 
 necessary to procure them by one half, then a lady to be as richly 
 dressed as before, would just have had to carry double the num- 
 ber. Had the facility been farther increased, so that they be- 
 came as plentiful as glass beads, they would then have become 
 as useless. If every peasant girl could afford to have a string of 
 them, no lady would wear them, and when ladies ceased to wear 
 them, peasant girls would lay them aside.* It is the same with 
 all other articles that are mere luxuries. As they only serve foi 
 marks of the riches of the individuals possessing them, every 
 diminution made in the labor embodied in them diminishes, in 
 a proportionate degree, their fitness for the purpose for which 
 they are employed. Should topazes become as plentiful as 
 cairngorums they would be no more esteemed. 
 
 There are few commodities, however, in which utility, as well 
 as vanity, has not a considerable share. On such the effects of 
 iiliprovements are twofold. As far as they possess inherent 
 utiUty, it tends to carry them first, and subsequently all other 
 instruments in the society, towards the more quickly returning 
 orders. In so far again as they are mere luxuries, it renders a 
 greater quantity of them necessary, or unfits them altogether for 
 the supply of the demands of vanity. There is hence a sort of 
 strife between the two principles, the one seeking to disparage 
 and discard such commodities, the other to retain them. The 
 result seems mainly determined by the proportion of the one, or 
 the other sort of qualities, existing in the article in question, and 
 by the degree in which its consumption is apparent. It may 
 
 * " The price of pearls in modern times has very much declined ; partly, no 
 doubt, from change of manners and fashions ; but more probably, from the 
 admirable imitation of pearls that may be obtained at a very low price." Mc'- 
 CuUoch's Dictionary of Commerce. They are also less worn. 
 
 o 
 
OF THE NATURE OF STOCK. £87 
 
 have so many useful and agreeable qualities, that however easily- 
 obtained, or however openly consumed, it cannot be driven out 
 of use. All that vanity can do with regard to such articles, is, 
 to consume them when they are most scarce. Some of the Ro- 
 mans never ate fish but when at a distance from the sea, nor 
 flesh but when on the sea-shore. Green peas become luxuries 
 at Christmas. Should the best flannel cost only two pence a 
 yard, it would still be worn by all who now wear it, and by many 
 who do not. Its consumption is not conspicuous. On the con- 
 trary, were any particular fine fabric of cotton presently used for 
 gowns, and costing two shihings per yard, in consequence of im- 
 provement to be sold for two pence per yard, it could no longer 
 be worn. It would no longer be dress for any rank, and its con- 
 sumption would therefore diminish or cease. About ten years 
 ago, what are called leghorn bonnets were fashionable, and much 
 worn in Canada and the United States. They then cost three 
 or four pounds. They may be had now for a few shillings, and 
 no one wears them; straw which were then disused but by the 
 less wealthy, are now preferred; they are dearer and less durable. 
 People who regard appearances, and are accustomed to see 
 and be seen, can scarce expect that any improvement will mate- 
 rially diminish their yearly outlay for dress, for themselves or 
 families. Whatever proportion of their revenues they may have 
 found it necessary so to expend, in order to maintain the appear- 
 ance their rank required, they may fairly reckon they will have 
 to expend in future. The gentleman, the tradesman, the lady, 
 the servant girl, must alike obey the laws which the strength of 
 this principle imposes on the society. Whatever advance im- 
 provement may make, they must still lay their account with being 
 looked down on by their respective associates, or having to wear 
 garments just as expensive as ever, without being better looking, 
 or more comfortable, in a degree answering by any means to the 
 facilities of fabrication effected by the successful efforts of inven- 
 tion. In so far as their dress is a mark of their riches, a sort of 
 inscription they bear about with them, as JMr. Storch expresses 
 it, serving to impress others with the belief of their possessing a 
 certain amount of wealth, or holding such a rank in society, it is 
 exactly analogous to coin. Double the facility of production, the 
 quantity carried about, to answer the same purpose, must be 
 doubled, or recourse must be had to some other material. Pur- 
 
288 OF THE NATURE OF STOCK. 
 
 pie, or scarlet, served among the Romans for a mark of this sort ; 
 only the rich could afford to wear it. Although still admired as 
 a color, it no longer serves the purpose, and is comparatively 
 little used. Lace, among the moderns, was once a mark of the 
 same kind. Invention has so far facilitated the production of 
 some sorts of it, that the wearing them no longer confers distinc- 
 tion. Increase that facility, till a yard of the finest sorts may be 
 had for a few half pence, and it is questionable if the beauty of 
 the fabric would preserve it as an article of dress wearable by 
 any one.* 
 
 To articles of furniture, of diet, to the equipage of the rich, 
 and to the whole apparent expenditure of every class, similar 
 observations will apply. A greater or less part of the effects of 
 improvement, is absorbed by vanity in them all, and conse- 
 quently lost. 
 
 * " At Hornton, in Devon, the manufacture. had arrived at that perfection, 
 was so tasteful in the design, and so delicate and beautiful in the workman- 
 ship, as not to be excelled by the best specimens of Brussels lace. During 
 the late war, veils of this lace were sold in London from twenty to one hun- 
 dred guineas ; they are now sold from eight to fifteen guineas. The effects 
 of the competition of machinery, however, were about this time felt; and in 
 1815, the broad laces began to be superseded by the new manufacture. Steam 
 power was first introduced by Mr. John Lindsay, in 1815-16 ; but did not 
 come into active operation till 1820. It became general in 1822-23; and a 
 great stimulus was at this period given to the trade, owing to the expiration 
 •of Mr. Heathcoat's patent, the increased application of power, and the perfec- 
 tion to which the different hand frames had by this time been brought. A 
 temporary prosperity shone on the trade ; and numerous individuals — cler- 
 gymen, lawyers, doctors, and others — readily embarked capital in so tempt- 
 ing a speculation. Prices fell in proportion as production increased, but the 
 demand was immense ; and the Nottingham lace frame became the organ of 
 general supply, rivaling and supplanting, in plain nets, the most finished pro- 
 ductions of France and the Netherlands. Lace, having become a common orna- 
 ment, easily accessible to all classes, has lost its attractions in the fashionable 
 circles, by which it was formerly patronized, so that very rich lace is no longer 
 in demand. And many articles of dress, which, in our drawing rooms and ball 
 rooms, lately consisted of the most costly and tasteful patterns in lace, are 
 now either superceded or made of different manufacture. — Many of the em- 
 broiderers in Nottingham are at present unemployed ; and even for the most 
 splendid and beautiful specimens of embroidery, some of which have occupied 
 six weeks, working six days a week and fourteen hours a day, the young women 
 have not earned more than one shilling a day. The condition of the plain 
 lace workers is still more deplorable — they cannot obtain more, on an average, 
 than two shillings and six pence a week, and working twelve or fourteen 
 hours per day, for their anxious and unremitting labor."! 
 
 t McCulloch's Dictionary of Commerce 
 
OF THE NATURE OF STOCK. 289 
 
 In as far again as any article is not a luxury, in as far as it is 
 beyond the reach of vani'ty, and consumed to supply some real 
 want, not to display superiority, in so far improvement is really 
 felt. Were invention to discover some substance having all the 
 properties, and the exact appearance of good leather, and capa- 
 ble of being formed for one sixth of the outlay, it would be an 
 effort of that power very sensibly felt. Boots would probably 
 indeed cease to be worn by the higher classes, unless when on 
 horseback, but good shoes cannot be dispensed with by any class. 
 They are worn for comfort, not for show, and the diminution in 
 the outlay necessary to procure them, would constitute a real 
 improvement. Improvements in mining and modes of transport- 
 ing coal, diminishing the labor necessary to bring them to market, 
 are also sensibly felt, they facilitate the supply of real wants, and 
 move instruments towards the more quickly returning orders. 
 Improvements hi the manufacture of iron, also escape vanity and 
 are real. Could ingenuity discover a methodof quarrying stones 
 and reducing them to shape, or of making bricks at one half of 
 the present outlay, it would be a real improvement : only a small 
 part of it would be lost on vanity ; for, unless in the highest 
 classes, a dwelling-house is much more for comfort than for show. 
 Could the substance of potatoes be converted into an article ex- 
 actly similar to wheaten flour, and requiring only half the outlay, 
 that would also be a very great improvement. Improvements 
 too in the fabrication of articles of glass, and earthen ware, are 
 in a great degree real. Could the manufacture of plate glass be 
 so facilitated, that it might be had for only double the price of 
 common window glass, the substitution of the one for the other 
 could not be called a luxury, but a real iuiprovement, an increased 
 ^provision for the supply of future wants. In Great Britain inge- 
 nuity has succeeded, in recent years, in very greatly facilitating 
 the manufacture of cotton fabrics. The increased facility of pro- 
 duction has in part effected a real improvement, but certainly has 
 in a great measure also been absorbed by vanity. Much less 
 labor is now necessary to produce articles of dress of this material 
 which are not seen, or are but little seen ; but for dresses worn 
 in public, the expenditure is certainly not diminished, or the 
 beauty or comfort of the article increased, in proportion to the 
 increased facility of production. The finer sorts of these stuffs 
 are perhaps produced with ten times the facility they were twenty 
 
 37 
 
290 OF THE NATURE OF STOCK. 
 
 years ago, yet probably the whole annual expenditure which a 
 young female makes for such part of her apparel as is formed of 
 these stuffs, is little less than what her mother, twenty years ago, 
 was accustomed to make, and certainly she is not ten times more 
 becomingly or more comfortably clad. The great cheapness 
 indeed of even the finest and most delicate of these fabrics, is 
 such that vanity seems to be discarding them. The utmost 
 efforts of ingenuity can scarcely embody a sufficiency of labor in 
 them, or vary them so as to make them a fit full dress for even a 
 tradesman's wife. 
 
 All luxuries occasion a loss to the society, in proportion to 
 their amount. The industry employed in their formation, gen- 
 erates no provision for future wants, and may be said to be ex- 
 pended in vain. Taking the whole society as a body, it supplies 
 no wants. It gives no absolute enjoyment, it is all relative, as 
 much as one is raised by it, another is depressed, the superiority 
 of one man being here equivalent to the inferiority of another. 
 To increase the facilities of production of luxuries, therefore, brings 
 no addition to the absolute capital. It is precisely analogous to 
 increasing the facilities for the production of the metals used for 
 coin, merely adding to the bulk circulated, and not enabling it in 
 any degree to perform its ofhce better. The expense, too, occa- 
 sioned by keeping up the circulation of the one and the other, 
 and consequent diminution of the national revenue, is equally a 
 loss. It is much greater, however, in the case of luxuries than 
 of coinage, because the whole amount of the former, in all socie- 
 ties, is probably much greater than that of the latter ; and because 
 it consists, in general, of materials far more easily destroyed. To 
 the loss thus occasioned by vanity the term dissipation may be 
 applied. Its amount cannot, for reasons already stated, be easily 
 ascertained, nor is it necessary for our purpose that it should. It 
 is sufficient to observe, that, in all societies which have hitherto 
 existed, it has been considerable ; and that it seems to be deter- 
 mined, in every society, by the strength of the selfish, and weak- 
 ness of the intellectual powers and benevolent afiections ; and, 
 consequently, that it is inversely as the strength of the accumu- 
 lative principle. 
 
 Though vanity, in this way, operates directly to retard the 
 increase of the stock of the society, some of its indirect effects 
 have, notwithstanding, an opposite tendency. As an antagonist 
 
OF THE NATURE OF STOCK. ggi 
 
 to the restraining influence of the spirit of imitation, it is often a 
 very useful auxihary in the spread of inventions. These, without 
 its aid, might perhaps have been often shut up in the countries 
 where they were discovered ; certainly they would not have 
 passed from region to region, so rapidly as they have sometimes 
 succeeded in doing. Under the guise of foreign rarities, and 
 consequently luxuries, they have made their way easily ; the 
 mask rubbing off by time, a substratum of utility has been found 
 under it. 
 
 Soap seems to have been first made in the midst of the ashes 
 and tallow of Germany and Gaul. It came to Rome as a luxury, 
 in the shape of a pigment for the hair. In the course of time, its 
 superior detergent qualities becoming apparent, and the manu- 
 facture being introduced, this article, so essential to the comfort ■ 
 of the modern European, passed entirely out of the rank of luxu- 
 ries. Vanity brought silk to Europe. At first it was almost 
 entirely a luxury. As a garment it has often more beauty than 
 any other texture ; but when it exchanged for its weight in gold, its 
 beauty must have constituted but a small part of the enjoyment 
 derived from the W'caring of it. In some fabrics it is scarcely now 
 a luxury ; its qualities of durability and beauty seem to give it a 
 real superiority, sufficient to render the superior price paid for it 
 no dissipation. Increase that facihty very much, and some of 
 these fabrics would be discarded by vanity. Were velvet to 
 become as cheap as cloth, it would not be worn by the higher 
 classes; its greater durability would make it too economical for 
 them, and its adoption by the lower would render it vulgar. 
 Fabrics of cotton were at first luxuries. They would not, per- 
 haps, have been worn had they not had rarity, and consequently 
 vanity, to recommend them. Cashmere shawls are so now ; in 
 time they too may cease to be so. The process, indeed, has 
 made some progress in France, where, I have been told, the 
 breed of the animal yielding the wool has been introduced, and 
 the manufacture considerably advanced. 
 
 Vanity, also, sometimes facilitates real improvement, by the 
 high estimate it gives to articles that are mere luxuries, but con- 
 tain the rudiments of extensive utilitj^ It thus stimulates inven- 
 tion to facilitate their production, develope their utility, and put 
 them out of the class of luxuries. 
 
 Glass was at first a luxury. It was prized by the Romans for 
 
292 OF THE NATURE OF STOCK. 
 
 show, as glass beads are now by savages. Ingenuity at length 
 perfected the various processes of the manufacture, and made it 
 an article extensively supplying real wants. The diamond is at 
 present chiefly a luxury; should art ever succeed in giving at will 
 a crystalline structure to simple carbon, so as to convert it into 
 that substance, it would pass from the rank of luxuries, and would 
 too contribute largely to the supply of real wants. The high 
 estimation in which it is held serves at present to turn the atten- 
 tion of ingenuity to such a project. 
 
 These, however, are indirect, and, as it wei'e, accidental effects 
 of luxury ; its direct operation is always to dissipate a part of the 
 national funds proportioned to its strength. 
 
 The different effects arising from the action of the inventive 
 faculty, as it operates on utilities or luxuries, afford a means of 
 distinguishing the one from the other. The progress of invention 
 extends the consumption of utilities ; it diminishes the consump- 
 tion of pure luxuries. Were steel, platina, or plate glass, pro- 
 duced by one 'tenth of the labor they presently cost, their con- 
 sumption would be very much increased. Were pearls, or lace, 
 to be got for one tenth of the labor that must now be given for 
 them, they would go completely out of fashion. The additional 
 amount of utilities produced, occupying the place of instruments 
 that cost more labor, and did not return more abundantly, their 
 consumption implies a diminution in the cost of the whole stock 
 of the society as compared with the returns made by it, and 
 consequently the progress of that stock to an order of quicker 
 return. The facility given to the production of luxuries has 
 rather a contrary effect, exciting to the greatest outlay of labor 
 of which the accumulative principle is capable, previous to the 
 abandoning of the manufacture. 
 
 PART II. 
 
 In the preceding part of this chapter we have considered the 
 loss occasioned to the stock of societies, from part of the products 
 that would otherwise be yielded by the industry of their members, 
 applied to the formation of instruments, being dissipated through 
 the operation of an affection of the mind. We are now to con- 
 sider a similar loss, occasioned by a peculiarity in the combined 
 corporeal and mental constitution of man. 
 
OF THE NATURE OF STOCK. 293 
 
 Tliere are various matters that physiologists have attempted 
 to comprehend under the general term of narcotics, of which the 
 primary operation is directed to the nervous system. What their 
 ukimate effects may be on man, considered not in the individual, 
 but in the species, this is not the fit place to discuss. There are, 
 however, some general laws that belong to them, which it con- 
 cerns the present inquiry to notice. 
 
 1. A gradual increase in the quantity consumed does not pro- 
 duce a correspondent increase in the effects first experienced. 
 One commencing with twenty drops of laudanum, if he make a 
 habit of consuming that drug, and attempt to continue the effects 
 first experienced, must double, quadruple, or farther increase the 
 quantity. A few glasses of wine will at first cause a degree of 
 exhilaration equal to what it will take a bottle or two finally 
 to produce. Unlike things consumed to satisfy hunger, thirst, 
 or w^armth, their effects are by no means determined by the 
 quantity consumed. We may reckon that a slice of bread, 
 or a glass of water, will one year hence supply the wants for 
 which any individual consumes them, as well as now, however 
 great his consumption of these articles may be in the interim. 
 But if a person now daily drinks a glass of brandy, there is no 
 saying how many glasses, ten years hence, he may find himself 
 obliged to take to produce the same effects. This is a property 
 common to all narcotics, though not in an equal degree. The 
 effects of tea and coffee on the nervous system diminish through 
 use, as well as those of brandy and tobacco, though not in an 
 equal degree, and the quantity taken may be gradually very 
 greatly augmented. 
 
 2. The temporary exhilaration produced by the consumption 
 of these substances is followed by a temporary depression. They 
 produce evil as w-ell as good. Whether, when taken in small 
 quantities, the former overbalance the latter, or the latter the 
 former, is a point undetermined ; but it is well known that as the 
 quantity is increased, the evil effects predominate, until at last 
 both the bodily and mental energies sink under their operation. 
 Hence what is called the abuse, to which the consumption of all 
 this class of commodities is apt to lead. The labor bestowed on 
 them is very often not only useless, but absolutely prejudicial to 
 the society. 
 
 3. Their consumption is regulated, in a great degree, by the 
 
294 ^^ THE NATURE OF STOCK. 
 
 influence of the imitative propensity. We may form a near 
 guess whether a person is in tlie custom of drinking wine, or tea, 
 or cofiiee, or smoking tobacco, from knowing the habits of his 
 associates. 
 
 4. Their consumption is also greatly regulated by the passion 
 of vanity. This is especially the case, as 1 have already re- 
 marked, in vinous liquors. These liquors derive their narcotic 
 properties from containing a portion of the fluid termed alcohol. 
 In addition to its power over the nervous system, this substance 
 has that of preventing, or retarding, the changes that naturally 
 go on in vegetable juices. Liquors, therefore, impregnated with 
 it, long retain their peculiar flavor and other properties, and may 
 thus be consumed in times and at places remote from those in 
 which they were produced. This serves to render them matters 
 on which vanity can easily lay hold and convert into luxuries. 
 Besides serving as marks to this passion, the vegetable juices 
 and salts contained in these liquors have probably other eflects. 
 They afford a certain degree of nourishment, and present the 
 spirit in a diluted form. Hence a part of their medicinal effects, 
 and hence, also, their greater safety as narcotics. The stomach 
 gets loaded with them sooner than with diluted alcohol, which 
 might be absorbed with less immediate inconvenience to the 
 digestive powers, though its permanent effects may be more 
 pernicious. In this respect there is a real cause for the prefer- 
 ence given them, although, in this view also, beer is the best, 
 because the safest of all hquors. 
 
 The fermented liquors, produced from the juice of the grape, 
 are most esteemed in Europe. It is, however, at least problem- 
 atical whether they have, or have not, any great, or indeed any 
 real superiority. Their chemical analysis does not show much 
 grounds for the preference, and we would not, a priori, conceive 
 that the substances, which by the art of the chemist may be made 
 into a compound not to be distinguished from them, would pro- 
 duce a liquid pecuharly beneficial to the constitution, or agreea- 
 ble to the palate.* If we inquire into the tastes of other nations, 
 
 * Many thousand pipes of spoiled cider are annually brought lo London 
 from the country, for the purpose of being converted into port wine. One, 
 probably, of the least noxious of the methods of producing the change, is to 
 add to the cider beet root juice, alcohol, logwood, and Rhatany root. The 
 interior of the cask is then crusted with supertartrite of potash, colored with 
 
OF THE NATURE OF STOCK. 295 
 
 we find, by the testimony of travellers, that over the greater part 
 of the world, they are rather disrelished. Captain Basil Hall, in 
 his voyage to Loo Choo, says he has found cherry brandy the 
 most generally esteemed liquor among all nations, and we may 
 see a reason for the preference given to such a beverage. The 
 sensation, with which even diluted alcohol at first affects the 
 organs of taste, is unpleasant. Most people take some plan to 
 subdue or correct its harshness. The mixture of matters them- 
 selves pleasant in flavor or taste, as in that sort of cordial, one 
 would suppose the most efi:ectual and agreeable means of doing so. 
 The Chinese have grapes, but make no use of them for the forma- 
 tion of fermented liquors. Our European travellers tax them in 
 consequence with want of taste and ingenuity. They, in turn, 
 are surprised at our folly in manufacturing what seems to them a 
 more harsh, and unpleasant, and is generally a far more expensive 
 beverage than theirs. Which has most reason on his side, the 
 European or the Chinese, is difficult to determine ; for, when the 
 passion of vanity joins with the imitative propensity, the two have 
 a singular power in producing obstinately opposing opinions, 
 especially when they have an organ to work on so pliant in the 
 reception of impressions as the palate. The fashionable drink of 
 the Prussians of old was fermented mare's milk ; while the nobles 
 drank this, the common people were content with mead. This, 
 at least, can be said in favor of the choice, that the latter liquor 
 must have been easily got in the country of wild honey, and 
 would therefore be vulgar ; the former could only be procured by 
 the wealthy, and would therefore indicate rank. 
 
 On the whole, as it must be allowed that vanity has a very 
 great influence in determining the preference which is given to 
 one sort of alcoholic liquor over another, so it is very difficult to 
 determine the point where its operation ceases. This, perhaps, 
 can only be done in cases where the degree in which some 
 agreeable flavor or relish is possessed is in question, or where 
 some positively disagreeable flavor or taste, or injurious quahty, 
 is communicated in the process of preparation. 
 
 Brazil wood, that the merchant, after bottling off the wine, may impose on 
 his customers by taking to pieces the cask, and exhibiting the beautiful dark 
 colored and fine crystalline crust, as an indubitable proof of the age of the 
 wine ; a practice by no means uncommon, to flatter the vanity of those who 
 pride themselves in their acute discrimination of wines. See Accum on 
 Adulterations. 
 
296 O^ THE NATURE OF STOCK. 
 
 It is also to be observed, with regard to these liquors, that, 
 with the exception, perhaps, of the negro, whose physical consti- 
 tution is so different from that of the white that no conclusion can 
 be drawn from the one to the other, the propensity to their con- 
 sumption is stronger among people living at a distance from the 
 equator, than among those who inhabit regions lying near it. 
 Were it necessary to assign reasons for a fact generally observed, 
 we might find them in the grosser feeding of the inhabitants of 
 cold climates, and in their diminished susceptibility to the impres- 
 sions of the sexual desires. 
 
 I have discussed the subject of these liquors at a length which 
 I fear may appear tedious. Some reasons for having done so 
 will show themselves afterwards. There is one that has imme- 
 diately to appear. 
 
 A very important question concerning their consumption arises, 
 which, it seems to me, has been too hastily determined, and that 
 determination rashly acted on, in a manner that has produced 
 very injurious effects. As far as we have presently to consider 
 the doctrine and practice, they may, in a great measure, be traced 
 to the followinu; passage in the Wealth of Nations. 
 
 " Though individuals may sometimes ruin their fortunes by an 
 excessive consumption of fermented liquors, there seems to be no 
 risk that a nation should do so. Though in every country there 
 are many people who spend upon such liquors more than they 
 can afford, there are always many more who spend less. It 
 deserves to be remarked, too, that if we consult experience, the 
 cheapness of wine seems to be a cause, not of drunkenness, but 
 of sobriety. The inhabitants of the wine countries are, in general, 
 the soberest people of Europe ; witness the Spaniards, the Italians, 
 and the inhabitants of the southern provinces of France. People 
 are seldom guilty of excess in what is their daily fare. Nobody 
 affects the character of liberality and good fellowship by being 
 profuse of a liquor whicli is as cheap as small beer. On the 
 contrary, in the countries which, either from excessive heat or 
 cold, produce no grapes, and where wine consequently is dear 
 and a rarity, drunkenness is a common vice, as among the north- 
 ern nations, and all those who live between the tropics, the 
 negroes, for example, on the coast of Guinea. When a French 
 regiment comes from some of the northern provinces of France, 
 where wine is somewhat dear, to be quartered in the southern, 
 
OF THE NATURE OF STOCK. 297 
 
 where it is very cheap, the soldiers, I have frequently heard it 
 observed, are at first debauched by the cheapness and novelty of 
 good wine ; but after a few months' residence, the greater part 
 of them become as sober as the rest of the inhabitants. Were 
 the duties upon foreign wines, and the excises upon malt, beer, 
 and ale, to be taken away all at once, it might, in the same man- 
 ner, occasion in Great Britain a pretty general and temporary 
 drunkenness among the middling and inferior ranks of people, 
 which would probably be soon followed by a permanent and 
 almost universal sobriety. At present drunkenness is by no 
 means the vice of people of fashion, or of those who can easily 
 afford the most expensive liquors. A gentleman drunk with ale 
 has scarce ever been seen among us." * 
 
 The general question that may here be said to be proposed is, 
 whether, or not, in any particular country, the cheapness or the 
 dearness of intoxicating liquors will most excite to their intemperate 
 use? 
 
 The excessive cheapness of any of these Hquors renders it 
 incapable of affording any gratification to vanity, and an equal 
 cheapness in them all would universally produce the same effect. 
 That passion would, therefore, in such a case have to turn itself 
 to other objects, and these liquors ceasing to be luxuries, one 
 main cause of their consumption would be done away with. To 
 excite to their abuse, there would remain only the pleasure arising 
 from their intoxicating qualities, joined to the facility with which 
 it might be indulged. Whether, or not, the ease with which this 
 propensity might be gratified would lead to long enduring excess, 
 or the vulgarity of the enjoyment to speedy and general temper- 
 ance, would probably depend on various circumstances. — On the 
 climate, whether near the equator, or at a distance from it. — On 
 the sort of liquor, whether purely alcoholic or mixed with much 
 of foreign matter. — On the strength of the effective desire of 
 accumulation, for that desire, when strong, leads to a restricted 
 consumption of things of which the immediate benefit is problem- 
 atical, and the dangers to futurity, from excess in them, very 
 great. If, then, the principle is naturally weak, or at the moment 
 its action be clogged by the stock of instruments in the society 
 being wrought fully up to the orders correspondent to it, or having 
 
 * Wealth of Nations, B. IV. c. III. 
 
 38 
 
298 OF THE NATURE OF STOCK. 
 
 passed these, then there will be a great probability of injurious 
 and long continued national excesses. 
 
 Unless, then, we have the means of knowing perfectly the 
 condition in which all these circumstances, and perhaps some 
 others, exist in any society, it is impossible to ascertain, with any 
 precision, what may be the effect of reducing very greatly the 
 price of alcoholic liquors. The national drunkenness that Adam 
 Smith speaks of may be short or long, or, for ought that we can 
 say, perpetual. Over the greater part of the United States of 
 America whiskey has long sold at about a shilling sterling per 
 gallon, so that one day's wages of a common laborer will pur- 
 chase a dozen bottles of that spirit. It is therefore put out of 
 the class of luxuries as completely as any intoxicating liquor can 
 well be. The consumption of it has, notwithstanding, been very 
 great, and in few countries have instances of injurious excess been 
 more frequent. It is true that the evil, now exposed to view 
 stripped of every disguise, is seen in all its hideousness, and is in 
 a fair way of being corrected. After having endured for more 
 than one generation, what Adam Smith terms the period of 
 general drunkenness, is probably passing away. If the cure be 
 thus effected, it may fairly be reckoned radical. Is it in all cases 
 advisable to go through a similar course, even with the probability 
 of a similar result? — to induce a season of national drunkenness, 
 even with the prospect of the public feeling being effectually 
 roused to put down the vice for ever ? To me it seems, that 
 the remedy is so violent, that in many cases there might be a 
 risk of the patient's sinking under its operation. A general 
 drunkenness among the middle and inferior classes, however 
 temporary, is a thing surely not to be lightly discussed in any 
 speculations that lead to practice. Compared with it, the tem- 
 porary subjugation of a country by a foreign enemy would, in its 
 immediate effects, be a small practical evil. If an experiment fit 
 to be tried, it should certainly only be so under the most favor- 
 able circumstances ; to peril it when the vital powers are in an 
 enfeebled condition, would be the height of rashness. 
 
 The analogy which Adam Smith, in the passage quoted, draws 
 between the French soldier transported from a part of France 
 where wine is scarce, to another where it abounds, and a nation 
 suddenly overflowed with an abundance of these liquors, will 
 not hold; for, the imitative propensity, in the one case, tends as 
 
OF THE NATURE OF STOCK. 299 
 
 powerfully to check, as in the other it operates to excite to the 
 abuse in question. If a man be brought among sober people, he 
 has every chance to remain, or to become sober ; if, on the con- 
 trary, he get among drunkards, it requires all his resolution to 
 avoid becoming one. A nation having a taste for these pleasures, 
 and suddenly obtaining the means of indulging in them, may be 
 compared to a company inclined to be jovial assembled round an 
 abundant table, where each excites the other to excess ; a band 
 of soldiers living and mixing with the inhabitants of a country 
 where, even though cheap, these liquors are temperately con- 
 sumed, to an individual partaking of his solitary bottle in the 
 midst of those who despise the pleasure, and view him with 
 contempt for indulging in it. 
 
 It is, however, particularly to be remarked, that the author 
 refers to fermented, not to purely alcoholic liquors, and the 
 former are certainly much less apt to lead to excess, than the 
 latter. I apprehend, however, that his reasonings in the preced- 
 ing, and one or two other passages, have been generally received 
 as applicable to both. 
 
 To return to the subject of narcotics in general, all excess in 
 their consumption, whether it be regarded as an application of 
 labor to an useless purpose, or to one partially hurtful ; whether 
 it proceed from vanity or pernicious habits, may not improperly 
 be termed dissipation, as the articles so consumed may be termed 
 luxuries. It is not necessary that we should pretend to deter- 
 mine what this loss may in any case amount to ; it is sufficient to 
 mark its existence, as a quantity to be taken into account in a 
 consideration of the causes, influencing the increase or decrease 
 of the national stock. 
 
CHAPTER XII. 
 
 OF EXCHANGES BETWEEN DIFFERENT COMMUNITtES. 
 
 There are then, it would appear from the preceding chapters, 
 two great classes into which commodities may be divided, luxu- 
 ries, and articles of consumption which are not luxuries, but, 
 were the term permitted, might be named utilities. When the 
 events in which instruments issue are of the latter class, then 
 instruments may properly be said to be exhausted, when of the 
 former they are on the contrary dissipated. 
 
 Having ascertained the circumstances limiting these two divi- 
 sions, we are able to enter on the investigation of some phenom- 
 ena, relating to the exchange of commodities, which we have 
 not hitherto particularly noticed. As yet we have only attended 
 to the laws finally regulating the exchange of commodities be- 
 tween individuals of the same society, but it is necessary that we 
 should also ascertain the general conditions existing in those ex- 
 changes which take place between different societies. 
 
 In our view of the subject, every society considered apart, is 
 a system within which all circumstances are common and similar, 
 and all societies compared together, are systems in which all or 
 many circumstances are proper to each and dissimilar to others. 
 The wages of labor, orders of instruments, and profits of stock, 
 in one society, for instance, are the same, in different, are or may 
 be different. When two persons in the same society exchange 
 commodities, we have seen that the exchanges they make are 
 for equal quantities of labor, reckoned according to the time when 
 applied, and the actual orders of instruments. This happens 
 because one man's personal labor, or the command of other men's 
 labor which he may possess, is equal to another man's personal 
 labor, or the command of other men's labor which he may pos- 
 
OF THE NATURE OF STOCK. 301 
 
 sess. In separate societies, however, this law obviously no 
 longer holds. An individual in one society, exchanging with 
 another, in another society, cannot pretend to regulate the amount 
 he is to receive in return by the power which he possesses, if he 
 conceives too much demanded, of turning his own funds to the 
 formation of that which he desires, for he has no such power. 
 To form the commodities he in this case desires, it is necessary 
 he should become a member of the society in which they are 
 formed, and give up the place he holds in the community of 
 which he now makes one. If the manufacturers of cloth in Eno-- 
 
 O 
 
 land find that the farmers do not give them, in the form of wheat, 
 the same quantity of labor that they in exchange give them in 
 cloth, they will turn their capital to agriculture, and so reduce 
 the price demanded; but should they find that the American 
 farmer puts less labor to the formation of the wheat he exchanges 
 for their cloth, than that cloth costs them, they have not the same 
 means of lowering his price. 
 
 As the exchanges, therefore, that take place between the 
 members of different societies, cannot be regulated by the amount 
 of labor embodied in the commodities fabricated by each, there 
 would seem to remain, as the foundation of the principles of such 
 exchanges, only the qualities of the articles exchanged. If the 
 manufacturers in England, find that including the expense of 
 transport, they can have wheat as cheap from the American farm- 
 ers as from the British, they will be inclined to exchange, and 
 if the American farmers find that, including also the expense of 
 transport, they can have English cloth as cheap as American, 
 they will be inclined to exchange. It is evident too, that the 
 British manufacturer will be more inclined to exchange, if the 
 American wheat come cheaper than the British, and the American 
 farmer, if the British cloth come cheaper than the American. 
 
 The commodities to be exchanged between any two societies, 
 may either minister to use, or to luxury, or partly to both. The 
 subject will present itself in the most simple form, by discussing 
 separately the divisions of it thus indicated. 
 
 First, then, we have to consider the principles and effects of 
 the exchanges of commodities which are in no degree luxuries. 
 
 If the members of one society, having before had no inter- 
 course with some other society, become aware that in it there is 
 a commodity of this sort, of which they would desire to have a 
 
302 OF THE NATURE OF STOCK. 
 
 supply, the question to be determined is, will they procure that 
 supply, and if so, what will be the effect thence resulting. As 
 they have hitherto done without the commodity, they must 
 already possess some substitute for it. They will then only seek 
 to procure it, if they can procure it for less labor than the substi- 
 tute they already possess ; and if they can procure it for less labor 
 they will naturally be excited to do so. Were coal, for instance, 
 the commodity which the members of one society A possess, and of 
 which the members of another society B wish to procure a sup- 
 ply, there must in B be some means in existence, of more or less 
 fully and easily satisfying the wants which that mineral can sup- 
 ply. It may be, for instance, that wood is the fuel there con- 
 sumed. Let us suppose that three cords of the wood commonly 
 burnt, are equivalent, in the heat given out by them, to one 
 chaldron of coals ; if, then, in the society B there be any com- 
 modity there equivalent to less than three cords wood, and which, 
 transported to A, will in A be equivalent, considered as an 
 utility, to one chaldron coals, the exchange will be possible, for 
 this difference may pay, or may do more than pay, for the 
 expense of transport. If, for example, in the society A timber for 
 architectural purposes be more scarce than in B, it might happen 
 that the wood used for fuel in B, when transported to A in logs, 
 would be in estimation there. It might be that in A, owing to the 
 general application of the soil to agricultural purposes, and the 
 scarcity of forest, a quantity of timber, fit for the use of the 
 builder, such as might be got out of a cord of the fire wood used 
 in B, might exchange for one chaldron coals. Were, then, an 
 individual of the society B, to transport to A a quantity of square 
 timber equivalent in B to three hundred cords of wood, he might 
 exchange it there for three hundred chaldrons coals, and might 
 so return to B with a commodity there equivalent to nine hun- 
 dred cords of fire wood, thrice the amount which he had trans- 
 ported from thence. Suppose that the expense of the transport 
 of both commodities is equal to three hundred cords, then he will 
 just have doubled the stock embarked in the enterprise. Were 
 this the state of things, timber, instead of being consumed in fuel 
 in B, would be transferred to A, and would return, in the form 
 of coals, an equivalent, after paying the charges of transport, to 
 double the labor expended in its formation. But in this state of 
 things the whole advantage would fall to the society B ; fuel 
 
OF THE NATURE OF STOCK. 303 
 
 would be more easily obtained there, but timber would not be 
 more easily obtained in A. As, however, it would be equally in 
 the power of the members of the latter society to send their coals 
 to B, and there exchange them for wood, were other circum- 
 stances wanting, this alone would have the effect of equalizing the 
 advantages, and in most cases, therefore, they would come to be 
 nearly equally divided between two societies so situated. The 
 first effects, therefore, would be that the same quantity of fuel 
 which before cost in B three days' labor might now be obtained 
 for two; and that the quantity of building timber that in A cost 
 three days' labor, might also be obtained for two. The revolu- 
 tion effected might nearly compare to an improvement in both 
 societies, by which, in the one, two cords fire wood might give 
 equal heat to what three had done, and, in the other, two logs of 
 timber might serve the same purposes as three. Like other 
 improvements, they would not be confined in their opera- 
 tion to the particular branches of industry in which they had 
 place, but would be diffused equally over both societies, carrying 
 the whole instruments in each towards the more quickly return- 
 ing orders. Profits would rise equally in all employments. The 
 absolute capital of both communities would be increased in pro- 
 portion to the augmented provision made for their future wants. 
 This provision, indeed, would be so far uncertain, that it might 
 be rendered inaccessible by war, or other causes interrupting the 
 commerce between the two countries ; and the whole industry 
 and instruments engaged in it might, therefore, be compared to 
 a stock engaged in some hazardous branch of industry, and run- 
 ning a chance of being wholly or partially lost, by the action of 
 uncontrollably destructive causes. Abstracting, however, the 
 chances to which they might thus be exposed, they would em- 
 body as real a provision for futurity as any other part of the stock 
 of either society. 
 
 In all exchanges taking place between different societies, in 
 commodities which are not luxuries, similar principles regulatino- 
 them, and similar efiects flowing from them, may be traced. 
 For, if they derive their value not from the gratification they 
 afford to vanity, but> from their capacity to supply real wants, 
 they may be compared with other instruments belonging to the 
 society, satisfying more or less perfectly the same class of wants. 
 And when, through the exchange of other commodities for them, 
 
304 OF THE NATURE OF STOCK. 
 
 they can be obtained for less labor than such instruments, will 
 naturally come to be so obtained, and completely or partially 
 fill the place of them. As coals will compare with cord wood, 
 so Indian rubber will compare with leather. New Zealand weed 
 with hempen cordage, slates with thatch, copper with iron. In 
 these cases, and in others where probably mere utility is sought 
 for, there are means of comparing one thing with another, and 
 the substituton of the one for the other, when in proportion to the 
 labor necessary to obtain it, it will more effectually supply future 
 wants, is always a real improvement. 
 
 It will often happen that the process will engage in it more 
 than two societies. Thus, the society B might exchange wood 
 with C, C might exchange iron with A, and A, coal with B. 
 Similar principles would still, however, guide its progress, and 
 similar effects result from it. While the exchanges were con- 
 fined to commodities in no degree luxuries, an increased pro- 
 vision for future wants would result from them, and a general 
 augmentation of the absolute capital of the societies receiving 
 these new supplies, and quickening in them of the accumulative 
 principle would be experienced. They would in them all have 
 the general effect of improvements, and would operate, in the case 
 supposed last, in the same manner as would in B some discovery 
 facilitating the transport of wood, in C some discovery facilitating 
 the smelting iron, in A some discovery facilitating the mining for 
 coal. The fewer obstructions, therefore, that stood in the way 
 of such transfers, the farther, in these cases, would the stock of 
 instruments in those societies be carried towards the order A, as 
 any obstruction that might occur would, on the contrary, have 
 the effect of checking the progress towards the more quickly 
 returning orders, and keeping them nearer the order Z. 
 
 The benefits to all parties, arising from such an interchange of 
 commodities as we have described, would be liable to be inter- 
 rupted by war or by legislative enactments. These disturbing 
 causes we have afterwards shortly to advert to, but there is one 
 arising from the progress of invention that may be properly 
 noticed here. 
 
 As there are no limits to the inventive faculty, so no commu- 
 nity can assure itself that any commodity which it now produces 
 and exports to some other community, may not come to be pro- 
 duced in that community, and so be no longer exported there. 
 
OF THE NATURE OF STOCK. 305 
 
 It may be, for instance, that, to return to the supposed case we 
 were just considering, in the society B, strata of coal are discov- 
 ered so near the surface as to be as easily wrought as in A, and 
 that the spirit of enterprise may there be sufficiently active, 
 successfully to engage in the occupation of mining for them. In 
 that case coals would there be procured for about five-sixths of 
 the labor they had cost when brought from A. They would fall 
 in relative value, the absolute capital of the society would be 
 augmented, and profits proportionally increased. But wliile in the 
 society B, the effects of the progress of invention would be thus 
 beneficial, in A they might operate prejudicially. No exportation 
 of coals could now take place from A to B, for being necessarily 
 very nearly at the same price in the one as in the other society, 
 there would be nothing to pay the expense of transport. Iron 
 then could no longer be paid for in coals, unless that commodity 
 sold at a lower rate. To pay for it, coals must be sold at B for 
 less, or some other commodity must be resorted to. In the 
 former case the society A would sustain a sensible loss, compara- 
 ble to an increased difficulty in working its mines, and propor- 
 tional diminution of the amount of its absolute capital. In the 
 latter, though the loss might be less, it would nevertheless be 
 real ; for, by the supposition, coal was the only commodity ex- 
 ported, and it could only be so because it was the one bringing 
 the best return. The necessity therefore of turning to some 
 other article, implies the obtaining of a less return, and a conse- 
 quent diminution of the absolute capital of the society, and, 
 unless counterbalanced by the progress of improvement, or an 
 increase in the strength of the effective desire of accumulation, 
 a withdrawal from the reach of the accumulative principle of its 
 members, of some portion of materials before within its grasp. 
 
 2d. When again, luxuries, the produce of foreign art, present 
 themselves to a society, whence they had before been strangers, 
 their value cannot be ascertained by comparing them with com- 
 modities of domestic formation, for it is not the relative useful 
 qualities of commodities, that fit them more or less perfectly to 
 gratify the passion of vanity, but solely the difficulty of procuring 
 them. Were a quantity of the article used for hemp in New 
 Zealand, shown to a person in England, who had never before 
 seen it, and was totally ignorant of its price, on being made 
 accurately acquainted with its strength, durability, weight, ab- 
 
 39 
 
306 OF THE NATURE OF STOCK 
 
 sorbing qualities, and pliancy, as compared with real hemp, he 
 would be able, knowing the value of the latter, to state pretty 
 nearly what it actually sold for. But were a person, in the same 
 country, perfectly ignorant of the value of pearls, and never 
 having seen any, to be shown a string of them, and made ac- 
 quainted with their quahties in relation to artificial pearls, and 
 glass beads of various sorts, though knowing well the price of the 
 latter, he would certainly be unable to assign the sum to be got 
 for the former. Were a variety of alcoholic liquors to be pre- 
 sented to an individual quite ignorant of them, and of their value, 
 and were he, changing from one to another, to partake, occasion- 
 ally, freely of them all for months and years together, were all 
 other circumstances concerning them but their sensible qualities 
 and eftects concealed from him, he would certainly be unable to 
 fix their relative value. Were, in like manner, specimens of all 
 the different fabrics used for female attire for the last ten years, 
 with their relative durabilities ticketed on them, presented to a 
 person of good taste, but perfectly ignorant of these matters, he 
 would certainly also be quite incapable of coming near their 
 actual relative cost. The same observation will apply to all 
 other luxuries. As they compare with each o;her, not by their 
 inherent qualities, but by the difficulty in procuring them, unless 
 the comparative labor necessary to procure them be known, there 
 is no means of fixing their relative price. It affords a rule too 
 by which we may test what are, or are not, luxuries. Thus, I 
 apprehend, that were a silver spoon, or sauce-pan, or vase, shown, 
 for the first time, to any person in the middle ranks of life, though 
 ignorant of its value, yet seeing its beauty and susceptibility of 
 receiving the most delicate impressions of the workman, and 
 being informed of its durability, safety, and the saving of labor 
 attending its use, on a fair estimate of these qualities, he would 
 place it not very far below its present relative value to copper. 
 He might, it seems to me, considering merely the qualities inhe- 
 rent in it, be willing to give for it twenty or thirty times what he 
 would for the same article wrought in copper. He would, how- 
 ever, I should apprehend, be far from estimating similar articles 
 fabricated of gold, at sixteen times the price of the same in silver. 
 Supposing him possessed of real taste and accurate judgment, the 
 difference between his estimate, and the actual comparative value 
 of these metals woidd mark how far they were, or were not 
 luxuries, to people of his fortune. 
 
OF THE NATURE OF STOCK. 307 
 
 The only rule, then, which people desirous of possessing luxu- 
 ries can adopt for measuring what they will give for them, is the 
 degree of difficulty of procuring them, the amount of labor which 
 must be given for them. When they are satisfied that any par- 
 ticular article of the sort they are in quest of is used by other 
 people, and that it cannot be had for less, they will pay the price 
 demanded. They do not seek for the grounds of their deter- 
 mination in the utility of the commodity, but in its scarcity. Let 
 a farmer go to lay out three pounds on lace for his wife, if he is 
 assured that the dealer in that article to whom he applies will 
 not charge him more than others, and that Mr. A's wife and Mr. 
 B's wife wear the same sort, he will care little whether he gets 
 for his money six or twelve yards, or Avhether it be two or three 
 inches broad. All that he is concerned about is that he should 
 get as much as other people. Let the same farmer think of 
 purchasing some new manure for his land, he will conceive 
 it necessary to ascertain both the effects of the article upon the 
 soil he farms, in comparison with other manures, and its cost also 
 compared with them. If he find that, compared with them, the 
 cost is no greater, he will be inclined to purchase ; if he find it 
 less, he will conceive it so much gain ; while it lasts it will be 
 equivalent to a marie pit discovered on his own farm. 
 
 If a dealer imports a commodity having a shade of distinction 
 scarcely perceptible considered in relation to the degree of enjoy- 
 ment it gives, but sufficiently marked to distinguish it from other 
 commodities of the sort, and if half a dozen people of rank adopt 
 the use of the article as a sign of their superiority, it has all 
 chances to enter into the consumption of every individual in the 
 community who can afford it. In such cases, the price of the 
 commodity depends altogether on the venders of it. But, as 
 each of these wishes to sell as much as possible, and as he 
 can do so most readily by underselling his neighbors, the price 
 gradually falls under a free competition, until the dealers in it 
 receive only the profits that the effective desire of accumulation, 
 and the progress of improvement in the society measures out to 
 them. At the end of the process the whole difference observa- 
 ble, if the article be completely a luxury, is a change of fashion. 
 The principle of accumulation has not been led to grasp a greater 
 compass of materials, nor has any addition been made to the 
 general stock of the society, a new set of marks of distinction has 
 
308 OF THE NATURE OF STOCK. 
 
 merely been introduced. The property in circulation is not aug- 
 mented, but the coin has received a new impression, or got 
 increased weight. It may, however, happen, and very often 
 does happen, that, during the process, a sort of factitious improve- 
 ment is introduced, which, while it lasts, is sometimes nearly 
 equivalent to a real improvement. 
 
 Suppose a merchant, seeking to strike out a new branch of 
 trade, exports to some distant country, and sells there to advan- 
 tage, an article of luxury the produce of the community to which 
 he belongs, and in return receives for it a commodity, a simple 
 utility in demand among his countrymen. Let the former com- 
 modity be lace, and the country to which it is exported E, and 
 the latter commodity barilla, and country to which it is imported 
 
 D. In process of time the trade increases, until a large quantity 
 of lace is exported, and a large quantity of barilla imported. 
 Suppose, farther, that the steady demand for the lace, joined to 
 other circumstances, animates ingenuity to facilitate the process 
 of manufacture, and that the article is before long produced at 
 half the outlay it cost when first exported. In the ordinary 
 course of matters, the diminished cost of production should be 
 followed by a correspondent reduction in the price it is sold at in 
 
 E. Two circumstances, however, may prevent this. The 
 intercourse between D and E may be very difficult, and clogged 
 by many obstructions, and the community E may be very 
 numerous, and may easily absorb a large amount of the article. 
 Both circumstances would help to diminish the effects of compe- 
 tition ; the former by lessening the number of competitors, the 
 latter by preventing the actual competition induced from operat- 
 ing fully. It might in consequence happen, that lace, though 
 produced with double facility, sold in E at nearly the same price 
 as at first. If we suppose that commodity to be a pure luxury, 
 this would be no disadvantage to E, for the quantity used would 
 serve exactly the same purpose as if its amount had been doubled ; 
 while, on the other hand, it would be so far an advantage to D, 
 that it would place somewhere there the command of all the 
 labor which in E was actually paid for. Among the members 
 of the society D double the quantity of barilla would be somehow 
 or another shared, that the labor expended in procuring it was 
 entitled to. The advantage would not certainly, of necessity, 
 have that healthy and vivifying effect which real improvement 
 
OF TPIE NATURE OF STOCK. 309 
 
 occasions, for it might not spread through the whole community, 
 but might be dissipated in luxuries by the merchants, manufac- 
 turers, and artisans engaged in acquiring it. If, however, in other 
 branches of trade and of manufactures for exportation, similar 
 facilities w^ere introduced, and similar large returns obtained, and 
 if in all the departments of domestic industry great real improve- 
 ments take place, the advance of the whole society would ,be 
 uniform, and not much unlike what would flow from an univer- 
 sally real improvement. 
 
 Should two societies in the same way trade together in mere 
 luxuries, a sort of factitious improvement might be created by the 
 effects of a restricted competition. The merchants who engaged 
 in the trade would, in the first place, acquire all the labor saved 
 by the overcharge of the commodities they bought and sold, and 
 the benefits might be diffused more or less generally on both 
 societies. 
 
 When, by the removal of restrictions, and the increased 
 capacity of industry to fabricate the goods in request as luxuries, 
 a free competition is induced, all these factitious advantages dis- 
 appear. Each adventurer endeavoring to beat down his opponent 
 in the foreign market, the productions of the industry of remote 
 countries come to be offered there, for the lowest amount, at which 
 the strength of the principle of accumulation can permanently 
 continue to produce them. They may even pass much below 
 this ; for vanity, capricious in its tastes, soon begins to despise 
 altogether what may be every one's purchase, and leaves what it 
 once highly prized as now vulgar and unworthy regard. In the 
 supposed case of the exportation of lace, that commodity might 
 have triple the labor expended on it, and its quantity might be 
 increased sixfold, and yet might bring in a smaller return than it 
 did before. The ample revenues which the merchant, the man- 
 ufacturer, the artisan, derived from the fabrication of such articles 
 become reduced to the lowest amount that may suffice to move 
 their respective productive faculties. Other branches of manu- 
 facture share the same fate ; the whole machinery of industry is 
 clogged and encumbered by the heavy additional burden thrown 
 on it, and distress and discouragement pervade the community. 
 
 3d. There are, however, very few, if any, commodities which 
 are purely luxuries. Although vanity is in part the cause of the 
 estimation in which very many are held, and though it gives to 
 
310 OF THE NATURE OF STOCK. 
 
 some perhaps nearly their whole value, nevertheless it seldom 
 exists in any alone. It almost always applies itself, as I have 
 already observed, to something ministering in some degree to 
 real wants or pleasures. There is beneath almost every luxury 
 a substratum of utility of greater or less depth. 
 
 The effects, consequently resulting from the exchange between 
 different communities, of very many commodities, are compounded 
 of the results produced by the traffic in articles of utility and of 
 luxury. As it is impossible in almost any case to determine 
 accurately how far any article is or is not a luxury, there is pro- 
 portional difficulty in ascertaining what are the . precise effects 
 resulting from the exchanges actually carried on between any 
 two communities. There is one principle which may, in some 
 instances, help to guide us. Almost all articles of which the 
 consumption is conspicuous, the precise effects resulting from 
 their physical qualities difficult to ascertain, and which, from their 
 novelty, have not yet been subjected to the effects of a free com- 
 petition, may be presumed to be in a great degree luxuries. In 
 them, we may be sure, vanity has found a material on which she 
 could easily fix, and from which there has been no opportunity 
 of dislodo;ino; her. 
 
 The relative effects of restriction, and free competition, when 
 opportunities have presented themselves of observing them, enable 
 us, however, with some certainty to determine, how far the com- 
 modities subjected to their operation have been luxuries, or real 
 utilities. In regard to articles supplying real wants, the more easy 
 and unconstrained the communication, the more extended the 
 production, the freer the competition, the farther, as we have 
 seen, are the stocks of instruments of the societies exchanging 
 carried towards the more quickly returning orders. Every step 
 in advance in the course is equivalent, subject only to the risk of 
 the communication being interrupted, to a real improvement. 
 With regard to such commodities, any general evil resulting from 
 overproduction is quite impossible. A partial glut, as it is termed, 
 may indeed occur ; but this, although a slight partial evil, must 
 be a general good. The commodity produced satisfying real 
 wants, an increased supply of it must diffuse a general and sensi- 
 ble plenty. In regard to such commodities the reasoning of 
 Mr. Say is, I conceive, conclusive. A general overproduction is 
 an absurdity, for it implies the means of a general consumption, 
 
OF THE NATURE OF STOCK. 311 
 
 and would, in fact, be a general improvement. It would be as 
 if the materials which nature has given to man were to receive 
 powers in addition to those which they already possess, for satis- 
 fying his wants ; as if the grain of the fields, the grass of the 
 meadow, the trees of the forest, advanced more rapidly to per- 
 fection, as if the ore yielded up its metallic treasures with greater 
 facility, the sun diffused a more genial warmth, and the earth 
 rejoiced in universal and exuberant fertility. The increased pro- 
 vision for wants thus presented, must either be consumed, or 
 applied to the formation of instruments to supply the demands of 
 a more distant futurity. 
 
 But though these are the effects of increased facilities in the ex- 
 change of commodities in as far as they are real utilities, it is exactly 
 the reverse in so far as they are luxuries. Restriction in the 
 exchange of luxuries may be, and often is felt, as no diminution 
 of enjoyment, but a great saving of labor, and the removal of that 
 restriction may almost immediately oblige all, or many of the 
 communities exchanging, to expend the whole amount of labor 
 they had before saved. If then we find that increased facility of 
 exchange, instead of diffusing plenty, spreads poverty, instead of 
 carrying the stocks of the communities exchanging towards the 
 more quickly returning orders, places them in those of slower 
 return, we may assure ourselves that vanity must have been a 
 very potent agent in giving to the commodities exchanged the 
 estimation in which they were held. 
 
 Perhaps the most remarkable example that was ever presented, 
 of general and long continued restrictions being at once and com- 
 pletely removed, is that which occurred in consequence of the gen- 
 eral peace succeeding the final defeat of the Emperor Napoleon. 
 A power which modern times cannot parallel, had been long ex- 
 erted to bind up the commerce of Europe. It had been exerted in 
 vain, for that commerce still moved, though it moved in shackles. 
 The termination of the war undid them at once. The ships of the 
 merchant again securely passed from land to land, and he again, 
 without fear, exposed his wares in every market. Had the com- 
 modities thus largely exchanged, been altogether utilities, it is 
 impossible but that a vast improvement must have been univer- 
 sally experienced, an augmentation of the resources of society 
 every where felt. The havock and insecurity of war, and the 
 waste of stock and labor attending it were done away with, and 
 
312 OF THE NATURE OF STOCK. 
 
 the whole energy and intelligence of the most powerful and intel- 
 lectual race which possihly the world has as yet seen, were turned 
 to the arts of peace, and the amelioration of the condition of man. 
 Instead, however, of having to mark the progress of abundance, 
 prosperity, and happiness, we are rather called on to note the 
 prevalence of poverty and distress. It is, I apprehend, impossi- 
 ble, to explain the far extended oppression under which capital 
 and industry have labored, but by admitting that they have 
 applied themselves largely to objects, the direct effects of the 
 attainment of which are worse than useless to society. Misery 
 it is true is clamorous, happiness is quiet, and therefore the 
 amount of the actual distress may sometimes have been made to' 
 appear greater than the reality, but admitting a large deduction for 
 misrepresentation thence arising, there remain too many well 
 authenticated facts and statements to doubt, that if freedom of 
 intercourse and competition has produced good, it has also pro- 
 duced evil, and hence that luxuries have made a large part of the 
 commodities in the production of which that competition has ex- 
 erted its powers. We may observe too, that countries producers 
 of articles which cannot be accounted luxuries, have in fact 
 derived great advantages from the facihty of intercourse and 
 increase of exchanges. Russia seems never to have made so 
 rapid advances, as within the last twenty years, while in Great 
 Britain protracted misery and distress were never so rife as they 
 have been for the greater part of that period. Were European 
 nations ranged according to their productions, those two countries 
 would probably be at opposite extremities of the scale of industry. 
 
CHA PTER XIII 
 
 OF WASTE. 
 
 The causes arising from deficiencies in the moral and intel- 
 lectual powers retarding the progress of improvement and accu- 
 mulation, and diminishing the stocks of societies, which we have 
 hitherto noticed, refer to the matter of which commodities con- 
 sist. There are others proceeding apparently from the same 
 circumstances, which create difficulties in the exchange and pres- 
 ervation of instruments, and may be said to relate to the manner 
 in which exchanges are made and instruments preserved. 
 
 Every thing retarding, or interposing difficulties in the exchange 
 of instruments, must have the effect of placing them in orders of 
 slower return. It must lengthen the period of exhaustion, or 
 add to the labor of formation. Instruments may be exchanged, 
 as we have seen, either by barter or cash, or, through the inter- 
 vention of credit, — a promise to deliver an equivalent at some 
 future time. 
 
 In the case of transfers by barter or cash, were the holders of 
 instruments so exchanged to represent them exactly for what 
 they are, all difficulties would be done away with, not arising 
 from the nature of the things themselves. But it is the business 
 of every exchanger to buy as cheaply, and sell as dearly, as pos- 
 sible, and he very frequently, I might say generally, endeavors 
 to do so by representing things to be other than what they are. 
 Were any one, for example, desirous of purchasing a horse, 
 morally certain that to whatsoever vender of those animals he 
 applied, he would tell him, as nearly as he himself knew, the 
 qualities of the horses he had on hand, and their just value, any 
 purchase of this sort he might have to make would be made 
 with facility and at once. The purchaser, however, can seldom 
 
 40 
 
314 OF THE NATURE OF STOCK. 
 
 depend on the accuracy of the statements he so receives. He 
 is often obhged to take much trouble, and to spend no little time, 
 before he makes his bargain, and, notwithstanding, is not unfre- 
 quently deceived. The time and money thus expended, both 
 by the sellers and purchasers of horses, and other commodities, 
 is so much loss to the community, and places the instruments on 
 which they are expended in orders of more slow return. Indirectly, 
 too, they may occasion more serious losses. If a farmer be deceived 
 in the purchase of a horse, it may very injuriously retard his 
 operations at the moment when it is most necessary for him to 
 advance them. If a builder be deceived in the timber he pur- 
 chases, it may occasion the speedy decay of the whole fabric he 
 erects. 
 
 The amount of loss arising, both directly and indirectly, from 
 successful or unsuccessful attempts to pass off commodities for 
 what they are not, is, I apprehend, determined by the weakness 
 of the social and benevolent affections and intellectual powers. 
 Where there is the most lively sympathy with the distresses and 
 losses of others, one will be most restrained from being the cause 
 of loss to another, both from the promptings of his own feelings, 
 and from a consideration of the sentiments with which others will 
 regard him. Where the tendency and consequences of actions 
 are most clearly seen, one will be most cautious of doing any 
 thing, which, by weakening general confidence and security, may 
 prejudicially affect the interests of society. Such losses will 
 therefore be least frequent where the accumulative principle 
 is strongest, and most frequent where it is weakest. 
 
 In China every man who sells tells as many lies as he thinks 
 have any chance of passing. He is never ashamed at being 
 detected. When that happens, he merely compliments the 
 person discovering the intended deception on his sagacity. 
 Among the ancients, both Greeks and Romans, all sorts of 
 trickery and artifice in purchasers and sellers seem to have been 
 common. Plato makes Socrates say that, in traffic and com- 
 merce, there is no such thing as an honest man, and Cicero has 
 a remark very similar. These, and the like assertions of clas- 
 sical authors, have indeed, now-a-days, been put down as mere 
 prejudice, but, though we are doubtless a very acute and saga- 
 cious generation, I can scarce think but that Socrates and Cicero 
 knew their own countrymen better than we can do. Mercantile 
 
OF THE NATURE OF STOCK. 315 
 
 honoi- and fair dealing are modern terms. Without much of the 
 reality of what they import, the extensive transactions now carried 
 on between individuals and communities could not exist. Never- 
 theless, the things to which they are applied want often not a 
 little of being fitly so described, and the deficiency in all com- 
 munities occasions a large portion of the outlay necessary to the 
 formation of instruments. 
 
 Deceit, however, it is to be observed, when exercised in the 
 exchange of mere luxuries, occasions an immediate gain, instead 
 of loss, to communities. When there was a prohibition on French 
 silks imported into Britain, they were particularly fashionable, 
 their great expense rendered them a fit material for vanity. The 
 British manufacturer could make fabrics not to be distinguished 
 from them, but which of course as British goods would not sell. 
 They were, however^ readily vended as smuggled French goods 
 by individuals hired to hawk them about under that guise. The 
 deceit was certainly an immediate loss to no one, a consid- 
 erable gain to the manufacturer.* The ulterior effects of all 
 deceit, however, in weakening the moral principle, must ever be 
 injurious to communities. 
 
 In exchanges effected by the intervention of credit the neces- 
 sity of perfect fair dealing is more apparent, and the losses occa- 
 sioned by fraud and deceit still greater. The persons giving the 
 credit must generally depend for repayment on the good faith of 
 the persons receiving it. The extent consequently to which 
 these transactions can in any community be carried, must be 
 measured by the general probity of its members. Where people 
 are inclined to make promises which they have reason to fear 
 they may not be able to fulfil, or which they know they cannot 
 fulfil, the system of credit is confined or destroyed. 
 
 The prevalence of a spirit of integrity in credit transactions, 
 would seem to proceed from similar principles to those, on which 
 good faith and honesty in all transactions depend. 
 
 The exchange of instruments between communities is ob- 
 structed by restrictions, prohibitions, or war. To the efiects of 
 these we have already partially adverted. They operate differ- 
 ently, as the commodities are utilities, or luxuries. 
 
 1. An interruption of the exchange of utilities between com- 
 
 * Hansard's Debates. March 8th, 1824. 
 
316 OF THE NATURE OF STOCK. 
 
 munities checks accumulation, by taking from it the materials on 
 which it exerts itself; it excites the inventive faculty, by prompt- 
 ing it to discover fresh materials, and new means of forming them 
 into instruments. According, therefore, to the circumstances of 
 the community, and the nature of the materials within reach of 
 its members, it may either come to be a good or an evil. 
 
 Were the intercourse between two communities, of which the 
 one A exchanges coal for the wool of the other B, suddenly to 
 cease, the event might be felt as a very great evil, and, at first, 
 the substitutes for these materials requiring more labor to work 
 them up into instruments of the sort required, the whole stock 
 of instruments possessed by both societies might be carried on 
 in the series some distance towards the more slowly returning 
 orders. It might happen, however, that in the society B import- 
 ing coal, there were beds of coal as easy to work as in A, and 
 that in the other A importing wool, there were tracts of land as 
 capable of feeding sheep as those employed for that purpose in 
 B. In this case, it is probable that invention would apply to 
 such materials, and that, in time, coal would be obtained in B, 
 at as cheap a rate as in A, and wool in A at as cheap a rate as 
 in B. Were it so, by the saving of labor and of time in the 
 transport of the commodities from country to country, the stocks 
 of instruments in both societies would be placed in orders of more 
 quick return than they were at the commencement of the inter- 
 ruption. Whether the loss on the one hand, or the saving on 
 the other, might, in the circumstances of either society, be fitly 
 esteemed greater, would depend on whether or not there were 
 materials in existence that by the power of invention might with 
 suflicient ease, and within the requisite time supply the particular 
 wants in question. There might not be fit materials, or the time 
 requisite to work them up might be too long. 
 
 Before the cession of Norway to Sweden, it was reckoned to 
 produce grain or vegetables for its inhabitants sufficient only for 
 four or five months. Its supplies for the rest of the year were 
 obtained from Denmark, to which country, in return for corn 
 received from it, it exported timber. When the great powers 
 had resolved on its annexation to Sweden, a British fleet block- 
 aded its coast, the peasantry came in starving crowds to the 
 towns, and a country from which the bravest race in Europe 
 once issued, was compelled to yield without a stroke. The 
 
OF THE NATURE OF STOCK. 317 
 
 insult then received, and the hardships endured, had the effect 
 of giving a great stimukis to agricukure. The more opulent 
 formed themselves into societies for the purpose of improving the 
 art, individuals skilled in its operations were engaged in Britain, 
 and in a few years a great addition was made to the agricultural 
 produce of the country.* The time in this case required for the 
 formation of instruments was too great, even supposing there had 
 been a sufficiency of materials of which to construct them, and 
 had not, therefore, the society submitted, it must have endured 
 excessive evils. 
 
 Many instances, however, might be cited, where the interdic- 
 tion by war, of the intercourse between different countries, has 
 very speedily produced a supply of the commodities interdicted, 
 and apparently without great injury to the nation possessing the 
 materials necessary for their formation. " Upon the break- 
 ing out of the war with France," observes Mr. Gee,f "and 
 prohibiting French commodities, encouragement was given for 
 erecting several of those manufactures here, as the lustring, 
 alamode, and otker silk manufactures for hoods and scarves which 
 the king's royal consort, the excellent Queen Mary, took no small 
 pains to establish ; for which article alone it is allowed France 
 drew from us above £400,000 yearly. At the same time the man- 
 ufacture of glass was established, which before we used to have 
 from France, and also that of hats and paper. In his time also 
 the manufactures of copper and brass were set on foot, which are 
 brought to great perfection, and now in a great measure supply 
 the nation with coppers, kettles, and all other sorts of copper 
 and brass ware. The making of sail-cloth was begun and car- 
 ried on to great perfection, and also sword blades, scissors, and a 
 great many toys made of steel, which formerly we used to have 
 from France; in the manufacture of which, it is said, we now 
 excel all other nations. The setting up of salt works and im- 
 proving of salt springs and rock salt, hath proved very beneficial 
 here, and saves a very great treasure yearly, which we heretofore 
 paid to France for salt and a great many other things which I 
 forbear to enumerate." 
 
 Restrictions operate quite oppositely on the exchange of luxu- 
 
 * These facts I learned in a tour through that country in 1818. I have no 
 means of ascertaining what is now the state of affairs there, 
 i Trade and Navigation of Great Britain. Lond. 1738. 
 
.318 OF THE NATURE OF STOCK. 
 
 ries between communities, from what they do on the exchange 
 of utifities. Their first effects are beneficial, while their ulterior 
 effects may be injurious. The "interdiction of a pure luxury 
 occasions, as we have seen, no loss whatever to the whole society. 
 It can scarcely fail to produce a gain. If it diminish the whole 
 amount of luxuries consumed in tlie society, that is evidently so 
 much saved. If, as is more likely, the force of vanity be not 
 weakened, it must at least be directed to other objects, probably 
 to some domestic imitation of the foreign article. In such cases 
 the successful imitators will demand and obtain prices yielding 
 much larger profits, than their capitals would give in any other 
 employments. The saving of labor, either in checking vanity, 
 or in supplying it with less outlay, is gain to some individuals, 
 loss to none. Competition, however, will in time reduce the 
 price paid for luxuries, to the lowest amount for which the laborer 
 and capitalist will exert their energies. As improvement can 
 have no effect on domestic luxuries, and as they must always be 
 rated by the real labor bestowed on them, they are ultimately the 
 productions of all others least profitable to the society. 
 
 2. The formation of instruments is rendered difficult and costly 
 to individuals, from frauds and violence punishable by law. To 
 guard against them always requires some vigilance, and occasions 
 some expense, and often demands a good deal of both. The 
 loss hence arising may be very considerable. It is said that the 
 cloth trade of Verviers, in France, was ruined from the number 
 of thefts committed in various stages of the manufacture, occasion- 
 ing a loss of about eight per cent, on the quantity produced. 
 
 The infrequency of crime will also, I apprehend, be found 
 chiefly to depend on the same principles that give force to the 
 effective desire of accumulation, the general strength of the 
 social and benevolent affections, and intellectual powers. Where 
 a desire of promoting the common good prevails, and there is a 
 clear perception of the means of doing so, infringements on the 
 rights of individuals, or violence to their persons, will be rare. 
 It is the strength of the moral feelings that is the safeguard of 
 the laws. Where these are destroyed, or greatly weakened, as 
 where a person has been cast out of the brotherhood of society 
 by being marked as a criminal, the dread of corporeal pains is 
 scarcely ever sufficient to deter from future trespasses. 
 
 The establishment of good laws and the security of the system 
 
OF THE NATURE OF STOCK. 319 
 
 of government, by diminishing the temptation to crime, and the 
 chance of escape from its consequences, have also, no doubt, great 
 effect. But sood laws or government can neither be established 
 nor maintained without good morals. Where purely selfish feel- 
 ings prevail laws have no power. 
 
 " Quid faciant leges ubi sola pecunia re gnat ? " 
 
 The direct destruction and waste occasioned by wars make, also, 
 no small item in the account of losses, to which the stocks of all 
 communities are subject. 
 
 The loss occasioned by the deceits and frauds of individuals, 
 and by the prohibitions and violence of states, may not unfitly be 
 termed waste. 
 
CHAPTER XIV 
 
 OF THE COMBINED OPERATION OP THE CAUSES INVESTIGATED IN THE 
 
 PRECEDING CHAPTERS. 
 
 The investigations in which we have been engaged in the 
 preceding chapters seem to indicate several great causes as 
 determining the nature and production of stock. They may be 
 divided into three classes. 
 
 I. Regarding things material. 
 
 o o o 
 
 1. The nature of the material world, producing a series of 
 events succeeding each other in regular order. 
 
 2. The nature of man, as a being in part material, acted on, 
 therefore, by matter, and whose existence and pleasures are, 
 consequently, dependent on events taking place among material 
 objects. 
 
 3. Also the nature of man, as a being in part material, and 
 whose corporeal powers — his labor, enable him to change the 
 positions of the matters around him. 
 
 II. Resardino; thinfrs not material. 
 
 1. The intellectual faculties of man, reaching not to an abso- 
 lute knowledge of the material world, but to a perception of the 
 order in which events succeed each other in it, and to a discovery 
 of the means of producing events necessary, or desirable to him, 
 by applying his corporeal powers to change the positions of the 
 materials within his reach. 
 
 2. The moral nature of man, — the motives by which he acts, 
 determining the degree in which he will be excited to apply 
 himself to the discovery of the order in which events succeed 
 each other, and to changing the positions of materials, and so 
 constructing instruments producing events ministering to future 
 necessities or pleasures. 
 
 Concerning these two causes, the general conclusions at which 
 
OF THE NATURE OF STOCK. 321 
 
 we arrived were; that the more the intellectual faculties are 
 expanded, the greater the power to extend the knowledge of the 
 successions of events, and to form materials into instruments ; 
 and that the greater the strength of the moral powers, — the 
 social and benevolent affections, the greater the desire to discover 
 the order of the succession of events, and to apply such discoveries 
 to the formation of materials into instruments. And conversely ; 
 that the feebler the intellectual faculties and moral powers, the 
 less both the ability to discover, and the inclination to apply dis- 
 coveries to the formation of instruments, and the greater the 
 tendency to dissipate the capacity of the instruments formed in 
 luxury, and to waste it through deceit and violence. 
 
 III. Causes derived partly from the nature of the material 
 world, and partly from the nature of man. 
 
 1. Change; arising from revolutions of all sorts, by which 
 men and arts are moved from region to region. This places 
 man and matter in new positions, and discloses to him new con- 
 nexions and relations, in the natures of the bodies within reach of 
 his operations. 
 
 2. Servile imitation ; the antagonist of the former, by which 
 men are led to operate by rule, and not of knowledge, and the 
 progress of invention and improvement retarded. 
 
 Strength of intellect and moral feeling gives continuity of 
 existence to the society, and leading the men composing it to 
 take an interest in distant events, extends the operations of their 
 powers to the intelligence, and application to useful purposes, of 
 a wide circle of events. Their weakness, and the prevalence of 
 the opposing causes, folly and pure selfishness, isolates each 
 member of society, contracts the operations of the powers of the 
 whole to the consideration and application of a narrow circle 
 of events, and dissipates and wastes them, in efforts made by 
 each to raise himself superior to others, and by force or fraud to 
 take from them what they possess. 
 
 There are thus two great principles, the inventive, and accu- 
 mulative, generating stock and adding to it, and they are both ex- 
 cited and moved, and enfeebled and restrained, by similar powers. 
 
 I. The inventive principle. 
 
 Its strength extending the power of man, augments stock, by 
 carrying the instruments composing it to orders of quicker return. 
 
 41 
 
322 OF THE NATURE OF STOCK. 
 
 It is accompanied by economy, by fidelity to engagements, by a 
 diminished inclination to luxury and waste. 
 
 Its weakness, by contracting the power of man, prevents the 
 augmentation of stock. It is accompanied by extravagance, by 
 infidelity to engagements, by a propensity to luxury and waste. 
 
 II. The accumulative principle. 
 
 Its strength leading men to embrace in their operations a wide 
 circle of events, accumulates stock, by giving additional capacity 
 to instruments already formed, or by working up new materials. 
 It carries instruments to orders of slower return, and is accompa- 
 nied also by economy, by fidelity to engagements, by a dimin- 
 ished inclination for luxury and waste. 
 
 Its weakness, contracting the compass of events on which 
 there is an inclination to operate, diminishes stock, by allowing 
 materials to escape from it, and lie idle, which, formed into instru- 
 ments, would yield abundant, though distant returns. Under it 
 instruments can only exist at the more quickly returning orders. 
 It is accompanied, also, by extravagance, by infidelity to engage- 
 ments, by a propensity to luxury and waste. 
 
 The consideration of the mode of operation of these two prin- 
 ciples suggests the following remark. 
 
 If, in any society, instruments be at orders of speedy return, 
 and we have not the means of ascertaining whether or not this 
 proceeds from the actual recent progress of invention, we may 
 fairly conclude it does so, if, in that society, .there be much 
 economy, little luxury, good faith in exchanges, fidelity in the 
 discbarge of promises, credit consequently extensively prevailing, 
 and few breaches in the peace, or transgressions of the laws of 
 the community. If, on the contrary, there be little economy, 
 much luxury, a want of good faith and fidelity, credit narrowed, 
 frequent public and private crimes, we may certainly conclude 
 that this position of instruments arises from a deficiency in the 
 accumulative, not from recent progress of the inventive principle. 
 
 Upon these two principles, the third set of causes referred to 
 operate somewhat differently. Change excites the principle of 
 invention, but often directly restrains that of accumulation. Imi- 
 tation restrains invention, but does not directly retard accumu- 
 lation. 
 
 The several causes referred to, rank among the chief agents 
 in the production of the phenomena which the progress of society 
 
OF THE NATURE OF STOCK. 323 
 
 exhibits. We have considered them separately, but they never 
 appear so, ahvays acting in combination. This circumstance 
 would not of itself aft'ect any conclusions concerning them, for it 
 applies to phenomena of all sorts, the causes influencing every 
 one being compound. But the peculiar nature of the human 
 mind, rather excited to action by motives, than passively operated 
 on by them, and moulding, therefore, its energies to suit the 
 course it adopts, occasions a difference between phenomena influ- 
 enced by it and all others. Hence, according to the preponder- 
 ating motive, and the course of action followed, the same powers 
 and principles take opposite directions, and the will is able to 
 draw to its purposes and make allies of those which would seem 
 naturally opposed to it. 
 
 Thus in an intelligent and moral community, the vanity of the 
 mother is gratified in the well-being of the child, and she prides 
 herself in the proofs of her having been an affectionate and care- 
 ful parent. In a vain and dissipated community, on the other 
 hand, she would be ashamed of devoting her attention to the 
 homely and unostentatious cares to which a solicitude for the 
 welfare of offspring prompts. In the one case vanity excites 
 parental affection, in the other it stifles it. The movement of 
 the mind, in these instances, is somewhat analogous to that of 
 those balances, in which the poise, if in the least inclining to one 
 side or the other, hurries it down with a rapid and continually 
 increasing preponderance. 
 
 This proneness in humanity to advance or recede with a speed 
 accelerated by the subjugation of opposing motives, helps to 
 afford an explanation of what I conceive to be one of the main 
 causes of the decay of states. 
 
 To add continually to the stock of any community, even some- 
 times to maintain it without diminution at its actual amount, is a 
 process in the prosecution of which difficulties always oppose. 
 While the funds of any society increase, the numbers among 
 whom those funds are to be shared also increase. The greater 
 annual revenue which invention and accumulation provide, though 
 it must support a more numerous population, may not support a 
 population having, individually, a greater share of the means of 
 comfort or pleasure, than that possessed by the members of the 
 society when improvement was yet in its infancy. To carry 
 the community still farther onward, even perhaps to maintain it 
 
324 OF THE NATURE OF STOCK 
 
 in its place, requires, therefore, generally, that the interests of 
 futurity should hold the same relation to those of present time 
 in the minds of the members of the society as ever. If, there- 
 fore, among any of the divisions of the body politic, futurity weighs 
 more lightly when compared with the present than it did before, 
 there there will be weakness, an incapacity to advance or even to 
 maintain the same position may be experienced, and that which 
 is defective drawing to it what is sound, from this point the pro- 
 gress from bad to worse may commence. The course of society 
 may thus be said to be always against an opposing current, which, 
 if it cannot be stemmed, sweeps downward with headlong force. 
 
 " Sic omnia fatis 
 In pejus ruere, ac retro sublapsa referri. 
 Non aliter, quam qui adverse vix flumine lembuin 
 Remigiis subegit : si brachia forte remisit, 
 Atque ilium in prseceps prono rapit alveus amni." 
 
 As a foundation for the few observations which our limits per- 
 mit me to make on this part of the subject, it is necessary to 
 refer to a circumstance, the truth of which was assumed in an 
 early part of the discussion. " The numbers of every society," 
 it was said, " increase, as what its members are inclined to esteem 
 a sufficient subsistence, is provided for them." * 
 
 The only classes in society which our inquiry has considered, 
 are the two of capitalists and laborers. With regard to them we 
 might a priori, and abstracting our attention from what we know 
 to be the fact, be in doubt which of the following suppositions 
 would be correct. 
 
 We might suppose that both classes would reckon that a suf- 
 ficient subsistence which had supported themselves, and that the 
 numbers of both being equally multiplied, the average revenues 
 of the individuals composing both might remain the same ; or we 
 might suppose that neither class would reckon that a sufficient 
 subsistence on which they had been supported, and that they 
 would not add to their numbers but in a proportion less than the 
 additional funds provided, so that the average individual incomes 
 of both capitalists and laborers, would be equally and continually 
 increased; or, finally, we might suppose that the capitalists 
 would add more to their numbers than to their revenues, or that 
 the laborers might do the same thing. 
 
 * Page 96. 
 
OF THE NATURE OF STOCK. 325 
 
 But though it might be difficult, a priori, to determine which 
 of these would take place, yet, in fact, we generally find that, 
 in the progress of society, the increase of the numbers of capi- 
 talists does not keep pace with the increase of their stocks and 
 incomes, while that of laborers does keep pace, or does more 
 than keep pace with their incomes. 
 
 The cause of this circumstance may, I think, be shortly stated, 
 as follows. 
 
 Marriage may be desired both for the pleasures of sense, and 
 for those of sentiment and affection. But, among men of even 
 moderate fortune, it does not in general add to the sum of their 
 purely sensual gratifications. It were obviously absurd, consider- 
 ing the lives which most young men in this class in Europe lead, 
 to speak of celibacy as implying abstinence. Purely selfish mo- 
 tives will never, therefore, lead such men to form this connexion. 
 They will rather keep them from it, vanity aiding, or prompting 
 them to the resolution of refraining from any such union, until 
 they have a prospect of raising their families above their own 
 rank. 
 
 Among men in the laboring class, again, marriage generally 
 adds to the amount of immediate sensual gratifications. Purely 
 selfish motives, therefore, side with those of sentiment and affec- 
 tion in prompting them to it, and they are not so apt to entertain 
 the ambition of raising their families above their own condition. 
 Hence, while capitalists are inclined to think that only a suffi- 
 cient subsistence for their offspring, which exceeds what they 
 themselves were supported on, laborers are content if they leave 
 their children in the same condition with themselves. It thus 
 happens, that the one class has a tendency continually to rise 
 above the other. 
 
 This separation has farther effects. 
 
 Vanity itself is sometimes a coadjutor to the accumulative 
 principle. A man's pride is sensibly gratified by rising, as it is 
 called, in the world, and placing himself on an equality widi 
 those to whom he was once inferior. But the further they are 
 above him, the greater his difficulty in raising himself to their 
 level, and the less his hopes of any gratification to mere vanity 
 from this source. It is, I apprehend, in a great measure on this 
 account, that as capital increases, there are fewer instances of 
 laborers making vigorous efforts to accumulate property. Vanity, 
 
326 OF THE NATURE OF STOCK. 
 
 losing hopes of acquiring distinction by accumulation, is entirely 
 occupied in exciting to dissipation. The laborer seeks preemi- 
 nence in displaying his abilities to spend, and employs any 
 spare funds he may possess in the purchase of fineries, in treating 
 his companions at the ale-house, and in similar extravagancies. 
 
 The prevalence of such habits and sentiments among the 
 laboring classes, produces various evils. Neglect to employ any 
 part of the earnings of to-day, in making provision for the wants 
 of to-morrow, every now and then, when that morrow brings 
 nothing for itself, gives rise to severe suffering. The condition 
 of the laborer fluctuates between abundance and dissipation, and 
 want and misery. The society loses, first, the benefits of that 
 stock, which the laboring classes accumulate in a better state of 
 things. It loses, also, the amount requisite to keep the laborer 
 from starvation w^ien in necessity, or to raise up other laborers, 
 to supply the place of those who perish from want, or the dis- 
 eases consequent on it. These may be called direct evils, those 
 which are indirect are much greater. 
 
 Waste accompanies dissipation. When laborers are in general 
 improvident and extravagant, very many of them must be dis- 
 honest. Men are naturally suspicious of persons whose expen- 
 diture exceeds the bounds of prudence, and they have too often 
 reason to be so. Honesty is at last the best policy, but it is 
 only at last. Deceit and knavery very often succeed better at 
 first, and, therefore, people who look not beyond what is present 
 and immediate, are very apt to resort to artifice and fraud, to get 
 rid of the necessities which their extravagance brings on them. 
 Hence, such a state of things would imply much watchfulness, 
 many checks and contrivances to guard against fraud and vio- 
 lence, and much loss, both from them and from the expensive 
 machinery necessary to restrain them. The most prejudicial, 
 however, of all the mischiefs that belong to our subject, brought 
 on by vicious principles of action pervading the lower classes, is 
 the gradual spread of similar manners and feelings through all 
 the orders of the state. The middle and higher classes of society 
 may be said to rest upon the lower; when decay, therefore, 
 infects the foundation, the structure must fall. By looking back 
 for a generation or two, we shall find that nearly all the capital- 
 ists in the nation have sprung directly from the people, and that 
 to them we must finally trace the greater part of that honorable 
 
OF THE NATURE OF STOCK. 337 
 
 enterprise, frugality, and perseverance, which liave given pros- 
 perity and power to the state. When the principles that actuate 
 the great lower and sustaining mass have a large mixture of 
 benevolence, self-denial, and probity, and when there is nothing 
 in the institutions of the society keeping them down as a degraded 
 caste, there is a constant mounting upwards of the elements of 
 health and strength, giving firmness and vigor to the whole body 
 politic ; when, on the contrary, the proper vices of the higher 
 ranks, luxury, extravagance, and their attendant evils, instead of 
 being counteracted by a continual infusion of the severer manners, 
 and mere self-denying morals, that should belong to the lower, 
 find those orders partaking as far as possible their follies and 
 levities, admiring them, and if required ready to minister to them, 
 we may assure ourselves that much unsoundness lurks beneath 
 whatever show of prosperity the outward condition of national 
 affairs may exhibit. It will, I believe, be found that, in civilized 
 societies, decay has generally thus proceeded from below upwards, 
 and that a deficiency in the lower classes, of the principles exciting 
 to economy, has gradually checked accumulation and invention 
 throughout the whole body, and at length produced universal 
 degeneracy and decay, and introduced the reign of waste and 
 violence. " Semper in civitate, quibus opes nulla^ sunt, bonis 
 invident ; vetera odere, nova exoptant ; odia suarum I'erum 
 mutare omnia petunt." 
 
 The experience of all ages proves the justice of the observa- 
 tion of the Roman historian. That state can never enjoy tran- 
 quility, which is oppressed by a crowd of 
 
 " Hungry beggars, 
 Thirsting for a time of pell-mell havock 
 And confusion." 
 
 But to trace at length the connexion between these is impossible, 
 without reference to the subjects of rent, and of population, which 
 are not embraced in our plan. I may, however, in conclusion, 
 observe that though, for the sake of simplicity of exposition, I 
 have assumed, all along, that the wages of labor constitute an 
 invariable quantity, I yet conceive that, in a society making a 
 steady and healthy progress, they should rather be continually 
 increasing, the laborer as well as the capitalist, gaining something 
 by the improvements which the progress of invention produces. 
 
CHAPTER XV 
 
 OF THE WEALTH OF NATIONS AS A BRANCH OF THE PHILOSOPHY OF 
 
 INDUCTION. 
 
 It will be perceived that there is an essential difference be- 
 tween the modes of investigation which I have followed in the 
 preceding pages, and those guiding the speculations of the cele- 
 brated philosopher, from whose opinions I venture to dissent. 
 Where the principles of investigation are different, the conclusions 
 arrived at can hardly agree ; and I scarce think, therefore, that 
 I should assist the reader in forming an opinion on the subject, 
 by entering into a particular discussion of the points in which we 
 are at. variance. The views I have endeavored to unfold must, 
 in so far, stand alone. 
 
 It so happens, however, that concerning the principles of inves- 
 tigation themselves, there is a common standard to which the 
 disciples of Adam Smith refer, and on the rules drawn from which, 
 I also conceive, the determination of the questions debated must 
 ultimately rest. Adam Smith has been said to have made politi- 
 cal economy a science of experiment, a branch of the inductive 
 philosophy.* Now, I apprehend, that the spirit of the philoso- 
 phy of the author of the Wealth of Nations was completely 
 opposed to the inductive philosophy — the philosophy of Bacon, 
 and that he never intended that that work should be received as 
 if established on it. If the reader agree with me, he will proba- 
 bly consider that the whole discussion here, in a measure termi- 
 nates. In placing before him the reasons for my belief, I shall 
 confine myself, as much as possible, to transcribing the words of 
 the Novirni Organum, on the one side, and those of Adam Smith, 
 in some of his speculations, on the other. 
 
 * Say's Introduction. and notr on Storch, p. 23. tome I. 
 
OF THE NATURE OF STOCK. 339 
 
 Lord Bacon affirms, that there always have been, and must 
 be, two sorts of philosophy — the popular, and the inductive; 
 or, as they might perhaps be denominated, the philosopliy of 
 system, and of science. In the one, the mind explains natural 
 phenomena according to its preconceived notions, in the other, 
 it traces out, by a careful interpretation, the real connexions be- 
 tween them.* The former will always be the most popular, and 
 on accoLuit of its facility of explication, and its fitness for the 
 purposes of argument, will maintain its place in the discussion of 
 all subjects of general interest ; while the latter must be confined 
 to a few, its spirit being difficult to seize, above the grasp of the 
 commonalty, and only to be comprehended by them in its effects. 
 
 It is not difficult to perceive the foundation on which each of 
 the two systems rests. 
 
 Necessity obliges men to attend to the phenomena around 
 
 * Nos siquidem de deturbanda ea, quas nunc floret, philosophia, aut si quse 
 alia sit, aat erit, hac emendatior, aut auctior, minime laboramus. Neque 
 enim ofRcimus, quin philosophia ista recepta, et alite id genus, disputationes, 
 alant, sermones ornent, ad professoria munera, et vitac civilis compendia, ad- 
 hibeantur, et valeant. Quin etiam aperte significamus, et declaramus, earn 
 quam nos adducimus philosophiam, ad istas res admodum utilera non futuram. 
 Non presto est; neque in transitu capitur ; neque ex prcenotionibus intellectui 
 blanditur ; neque ad vulgi captum, nisi per utilitatem, et eiFeeta descendet. 
 
 Sint itaque (quod felix faustum que sit utrique parti) duae doctrinarum 
 emanationes, ac duiE despensationes ; duae similiter contemplantium, sive 
 philosophantium tribus, ac veluti cognationes ; atque illae neuticum inter se 
 inimicae, aut aliense, sed faederatoe, et mutius auxiliis devincta; ; sit denique 
 alia scientias colendi, alia inveniendi ratio. Atque quibus prima potior et 
 acceptior est, ob festinationem, vel vitas civilis rationes, vel quod illam alter- 
 am ob mentis infirmitatem capere et coniplecti non possint (id quod longe 
 plurimis accidere necesse est,) optamus, ut iis feliciter, et ex vote succedat, 
 quod agunt ; atque ut quod sequuntur, teneant. Quod si cui mortalium cordi 
 et curae sit, non tantum inventis haerere, atque iis uti, sed ad ulteriora pene- 
 trare ; atque non disputando adversarium, sed opere naturam vincere ; deni- 
 que, non belle et probabiliter opinare, sed certo et ostensive scire ; — Atque 
 ut melius intelligamur, atque illud ipsum quod volumus, ex nominibus 
 impositis magis familiariter occurat ; altera ratio, sive via, anticipatio mentis.; 
 altera, hderpretatio naturcE, a nobis appellari consuevit." Praef. II. Instaur. 
 
 " Ut cunque enim varia sint genera politiarum, unicus est status scientia- 
 rum, isque semper fuit et mansurus est popularis. Atque apud populura 
 plurimum vigent doctrinae, aut contentiosae et pugnaces, aut speciosae et 
 inanes ; quales videlicet assensum aut illaqueant, aut demulcent." Prfflf. 
 Inst. 
 
 " Quinetiam significamus aperte, ea, qute nos, adducimus, ad is tns res non 
 multum idonea futura ; cum ad vulgi captum deduci omnino non possint, 
 nisi per effecta et opera tantum.' Lib. I. c. xxviii. 
 
 42 
 
330 OF THE NATURE OF STOCK. 
 
 them, to mark their actual successions, and to name them. 
 They have thus a store of general facts, and of regular expressions 
 for them. These, however, refer not to the laws of the general 
 system themselves, but to the phenomena oi events, the conse- 
 quences of those laws. 
 
 Their farther discussions regarding them may be undertaken 
 for the purpose either of explaining, or of investigating them. 
 If for the former they will refer to principles already admitted ; 
 that is, to known modes of succession. If for the latter, they 
 will search for the causes on which those common successions 
 proceed. An example will render this plain. 
 
 In the earliest stages of society, and before speculation com- 
 menced, men would make some general observations concerning 
 the motions of the different bodies about them. They would 
 observe, for instance, that, unless prevented by some obstacle, 
 most bodies fall to the earth. Adopting this observation as a 
 general rule, when they saw one so falling, they would conceive 
 of the event as a usual or natural occurrence. A savage, when, 
 in traversinof the forest, he sees a rotten branch break off and 
 fall to the ground, thinks of it as an event which is a necessary con- 
 sequence of its nature, and, if his language furnished the expres- 
 sion, might say it was a natural motion in it as a heavy body. 
 Were he to see the same broken branch moving rapidly through the 
 air upwards, or horizontally, he would conceive of it as not pro- 
 ceeding from its own nature, but from some disturbing cause, and 
 might call it a motion produced by violence. He would observe 
 too, that some substances, as air, and what he calls fire, rise 
 upwards. He would so conclude, that all light bodies ascended. 
 In the same manner, the heavenly bodies seem to him to have 
 naturally a circular motion. 
 
 Let us now suppose that the two sorts of philosophy : 1st. the 
 explanatory or systematic, and 2d. the inductive or scientific, in 
 pursuit of their respective objects, apply themselves to the con- 
 sideration of the complicated series of phenomena, connected 
 with sensible motions of all sorts. 
 
 As what is conceived to be already known requires no expla- 
 nation, the philosophy of system takes things which, because 
 familiar, are admitted as obvious, as the media for explaining all 
 other things. To do otherwise, were to undertake a work foreign 
 to its objects. In this way, under its hands, the practical rules 
 
OF THE NATURE OF STOCK. 331 
 
 of the observer, become the speculative principles of the philo- 
 sopher. Motion is divided into natural, and violent. Certain 
 bodies have a natural tendency downwards, others upwards, 
 others to move in a circle. From these principles, the whole 
 phenomena are explained in a plausible mannei', and arranged 
 in a systematic form. Such was the plan of the philosophers of 
 Greece, and such their pseudo science of motion. It is evident, 
 that however it might systematize and explain facts already 
 known, it could not conduct to new truths. It could not lead 
 farther than the principles from which it set out, and these evi- 
 dently embraced not the laws of the general system of things, 
 but only circumstances, the results of those laws. 
 
 The philosophy of induction has for its object the discovery 
 of truth. It seeks for the laws regulating the general system. 
 As it is the aim of the other to explain plausibly, its aim is to 
 investigate strictly. What, consequently, are to the one ultimate 
 principles, are to the other collections of facts, the causes of which 
 are to be inquired into. When, therefore, this philosophy ap- 
 plied itself to the consideration of the phenomena of motion, it 
 pronounced the whole antecedent system factitious and foreign to 
 its objects, and commencing their investigation sagaciously and 
 diligently anew, it discovered the real and simple laws regulating 
 the various series of these events.* 
 
 To which of those opposite sects does Adam Smith belong? 
 and on which of these two modes are the principles guiding his 
 speculations framed? 
 
 To me it appears that his philosophy is that of explanation 
 and system, and that his speculations are not to be considered as 
 inductive investigations and expositions of the real principles 
 guiding the successions of phenomena, but as successful efforts 
 to arrange with regularity, according to common and preconceived 
 notions, a multiplicity of known facts. 
 
 My reasons for this opinion are drawn, 1st. from the object 
 at which his philosophy aims : 2d. from the methods which he 
 adopts to attain it: 3d. from the consequences which have result- 
 
 * Etiam quum de causis motuum aliquid significare volunt, atque divi- 
 sionem ex illis instituere, difTerentiam motus naturalis et violent!, maxima 
 cum socordia, introducunt; quae et ipsa omnino ex notione vulgari est ; cum 
 oranis motus violentus etiam naturalis revera sit, — ista mere popularia sunt, 
 et nullo modo in Naturam penetrant, Nov. Org. Lib. I. Ixvi. 
 
332 OF THE NATURE OF STOCK. 
 
 ed^from his labors. I shall arrange the proofs for the justice of 
 this conclusion, which I purpose submitting to the reader, accord- 
 ing to these three heads ; contrasting in each the spirit and con- 
 sequences of his speculative principles with those of the inductive 
 philosophy. 
 
 I. According to Adam Smith "Wonder, and not any expecta- 
 tion of advantage from its discoveries, is the first principle which 
 prompts mankind to the study of philosophy, of that science 
 which pretends to lay open the concealed connexions that unite 
 the various appearances of nature;* — philosophical systems are 
 to be considered as mere inventions of the imagination, to con- 
 nect together the otherwise disjointed and discordant phenomena 
 of nature." — "A philosophical system is an imaginary machine 
 invented to connect together in the fancy, tho^e different move- 
 ments and effects, which are already in reality performed." f 
 
 It is needless to say that this account of the object of philoso- 
 phy is quite opposite to that given in the Novum Organum. 
 The passages already quoted may show this and many others 
 might be adduced. It is throughout the endeavor of the founder 
 of the experimental philosophy to hold out truth itself, and the 
 benefits to be derived from it as its object, to show that this we 
 can never reach by any effort of the mere reasoning and imagin- 
 ative faculties, or in any other manner than through patient 
 inductio n,J and that that framing of systems explanatory of things 
 already known is foreign to its purposes. <§> 
 
 * z/ta TO davfi<jc'C,Bi,p 6i dvdpomoi nal rvv ttuI to TTfCorov ^nf^avlo cpiJ-oao- 
 gieip, &c. Arist. Lib. I. Cap. 2. Metaph. 
 
 t These passages are quoted from one of his posthumous works : " The 
 Principles which lead and direct Philosophical Inquiries, illustrated by the 
 History of Astronomy, of Ancient Physics, Logic, and Metaphysics." It may 
 perhaps be thought that in this work he represents only what he conceives 
 to be the actual path of philosophy, not that which it should pursue. 1 do 
 not think so, because the declarations of his particular friends intimate the con- 
 trary -, thus his editors say, in reference to the fragment on Astronomy, that 
 it is to be viewed as an additional illustration of those principles of the hu- 
 man mind, which Mr. Smith has pointed out to be the universal motives of 
 philosophical researches. Dugald SteWart, also, in his life and introductory 
 dissertation intimates the same thing. The best proof, however, is in the 
 course he actually himself pursued. 
 
 + Etenim vcrum examplar mundi in intellectu humano fundamus ; quale 
 invenitur, non quale cuipiam sua propria ratio dictaverat. — Itaque ipsissimae 
 r<?s sunt (in hoc gcnerc) Veritas et utilitas. Nov. Org. Lib. I. cxxiv. 
 
 § Rursus, si alius quispiam fortasse vcritatis inquisitor sit severior ; tamen 
 
OF THE NATURE OF STOCK. 333 
 
 11. Philosophy being thus, according to Adam Smith, an art 
 addressing itself to please the imagination, it gains its end by 
 searching for some common and familiar observation, and makine: 
 it serve as the means of connecting any series of interesting events, 
 to the consideration of which curiosity may direct the attention. 
 "In the mean time it will serve to confirm what has gone before 
 and to throw light upon what is to come after, that we observe, 
 in general, that no system, how well soever in other respects 
 supported, has even been able to gain any general credit on the 
 world, whose connecting principles were not such as were famil- 
 iar to all mankind." * It is by this circumstance that he judges 
 of the merit of all philosophical systems, and the superiority of 
 Sir Isaac Newton over Des Cartes, consists, according to him, 
 in his discovering that he could join together the movements of 
 the planets by so familiar a principle of connexion as that of 
 gravity, which completely removed all the difficulties the imagin- 
 ation had hitherto felt in attending to them.f 
 
 No doctrin-e, certainly, can be more opposed to the spirit of 
 the philosophy of Bacon than this. It is this propensity to gen- 
 eralize immediately from a few familiar notions, that he all along 
 represents as the vice of the antecedent system-builders, and the 
 error which his followers have to guard against. "There have 
 been, and cap be," he says, "but two modes of searching after 
 truth. The one commencing the chain of reasoning with some 
 familiar conception of things, flies from them immediately to 
 general axioms, and from these, and their assumed incontroverti- 
 ble truth, judges of all particulars. A way of philosophizing 
 brief, but rash ; easy and w^ell fitted to conduct to disputes, but 
 not leading to a knowledge of nature. This is the common 
 mode. The other rises gradually and slowly from fact to fact 
 and only at last arrives at the most general conclusions. These, 
 however, are not notions, the products of the imagination, but 
 
 et ille ipse talem sibi proponet veritatis conditionem, quse menti, et intelleclui 
 satisfaciat in redditione causarum, rerum quae jampridem sunt cognitSB ; non 
 earn quae nova operum pignora, et novam axiomatum lucem assequatur. Ita- 
 que si finis scientiarum a nemine adhuc bene positus sit, non mirura est, si 
 in iis, quoB sunt subordinata ad finem, sequatur aberratio. Nov. Org. 
 
 * History of Astronomy. 
 
 + History of Astronomy. Pessimum enim omnium est augurium quod ex 
 consensu capitur in rebus intellectualibus. Nihil enim niultis placet, nisi 
 imaginationem feriat, aut intellectum vulgarium notionum nodis astringat, ut 
 supra dictum est. Nov. Org. Lib. I. Ixxvii. 
 
334 OF THE NATURE OF STOCK. 
 
 real laws of nature, and such as she herself will acknowledge and 
 obey.* Of the two, the fornaer, the explanation of things accord- 
 ing to preconceived notions, much more easily gains assent than 
 the latter, its principles, collected from a few facts, and these of 
 familiar occurrence, seize on the judgment, and fill the imagina- 
 tion. Whereas, on the other hand, a real interpretation of 
 nature must find its materials in things very various in themselves, 
 and gathered together from different quarters, cannot make a 
 forcible impression on the mind, and must necessarily appear to 
 it as something harsh, unusual, and mysterious. Hence in all 
 chains of reasoning, having for their object not to gain a knowl- 
 edge of nature, but to direct the opinions of men, the mode of 
 philosophizing which proceeds by arguing from preconceived 
 notions, will always be the m.ost successful. "f 
 
 I believe it will be found, that the practice of the author of 
 the Wealth of Nations, every where agrees with his theory, and 
 that he has himself, in all his speculations, adopted the explana- 
 tory and systematizing form of philosophizing, instead of the 
 scientific and inductive, conforming himself to those principles 
 which he has pointed out as leading and directing philosophical 
 inquiry, and according to the accuracy of their agreement with 
 which, all systems of nature have constantly, he tells us, " failed 
 -or succeeded in gaining reputation and renown to their authors;" 
 and that, his object being every where to build common facts and 
 familiar observations into a system, not to inquire into the causes 
 or real laws from which they spring, he takes those things for 
 fundamental principles which would present themselves to the 
 
 * " a sensu et particularibus primo loco ad maxime gcneralia advoletur, 
 
 tanquam ad polos fixos circa qiias desputationes vertantur ; ab illis ccetera per 
 media deriventur ; via certe compendiaria, sed praecipiti ; et ad Naturam im- 
 pervia, ad disputationes vero proclivi et accommodata. At secundum nos, 
 axiomala continenter, et gradatim excitantur, ut nonnisi postremo loco ad 
 generalissima veniatur ; ea vero generalissima evadunt, non notionalia, sed 
 bene terminata ; et talia qute Natura ut revera sibi notiora agnoscat, quodque 
 rebus hcereant in meduUis." Nov. Org. Praef. et lib. I. xviii. xix. 
 
 f Quin longe validiores sunt ad subeundam assensum anticipatlones, quam 
 interpretationes ; quia ex paucis collectae, iisque maxime quae familiariter, 
 occurrunt, intellectum statim perstringant, et phantasiam implent; ubi contra, 
 interpretationes, ex rebus admodum variis et miiltum distantibus sparsim 
 collectae, intellectum subito percutere non possunt; ut necesse sit eas, quoad 
 opiniones, duras et absonas, fere instar mystoriorum fidei videri. In scientiis, 
 quae in opinionibus et placitis fundatae sunt, bonus est usus anticipationum 
 fit dialectical ; qiiando opus est assensum Bubjugare,non res. lb. Lib. I.xxviii. 
 
OF THE NATURE OF STOCK. 335 
 
 inductive inquirer as phenomena, the principles of which his 
 manner of philosophizing would call on him to investigate. 
 
 In the catalogue of our author's works, the Theory of Moral 
 Sentiments ranks next to the Inquiry into the Nature and Causes 
 of the Wealth of Nations. On what is it founded ? A general- 
 ization from what is termed sympathy — a principle than which 
 there is perhaps no one more sensible to every individual, more 
 capable of serving as a familiar bond of connexion between the 
 phenomena of the moral world, or better fitted therefore, for the 
 purposes of the systematic philosopher ; but than which, also, 
 there is, probably, no single circumstance in the combined actions 
 of the mind and body, that would appear to the inductive philoso- 
 pher more deserving of being itself investigated. 
 
 A person enters for the first time an hospital, and the spectacle 
 is presented to him of an individual undergoing a severe operation. 
 As at each cut of the knife he sees the flesh divided, the muscles, 
 vessels, and nerves exposed, the blood flowing from the large, 
 gaping, quivering wound, and as he hears the stifled groans of the 
 sufferer, he is conscious of a strange, tremulous sensation, stealing 
 rapidly over his frame, a cold dew stands on his forehead, his 
 features contract, he breathes with difficulty, his limbs sink under 
 him ; — in fact, he will be found to be in the very same state with' 
 the person operated on, in all respects, but that he feels not the 
 acuteness of torturing pain, and is not subject to the quickening 
 reaction produced by it. The vital powers therefore very possi- 
 bly yield for a little, he faints, is carried out to the fresh air, and 
 in a few minutes walks off" astonished at the strangeness of the 
 occurrence. When he reaches his home, he learns that an inti- 
 mate friend has suffered a great calamity, and the intelligence 
 deeply afflicts him. In both cases he suffers, or sympathizes,, 
 with another person. But are the two precisely alike ? are we 
 warranted to assume, with Adam Smith, that the laws governing 
 them are the same ? and is there not a singular blending in both 
 of mental and corporeal phenomena, all the circumstances of the 
 actions and reactions of which are deserving of the minutest in- 
 vestigation from one, who would set about an inductive inquiry 
 into the principles of our compound nature ? 
 
 The picture, which, adopting tlie common notion of sympathy 
 as the point of view, he has given of the phenomena of the moral 
 world, is exceedingly interesting and comprehensive, and as a sys- 
 
336 OF THE NATURE OF STOCK. 
 
 tern regularly arranging a vast mass of facts, is very valuable. 
 Here, however, its merits cease. No one, I apprehend, will now 
 cite it, as truly developing the nature of our intellectual being, 
 as an addition to the science of mind.* 
 
 Similar observations will apply to his fragments on the imita- 
 tive arts. He adopts in them the hypothesis that the pleasure 
 they give arises from some difficulty in the execution being over- 
 come, and it seems to have been his intention to build up a 
 whole system of art on this principle. Perhaps no circumstance 
 can be found, running more through all the arts, and, therefore, 
 better fitted for the connecting purposes of the system-builder, 
 or, on the other hand, more curious in itself, and wdiich, there- 
 fore, the inductive philosopher would be more inclined to inquire 
 into. How is it, that the images of the poet come upon us with 
 most force, when he puts his words into measured cadence ? 
 How is it that an ideal form, if struck out of marble, affects us 
 so much more than if moulded in wax ? Is it that the spirit, 
 when fully roused, and striving to embody some great sentiment, 
 or strong emotion, naturally seizes on the materials which may 
 best betoken energy, and thus contrives to give an additional air 
 of intellectuality to mere matter? — This or a series of such 
 questions present themselves to the inductive inquirer. What 
 to the systematic philosopher affords the means of explaining 
 other things, is to him the subject itself of inquiry. 
 
 But, of all his speculations, there is none in which he seems to be 
 more completely the philosopher of system and explanation than 
 in the Wealth of Nations. It is a system entirely founded on the 
 most common and familiar notions, and proceeds altogether on 
 the generalization of them. Value, riches, stock, capital, wealth, 
 jprojit, self-interest, the desire of bettering one's condition, are 
 evidently of this sort. They are manifestly terms of ill-defined 
 import, referring to notions drawn hastily, and confusedly, from 
 the course of passing events ; " notiones confusae, et temere a 
 rebus abslractae." And the strain of his reasoning upon them is 
 that proper to the philosophy of system, which, taking from 
 experience the most common and familiar observations, applies 
 itself not to inquire into them, but to form a theory out of them. 
 " Rationale enim genus philosophantium ex experientia arripiunt 
 
 * See the account given of it by his admirer and disciple, Sir James Mac- 
 intosh, in his Ethical Systems. 
 
OF THE NATURE OF STOCK. 337 
 
 varia et vulgarla, eaque neque certo comperta, nee cliligenter 
 examinata et pensitata ; reliqua meditatione, atque ingenii agi- 
 tatione ponunt." If we, therefore, view his work as an attempt 
 to establish the science of wealth, on the principles of the experi- 
 mental or inductive philosophy, it is exposed to the censure of 
 transgressing every rule of that philosophy. 
 
 " Men are inclined to think that it is not necessary to inquire 
 into the causes of events that are common and happen every 
 day, but, taking them for things too evident and manifest to 
 require explanation, assume them as causes sufficiently account- 
 ing for phenomena, that are not of so frequent and familiar occur- 
 rence. Whereas, in reality, no judgment can be formed of events 
 which are rare and remarkable, nor can any thing new be brought 
 to light, without an accurate investigation of the causes, and 
 even the causes of the causes of things, that are the most com- 
 mon and familiar." * 
 
 The reason of this will be evident, by referring to the example 
 before adduced. If a man, as in the case of the savage, who is 
 totally unacquainted with the system of things but as they pre- 
 sent themselves to the eye of the practical observer, be asked 
 why a stone falls to the ground, he would answer, " it is its 
 nature, all heavy bodies fall to the ground." " Why does smoke 
 ascend?" "It is its nature, all light bodies mount upwards." 
 "Why, when a stone is seen flying through the air, do you look 
 
 * Atque de istis rebus, quiB videntur vulgatce, illud homines cogitent ; 
 solera sane eos adhuc nihil aliud agere, quam ut eoriim, quae rara sunt, 
 causas ad ea, quoe frequenter fiunt, refcrant et accommodent : at ipsorum, 
 qu« frequentur evenuint, causas nullas inquirant, sed ea ipsa recipiant tan quam 
 concessa et admissa. 
 
 Itaque non ponderis, non rotationis ceslestiiirn, non caloris non frigoris 
 non luminis, non duri non mollis, non tenuis, non densi, non liquidi, non 
 consistentis, non animati, non inanamiti, non similaris, non dissimilaris, 
 nee demum org a nici causas quaerunt; sed illis tanquam pro evidcntibus et 
 manifestis receplis, de cteteris rebus, quae non tani frequenter et familiariter 
 occurrunt, disputant et judieant. 
 
 Nos vero, qui satis scimus nullum de rebus raris aut notabilibus judicium 
 fieri posse, , multo minus res novas in lucern protrahi. absque vulgariuni 
 rerum causis et causarnm causis rite examinatis et repertis ; necessario ad 
 res vulgarissimas in historiam nostram recipiendas compcllimur. Quenetiam 
 nil magis philosophice offecisse deprehendimus, quam quod res, quse familiares 
 sunt et frequenter occurrunt, contemplationem hominum non morentur et 
 detineant, sed recepiantur obiter neque earum causae quteri soleant : ut non 
 saepius requiratur informatio de rebus ignotis, quam attentio in notis. Nov. 
 Org. cxix. 
 
 43 
 
338 OF THE NATURE OF STOCK. 
 
 about to find out the reason of it?" "Because it is against its 
 nature, and I know, therefore, it must have been produced by 
 violence — by some external force." Thus, too, among mere 
 practical observers of events, there would come to be the terms 
 gravity, levity, natural and violent motion. Now all these words 
 and phrases, if correctly interpreted, are perfectly correct, accord- 
 inor to the measure of the knowledo;e of the individuals, and 
 assume nothing but what their experience warrants. When it is 
 said that smoke ascends in consequence of its levity, or because 
 it is the nature of it and other light bodies to ascend, nothing 
 more is necessarily implied in the words than that there is some- 
 thing, — what is not known, — arising from the general constitu- 
 tion of things, from the system of nature itself, causing that 
 ascent, and that, while this general constitution of things remains 
 unaltered, all such bodies will ascend. So it is when it is said 
 that it is against the nature of a stone to move in any direction 
 but downwards, and that its other motions must be violent. The 
 expressions, in strictness, mean nothing more than that unless 
 acted on by some extraneous cause, while the present condition 
 of things lasts, if it move at all, its motion will be directly down- 
 wards. All these are conclusions drawn from experience, and 
 form general rules of real practical utility. Science will never 
 teach the savage to shape, to trim, or to preserve the poise of 
 his canoe, better than observations similar to these have already 
 taught him. 
 
 When now the systematic philosopher applies himself to ac- 
 count for, and range in regular order, the various phenomena refer- 
 able to matter and motion, his object being merely explanation 
 and arrangement, he naturally sets out from common and familiar 
 notions, and principles which no one doubts of, and applies all 
 his powers to tracing out from their operation some explanation 
 of the phenomena in question. " Reasoning on these familiar 
 notions, from a few particulars, and perhaps some generally ad- 
 mitted maxims, he rises immediately to the most general conclu- 
 sions, and from their fixed and immutable truth judges all other 
 particulars. If some of them seem contrary to his theory, he 
 employs his ingenuity to explain them away, or to make them 
 appear coincident, or removes the difficulty by terming them 
 exceptions ; while such particulars as are not opposed to his 
 principles, are laboriously and artfully arranged, according to his 
 
OF THE NATURE OF STOCK. 339 
 
 system."* Omitting, for the present, the consideration of what 
 he actually accomplishes, let us attend to that wherein he fails. 
 
 The familiar notions of the common observer become his con- 
 necting media, and he pretends to account for the whole phe- 
 nomena of matter and motion, on the principles, as he calls them, 
 .of gravity, levity, natural and violent motion. JNow it is obvi- 
 ous that, by this application of the terms, he completely, though 
 imperceptibly, changes their meaning. As employed by the 
 man of practical observation, though perhaps somewhat confusedly 
 conceived, they necessarily and really mean nothing more, than 
 certain known consequences, the results of some unknown laws 
 or powers regulating the system of things. As employed by 
 the systematic philosopher, they, on the contrary, are assumed 
 to be the very laws, powers, or principles, themselves governing 
 and sustaining the mundane system. The change in signification 
 is not perceived, for the generality of mankind are incapable of 
 any thing like metaphysical accuracy of conception, and are led 
 away very easily by the fallacies of language. Its consequences, 
 however, are important, for if we understand by science the 
 knowledge of the real laws of nature, — the laws governing the 
 general system, — this assumption completely diverts from their 
 discovery, for it induces the belief that they are already reached. 
 It seems to be on this account, that Lord Bacon so often points 
 out the errors arising from the hasty adoption of preconceived 
 notions, "anticipationes," the greater part of the first book of the 
 " Novum Organum " consisting, in fact, of an exposition of 
 them.f Acuteness of reasoning, and reach of thought are thus, 
 
 * Formam enim inquirendi et inveniendi apud antiquos et ipsi profitentur, 
 et scripta eorum pree se ferunt. Ea autem non alia fuit, quam ul ab exemplis 
 quibusdam et particularibus (additis notionibus communibus, et fortasse por- 
 tione nonnuUa ex opinionibus receplis, quae maxime placuerunl) ad conclu- 
 siones maxime generalia sive principia scientianim, advolarent; ad quorum 
 veritatcm immotam et fixam, conclusiones iuferiores per media educerent 
 ac probarent, ex quibus artem constituebant. Turn demum si nova particularia 
 et exempla mota essent et adducta, quse placitis suis refragarentur ; ilia aut 
 per distinctiones, aut per regularum suaruin explanationcs, in ordinem sub- 
 tiliter redegebant ; aut demum per exceptiones grosso modo summovebant. 
 At rerum particularium non refragrantium causas, ad ilia principia sua 
 laboriose et pertinaciter accommodabant. Verura nee historia naturalis et 
 experientia ilia erat, quam fuisse oportebat (longe certe abest }) et ista advo- 
 latia ad generalissima, omnia perdidit. Nov. Org. L. I. cxxv. 
 
 t " Non, si omnia omnium aetatum ingenia coierent, et labores contulerint 
 
340 OF THE NATURE OF STOCK. 
 
 he observes, rendered useless, for they come too late. The 
 place for them is in examining and weighing experiences, and 
 from these deducing first principles * If this be omitted no 
 subtilty of definition, or logical accuracy of deduction can avail. 
 The remedy is too weak for the evil, nor is itself void of evil. 
 The instrument employed is not fitted to reach the depths of 
 nature, and, by catching after what it cannot attain to, is rather 
 calculated to establish error, than to open up the road to truth. 
 The definitions may indeed sufficiently mark the sense, and from 
 these definitions the conclusions insisted on may be logically 
 deduced, nevertheless there is this of deceit in the procedure, 
 that the notions themselves may be taken up hastily, and care- 
 lessly from common observation, and may, therefore, be confused, 
 and loose, and afford no solid foundation for the edifice which it 
 is attempted to rear." j Such was the system of physics which 
 the Greeks raised from these principles. Being built on com- 
 mon and familiar notions ; a conversion of general practical rules 
 into speculative general principles, whatever its merits were as a 
 system, explaining according to popular notions, the various 
 phenomena of nature, and ranging these in regular order, it had 
 no pretensions to merit as expository of the real science of 
 nature. 
 
 It was not until attention was directed to the examination of 
 things before supposed to be known, — motion, natural and vio- 
 lent, gravity, levity, &ic. — and inquiry made into the principles 
 by which tliey themselves are regulated, the laws, that is to say, 
 according to which the phenomena, so denominated, are produced, 
 that a beginning was given to real science. Then the laws regu- 
 
 et transmiserint, progressus magnus fieri poterit in scientiis per anticipa- 
 tiones : quia errores radicales, et in prima digestionc mentis ab excellentia 
 functiorum el remediorura seqiientium non curantur." Nov. Org. Lib. I. 
 
 XXX. 
 
 * Ibid. c. xxi. 
 
 t " Verum infirraior omnino est nialo medicina ; {Ars dialectka scilicet) 
 neo ipsa mali expers — naturajenim subtllitatem longo intervallo non attingit ; 
 et prensiindo quod non capit, ad errores potius stabiliendos, et quasi figendos, 
 quam ad viam veritati aperiendam valuit — hoc subest fraudis, quod syllogis- 
 mus ex propositionibus constet, propositiones ex verbis, verba autem notionum 
 tesseras et signa sint. Itaque si notiones ipste mentis (quae verborum quasi 
 anima sunt, et totius hujusmodi structurte ac fabricas basis) male ac temere 
 a rebus abstractae, et vaga-, nee satis definlta; et circumscriptos, denique multis 
 modis vitiosa? fuerint, omnia ruunt." Nov. Org. Praf. 
 
OF THE NATURE OF STOCK. 34] 
 
 lating the universal system were gradually unfolded, and things 
 seemingly forever hidden in the depths of the immensity of space 
 and time, brought clearly before the intellectual ken of man. 
 
 As in the system of things making up the world of mere 
 matter, certain terms are employed to denote general facts and 
 rules, which experience has taught, so, in the compound system 
 of men and things making up the world of civilized life, certain 
 other terms are employed to denote the general facts and rules, 
 which experience also has there taught ; and as in a department 
 of the one, we have heaviness, lightness, natural, and violent 
 motion, fee. ; so in a department of the other we have capital, 
 value, profit, a due regard to self-interest, &;c. ; in both, too, it 
 is to be observed, such popular and familiar phrases and notions, 
 correctly interpreted, express, not the general laws of the system, 
 but the usual and expected results of those laws. 
 
 Thus, if, in any particular society, one were to be asked, what 
 the capital of some other person were, he might answer, " about 
 a thousand pounds." If farther requested to state his reasons for 
 saying so, he might reply, " the property he holds would fetch 
 that in the market, he has been offered that for it," or, " I know 
 it cost him that, and that he laid out his money judiciously." 
 These are all the answers he would think of giving ; for common 
 purposes they are all he requires to give, and they are all that 
 his notions actually embrace. If asked again, " what revenue 
 does this person derive from his capital ? " he might answer, " I 
 suppose about that which such a capital generally yields, the 
 usual profits of stock — a fair, reasonable, mercantile profit, neither 
 much above or below par." If questioned farther, as to the 
 nature of this capital, and its return, which he terms profit, he 
 would answer, if simply a practical observer, " Really as to 
 this I have never inquired, I know that where I have lived, and 
 I believe in all civilized societies, certain things, if sold, have cer- 
 tain values, bring certain sums of money, and if kept and judi- 
 ciously employed, yield certain amounts of money, or moneys' 
 worth. Why they do so, though it must arise, no doubt, from 
 the circumstances and actions and reactions on each other of the 
 various things and persons forming these societies, I have not 
 examined into, and do not pretend to know." His answer, in 
 short, would be that he knows them only as results of the laws 
 governing the general system of which he makes a part. 
 
342 OF THE NATURE OF STOCK. 
 
 By taking, therefore, these, and such like common and fami- 
 liar notions, as the foundation of his reasoning, Adam Smith made 
 his work an explanatory system, not an inductive inquiry. The 
 principles of the inductive philosophy would have led him to 
 inquire into the nature of those familiar notions, — into the laws 
 or causes of those common occurrences ; and he would have set 
 out with the question. What is it, in the nature of man and matter, 
 that makes any thing constitute a capital, or yield a profit? In 
 the words of the Novum Organum, already cited, he would have 
 considered, "that no judgment can ever be formed of things that 
 are rare and remarkable, much less can any thing new be brought 
 to light, unless the causes, and even the causes of the causes, of 
 occurrences the most common and familiar, be rigidly examined 
 and clearly discovered." 
 
 It is, therefore, an abuse of words to say, that the publication 
 of the Inquiry into the Wealth of Nations, rendered political 
 economy a science of experience.* It made it so in no other 
 manner than as every philosophical system is, of necessity. They 
 are all, of necessity, founded on some observations, the fruits of 
 experience.! The difference between them is, that those obser- 
 vations which men make concerning the general results of the 
 laws of the universe, and to which convenience leads them to 
 give names, are assumed by the systematic philosopher for the 
 laws themselves, and that the scientific inquirer examines them 
 patiently, and perseveringly, and ascending gradually, from one 
 thing to another, endeavors thus at last to reach the real laws of 
 nature. While the one assumes phenomena for principles, the 
 other applies to the things giving rise to those phenomena, and 
 collecting, comparing, and arranging these, traces out the real 
 connexions between them, the real principles governing nature. 
 
 « u 
 
 Unc science experimentale," Say. See note on Storch, p. 24, vol. 1. 
 of the " Cours d'Econome Politique," where he declares it to be precisely 
 similar to modern mechanical science, '' la mecanique analytique." The 
 comparison should have been, as we have seen, with the ancient mechanical 
 philosophy. 
 
 t " Neque illud quenquam moveat, quod in libri^ ejus (Aristolelis) de ani- 
 malibus, et in probleinatibus, et in aliis suis tractatibus, versatio f'requens sit 
 in experimentis. Ille enim prius decreverat, neque experientiam ad consti- 
 tuenda decreta et axiomata rite consuluit ; sod postquam pro arbitrio suo de- 
 crevissit, experientiam ad sua placita tortam circumducit, et captivam; ut 
 hoc etiam nomine magis accusandus sit, quam sectatores ejus moderni (scho- 
 lasticorum philosophorum genus) qui experientiam omnino deseruerunt." 
 Nov. Org. ib. L. I. Ixiii. 
 
OF THE NATURE OF STOCK. 343 
 
 We may easily satisfy ourselves of the difference of the prin- 
 ciples which true science reaches, and those employed in the 
 Wealth of Nations, by taking any of the latter and seeing how 
 it agrees with the rules by which the former may be tested. 
 Thus the principle, that self-interest is the great and all-sufficient 
 cause of the increase of wealth, both private and public, is evi- 
 dently nothing else than an application of the common assumption 
 that a man's fortune and his interest are the same, and a generali- 
 zation of the observation that he, therefore, who understands his 
 interest best and takes best care of it, will get rich the fastest. 
 But if self-interest be, in the scientific sense, the cause of wealth, 
 both public and private,* (the law according to which it either is, 
 or is not produced,) whenever self-interest, (the desire of bettering 
 one's condition) manifests itself in action, it must tend to the 
 increase of public wealth. f 
 
 Do the labors of the cool, calculating, gambler, or of the 
 sharper, add to public wealth ? Does the spirit of keen bargain- 
 ing, and taking every possible advantage of those with whom 
 transfers are effected, that sometimes pervade classes, and com- 
 munities, add to public wealth ? Assuredly not ; yet in all these 
 self-interest is the ruling motive of action. Let it not be said, 
 that these are exceptions to a general rule. Though there may 
 be exceptions to general rules, there are no exceptions to scien- 
 tific principles. " Wherever a scientific cause, or law, or princi- 
 ple operates, there the thing itself, of which it is said to be the 
 cause, is necessarily produced. And it may be universally 
 affirmed that, where this the form is, there the thing sought is 
 also, and where it is not, there the thing cannot be. J Nothing 
 is to be received for the true scientific cause, unless the thing of 
 which it is the cause, increases and decreases along with it.<§> 
 
 * Desir de 1' homme d' ameliorerson sort : principe qui est au monde moral, 
 ce que la gravitation est au monde phisique. Storch. 
 
 t It will be observed that 1 here, and throughout, speak of self-interest in 
 the common and familiar sense. The author of the Theory of Moral Senti- 
 ments was not an utilitarian. If the reader happen to be so, he will perceive 
 that the argument is not altered, the names only have to be so. 
 
 + Etenim forma naturse alicujus talis est, ut ea posita, uatura data infallibi- 
 liter sequatur. Itaque adest purpetud, quando natura ilia adest, atque earn 
 universaliter affirmat, atque inest omni. Eadem forma talis est, ut ea amota, 
 natura data infallibiliter fugiat. Itaque abest perpetuo, quando natura ilia 
 abest, earn que pertuo abnegat, atque inest soli. Nov. Org. Lib II. iv. 
 
 § Omnino sequetur ut non recipiatur alique natura pro vera forma, nisi per- 
 
344 OF THE NATURE OF STOCK. 
 
 This difference, indeed, between common practical observa- 
 tions and rules, and general scientific principles must always exist, 
 for it springs from the different nature of the one and the other. 
 The observations which the man of practice makes, as has been 
 already remarked, are on phenomena, the results of the play of 
 real principles, and as these principles may vary in their propor- 
 tions to each other, and in the modes in which their powers are 
 exerted, the results produced by their action must occasionally 
 vary. The principles themselves, however, never vary ; and, 
 therefore, one observ^ation or experiment concerning a real prin- 
 ciple, if there be no inaccuracy in it, has always in science been 
 esteemed as good as a thousand. The whole inductive philoso- 
 phy may, indeed, be said to rest on the impossibility of the 
 occurrence of exceptions to real laws. Hence the extensive use 
 of negative instances, determining, at last, what is a principle 
 by pointing out what it is not. 
 
 Again ; it is far from being the case, that a regard for self- 
 interest, a desire of bettering one's condition, prompts always to a 
 course of action leading to an increase of even private fortune. 
 This must depend on what is esteemed the best condition, — on 
 what one's happiness rests. f Hence what has been regarded as 
 the most enlightened self-interest, has often led, as we have seen, 
 to a course of action the very reverse. The Romans, under the 
 emperors, were assuredly as earnest in their quest after happi- 
 ness, as were ever any race, yet their manners, and their whole 
 practical morality tended to the diminution of wealth previously 
 accumulated, and they swallowed up, in extravagant dissipation, 
 the riches of kingdoms. Nor let it be here answered, that facts 
 applicable to the Romans, or other people of habits and modes 
 of thinking and acting unlike those characterizing the civilized 
 world of modern days, cannot be fairly adduced in investigations 
 concerning existing systems of society. This is indeed true, if 
 the reasonings in the Wealth of Nations be admitted to be of the 
 systematic and explanatory cast, but not if that work he main- 
 tained to be an inductive inquiry. These remote and hetero- 
 geneous instances, are the very ones which experimental science 
 
 petuo decrescat quando natura ipsa descrescit, et similiter perpetuo augeatur 
 quando natura ipsa augctur. Nov. Org. Lib. II. xiii. 
 
 t Le desir d'ameliorer son sort — le d66ir d'etre heureux. Storch, vol. I. 
 p. 44, 4.5. 
 
OF THE NATURE OF STOCK. 345 
 
 most prizes,* and this, for the reason just adduced, that real prin- 
 ciples being constant in their action, what are, and what are not 
 the principles inquired after, are thus tested.f 
 
 III. The actual history of what is termed the science of politi- 
 cal economy, is another mode of ascertaining the justice of its 
 pretensions to that appellation. By comparing it with the 
 generic character of the history of philosophical sects of the ex- 
 planatory and systematic form, given by the founder of the induc- 
 tive philosophy, as contrasted with what he pointed out was to 
 be expected from that philosophy, and time has shown it has 
 accomplished, we might have farther grounds to come to a con- 
 clusion on the question. To do this at length, however, would 
 lead us too far beyond limits, which I have already exceeded. I 
 shall, therefore, confine the few farther observations I have to 
 make, to one circumstance, which Lord Bacon gives as charac- 
 teristic of the two sects. In his figurative language " the path 
 which the inductive philosophy takes, is at first steep and diffi- 
 cult, but leads to an open country, while that adopted by 
 the explanatory and systematic, though at first easy and invit- 
 ing, is at last lost in deserts or conducts to precipices." J 
 
 The doubts and difficulties in which the progress of those has 
 been involved, who have advanced farthest along the apparently 
 safe and easy road that Adam Smith seemed to have opened up, 
 indicate it not to be the path of science. Of these I shall adduce 
 a few instances. 
 
 Capital is uniformly treated of in the Wealth of Nations, as a 
 thing homogeneous in its nature, having always the same quali- 
 ties, (according to the definition of Mr. Say, an amount of values,) 
 and any increase or diminution of it, as a mere alteration in 
 quantity. This being taken to be the case, as like causes pro- 
 duce like effects, it seems very evidently to follow, that the only 
 manner in which a change can be produced in the returns yielded 
 by it, must be by the labor that it employs, absorbing a larger or 
 smaller part of them. This result is not uniformly kept in view 
 
 * Nemo enim rei alicujus naturam inipsare,recte aut feliciter perscrutatur. 
 Nov. Org. Prffif. 
 
 Instantias romotas et helerogeneas, per quas axiomata, tanquam igiie pro- 
 bantur. Ibid, Lib. I. xlvii. 
 
 i Note K. 
 
 t — " Via altera ab initio ardua et difRcilis, desinet in apertum ; altera primo 
 intuitu expedita et proclivis, ducat in avia et prfficipitia." 
 
 44 
 
346 OF THE NATURE OF STOCK. 
 
 in the Wealth of Nations, though it is very frequently brought 
 forward. We are often told, that, as the wages of labor fall? 
 profits rise, and as profits fall the wages of labor rise, but other 
 causes besides the proportion of Its returns paid to the laborer, are 
 conceived to operate on it. Thus a simple increase in its quantity 
 is assigned, in one part of the work, as sufficient of itself to occa- 
 sion a fall in profits. " When the stocks of many rich merchants 
 are turned into the same trade, their mutual competition naturally 
 tends to lower its profit ; and when there is a like increase of 
 stock in all the different trades carried on in the same society, 
 the same competition must produce the same effect in all." Mr. 
 Ricardo has, however, pointed out, from Adam Smith's own prin- 
 ciples, that no such effect would ensue, and insists on it as a 
 general principle that wages alone vary profit. Profits, according 
 to him, are increased or diminished, exactly as the maintenance of 
 labor is easy or difficult, from fertile land being abundant or 
 scarce. Admitting the popular notion of capital, that serves as 
 the basis of Adam Smith's reasonings, to be of a sort on which 
 true science may be built, the theory of Mr. Ricardo seems to 
 me hard to be controverted, and has certainly the merit of giving 
 uniformity and regularity to llie system. It has accordingly been 
 acquiesced in very generally in Britain, by men who are given 
 to this department of inquiry, and has been adopted and defended 
 by many writers of unquestioned ability. Nevertheless, it may 
 well be doubted, if it has added to the general confidence in the 
 science. The conclusions to which it leads have in them some- 
 thing so extraordinary, as to exceed the strength of any common 
 measure of faith in such abstractions. 
 
 Thus, according to the principles of this school, no extension 
 of foreign trade, however advantageous, and no improvement in 
 domestic industry, however great, can, in the least, increase pro- 
 fits. On the other hand, no diminution of foreign trade can, of 
 itself, lessen profits. It follows also, from the same principles, 
 that colonies give no commercial advantages to the mother 
 country, and, therefore, that being in general expensive, they 
 ought to be shaken off as a burden on her resources. Sir Henry 
 Parnell observes, and quotes Mr. Mills In his support, that, 
 "The capital which supplies commodities for the colonies would 
 still prepare commodities if the colonies ceased to purchase them ; 
 and those commodities would find consumers, for every country 
 contains within itself a market for all it can produce. There is, 
 
OF THE NATURE OF STOCK. 347 
 
 therefore, no advantage derived under freedom of competition, 
 from that part of the trade with a colony, which consists in sup- 
 plying it with goods, since no more is gained by it than such 
 ordinary profits of stock as would be gained if no such trade 
 existed." 
 
 These, and similar doctrines, have something in thera so 
 strange, so contrary to experience, and seem so paradoxical, that 
 they have in most people rather the effect of exciting surprise, 
 than producing belief. They are exceeded, however, by what 
 a writer in the Edinburgh Review has proved, and in my opinion 
 satisfactorily proved, from the principles of his school, concern- 
 ing the effect of Irish absenteeism. He shows that it can have 
 no disadvantageous, and possibly may have an advantageous 
 efTect, that it can only cause capital to pass from one employ- 
 ment to another, possibly from a less, to a more advantageous 
 employment. That, as it is the capital of the artisan, the trades- 
 man, and shop-keeper, that yields them their revenue, were all 
 their customers annihilated, they would still live equally well on 
 their capitals. That so, were all the landlords in Ireland to 
 leave it, and were their rents to be sent them, to a distant king- 
 dom, in the shape either of cash or agricultural produce, it could 
 not possibly be of any detriment to the country they abandoned. 
 
 Though the argument is skilfully conducted, and though it is 
 in perfect accordance with the leading principles of the science — • 
 for, if capitalists are dependent on their customers, what becomes 
 of the all-sufficiency of capital? — and, if the British government 
 could advantage Ireland by taxing absentees, what becomes of 
 the principle of non-interference? — yet there are perhaps few 
 people, on whom it has had the effect the author probably 
 desired. It has the disadvantage of proving too much. When it 
 is shown, that, according to received principles, two large classes 
 so intimately dependent on each other, as are the landlords of a 
 great country, and the mechanics and capitalists that they em- 
 ploy, can be completely severed, without injuriously affecting 
 the whole system of things in the society, we are rather inclined 
 to doubt of the principles, than to acquiesce in the conclusion. 
 However skilfully the argument may be urged, or however 
 closely one part of it may seem joined to another, it has rather 
 the effect of inducing skepticism than conviction. We siill figure 
 to ourselves that there is a loss to Ireland, a gain to some other 
 
348 OF THE NATURE OF STOCK. 
 
 place. We cannot get rid of the imagination, that, if the land- 
 lords were all to go in a body, for instance, to Brussels, and 
 spend their rents there, they would give profitable employment, 
 in some way or other, to a vast number of laborers, tradesmen, 
 and artificers, and that the population and wealth of that town 
 would be largely augmented, that of Ireland proportionally dimin- 
 ished. 
 
 These, and many such like instances, seem to us contrary to 
 the usual progress of real knowledge. The experience of what 
 true science is, has accustomed us to expect that in this, as in 
 other branches of inquiry, the farther we advance the larger and 
 larger a compass of undeniable facts should present themselves, 
 that we should be able more and more evidently to connect phe- 
 nomena, that seemed at first disjointed and isolated, and that, 
 the indistinctness of distance being removed, truth should stand 
 clearly before us. Deceived in our anticipations, we feel like 
 travellers who find the straight and well-beaten path on which they 
 entered, becoming more devious and faint the farther they jour- 
 ney, leaving the habitations of men, and leading to barren and 
 dano-erous wastes. Though we can trace no error, we begin to 
 suspect that there is one, and that somehow or other, we have 
 taken the wrong direction. 
 
 Dugald Stewart has a remark on the abstract philosophy of 
 David Hume, that seems not inapplicable to this, so termed, 
 abstract science. It is well knowTi, that that skeptical philoso- 
 pher deduced, pretty clearly, frour Mr. Lock's principles, that 
 the human mind was a mere bundle of sensations. The profes- 
 sor observes, that, before any formal refutation of the doctrine 
 appeared, it might have been sufficient answer to it, that it was 
 so contrary to the experience of every one, as to make it more 
 reasonable to suppose an error, either in the premises or deduc- 
 tion, though that error might not be discoverable, than to believe 
 that the metaphysicians were right, all the rest of mankind 
 wrong. Such an answer is, I suspect, that which is now present 
 to the minds of very many, in regard to the strange dogmas of 
 the prevailing school of political enonomy. They regard them 
 as a sort of practical demonstratio ad absurdum of some funda- 
 mental fallacy in the science. 
 
 Reasoning from Adam Smith's principles, his followers, in 
 more than one instance, have arrived at conclusions differing 
 
OF THE NATURE OF STOCK. 349 
 
 considerably from his. He looked on parsimony as the great 
 generator of wealth ; they rather hold an opinion similar to that 
 of Mandeville, that to consume largely is an essential part of the 
 process, consumption and reproduction being represented by them 
 as the two springs, by the rapid play of which the general pros- 
 perity is advanced. The doctrine, as it has been maintained, 
 has the advantage or disadvantage of being somewhat paradoxical ; 
 but omitting the consideration of this circumstance, it is worth 
 while to examine whether or not, when applied to practice, it 
 has brought about the anticipated results. Of the many instances 
 that might be produced of events of this class turning out con- 
 trary to the predictions of the votaries of the science, I select one 
 from the " Cours d'Economie Politique " of Mr. Storch, a work 
 which, according to Mr. MaccuUoch, stands at the head of all 
 those on Political Economy ever imported from the continent 
 into England. 
 
 That author brings forward Ireland, as an example of great 
 prosperity, and very rapid progress in wealth, in consequence of 
 that nation following the rules of the system. " The sudden and 
 prodigious increase," he observes, " which took place in the 
 consumption of spirituous liquors, sugar and tea, soon after the 
 union, is the more remarkable, from its having occurred at a time 
 when these commodities were charged with additional duties, 
 that in any other country would have been equivalent to an 
 absolute prohibition. 
 
 " To date from the union, the consumption of wine has aug- 
 mented by half; and yet the consumers, to buy half more than 
 they formerly did, are obliged to pay three times the price. As 
 for rum, and other foreign spirits, although the duties have been 
 doubled, the consumption has increased eightfold. 
 
 "The importation of tea has risen, since the union, from 2,260,- 
 600 pounds to 3,706,771. The amount of sugar purchased has 
 risen from 211,209 hundred weight to 447,404, so that Ireland 
 consumes more of that nourishing, agreeable, and healthy com- 
 modity, than both Russia and France conjoined. In short, an 
 examination of the table of importations of Ireland shows that, 
 with the exception of a small number of articles, the additional 
 consumption of those commodities, the production of other 
 countries, of which the increasing demand most marks the grow- 
 ing riches of a people, has equalled, or rather surpassed the 
 
350 OF THE NATURE OF STOCK. 
 
 whole consumption before the union. The facts which we 
 have thus analyzed," he continues, " present a statistical picture 
 altogether sino-ular, and such as the most flourishing colonies 
 have never furnished. It is true that, by this prodigious increase 
 of importations, the purchases of the people of Ireland have in- 
 creased in a greater ratio than their sales ; but this circumstance, 
 which would spread alarm among most other nations, is regarded 
 in Great Britain as a symptom of prosperity, I know nothing 
 more calculated to show how much those continental govern- 
 ments are deceived, who see only objects of alarm in observing 
 the increase of importations. ' They send the money out of the 
 country , they favor foreign industry at the prejudice of domestic, 
 and ruin the inhabitants by exciting them to expenses beyond 
 their incomes.' Such is the cry of these alarmists. Perhaps I 
 return too frequently to a consideration of such errors ; but they 
 are so common, and, at the same time, so injurious, that I think 
 it my duty to neglect no opportunity to prove their fallacy, 
 whether by arguments or by examples ; and what more striking 
 example could 1 oppose to this doctrine than that of the pros- 
 perity of the Irish V 
 
 Speaking of the probability of a rise in the price of colonial 
 productions, he observes farther, " that it may possibly diminish 
 their consumption, but that it is much more likely that the Irish, 
 who have acquired a taste for such enjoyments, will work still 
 harder, and produce still more linen, hemp, and oats, that they 
 may have plenty of sugar and rum. With a people so ingenious, 
 all that is requisite is to give them wants, and excite them to 
 labor." * 
 
 Science is said to be prophetic ; does this then sound like her 
 voice ? 
 
 I shall conclude these remarks, by observing, that in my opinion 
 the disciples and followers of Adam Smith, in claiming for the 
 speculations contained in the Wealth of Nations, and for the 
 doctrines they have founded on them, the rank of an experimental 
 science, the conclusions of which are entitled to the same cre- 
 dence with other experimental sciences, act injudiciously, and by 
 insisting on pretensions which are unfounded, injure the cause of 
 that philosopher and conceal his real merits. If we view his 
 philosophical system of the Wealth of Nations, or indeed any of 
 
 * Vol. IV, p. 266. 
 
OF THE NATURE OF STOCK. 35 1 
 
 his philosophical systems, as lie views every such system, " as 
 an imaginary machine invented to connect together in the fancy 
 those different movements and effects which are already in reality 
 performed," nothing of the sort can be more beautifid. A clear, 
 orderly and extensive view is given of a vast number of interest- 
 ing and important facts, connected by a few familiar principles. 
 A great body of knowledge is thus brought before the mind in a 
 shape which it can readily grasp, and easily command. The 
 object being not to discover, bat to arrange and methodize, all 
 the subordinate principles of the system are artfully bent so as to 
 embrace the phenomena, and care is taken that the imagination 
 be not shocked by a view of matters that shall seem irreconcila- 
 ble to the aspect of affairs which the contemplation of the world 
 of life itself presents. Nor is it to be disputed that a general 
 system of the sort, besides the pleasure and the advantage de- 
 rived from it, is likely to be nearer the truth than speculations of 
 the same nature, confined to particular parts. 
 
 The case, however, is completely altered, when the loose and 
 popular principles on which such a system proceeds, are adopted 
 as demonstrative axioms, the discoveries of real science, and are 
 carried out to their extreme consequences. Their original pur- 
 pose is then altogether changed, and instead of serving to bring 
 before the mind a collection of facts, they lead it farther and far- 
 ther away from truth and reality, into the barren and weari- 
 some regions of mere verbal abstractions. 
 
APPENDIX TO BOOK II. 
 
 Of the Principle of the Division of Labor. 
 
 Not having been able without interrupting the course of inves- 
 tigation, to enter into a discussion of the principle of the division 
 of labor, as viewed by Adam Smith, I have thought it better 
 to place apart the observations I have to make on it. 
 
 In the Wealth of Nations, the division of labor is considered 
 the great generator of invention and improvement, and so of 
 the accumulation of capital. In the view I have given it is 
 represented as pi'oceeding from the antecedent progress of inven- 
 tion, and increase of stock, and as operating chiefly by quicken- 
 ing the exhaustion of instruments, and so placing them in orders 
 of more speedy return. Now in reality, as far as its origin is 
 concerned, the account of the matter which we find in the Wealth 
 of Nations, is more favorable to the latter supposition, than to 
 the former. 
 
 " In a tribe of hunters, or shepherds, a particular person makes 
 bows and arrows, for example, with more readiness and dexterity 
 than any other. He frequently exchanges them for cattle or for 
 venison, with his companions ; and he finds at last that he can 
 in this manner get more cattle and venison, than if he himself 
 went to the field to catch them. From a regard to his own 
 interest, therefore, the making of bows and arrows grows to be 
 his chief business, and he becomes a sort of armorer. Another 
 excels in making the frames and covers of their little huts or 
 moveable houses. He is accustomed to be of use in this way to 
 his neighbors, who reward him in the same manner with cattle 
 and with venison, till at last he finds it his interest to dedicate 
 himself entirely to this employment, and to become a sort of 
 
OF THE NATURE OF STOCK. 353 
 
 house carpenter. In the same manner a third becomes a smith 
 or a brazier; a fourth a tanner or dresser of hides or skins, the 
 principal part of the clothing of savages." 
 
 If this be a true account of matters, it is evident, that it is the 
 antecedent progress of invention, and the existence of the several 
 arts of the bow-maker, the hunter, the carpenter, the brazier that 
 is the real cause of the separation of the members of the society 
 into artists of different sorts. I rather think, however, that it will 
 be found, that separate artists have come to exist from the passage 
 of individuals from one community to another, and their carrying 
 with them the arts proper to each. If, for example, in any par- 
 ticular tribe, the art of reducing from the ore and working up 
 some of the metals, were well known, and were chance to throw 
 a member of it among another tribe ignorant of this art, he might 
 come to employ himself altogether in the smelting and giving 
 form to metal, and there might come to be a class, whose chief 
 employment were that of working in metal. But it is of little 
 consequence how the separation of employments was brought 
 about. The real question is, do the acknowledged advantages of 
 it proceed directly from the increased efficiency of tlie labor of 
 the workman ; or from the stock of instalments of the society 
 being thus in much more constant employment, and its being, 
 therefore, in the power of the accumulative principle to give 
 them a much more effective construction. 
 
 The efficiency of the labor of the workman may be advanced, 
 either by his dexterity being increased, or by an improvement 
 in the construction of the implements with which he works. 
 
 1. As concerns his dexterity, it is to be noted that it is chiefly 
 in the beginning of art that great manual dexterity is requisite. 
 Then the hand is the great instrument. The manual dexterity 
 of the savage in hurling his dart, or shooting with his bow and 
 arrow, in guiding his canoe by the pole or paddle, in framing his 
 fishing and hunting apparatus with the rude tools he possesses, 
 far exceeds that necessary to the civilized man, not only in the 
 common, but even in the more delicate arts of civilized life; and, 
 were we to take into the account things generally confounded 
 with manual dexterity, quickness and accuracy of sight, and 
 delicacy and flexibility of the other organs, the disparity between 
 the two would be much greater. As art advances from its first 
 rude elements, the hand does less, the instrument more. To 
 
 45 
 
354 OF THE NATURE OF STOCK. 
 
 acquire the manual dexterity necessary to guide a bark canoe 
 with rapidity and speed, requires the practice of years. To row 
 a boat equally well might be learned in a few months. The 
 mere manual dexterity necessary to move the different pieces of 
 mechanism that govern the motion of a steam-boat, might be 
 acquired in a few days or hours. 
 
 It may be remarked, that the examples of this dexterity ad- 
 duced in the Wealth of Nations, are from arts where the imple- 
 ments are exceedingly simple, and where, of consequence, the 
 band is the great operator. Were improvements taking place in 
 the art of pin-making, or nail-making, that would be done by the 
 instrument which is now done by the quick and complex motions 
 of the hand. In fact, in the arts in which the greatest improve- 
 ments have had place, such as in the cotton manufacture, the 
 mere manual dexterity requisite is very easily acquired. In a 
 few weeks, or months, the limit is attained. But, when the 
 manual dexterity requisite for the practice of any art can be 
 attained in so short a time, it cannot matter much to the society 
 or to the individual, whether the workman have to learn one or 
 several arts. Besides, the acquisition of any difficult art very 
 much facilitates the attainment of any other. The great matter 
 is to get, as a workman expresses it, the use of one's hands. To 
 become familiar, that is to say, with handling matters of various 
 sorts, judging of their forms and qualities, and acquiring the power 
 of determining the movement to be given, and the habit of exe- 
 cuting it quickly and accurately. When this is acquired, there 
 is no great difficulty in the management of any common tool, if 
 once the principle on which it operates be understood. Hence 
 a good workman in any trade, displays comparatively but trifling 
 awkwardness in applying himself to any other. Almost all he 
 requires is to know how a thing is done, and to understand how 
 the implements employed operate. This is very observable in 
 the progress of new settlements in America, where I have seldom 
 seen a good mechanic have much difficulty in turning his hand, 
 as it is said, to any thing. 
 
 Agriculture, from its nature, is the art in which the division of 
 labor has made least progress. Were it possible to conceive 
 that, by the operation of any circumstance, it could there be carried 
 to its full extent, whether would its benefits be felt in the increased 
 dexterity of the workman, or in the increased efficiency of the 
 
OF THE NATURE OF STOCK. 355 
 
 instruments employed ? At present a man employed in such work, 
 generally, ploughs, harrows, reaps, mows, threshes, and drives 
 as well at twenty-five, as at thirty-five, or forty-five. It seems 
 not very probable, therefore, that, were he to confine himself 
 altogether to one of these occupations, he would perform it belter 
 than he now does. On the other hand, it seems very likely, that, 
 did the dependence of the several agricultural operations on the 
 seasons permit the separation of occupations in this art, the im- 
 plements employed in it would soon become much more efficient. 
 We see, in fact, that it is the impossibility of this separation taking 
 place, that does here retard or prevent improvement. Thresh- 
 ing-mills, for example, would be universally adopted, were it not 
 that, being nearly idle great part of the time, the cost of con- 
 struction is too great for the return. The machine is probably 
 unemployed for nineteen days out of twenty, so that could this 
 division take place in twenty adjoining farms, each of which has 
 now its own threshing-mill, nineteen of those at present necessary 
 might be dispensed with. The same thing may, I believe, be 
 said concerning drilling-machines ; it is their cost and the long 
 time they lie idle, that prevents their general adoption. Similar 
 causes altogether prevent the introduction of many other ingen- 
 ious machines and implements. As much ingenuity, indeed, has 
 been displayed in contrivances for the purposes of this art, as 
 for any other, but the instruments produced, though they would 
 have been very effective aids in particular operations, have never 
 come into use, because, unless for a few days every year, they 
 would have lain idle on the hands of their owners. Were it pos- 
 sible for farmers to divide their employment, and, each taking 
 to a particular department, were the distinct occupations of 
 ploughers, reapers, harrowers, he. to arise, none of the instru- 
 ments employed lying idle, they would yield much more speedy 
 returns ; their construction, in all probability, would greatly 
 improve, and the whole capital of the country would soon 
 be very much increased. It is worth while observing, too, 
 that in this sort of labor, the improved construction of instru- 
 ments seems to lessen the quantum of manual dexterity necessary. 
 The manual dexterity necessary for managing a threshing or a 
 drilling-machine is very trifling. 
 
 It is chiefly in some very delicate arts, such as that of watch- 
 making, or in some in which, from their nature, the use of tools 
 
356 OF THE NATURE OF STOCK, 
 
 cannot be extensively introduced, as in printing, that the efficiency 
 derived from long practice is very great, and where, consequently, 
 the division of labor would seem in this way a direct improvement. 
 These, however make but a small part of the arts of any com- 
 munity. 
 
 2. Amons: the direct advantages derived from the division of 
 labor, Adam Smith reckons the invention of many machines 
 facilitating and abridging labor. It seems to me, that the facts 
 are, on the whole, opposed to this idea. Whatever confines a 
 man's faculties to one monotonous occupation, must rather dull 
 and cramp, than quicken and expand them. " The understand- 
 ings of the greater part of men, are necessarily formed by their 
 ordinary employments. The man, whose whole life is spent in 
 performing a few operations, of which the effects, too, are per- 
 haps always the same, or very nearly the same, has no occa- 
 sion to exert his understanding, or to exercise his invention, in 
 finding out expedients for removing difficulties which never occur. 
 He naturally loses, therefore, the habit of such exertion, and 
 generally becomes as stupid and ignorant as it is possible for a 
 human creature to become. The torpor of his mind renders him 
 not only incapable of relishing or bearing a part in any rational 
 conversation, but of conceiving any generous, noble, or tender 
 sentiment, and consequently of forming any just judgment con- 
 cerning many even of the ordinary duties of private life. Of 
 the great and extensive interests of his country he is altogether 
 incapable of judging ; and unless very particular pains have been 
 taken to render him otherwise, he is equally incapable of de- 
 fending his country in war. The uniformity of his stationary life 
 naturally corrupts the courage of his mind, and makes him regard, 
 with abhorrence, the irregular, uncertain, and adventurous life of 
 a soldier. It corrupts even the activity of his body, and renders 
 him incapable of exerting his strength with vigor and perseverance 
 in any other employment than that to which he has been bred. 
 His dexterity in his particular trade seems, in this manner, to 
 be acquired at the expense of his intellectual, social, and martial 
 virtues." * 
 
 These beinc the direct effects on the intellectual and moral 
 powers of the division of labor, it can scarcely be said to be the 
 direct cause of invention in the artisan. The extended division 
 * Wealth of Nations, Book V. c. I. 
 
OF THE NATURE OF STOCK. 357 
 
 of labor implies the existence of many arts, and of much intelli- 
 gence. Where it exists, therefore, the inventive faculties will 
 be generally active. But this activity, though a concomitant of 
 the division of labor, is to be held as an effect, not of that divi- 
 sion, but other causes themselves producing the division of labor. 
 It will appear, in short, to be, hke most popular principles, a 
 result, not a cause ; and ranks properly, not as a prime mover in 
 the course of human affairs, but as a consequence of the actions 
 of the prime movers. 
 
BOOK III. 
 
 OF THE OPERATIONS OF THE LEGISLATOR ON NATIONAL STOCK. 
 
 INTRODUCTION. 
 
 When men unite in large societies, they cannot each take an 
 active part in what concerns the common good. They are 
 obliged to delegate their individual powers and rights to act, in 
 things relating to it, to several, or to one. This body of men, 
 or this man, acting and making laws for the supposed advantage 
 of the whole, may properly be termed the legislator. It is, there- 
 fore, the capacities and powers of the whole, as far as they make 
 one, turned to this sphere of action, and designated by this term, 
 that we have now to consider, 
 
 " Man is generally considered by statesmen and projectors, as 
 the materials of a sort of political mechanics. Projectors disturb 
 nature in the course of her operations on human affairs ; and it 
 requires no more than to let her alone and give her fair play in 
 the pursuit of her ends, that she may establish her own designs." 
 " Little else is requisite to carry a state to the highest degree of 
 opulence from the lowest barbarism but peace, easy taxes, and a 
 tolerable administration of justice ; all the rest being brought 
 about by the natural course of things. All governments which 
 thwart this natural course, which force things into another chan- 
 nel, or which endeavor to arrest the progress of society at a par- 
 ticular point, are unnatural, and to support themselves are obliged 
 to be oppressive and tyrannical." * 
 
 The principle here set forth by Adam Smith, though not for- 
 mally announced in the Wealth of Nations, runs, nevertheless, 
 through the whole work, and in its particular application to this 
 science, forms the most important of the conclusions to which 
 his reasonings tend. It is very frequently, also, expressly brought 
 forward by the supporters of his opinions, as an argument against 
 the interference of the legislator, and of all those they employ, 
 
 104 
 
 Account of the Life and Writings of Dr. Smith, by Dugald Stewart, p. 
 
OF THE OPERATIONS OF THE LEGISLATOR, &c. 359 
 
 none perhaps, is more popular, or has had greater influence in 
 giving currency to the system. A brief examination of its merit 
 may not, then, form an improper introduction to the particular 
 subject of this book. 
 
 In strict philosophical accuracy, the whole of every political 
 system is certainly natural. Every political system must be 
 allowed to have proceeded from the operation through long ex- 
 tended time, of the things without, and the things within man, 
 acting as the powers and principles which nature has given them, 
 cause them to act. Every such system has many parts, but 
 they all belong to a great whole, and from their action and 
 reaction on each other the movements of that whole proceed. 
 It seems not, therefore, to me, that we can take any of those 
 parts separate from the others, and with propriety say, that it 
 acts in opposition to the designs of nature, for that cannot well 
 be said to be in opposition to the designs of nature, or to thwart 
 her operations, which proceeds from principles that she herself 
 has established. Least of all can statesmen be taken separate 
 from the rest of the frame of society, and the actions they gener- 
 ate considered as unnatural, or operating contrary to the order of 
 things which nature has established, for, to speak in the general, 
 they are all moulded after the form and character of their time 
 and nation, and instead of giving laws to the age, must rather be 
 regarded by the philosopher as emanations of its genius, and 
 organs by which its voice is uttered. Were the whole present 
 race of politicians swept from the earth, so little essential differ- 
 ence would there be between them and their successors, that the 
 change hence resulting to human affairs could not, probably, 
 be traced a century afterwards. Napoleon, when speaking on 
 this subject to one of his generals, is somewhere reported to 
 have expressed himself in nearly the following terms. " We are 
 apt to think that w"e have done much more than we really have. 
 It is the march of events that has made us, and makes us, what 
 we are. Had you and I never existed, our places would have 
 been held by others, and were we now to cease to exist, the; 
 blank would be so filled as not to be perceptible : " It must be 
 allowed that this was with justice said of himself, even by such 
 a man. Already we perceive that all the apparently mighty 
 changes, referable to his personal agency, were rather undulations 
 on the surface of the tide of human affairs, than alterations in its 
 course. 
 
 When we speak of the course of the operations of nature on 
 human affairs, philosophical accuracy would, I think, imply a 
 reference to the whole course, and all the springs and principles, 
 that actuate and guide it. These springs and principles, discord- 
 ant and jarring as they may appear, may, nevertheless, have 
 been so adjusted by the hand of nature, as to have a tendency 
 
360 OF THE OPERATIONS OF THE LEGISLATOR 
 
 gradually to bring the whole system nearer and nearer perfection 
 and happiness, 
 
 " From seeming evil still educing good, 
 And better tlience again, and better still, 
 In infinite progression.'' 
 
 This is a pleasing and no improbable theory, but, in this view of 
 the subject, it is the tendency of the whole of these springs and 
 principles that we have to consider, not some taken apart from 
 others. Indeed, if we reason analogically, concerning the appar- 
 ent action of these different springs and principles, so far from its 
 appearing probable that the direct interference of the legislator 
 in endeavoring to give an advantageous direction to the course 
 of the national industry, in its efforts after the production of 
 wealth, is a principle unlikely to farther that production, the pre- 
 sumption rather is, that it will farther it. 
 
 To perceive this, it is necessary particularly to attend to the 
 distinction which Adam Smith makes between nature and art as 
 applied to the progress of human affairs. When we say, a thing 
 is produced by art, we mean, that it is the result of the agency 
 of man, designedly directed to its production. When we say, a 
 thing is produced by nature ; we mean that it is produced either 
 without the agency of man, or, if by his agency, without its being 
 his intention to produce that, which he, nevertheless, produces. 
 Thus the fruit, which a tree cultivated with care in an orchard 
 yields, is an artificial production, that yielded by another growing 
 spontaneously in some wild, is a natural production. A path 
 betw^een two points marked out by rule and line is artificial. A 
 footpath formed by the mere unconstrained passing of many peo- 
 ple from one point to another, is natural, because, though equally 
 with the former the work of man, it is not designedly formed by 
 him. In this case it was his intention merely to pass from place 
 to place, not to form a path by so passing. It is in this latter 
 sense, that the production of national wealth is said to be the 
 work of nature. It is said to be the intention of each individual 
 in a nation, to advance merely his own wealth, and the tendency 
 which the actions of all the individuals in a nation have to ad- 
 vance the sum of the national opulence, as it is said to make no 
 part of their motives to action, is esteemed a work of nature, in 
 the same manner as we may esteem a footpatli, formed by the 
 continual passing of people over some moor or heath, to be the 
 work of nature. According to this view of the subject, it is the 
 legislator alone, who can, of design, act with the view to advance 
 the national opulence. It is hekl, however, that as this inter- 
 ference of the legislator disturbs the course which events would 
 otherwise have taken, it acts in opposition to the course of nature, 
 and, therefore, that the presumption is that it will be injurious. 
 On the contrary, I hold, that a just analogy would rather lead us 
 to infer that it will be beneficial. 
 
ON NATIONAL STOCK. 361 
 
 It must be acknowleds-ed that when man acts most success- 
 fully, it is thus that he does act. He never, indeed, seeks to 
 conquer nature otherwise than by obeying her, but his aim, 
 nevertheless, always is to conquer her. By observing the order 
 of events, he acquires the power of changing that order. He 
 does so, by that which distinguishes him from other animals, the 
 reasoning faculty, which so directed we term art, and without 
 the aid of which so directed, we scarce attain any object. 
 
 But though art and nature are thus put in opposition to each 
 other, the form of expression is more popular than correct. 
 Were the changes which man every where produces on the 
 course of events, contrary to the designs of nature, we may rest 
 satisfied that she would not have given him powers sufficient to 
 effect them. What we call a conquering or governing of nature, 
 is to be held, in a more enlarged and truer sense, an acting in obe- 
 dience to her designs, and man as a reasoning animal is rather to 
 be considered as an instrument in her hands, through which she 
 effects much of that change in the order of events, and conse- 
 quent progress from good to better, that we may fairly hope is 
 going on, than as a separate agent acting in opposition to her. 
 In this sense, all art may be said to be nature, as in another 
 sense all nature may be said to be art. 
 
 Is it then a thing to be assum.ed, a priori, as next to demon- 
 strable, that art, the art of the legislator, cannot operate so as to 
 advance t,he prosperity of nations? That, of all the springs and 
 principles actuating the movement of societies, it is the only one 
 powerless to do good, or whose power can no otherwise be advan- 
 tageously exerted than in checking its own propensity to act? 
 That though in every other department of human action it is 
 called on to lead, yet here it must impose chains on itself and sit 
 still ? That though every where else nature willingly submits 
 herself to its government, nay, seems to court it, yet here she 
 commands it to rest a mere spectator, beholding her "working 
 out her own ends in her own way ? " 
 
 The presumption, it seems to me, would rather be, that, 
 though neither here nor elsewhere can man in wisdom oppose 
 nature, yet here, as elsewhere, he is called on to direct her oper- 
 ations. That the result of a successful inquiry into the nature of 
 wealth, would terminate in affording the means of exposing the 
 errors that legislators had committed from not attending to all 
 the circumstances connected with the growth of that wealth, 
 whose progress it had been their aim to advance, and would so 
 teach them, not that they ought to remain inactive, but how they 
 may act safely, and advantageously ; and that thus, it would 
 maintain the analogy running through the w^hole of mr-n's con- 
 nexion with the trains of events going on about him, tlie course 
 of which he governs by ascertaining exactly what it is. That 
 
 46 
 
362 OF THE OPERATIONS OF THE LEGISLATOR, «&c. 
 
 here, as elsewhere, his advance In knowledge would show him 
 his power, not his impotence. 
 
 According to the view of the nature of stock, and of the 
 causes generating and adding to it, which has been given in the 
 preceding book, it would seem that its increase is advanced : 
 
 I. By whatever promotes the general intelligence and morality 
 of the society; and that, consequently, the moral and intellectual 
 education of the people makes an important element in its pro- 
 gress : 
 
 II. By whatever promotes invention ; 
 
 1. By advancing the progress of science and art within the 
 community ; 
 
 2. By the transfer from other communities of the sciences and 
 arts there generated : 
 
 III. By whatever prevents the dissipation in luxury, of any 
 portion of the funds of the community. 
 
 A full investigation of the modes in which the legislator may pro- 
 mote the increase of the stock of the community, would compre- 
 hend an examination of the manner in which he may operate in 
 these several particulars, of the rules necessary for him to observe 
 in each case, and an enumeration of instances, in which, according 
 as his efforts have been judiciously or injudiciously exerted, he 
 has succeeded or failed in his enterprises. 
 
 But an investigation of all these particulars would extend far 
 beyond the bounds which I have prescribed myself. I purpose, 
 therefore, to confine myself to two of them, and to limit the sub- 
 ject of this book to show that tlie legislator may operate with 
 advantage to the community, 1st. in the transfer of foreign arts 
 to his own country ; 2d, in applying to useful purposes funds 
 which would otherwise be dissipated in luxury. 
 
CHAPTER I. 
 
 OF THE OPERATIONS OF THE LEGISLATOR IN BRINGING THE ARTS OF 
 FOREIGN COUNTRIES TO IIIS OWN. 
 
 When we examine the arts practised by the members of any 
 of the numerous societies, among whom the surface of the earth 
 is divided, we find that there are very few which have arisen 
 among themselves. Unless in some rare instances, they have 
 been all brought from abroad. Inventions appearing at various 
 points in their rude elementary state, have gradually spread 
 themselves far and wide, and, as they have spread, have im- 
 proved. These passages from place to place, seem to have been 
 generally brought about by violent causes — by wars, internal 
 disturbances, and revolutions,* But, as society assumes a more 
 settled form, it is to be hoped that reason will rise superior to 
 force, and that changes produced by violence will diminish ; that 
 wars and tumults will become less frequent, or will altogether 
 cease, and that thus a great portion of the evils which have 
 afflicted humanity will be removed. But if the direct evils 
 brought about by the reign of violence, be removed by the 
 ascendency of reason over passion, must the indirect good also 
 produced by it be abandoned ? or, is it not the place of the 
 intellectual part of our nature5_ watching in this, as in other 
 instances, the progress of events, so to influence that progress, 
 as that the good may be brought to pass, the evil prevented? 
 
 The answer to these questions is, I conceive, too obvious to re- 
 quire a formal enunciation. If this be the case, it would not seem 
 necessary to recommence a discussion concerning the apparent 
 propriety of assistance being in many instances given by the 
 legislator to the passage of the useful arts from country to country. 
 
 * See Book I. c. ii. and Book II. c. x. and xiii. 
 
364 OF THE OPERATIONS OF THE LEGISLATOR 
 
 This, as a general practical conclusion, must be granted. The 
 question again resolves itself into particulars, and the investiga- 
 tions of the political economist,, would seem to be confined to 
 the tracing out, from the principles of his science, rules determin- 
 ing when the passage of any art is practicable, and when the 
 benefits derived from it will exceed, or fall short of the necessary 
 expense of effecting the passage. It is not my intention to 
 attempt a full discussion of these various particulars. It will be 
 sufficient for the object in view, to enumerate the general advan- 
 tages which such transfers produce, and to state some of the 
 chief circumstances favorable, and some of the others adverse to 
 their success. 
 
 When these measures are completely successful, that is, when 
 the commodity, the product of the art in question, comes to be 
 made at the same cost in the country to which its manufacture is 
 transferred, as in that from which it comes, or at less cost than 
 there, the advantages which the community derives from them 
 are various, but, as concerns commodities, not luxuries, may be 
 reduced to three heads. 
 
 1. The saving of the expense of transport of the foreign com- 
 modity. TJiis, as has been already noticed, is often very great."* 
 It may be remarked, too, that some articles are so perishable, or 
 so difficult of transport, that they cannot enter into the system of 
 exchange of two societies. They are produced, or may very 
 easily be produced in the progress of the construction and ex- 
 haustion of other instruments, but from its being found very diffi- 
 cult or impracticable to transport them to places where they 
 mi'dit be exchanged for valuable commodities, they want the 
 whole, or a great part of the utility they would there possess. 
 A farmer, for instance, in the interior of some great agricultural 
 country, say North America, has almost always a large mass of 
 commodities which are nearly, or altogether, valueless to him. 
 Great part of the timber he cuts down he is obliged to burn up 
 on the ground, and much of the produce of his orchard, of his 
 dairy, and of his poultry yard and garden, is either entirely, or 
 in a great measure, lost. No little part of the direct produce of 
 the farm, is also lost. His working cattle are idle for weeks or 
 months in the course of the year, and any superabundance of the 
 
 * Book I. c. ii. 
 
ON NATIONAL STOCK. 365 
 
 more bulky articles, such as turnips, potatoes, oats, or hay, lies 
 nearly useless on his hands. When a manufacturing village is 
 established in his neighborhood, all such productions become 
 valuable, and are transferred to the artisan, and master manufac- 
 turer, as returns for the products of their art. The pine of the 
 forest goes to build their houses, the maple, the birch, and the 
 walnut to make furniture for them, all potatoes and other vege- 
 tables of the sort, that can be spared, are consumed by them as 
 articles of food, the working cattle get employed at all times, 
 and there are none of the returns of the industry of the agricul- 
 turist, but find a ready market. The advantages hence resulting 
 to the parts of the country where the new art fixes itself, may be 
 estimated by observing the great rise in the value and rent of 
 land which follows it. We have also a good measure of them, 
 in the difference between these in the neio;hborhood of manufac- 
 turing towns and villages, and in places distant from them. ' 
 
 The direct effect, therefore, of these general and partial im- 
 provements, is to carry instruments, generally or partially through- 
 out the community, to orders of quicker return, and so increase 
 the absolute capital of the society. 
 
 2. They have also a large indirect effect in carrying instru- 
 ments to orders of quicker return, by stimulating invention, and 
 diminishing the propensity to servile imitation.* Every useful 
 art is so connected with many, or with all others, that whatever 
 renders its products more easily attainable, facilitates the opera- 
 tions of a whole circle of arts, and introduces change — the great 
 agent in producing improvements — under the most favorable 
 form. Thus the recent improvements in the iron manufacture, 
 have in Great Britain had no inconsiderable share in efFectins the 
 general improvement in the mechanical arts which has there 
 taken place. Arts, too, as we have seen, when brought together 
 pass into one another, and thus also improvements in old arts 
 are produced, or new arts generated. Even their very existence 
 in any society gives a powerful stimulus to the ingenuity of its 
 members. This has been well noticed by Mr. Hamilton: "To 
 cherish and invigorate the activity of the human mind, by multi- 
 plying the objects of enterprise, is not among the least consider- 
 able of the expedients by which the wealth of a nation may be 
 
 * Book II. c. X. 
 
366 OF THE OPERATIONS OF THE LEGISLATOR 
 
 promoted. Even things in themselves not positively advanta- 
 geous, sometimes become so, by their tendency to provoke exer- 
 tion. Every new scene which is opened to the busy nature of 
 man, to rouse and exert itself, is the addition of a new energy to 
 the general stock of effort. 
 
 " The spirit of enterprise, useful and prolific as it is, must neces- 
 sarily be contracted or expanded in proportion to the simplicity 
 or variety of the occupations and productions which are to be 
 found in a society. It must be less in a nation of mere cultiva- 
 tors, than in a nation of cultivators and merchants, less in a 
 nation of cultivators and merchants, than in a nation of cultiva- 
 tors, artificers, and merchants." * 
 
 3. The supply of any commodities which one society is in the 
 habit of receiving from another and independent society, is liable 
 to be suddenly interrupted by wars, or other causes. Hence 
 arises great waste of the resources of the community. In many 
 cases the whole system of instruments it possesses is at once 
 disjointed, and it is long before the society recovers from the 
 shock. The deficiency is at last supplied, it may be in a more 
 effective manner than before, but in the interim there is great 
 waste.f Communities dependent on others for the supply of 
 commodities for which they cannot readily find substitutes, must 
 necessarily, every now and then, be subjected to great diminu- 
 tion of their funds from such causes. There are few expensive 
 wars that do not furnish instances of it. It is probable that the 
 absolute loss so caused to the present United States, from the 
 interruption of their intercourse with Great Britain, at the com- 
 mencement of the war of the revolution, equalled the whole ex- 
 pense of that war. The loss which many of the continental 
 nations experienced from the sudden interruption to the supply 
 of British manufactures, during the progress of the war against 
 Napoleon, was also excessive. Great Britain herself, on the 
 same occasion, suffered very severely from being at once deprived 
 •of the supply of materials necessary to many branches of her 
 industry. Thus the cutting off the supply of Baltic and Norwe- 
 gian timber, was for some years very sensibly felt by her. 
 
 It is no doubt true, that, on such occasions, the necessity which 
 arises to procure substitutes for the commodities which are defi- 
 
 * Works, vol. I. Report on Manufactures, 
 f Book II. c. xiv. 
 
ON NATIONAL STOCK. 367 
 
 cient, largely stimulating ingenuity, often ultimately produces 
 real benefit. Wars and similar interruptions to intercourse, as 
 has been repeatedly observed, are, in fact, one of the chief agents 
 by which the arts have been made to pass ft-om country to 
 country. But the same benefits might have been produced by 
 the gradual operations of the legislator, without the sacrifice in 
 this way required, and it is the business of reason, watching 
 events, to separate tlie good from the evil, and to search for 
 plans of obtaining the one, and avoiding the other. 
 
 But, while the legislator is called on to act, he is also called 
 on to act cautiously, and to regulate his proceedings by an atten- 
 tive consideration of the progress of events. He is never justi- 
 fiable in attempting to transfer arts yielding utilities from foreign 
 countries to his own, unless he have sufficient reason to conclude 
 that they will ultimately lessen the cost of the commodities they 
 produce, or are of such a nature, that the risk of waste to the 
 stock of the community, from a sudden interruption to their im- 
 portation from abroad, is sufficiently great to warrant the probable 
 expense, both of the transfer and of maintaining the manufacture 
 at home. It is his business first to ascertain these points, and to 
 regulate his proceedings accordingly. 
 
 When there are circumstances particularly unfavorable to the 
 practice of the art, and no countervailing circumstances particu- 
 larly favorable to it, the first introduction of it must always cost 
 the society high, and the subsequent maintaining of it will in all 
 probability be a burden on the common industry and stock. 
 Among unfavorable circumstances may be noted a strength of 
 the effective desire of accumulation, less than that of a foreign 
 country, and instruments consequently remaining at orders of 
 quicker return. This is a circumstance lying beyond the reach 
 of the legislator, and which he cannot hope to change. If then 
 there are no other counteracting favorable circumstances, the art 
 cannot be transferred and preserved, but at great and continual 
 expense. Examples of injudicious conduct of the legislator from 
 inattention to this particular have been not unfrequent. As an 
 instance, may be noted the attempts of Louis XIV. to make 
 France a maritime and commercial nation. To do so, it only 
 required that the principle of accumulation should have existed 
 in sufficient strength among the people of France, to carry them 
 to the construction of instrunients of the same orders as were 
 
368 OF THE OPERAIIONS OF THE LEGISLATOR, &c. 
 
 formed in England, and other maritime and commercial nations. 
 The French at that time had ships and commerce, and had their 
 accumulative principle been so strong as to lead them to con- 
 struct instruments returning as slowly as those formed by the 
 English and Dutch, their commerce and navy would easily have 
 rivaled those of these nations. The attempt of the British, in 
 some instances, to supplant the Dutch in their fishery, was liable 
 to a similar objection. 
 
 Among circumstances particularly favorable to the transfer of 
 a foreign art, may be noted the raw materials of the manufacture 
 existing within the territory of the society in abundance. The 
 acquisition of the art in this case saves the expense of a double 
 transport. On this account, the bringing the woollen manufac- 
 ture to England was a very happy measure. 
 
 Great strength of the accumulative principle, is also another 
 particularly favorable circumstance. This rendered the efforts 
 of the English in the beginning of last century, to acquire many 
 foreign manufactures, prudent and successful. 
 
 The legislator effects his purposes by premiums for successful 
 individual imitations of the foreign article ; by general bounties 
 on the home manufacture ; or by duties on that imported from 
 abroad. Of these, premiums take so little out of the common 
 funds, that their amount forms an item too small to enter into the 
 calculation, in questions of national policy. They are useful as 
 testing the practicability of the transfer. That having been 
 done, it having been made sufficiently apparent that nothing 
 prevents the branch of industry in question being established, 
 but the difficulties attending new undertakings, the want of skilled 
 labor, and a sufficiently accurate knowledge of the properties of 
 the materials to be employed in the formation of the new instru- 
 ments, it is then proper to proceed to direct and general encour- 
 agements by bounties or duties. In this way real capital, and 
 healthy enterprise are directed to the art, the difficulties attend- 
 ing its introduction overcome in the shortest possible space, and 
 the commodities yielded by it are produced at less outlay, and 
 afforded at a less price than that, at which they were before im- 
 ported. 
 
CHAPTER II. 
 
 OF THE OPERATIONS OF THE LEGISLATOR ON LUXURIES. 
 
 The legislator Is always called on to provide a considerable 
 annual revenue. He has to provide for the expenses incident to 
 the conduct of present wars, to the burdens imposed by those 
 of preceding times, to the construction and maintenance of public 
 works, to the encouragement of science and art by premiums and 
 otherwise, and to various other outlays. If any part, therefore, 
 of this necessary annual expenditure, can be drawn from funds 
 naturally dissipated in luxury, the art of the legislator will here 
 effect a saving to the community to that amount. 
 
 Commodities which are mere luxuries, derive their value, as 
 we have seen,* from the difBculty of obtaining them. The 
 amount of labor necessary to procure them, and which thus may 
 be said to be embodied in them, is what makes them esteemed. 
 It is through it that they become fit objects of vanity, marks of 
 riches, things distinguishing their possessors from other men. It 
 is of no consequence how this labor has been expended. It may 
 have been given to ransack the depths of the earth as for dia- 
 monds, or of the sea as for pearls. All that the possessor of the 
 luxury desires, is, to have a means of showing that he has ac- 
 quired the command of a certain amount of the exertions of other 
 men. It is a matter of indifference to him, what the difficulty 
 is, to surmount which these exertions are necessary. Thus, 
 were we to suppose that diamonds could only be procureduTrom 
 one particular and distant country, and pearls from another, and 
 were the produce of the mines in the former, and of the fishery 
 in the latter, from the operation of natural causes to become 
 
 * Book II. c. xi. 
 
 47 
 
370 OF THE OPERATIONS OF THE LEGISLATOR 
 
 doubly difficult to procure, the effect would merely be that in 
 time half the quantity of diamonds and pearls would be sufficient 
 to mark a certain opulence and rank, that it had before been 
 necessary to employ for that purpose. The same quantity of 
 gold, or some other commodity reducible at last to labor, would 
 be required to procure the now reduced amount, as the former 
 larger amount. Were the difficulty interposed by the regula- 
 tions of the legislators of the distant countries, it could make no 
 difference to the fitness of these articles to serve the purposes of 
 vanity. As in the case of a natural difficulty, an additional 
 quantity of labor would be requisite to procure the commodities 
 in question, and they w^ould, therefore, equally serve the pur- 
 poses of vanity. Nor would it seem to alter the case, were the 
 difficulty interposed by the legislator of the society consuming 
 the articles. 
 
 For the sake of illustration, we may suppose that some par- 
 ticular society is possessed of a pearl fishery, from which its 
 members are supplied with the pearls they use, and farther, that 
 the case may assume the simplest form, that this society has no 
 communication with any other. The fishery is situated in a 
 particular bay, where alone, it is found, the animals yielding 
 these concretions can live. The labor annually expended in 
 procuring this luxury, amounts to a million days, or reckoning 
 each day at two shillings, to one hundred thousand pounds. 
 Each day's labor procures one hundred oysters ; from which, on 
 an average, one pearl is procured. In this state of things a dis- 
 covery is made, similar to that which Linneus conceived proba- 
 ble. It is found, that, by a particular process, the diseased 
 action in this creature, which, like ossification in the human 
 body, produces a deposition of calcareous matter in its fleshy 
 substance, instead of on the sustaining earthy portion of its frame, 
 may be induced ad libitum. The effect of this discovery is to 
 diminish very greatly the labor necessary to procure these sub- 
 stances. In process of time, every hundred oysters, instead of 
 one, yield, on an average, five hundred pearls, consequently the 
 amount of labor expended in procuring each might be little more 
 than the five hundredth part of what it was. 
 
 The ultimate effect of such a change would depend on whether 
 the fishery were free or not. Were it free to all, as pearls could 
 be got simply for the labor of fishing for them, a string of them 
 
ON NATIONAL STOCK. 371 
 
 might be had for a few pence. The very poorest class of women 
 in the society could, therefore, afford to decorate their persons 
 with them. They would thus soon become extremely vulgar, 
 and unfashionable, and so at last valueless. 
 
 If, however, we suppose that instead of the fishery being free, 
 the legislator owns and has complete command of the place, 
 where alone pearls are to be procured, as the progress of dis- 
 covery advanced, he might impose a duty on them equal to the 
 diminution of labor necessary to procure them. They would 
 then be as much esteemed as they were before. What simple 
 beauty they have would remain unchanged. The difficulty to 
 be surmounted in order to obtain them, would be different, but 
 equally great, and they would, therefore, equally serve to mark 
 the opulence of those who possessed them. If we suppose the 
 yearly expense of obtaining the pearls, and of collecting the duty 
 on them, to amount to twenty thousand pounds, there would 
 then remain to the legislator, a clear annual revenue from this 
 source of eighty thousand pounds. This revenue would not 
 cost the society any thing. If not abused in its application, it 
 would be a clear addition of so much to the resources of the 
 community. 
 
 Were the precious metals in reality, as Adam Smith seems to 
 have conceived, mere luxuries, a tax imposed on them at the 
 mines would have a similar effect to the hypothetical tax on 
 pearls, which we have been considering. It would make a real 
 addition of so much to the revenue of the community possessing 
 the mines. In this case the tax imposed by the king of Spain 
 on the gold and silver obtained from America, amounting at first 
 to half of the whole quantity annually procured, would not, 
 unless among the first adventurers, have caused any diminution 
 of the revenue of individuals, and its produce would have formed 
 a large real addition to the general revenue of the society. 
 
 Neither in this case, however, nor perhaps in any other, have 
 commodities altogether luxuries presented themselves to the 
 operations of the legislator. They all, probably, derive part of 
 their value from their utility, although in many instances the part it 
 makes up may be very small. Hence a general tax upon almost 
 any class of commodities, is a tax in whole, or in part, upon 
 some utility, and abstracts something from the revenue of its 
 consumers. All silk goods are perhaps in part luxuries to the 
 
372 OF THE OPERATIONS OF THE LEGISLATOR 
 
 majority of those who consume them. They are also, however, 
 in a very great degree, and to all classes, utilities. There is a 
 real beauty and durability in such fabrics, probably in many cases 
 sufficient to warrant the higher price paid for them. A general 
 tax, therefore, upon silks, though it would in part be a tax on 
 luxuries, and, in so far, occasion no diminution of the revenues 
 of any one, would also in part be a tax upon utilities, abstracting 
 a real amount from the funds of individuals. The same things 
 will hold true concerning a great number of commodities. Pure 
 vanity, and real enjoyment, have each a place, as we have seen, 
 in the general expenditure of almost every person. 
 
 But though tliis is true of taxes levied generally on any class 
 of commodities, it yet not unfrequently happens, that taxes on 
 commodities of the same class may be so ordered as to fall nearly, 
 or altogether, on luxuries. It may be, though a whole class of 
 commodities have, under the appearance of luxury they exhibit, 
 a considerable substratum of real utility, that yet individuals of 
 the class, not differing from others in the quantum of utility they 
 possess, may have some peculiarities serving to afford a hold to 
 vanity, and to enable that passion to raise their value very high, 
 by making them pass as marks of the superiority of one man over 
 another. As these, therefore, differ from other commodities of 
 the sort, merely in the amount of luxury embodied in them, a 
 tax on them may be considered as altogether a tax on luxuries, 
 giving a revenue to the legislator, and taking nothing from the 
 society. 
 
 Alcoholic liquors, considered as a class, are probably, in a 
 great degree, luxuries. They may in part be really useful, but 
 certainly, speaking in the general, their consumption is not 
 measured by the utility resulting from it. Some of them, how- 
 ever, agreeing with each other in the amount of utility they may 
 possess, differ yet largely in the quantum of luxury embodied in 
 them. Thus it is, I apprehend, very difficult to say whether 
 rum, brandy, whisky, or gin, considering each with regard to 
 its intrinsic qualities, is the preferable liquor. It seems probable 
 that they are nearly alike in most respects, save their being more 
 or less luxuries. In Great Britain rum is, I believe, at least 
 double the price of whisky, and brandy still higher, the con- 
 sumption, therefore, of the dearer article instead of the cheaper, 
 must arise nearly altogether from vanity. In Canada, again. 
 
ON NATIONAL STOCK. 373 
 
 the price at which Scotch whisky is sold, is double the price of 
 rum, and considerably above the price of brandy. The excess 
 of its price above these other liquors must, therefore, be con- 
 sidered a luxury.* The chief part of the high price in England 
 of rum and brandy, is made up of the duty paid to the govern- 
 ment. In this case, therefore, the legislator would seem to de- 
 rive a revenue from mere luxuries. Were such duties withdrawn, 
 atid were not the measure to lead to an increased and extrava- 
 gant consumption of alcoholic liquors in general, it would have 
 the effect of changing the sort of liquors consumed. Rum and 
 brandy being as cheap as whisky, would come, with many 
 people, to occupy the place of it, they would no longer afford a 
 peculiar gratification to vanity, and that passion would fly off to 
 some other article, fitted for its purpose, in all probability, not 
 by the operations of the legislator, but by the real expenditure 
 of labor or some equivalent to it. The society, considered as a 
 body, would lose the advantages of the revenue before at the 
 command of the legislator, and, considered as individuals, they 
 would gain nothing. Certain classes among them would merely 
 change the form of some of the characters, by which they marked 
 to others their relative means and stations. 
 
 It would appear, then, that the powers of the legislator, when 
 prudently directed in the taxation of luxuries, may be so exer- 
 cised as to raise a considerable revenue, without trenching at all 
 on the incomes of individuals. It is to be observed, that his 
 proceedings in this way have a greater chance of success, when 
 he levies duties on foreign, than on domestic commodities. 
 Almost all commodities of home manufacture form large classes, 
 running gradually into one another, and so not easily discrimi- 
 nated, or affording any very striking characteristics to serve the 
 purposes of vanity. If we examine, for instance, the manufac- 
 tures in Britain of cloths, or of malt liquors, we shall find in them 
 all a great number of commodities differing very little from each 
 other. If a heavy duty be then imposed on any of them, there 
 is a considerable chance of its consumption greatly diminishing or 
 ceasing altogether. Were porter taxed more highly than other 
 
 * The quantity consumed is small, it would in all likelihood be much greater 
 were it not for the difficulty of distinguishing it from whisky of the country, 
 which sells at less than one fourth of the price. Scotch whisky being 10s 
 per gallon, Canadian from 2s to 3s. 
 
374 OF THE OPERATIONS OF THE LEGISLATOR 
 
 malt liquors, there are so many sorts of ales which very nearly 
 resemble it, or might be made to do so, that instead of being con- 
 verted by the tax into an especial luxury, it is probable the con- 
 sumption of porter would nearly cease. The imposition of a 
 high duty on any particular sort of foreign wine, has not so great 
 a tendency to diminish its consumption ; people would still drink 
 claret, however highly it were taxed, because it has qualities 
 sufficiently marked to distinguish it from other wines, and to 
 make, therefore, its consumption capable of denoting a degree of 
 present opulence, proportioned to the price it costs. 
 
 Some commodities of domestic manufacture are, nevertheless, 
 much better fitted for the operations of the legislator than others. 
 A duty, for instance, on the finer textures of cottons and linens, 
 might perhaps be so levied as to make it nearly altogether a tax 
 on luxuries. The fineness of the thread in these fabrics, affords 
 a pretty conspicuous mark, and by raising the impost gradually 
 in proportion to it, the more delicate sorts might, perhaps, come 
 to be esteemed as adequate marks of a capacity to expend largely 
 and so be converted into especial luxuries. In this case part of 
 the expenditure of individuals, which is now dissipated in chang- 
 ing fashions, would be made over to the legislator, and might 
 suffice to sustain some part of the public burdens. 
 
 All such duties, however, require to be laid on very gradually, 
 else the consumption of the commodities on which they are im- 
 posed may very probably be stopped. Men have generally a 
 very high opinion of the reasonableness of their conduct, and the 
 correctness of their taste. They are apt to fancy that there is a 
 real and very great enjoyment in expenses, which, in truth, have 
 scarce any thing to recommend them but the gratification they 
 afford to vanity. In like manner, when any article rises suddenly 
 and greatly in price, when in their power, they are prone to adopt 
 some substitute and relinquish the use of it. In such cases the 
 observation is forced on them, that the commodity is no better 
 than it was before, and that, if then they sometimes used another 
 for it, the best thing for them now to do is to confine themselves 
 altogether to that other. Hence, were a high duty at once im- 
 posed on any particular wine, or any particular sort of cotton 
 fabric, it might have the effect of diminishing the consumption 
 very greatly, or stopping it entirely. Whereas, were the tax 
 at first very slight, and then slowly augmented, the reasoning 
 
ON NATIONAL STOCK. 375 
 
 powers not being startled, vanity, instead of flying off to some 
 other objects, would be apt to apply itself to them as affording a 
 convenient means of gratification. 
 
 The chief practical objection to such imposts, as a source of 
 revenue, is the expense of collection and the attempts generally 
 made to evade them. The former diminishes the amount yield- 
 ed by them, the latter is injurious to the morals of the people. 
 Both are greater in commodities of domestic, than of foreign 
 manufacture. In articles produced within the country, it is 
 necessary to watch the whole progress of manufacture, and to 
 guard against imposition at every stage. Commodities, on the 
 other hand, imported from abroad, have only to be watched at 
 the time and place of importation. 
 
 There is a case in which duties imposed on foreign commodi- 
 ties, have particular advantages. It not unfrequently happens 
 that in manufactures which it is the object of the legislator to 
 introduce, and carry to perfection within the society, the chief, 
 perhaps the only difference, between the enjoyment afforded by 
 the foreign and by the domestic article lies in the gratification the 
 former affords to vanity. This is very generally the case in all 
 commodities affording materials for such articles of dress as are 
 seen by many, these being always in a great degree luxuries. I 
 very much question, for instance, whether the passage of the 
 manufacture of calicoes from Britain to America, has occasioned 
 the wearers of calicoes in the United States any sensible diminu- 
 tion in the comfort, or in the pleasure arising from the perception 
 of beauty, afforded by such articles. The standard is in such 
 cases altogether relative, the pleasure given by any particular 
 dress of this sort arising from its being as fashionable, and as be- 
 coming as the dresses of other persons, or more fashionable and 
 more becoming than theirs, and the chief requisite for rendering 
 any fabric fashionable, seeming to be that it be costly, and have 
 novelty. The unrestrained introduction of British or other foreign 
 calicoes would, therefore, in all probability, have been felt, merely 
 as a change in fashion, not as an increase of pleasure or diminu- 
 tion of cost. 
 
 There are very many similar cases. As the great mass of 
 commodities are in part utilities, in part luxuries, so, in transfer- 
 ring the manufacture of any of them from one country to another, 
 it very frequently happens that, in as far as the article in question 
 
376 OF THE OPERATIONS OF THE LEGISLATOR, <fec. 
 
 has real utility, the domestic soon equals the foreign variety. It 
 is chiefly in a laborious finish, for the most part the result of the 
 demands of vanity, that the former falls behind the latter. In 
 such instances the operation of transferring the art from one 
 country to another, by means of a protective duty, takes either 
 very little, or nothing, from the revenue of individuals, and makes, 
 it may be, a considerable addition to that of the legislator. Its 
 general effects on the funds of the community, are directly, and 
 indirectly, to advance the absolute capital of the society by the 
 introduction of a new art, and, during the process, to give a con- 
 siderable revenue to the legislator for the attainment of public 
 objects, without encroaching at all, or but in a very slight degree, 
 on the returns made by the industry or stocks of individuals. 
 
CRA PTER III 
 
 OF OBJECTIONS TO THE INTERFERENCE OF THE LEGISLATOR IN THE CASES 
 INDICATED IN THE TWO PRECEDING CHAPTERS. 
 
 It appears, therefore, tliat there are at least two modes by 
 which the legislator can effectively advance the general stock. 
 1st. By effecting the passage of the useful arts from foreign 
 countries to his own : 2d. By applying to useful purposes a 
 portion of those funds, which, in all societies, are otherwise dissi- 
 pated in the production of mere luxuries. 
 
 To these positions several objections may be made, of which 
 some are founded on the nature of things, others arise almost 
 entirely from the ambiguity of language. 
 
 It may, probably, occur to the reader, that I have considered 
 the legislator as always endeavoring to act for the good of the 
 society, and capable of understanding what is for its good, 
 whereas, in .reality, the individual or individuals in whom the 
 legislative power is vested, very often neither understand what is 
 for the general welfare, nor act so as to promote it. This objec- 
 tion carries us to the nature of laws and government, and can, 
 therefore, be only very generally answered. 
 
 I would observe, then, that though in other matters, as in 
 projects of distant conquest, or in intrigues for changing the con- 
 stitution, the legislator may act in opposition to the common 
 interests, yet, speaking generally, in all his proceedings relative 
 to the wealth of the community, it is his aim to act in accordance 
 with them. In despotic governments this is the case, because 
 there the legislator looks on the wealth of the people as his own ; 
 in free governments because in them his interests are identified 
 with theirs. It may be that he does not adopt judicious measures 
 for the purpose, but if so, it is his judgment, not his will that is 
 in fault. 
 
 48 
 
378 OF THE OPERATIONS OF THE LEGISLATOR 
 
 Again, it must be granted that the perfection, or imperfection 
 of action of the power invested with legislative authority, depends 
 chiefly on the prevalence or defect, of intelligence and public 
 spirit throughout the community. Every government rests on 
 opinion. Whenever the majority are thoroughly convinced that 
 they would derive advantages from a change in the constitution, 
 or in the person or persons administering it, the time of a 
 revolution approaches. It is only from the members of any 
 society not perceiving what would be for their good, or not 
 believing they can find among them men sufficiently honest or 
 intelligent to execute what would promote it, that the legislative 
 power can be greatly or permanently vicious or defective. There 
 is always a close connexion between the nature of the people 
 and of the government. Despotism and anarchy imply a general 
 debasement in the intellectual and moral powers ; freedom and 
 order, an elevation of them. The more despotic the government 
 the more dependent on the will or caprice of a single person, 
 the more it is subject to error in all legislative measures. The 
 more despotic the government, however, the less also the intel- 
 ligence, and the greater the selfishness, and consequently the 
 vanity of the governed. The less, also, the inventive power, 
 and the advance in science and art, and the greater the addiction 
 to luxury.* But the less the comparative advance in science 
 and art, and the greater the addiction to luxury, the greater 
 facility is given to such operations of the legislator as have for 
 their aim to increase the wealth of the community. The farther 
 any society is behind others in a knowledge of the useful arts, 
 the greater the number of new arts that may be introduced ; the 
 larger the amount of luxury that prevails in it, the greater the 
 revenue that may be raised by taxation without interfering with 
 individual income. Hence, speaking generally, if legislators in 
 despotic governments, were other circumstances equal, would be 
 more prone to go wrong; they have there so great facility in 
 acting, that they have greater chance to go right. 
 
 A reference to examples will make this apparent. If, for an 
 Instance of one of the most ignorant and slavish of existing socie- 
 ties, we turn to some one of the islands of the South Sea, it will 
 be allowed that a legislator of intelligence and perseverance might 
 
 * See page 321, 322. 
 
ON NATIONAL STOCK. 379 
 
 there effect much good by introducing among them the arts of 
 men farther advanced in the career of improvement. Though 
 we cannot expect to find such a legislator there, one would be 
 inclined to augur favorably of the efiects likely to result from the 
 unskilful efforts of even any of their barbarous chiefs, directed to 
 so praiseworthy an object. We should not conceive he wasted ' 
 the resources of his country, by turning part of the national funds 
 to such purposes. Of extensive countries where unmitigated 
 slavery and despotism prevail, Egypt is perhaps most under the 
 eye of Europeans. It is not, however, commonly beheved by 
 them, that the projects of its present ruler for the introduction 
 into it of modern science and art, are inconsistent with the dictates 
 of sound policy. Facts would demonstrate the fallacy of any 
 such supposition. Errors, no doubt, may have been, and may 
 be committed, but the good assuredly overbalances the evil. 
 The revolution wrought in Russia by Peter the Great, is another 
 instance of the same sort. In such cases the power of the legis- 
 lator to effect beneficial changes is so great, that even his most 
 blundering efforts are seldom altogether successless. A fruitful 
 soil yields large returns, even to a very unskilful husbandman. 
 If we pass from them to governments, of which freedom, intelli- 
 gence, and public spirit, are the moving powers, we find there, 
 that though the capacity to produce good is diminished, the 
 liability to error is also diminished. It were folly in the legisla- 
 ture of the United States, to imagine itself capable of giving an 
 impulse so sudden and great, to the resources of the country, as 
 that brought about in Egypt by the present Pacha, or in Russia 
 by the first Peter. It has the advantage, however, of being 
 much less liable to error. Every important measure there agi- 
 tated, before it can be adopted, is subjected to the scrutiny of great 
 numbers of intelligent and well informed individuals, stimulated 
 alike by their regard to their country and to themselves, to trace 
 out with accuracy its future operation and effects. By this 
 means the greatest security, of which the nature of human affairs 
 admits, is given against the adoption of impolitic or hurtful 
 schemes. With such cautions, the legislator may with prudence 
 undertake a series of measures, that, under other circumstances, 
 were of very doubtful expediency. 
 
 In one sort of government, therefore, the facility of action 
 gives warrant to act, and in another the probable freedom from 
 
380 OF THE OPERAIIONS OF THE LEGISLATOR 
 
 error. In both it is the part of the legislator to act, but to act 
 in conformity to the laws arising from the constitution which na- 
 ture has given to man and to matter. In doing so instead of 
 acting in opposition to nature, he fills his natural place in a sys- 
 tem established by nature. In both, also, it is the part of the 
 inquirer into the principles of politics, to endeavor to throw light 
 along the patli of the legislator, not vainly to attempt to persuade 
 him, that an insuperable obstacle blocks it up. 
 
 Finally, concerning this objection, it may be observed, that it 
 refers to casual ills connected with what is in itself an acknow- 
 ledged good, and is of a character altogether different from those 
 springing from the doctrines of the followers of Adam Smith. 
 They hold up legislative interference as necessarily and essen- 
 tially evil. 
 
 The second objection I have to note, as resulting from the 
 nature of things themselves, is the possible evil effects of an ex- 
 cessive revenue accruing to the legislator, from protecting and 
 encouraging the industry of the society and turning into his 
 own coffers as much as possible of the amount otherwise dissi- 
 pated in luxuries. A superabundant rev^enue in the hands of 
 the legislator, though directly a great good, is sometimes, indi- 
 rectly a great evil. It may enable him, without any expense to 
 the society, to carry on projects that must otherwise have pressed 
 heavily on its resources, but it also places an instrument of great 
 power in his hands, and one which, in certain circumstances, he 
 may turn to very pernicious ends. It may have an effect similar 
 to that which the discovery of the western continent produced 
 on Spain. The direct effects of the riches that flowed in from 
 the new world, were mightily to increase the power of the 
 Spanish monarchy. Indirectly, however, their effects were to 
 corrupt the court and the nobles, and to spread wide, through the 
 higher classes, a dissolute, and yet a mercenary spirit. The 
 objection, however, only refers at all to countries where there 
 are no public burdens to absorb the surplus public revenue. It 
 is, consequently, totally inapplicable to Great Britain. It also 
 chiefly refers to countries where there are no efficient checks to 
 abuses of the legislative or executive powers. This, too, it may 
 be observed, is an objection which, as far as I know, has not 
 been urged by modern political economists. 
 
 The objections, which have their foundation in the views of 
 
ON NATIONAL STOCK. 33^ 
 
 the subject presented by Adam Smith, and which are urged by 
 his present followers, depend mainly on the nature of words, and 
 the sophisms produced by a generalization from names instead of 
 things — from preconceived notions which verbally, but not really, 
 embrace the phenomena. Terms, and so, also, reasonings, fitly 
 applied to the operations of individuals in the preservation, enjoy- 
 ment, and increase of wealth, are transferred immediately to 
 societies, and the rules and principles which hold good in the 
 one, are assumed to be exactly applicable to the other. If what 
 is thus taken for granted be admitted, farther discussion is un- 
 necessary, for the truth of the proposition to be proved, is implied 
 in the terms in which it is enunciated. It has been my aim, 
 throughout the preceding pages, to expose the fallacy of these 
 assumptions, and, consequently, of the arguments resting on them. 
 It is only necessary for me here, then, to state very shortly the 
 objections, and the answers to them. 
 
 It is said capital can only augment by accumulation, and, 
 as the interference of the legislator takes somethino- from indi- 
 vidual revenue, it must also take from the power to accumulate, 
 and, consequently, instead of augmenting, must tend to diminish 
 the sum of the capitals of all the individuals in the society, that is 
 the national capital or stock. This objection proceeds on two 
 assumptions, the first, that the nature of national capital, or stock, 
 about which the whole discussion turns, which it is the object of 
 the inquiry to investigate, and concerning which scarce two 
 authors of note agree in opinion, is known previously to any 
 investigation, and is precisely identical with the notion suggested 
 by the same term apphed to individual wealth. The second, 
 that what is generally true concerning individual capital, is 
 universally true concerning national capital, and that, as the 
 former commonly augments by accumulation, the latter can do 
 so in no other manner. 
 
 The answer to this objection is, that the proceedings of the 
 legislator may increase the absolute capital and stock of the 
 society, the provision, that is, for future wants, embodied in the 
 stock of instruments possessed by it, though they may not 
 increase, and may even a little diminish its relative capital, or the 
 sum which would be brought out by measuring those instruments 
 with one another. That it is the amount of the absolute capital 
 of the society, which is the proper measure of the wealth of the 
 
382 OF THE OPERATIONS OF THE LEGISLATOR 
 
 whole, and of each individual, and that whatever augments it not 
 only directly, and of itself, advances national wealth, but ulti- 
 mately, also, does so indirectly, through the stimulus given to 
 the accumulative principle, and the addition thence arising to 
 relative capital. 
 
 This objection and the answer to it apply to utilities. The 
 second objection refers to the proceedings of the legislator con- 
 cerning commodities wholly or in part luxuries. It proceeds on 
 the same assumption, that what is true concerning the wealth of 
 individuals, and sufficiently explains its increase and diminution, 
 is also true concerning the wealth of societies, and fully explains 
 the causes of its increase and diminution. 
 
 If, other circumstances remaining unaltered, a single individual 
 in a society acquires the power of purchasing some article enter- 
 ing into his system of consumption, at less cost than before, he 
 is by so much a gainer, and the change is equivalent to a propor- 
 tional increase in revenue. Transferring this fact to societies, it 
 is held that the revenue of every society is increased in exact 
 proportion to the diminution in the cost of any article entering 
 into its system of consumption, and diminished in proportion to 
 the increase in the cost of any such article. By how much, 
 therefore, any operations of the legislator add to the price of any 
 commodity, by so much, it is said, they always, and in every 
 case, take from the revenue of the society. When, therefore, 
 by taxing foreign luxuries, the legislator raises their price, it is 
 asserted that he proportionally diminishes the general revenue. 
 
 The answer to this objection is, that though as every com- 
 modity consumed by an individual, derives the estimation in 
 which it is held from something in some most complicated system 
 of persons and things constituting the society of which he is a 
 member, while that system remains in all its parts unchanged, 
 whatever gives him the command of a greater portion of the 
 particular commodity than before, necessarily increases the 
 amount of commodities, which, compared with others, he pos- 
 sesses, and thus makes him, as compared with them, so much 
 richer; yet, if any commodity become universally cheaper 
 throughout a whole society, as this implies a change to a certain 
 extent in the system of things, comprehended with persons in 
 the term society, it may be that the revolution may affect the 
 causes giving estimation to the commodity in question, and that. 
 
ON NATIONAL STOCK. 383 
 
 until we know whether or not this be the case, and how it oper- 
 ates, we act with unwarrantable rashness in transferring rules 
 true concerning individuals, to societies, and in asserting that a 
 general diminution in cost, is, in all cases, equivalent to a general 
 increase of revenue, or a general augmentation of cost, to a general 
 diminution of revenue. That if there be any class of commodi- 
 ties, the estimation of which depends wholly, or in part, on their 
 power to mark the possession of a certain relative superiority, 
 or a command greater or less of the labor of other men, then the 
 generally diminished cost of such commodities, lessening their 
 power to mark the desired distinction, and taking thus in a like 
 degree from that for which they were altogether, or in part, 
 esteemed, either makes no change in the general revenue, or a 
 smaller change than that indicated by the amount of the diminu- 
 tion. That such commodities serving merely, as Mr. Storch 
 expresses it, for marks of opulence, their fitness for the purpose 
 is diminished as their cost becomes less, and, therefore, a dimi- 
 nution of their cost produces no increase, or no proportionate 
 increase, of general revenue, and an increase of it, no diminution, 
 or no proportionate diminution of general revenue. That thus, 
 though, were the power of procuring a string of pearls for a few 
 hours labor given to any individual European, it might very greatly 
 increase his wealth, yet, the same power given to all Europeans, 
 would produce no increase, or no proportional increase to Euro- 
 pean wealth, and, on the contrary, as the facility of purchase 
 by putting the wearing of peals out of fashion, would probably 
 render the stock of these articles in the possession of individuals, 
 valueless, it would, in all probability, proportionably diminish 
 the amount of wealth actually existing.* 
 
 * It is remarkable that neither Adam Smith, nor Mr. Say, nor Mr. Storch,. 
 although they have stated distinctly enough in various places, that many 
 commodities derive their whole, or the greater part of their value, from the 
 gratification they afford to vanity, — their power to mark the superiority of 
 one man over another, — seem to have perceived that the admission was fatal 
 to the majority of their theoretical conclusions. They consequently have not 
 thought it necessary to adduce any reasons to show that the operations of the 
 legislator, on such commodities, may not have the beneficial effects indicated 
 in the text. Mr. Say, indeed, has the following passage. 
 
 " De ce que le prix est la mesure de la valeur des choses, et de ce que leur 
 valeur est la mesure de leur utilite, il ne foudrait pas tirer la consequence 
 absurde qu' en faisant monter leur prix par la violence, on accroit leur utilite. 
 La valeur echangeable ou apprecative nest une indication de I'utilite donnee 
 
384 OF THE OPERATIONS OF THE LEGISLATOR 
 
 If the legislator, by an arbitrary and secret act, could impose 
 a duty on the share of any commodity consumed by an individual, 
 the rest of the community going free, that individual would un- 
 doubtedly be exactly so much a loser. It would be to him a 
 matter of indifference what the commodity in question were. If 
 the circumstances of his condition obliged his wife to wear jewels, 
 or him to have a supply of claret on his table, an arbitrary impost 
 of the sort on the claret he consumed, or the jewels his wife 
 wore, would probably be to him equivalent, to a like exaction 
 on coals or bread. In the same way, a secret remission to a 
 single individual of the duty levied on any article, would be just 
 so much gain to him. 
 
 The fundamental error on this subject of Adam Smith, and 
 the present prevailing school of political economists in England, 
 lies, in their assuming, that what is true concerning an individual, 
 is true, also, concerning a community, and maintaining, conse- 
 quently, that every impost is so much absolute loss to the society, 
 and every diminution of it, so much gain. Before this assump- 
 tion can be made good, with regard to any particular impost, it is 
 necessary that the three following questions concerning it should 
 be determined. 
 
 1st. Will the duty so levied, by directly or indirectly effecting 
 an improvement in the arts, increase the absolute capital of the 
 society ? 
 
 2d. Will it prevent future waste, by the transfer of an art pro- 
 ducing useful commodities, the supply of which is liable to sud- 
 den interruptions ? 
 
 3d. Does it fall partly or altogether on luxuries, and is its real 
 effect, consequently, not to diminish, by so much, the annual reve- 
 nue of the society, but only to apply a part of it, which would 
 
 de la production reelle, qu'autant que cette valeur est abandonnee a elle meme 
 et que Taction des hommes qui font un marchc est entierenient libra ; de 
 meme qu'une barometre n'indique la pensateur de 1' atmosphere, qu'autant 
 que le mercure pent s'y mouvoir avec facilitu." p. 5. vol. I. 
 
 So far as the above is applicable to luxuries, it is evidently nothing but an 
 ipse dixi dressed in a metaphor, — a sort of argument too economical to admit 
 of an answer. If luxm-y, " Luxe de I'ostcntation," be, as Mr. Say himself 
 says, " une consommation qui n'a pour objet que cette depense meme ; una 
 destruction de valeur qui ne se propose d'autre but que cette destruction," * 
 it surely matters not to the consumer how this value be given to the com 
 modity. 
 
 * Vol H. p. 995. 
 
ON NATIONAL STOCK. 385 
 
 Otherwise have been dissipated by vanity, to supply funds for 
 the necessary expenditure of the legislator ? 
 
 Unless these questions can be all answered in the negative, 
 the assumed parallel between the effects of an impost on an 
 individual, and on a community, does not hold, and the whole 
 reasonino; founded on it falls to the ground. 
 
 49 
 
NOTES 
 
 NOTE A . Pase 1 
 
 D 
 
 "We derive from Dr. Smith no assistance in forming our opinions 
 ^n this important subject; for he seems to have had no fixed ideas 
 in relation to it. Indeed, there is no opinion that has been any 
 where maintained on the subject of the sources of national wealth, 
 which does not appear to have been adopted in different parts of 
 the Inquiry into the Wealth of Nations. 
 
 1. " The annual labor of every nation is" at one time stated to 
 be " the fund which originally supplies it with all the necessaries 
 and conveniences of life which it annually consumes, and which 
 consists always either in the immediate produce of that labor, or in 
 what is purchased with that produce from other nations." * 
 
 2. Lands, mines, and fisheries, elsewhere are regarded as repla- 
 cing, " with a profit, not only the capitals employed in them, but 
 all the other capitals employed in the community." t That, how- 
 ever, which replaces all the capitals employed in the community, 
 and is the source from whence they derive their profit, must be the 
 sole source of wealth. Mankind are, therefore, here considered as 
 deriving the whole of their wealth from land. | 
 
 3. Again, plain reason is stated to dictate, that the real wealth of 
 a country consists in the annual produce of its land and labor ; 
 and this opinion, which coincides with that of the Bishop of Cloyne,§ 
 and the learned author |1 of the Essay on Money and Coin, is most 
 generally adhered to by Dr. Smith. 
 
 * Wealth of Nations, vol. I. p 1. 4to. edit. This opinion is maintained by 
 Mr. Hume. See his Discourse of Commerce, p. 12. edit. 1752. 
 
 f Wealth of Nations, vol. I. p. 338. 4to. edit. 
 
 t Ibid, vol. I p. 414. 
 
 § Querist. Quer. 4. " Whether the four elements, and man's labor therein, 
 be not the true source of wealth." 
 
 II " Land and labor together are the sources of all wealth, Avithout a com- 
 petency of land, there would be no subsistence ; and but a very poor and un- 
 comfortable one without labor. So that wealth or riches consist either in a 
 property in land, or in the products of land and labw. 
 
388 NOTES. 
 
 4. In another part of the work, however, we find it asserted, that 
 " land and capital stock are the two original sources of all reve- 
 nue, both private and public : capital stock pays the wages of pro- 
 ductive labor, whether employed in agriculture, manufactures, or 
 commerce." * Land and capital are, therefore, here deemed the 
 sole sources of wealth ; and labor is considered as deriving from 
 them its wages, without adding to the opulence of the community. 
 
 5. Lastly, we are taught to consider land, labor, and capital, as 
 being all three sources of wealth; for we are told that, "whoever 
 derives his revenue from a fund that is his own, must draw it either 
 from his labor, his stock, or his land. The revenue derived from 
 labor is called wages; that from stock, profit; and from land, 
 rent;"t an opinion which seems to have been hinted at by Sir 
 William Petty, | when he stated it as an impediment to the wealth 
 of England, that taxes were not levied upon lands, stock, and labor, 
 but chiefly upon land alone, though land and labor are generally 
 considered by that ingenious writer as the sole source of wealth. 
 
 In treating of political economy, the science which professes to 
 display and to teach means of increasing the wealth of a state, it 
 would seem that the first and most anxious object of inquiry ought 
 to have been, what wealth is, and from what sources mankind de- 
 rive it? for it appears impossible to discuss with precision the means 
 of increasing any thing, without an accurate notion of its nature 
 and of its origin. " Lauderdale. 
 
 To this catalogue of the various notions held out in the Wealth 
 of Nations, concerning the nature of that wealth. Lord Lauderdale 
 might have added another, showing some general resemblance to 
 that exhibited in the present work. "Wealth," we are told, B. V. 
 c. i., "always follows improvements of agriculture and manufac- 
 tures, and is, in reality, no more than the accumulated produce of 
 those improvements." 
 
 B. Page 4. 
 
 <i 
 
 Si r on se demande en effet en quoi consiste la ricliesse, on 
 n'est pas pen surpris de ne trouver dans les auteurs les plus estimes 
 que des opinions differentes ou contraires. 
 
 "Les uns la font consister dans I'universalite des proprietes 
 privees,^ et d'autres dans I'abondance des denrees. || 
 
 " Ceux-la distinguent la richesse publique de la richesse particu- 
 liere, donnent a la premiere une valeur d^usage et non d^ eeliange, 
 et a la seconde une valeur d'echange et non d'usage, et font consister 
 cette derniere dans la valeur venale du jij'oduit ?iet.^ 
 
 * Wealth of Nations, vol. II. p. 5G0. 
 ] Wealth of Nations, vol. II p. C3. 
 t Tracts, edit. 1768, p. 2t;3. 
 
 § Treatise of taxes by William Petty — Gregory King calculation, piib- 
 lished by Davenant — Becke observations on the produce of the income tax. 
 II Dime royale du marechal de Vauban. 
 II Physiocratie, p. lib — Philosophic rurale, p. 60. 
 
NOTES. 389 
 
 " Ceux-ci la composent de toiites les choses materielles dont 
 I'homme peut faire usage pour satisfaire un besoin ou une jouis- 
 sance de sensualite, de fantaisie ou de vanite.* 
 
 " Un autre ecrivain regarde la richesse comme la jwssession 
 d'une chose plus desirec par ccuz qui nc Vont pas que par ccux qui 
 enjouissentA 
 
 " Un autre ecrivain la definit le supcrjlu.\ 
 
 " Un autre ecrivain la place dans I'accuraulation du travail exisi- 
 ble.§ . . ] 
 
 " Adam-Smith dit tantot qu'un homme est riche ou pauvre selon 
 le plus ou moins de choses necessaires, utiles ou agreables a la vie 
 dont il peut se procurer la jouissance ; tantot qu'un homme est riche 
 ou pauvre selon qu'il peut disposer de plus ou moins de travail ; 
 tantot que la richesse reelle d'un pays consists dans le produit 
 annuel de ses terres et de son travail. || 
 
 " Un ecrevain recent definit la richesse, tout ce que I'homme 
 desire comme utile et agreable.^ 
 
 " Les richesses, dit M. Say, se composent des choses qui ont une 
 valeur.** 
 
 " M. Ricardo pense que la valeur differe essentiellement de la 
 richesse, et que les choses, une fois qu'elles sont reconnues utiles 
 par elles-memes, tirent leur valeur echangeable de deux sources, 
 de leur rarete, et de la quantite de travail necessaire pour les ac- 
 querir.ft 
 
 " M. Sismondi definit la richesse, le fruit du travail accumule et 
 non encore consomme. If 
 
 " Cette incertitude sur la nature de la richesse se reproduit dans 
 I'examen des moyens qui peuvent contribuer a sa progression, a 
 son accroissement et a sa grandeur. 
 
 " Ceux qui ont ecrit les premiers sur cette matiere importante, 
 seduits par I'apparence des faits, ont attribue aux metaux precieux, 
 obtenus en retour de I'exportation des produits du sol et de Indus- 
 trie de chaque pays, la cause de la richesse des peuples.^^ 
 
 * Essai sur la nature du commerce, par Cantillon. — Abrege des princi- 
 pes d'cconomie politique, par M. le senateur Germain Garnier, Paris, 179G. 
 M. Malthus, Principes d'economie politique consideres par rapport a leurs ap- 
 plications practiques (page 23.) 
 
 t Richezza e il possesso d'alcuna cosa che sia piu desiderata dal altri che dal 
 possessore, Galiani, della Moneta. 
 
 t II superfiuo costituisce la richezza, Palmieri, publica Felicity, tonje I. 
 page 155. 
 
 § Princ. d'econ. polit., par M. Canard, Paris, 1801. 
 
 II Rich, des nat., in-4to. vol. I. pag. 209 et 338. 
 
 11 An inquiry into the nature and origin of public wealth, by Earl of Lau- 
 derdale, chap. 2. page 56 et 57. 
 
 *" Traite d'econ. polit., page 1. 
 
 tf Des principes de I'economie politique et de I'impot, tome II. chap. 20. 
 
 tf Nouveaux principes d'economie politique, tome I. page 60. 
 
 §§ En Angleterre, Raleigh, Essai sur le commerce, en 1595. — Edouard 
 MissELDEiv', Cercle du commerce, en 1623. — Louis Roberts, Tresor du 
 trafic, en 1G4I. — Thomas Munn, Tresor de I'Anglelerre pour le commerce 
 etranger. en 1604. — Fortrey, Interuts et ameliorations de I'Angleterre, en 
 1664. — Davenant, dans son ouvrage relatif au commerce et au revenu de 
 I'Angleterre, tome 1. page 16, en 1696. — M. Martin, inspecteur-general des 
 douanes, ou le Marchand anglais, en 1713. 
 
390 NOTES. 
 
 "D'autres ecrivains en ont place la source dans la reduction de 
 I'interet de I'argent.* 
 
 " Les economistes, entraines par una theorie seduisante et cap- 
 tieuse, ont exalte le systeme agricole.t 
 
 "Adam-Smith lui a prefere le travail qui se perfectionne par sa 
 division, et qui, apres qu'il est fini, se fixe et se realise dans un ob- 
 jet permanent.:^ 
 
 '• Lord Lauderdale, dans I'ouvrage precite, ouvrage remarquable 
 par la finesse de ses aper^us, fait deriver la richesse de I'art de sim- 
 plifier et d'abreger le travail et d'ameliorer ses produits, resultat 
 necessaire de I'accumulation et de la direction des capitaux. 
 
 " M. Say fait deriver la plus grande augmentation de la richesse, 
 de I'emploi des capitaux dans I'agriculture.^ 
 
 " De I'union des systemes d' agriculture et de commerce, dit M. 
 Malthus, depend la plus grande prosperite nationale.|| 
 
 " M. Ricardo est d'avis que la richesse d'un pays s'accroit de 
 deux manieres : par I'emploi d'une portion plus considerable du 
 revenue a I'accroissement du travail productif, ou en rendant plus 
 productive celle qui existe.^f 
 
 " M. Sismondi ne voit I'accroissement des richesses que dans 
 I'accroissement des jouissances nationales." ** Ganilh des Systems, 
 Tome 1. p. 14. 
 
 C. Page 8. 
 
 At the time the reference to this note was made, it was my inten- 
 tion to have here inserted some extracts from the North American 
 Review, and some other publications, for the purpose of showing 
 the views entertained in this country concerning the system of 
 Adam Smith, and some of his followers. As far as concerns this 
 continent, however, these extracts would be superfluous, and I have, 
 therefore, thought it better to omit them, until such time as the 
 work appear in Great Britain. 
 
 En Hollande, Jean de Witt, Memoires, en 1669. 
 
 En Italie, Serra, Breve traltato delle cose die possono far abondare li regni 
 d'oro, en 1613. — Genovesi, Lezioni di econom. civile, en 1764. — Muratori, 
 Felicita pub., cap. 16, sul principio. — Corniani, Reflez. sul le monote. 
 
 En France, le cardinal de Richelieu et Colbert, ordonnances et regle- 
 mens pendant leur administration. 
 
 * Thomas Culpeper's useful remark on the mischief of an high national 
 interest, en 1641. — Josias Child, brief observations concerning trade and 
 interest of money, en 1651. — Samuel Lamb-For Banks and lumber houses, 
 en 1657. — William Patterson, auteur du Projct de la banque de Londres, 
 en 1694, et Barnard, dans ses Discours sur la reduction de rintcret de I'ar- 
 gent, en 1714. 
 
 t Physiocratio. 
 
 I Richesse des nations, liv. 11. chap. 3. — David Hume pent avoir donno i 
 Adam-Smith I'ideo de ce systeme. II dit litteralement que les homnies ne 
 peuvent acqucrir que par le travail. (Essai sur le commerce, edit. d'Edim- 
 bourg, 1804, in 8vo. vol. I. page 277.) 
 
 § Ibid., tome II. page 231. 
 
 II Addition aux quatre premieres editions de I'Essai sur la population, 
 chap. 1 1 . 
 
 II Ibid. 
 
 ** Id., tome I. page 53. 
 
NOTES. 391 
 
 D. Page 18. 
 
 Adam Smith here admits, to a certain extent, the correctness of 
 the general notions concerning the nature and ofRce of money, 
 entertained by the school of political economists who preceded Hume. 
 Had he done otherwise he would have acted very unfairly, for his 
 own reasonings, on this subject, are sometimes little more than a 
 repetition of theirs, as might be shown by an examination of parallel 
 passages. Compare, for instance, the two following. " Although 
 they who have their estates in money are said to be a great number, 
 and to be worth ,£5,000 or o€10,000 per annum, more or less, which 
 amounts to many millions in all, yet are they not possessed thereof 
 altogether at once, for it were vanity or against their profit to keep 
 continually in their hands above £40 or ,£50 in a family to defray 
 necessary charges. The rest must ever run from man to man in 
 traffic for their benefit, whereby we may conceive that a little 
 money (being made the measure of all our other means) doth rule 
 and distribute great matters daily to all men in their just propor- 
 tions."* " As the same guinea which pays the weekly pension of 
 one man to day, may pay that of another tomorrow, and that of a 
 third the day thereafter, the amount of the metal pieces which 
 annually circulate in any country must always be of much less value 
 than the whole money pensions annually paid with them."t 
 
 The more recent followers of Adam Smith have not always done 
 the earlier writers equal justice. Thus Mr. McCulloch, in his Princi- 
 ples of Political Economy, asserts that the mercantile system, of which 
 he esteems Mun one of the earliest and ablest defenders, reckoned 
 money the only wealth, and remarks, that " the simple consideration, 
 that all buying and selling is in reality nothing more than the barter- 
 ing of one commodity for another, — of a certain quantity of corn or 
 wool, for example, for a certain quantity of gold or silver, and vice 
 versa, was entirely overlooked." Now instead of considering 
 money as the only wealth, Mun, on the contrary, says, " they that 
 have wares cannot want money ; — neither is it that money is the 
 life of trade as if it could not subsist without the same ; for we 
 know that there was great trading by way of commutation or barter, 
 when there was little money stirring in the world." | That the 
 true use of money is its affording a fixed standard for the price of 
 other things, is a doctrine, indeed, laid down by Bodin a century 
 earlier than Mun. " Car si la monoye, qui doit regler le prix de 
 loutes choses est muable et incertaine, il n'y a personne qui puisse 
 fair estat au vray de ce qu'il a; les contracts seront incertains les 
 changes taxes gages, &c. incertaines." &c.§ The real error of 
 those writers was their transferring to national wealth the rules 
 which apply to individual wealth ; it was I apprehend, therefore, 
 the same in kind as I have hinted in the text, as that of Adam 
 Smith himself, though different from it in degree. 
 
 * Mun, p. 42, 12mo. edit., he published in 1664. 
 
 t Wealth of Nations, B. II. c. ii. 
 
 t Ibid. p. 24. 
 
 § De la Republique, liv. VI. 
 
392 NOTES. 
 
 E. Page 87. 
 
 " Oufifs ou instrumens de metier. Jamais mot n'a recu une ac- 
 ception plus etendue que celle que je voudrais donner ici au terme 
 d'outils, car je desirerais y coraprendre depuis la fronde dont se 
 sert le chasseur sauvage jusqu'a la machine la plus vaste, jusqu'au 
 mecanisme le plus complique, jusqu'aux etres animes memes qui 
 facilitent le travail de I'homme. L'enclume du forgeron et le metier 
 pour faire des bas, les aiguilles de la lingere et les pompes a feu, 
 les navires et les betes de somme et de trait ; en un mot, tout pro- 
 duit materiel de la nature et du travail, tout objet vivant ou inanime 
 que I'homme emploie pour s'aider dans son travail industriel, voila 
 ce que j'appelle outils, instrumens de metier. Ce mot, dans son 
 sens le plus etendu, n'exclut que les constructions." * Starch, vol. 
 I. p. 231. 
 
 F. Page 153. 
 
 " Memorial dans lequel ou propose a I'Empereur un moyen de 
 secourir le peuple dans les annees steriles." {Lettres Edifiantes, 
 Tom. XL p. 427.) 
 
 Lieou-que-y, (the Mandarin who memorializes,) after narrating 
 the miseries suffered from famine in the province Chansi, from 
 which he dates, and stating the insufficiency of the ancient provi- 
 sions of the empire, which suppose a quantity of rice to be stored 
 up in the imperial magazines, sufficient for all emergencies, but 
 which are neglected by the superior Mandarines, from the multi- 
 plicity of the affairs they have to manage, or abused by their de- 
 pendents, and which are, in fact, regarded as obsolete ; proceeds 
 • to state his own scheme for obviating, in future, similar calamities. 
 
 "Ne seroit-il done pas a propos de profiter de ce temps d'abon- 
 dance pour remplir de grains les greniers publics, en les payant de 
 I'argent tire du tresor de votre majeste 1 par exemple, supposons que 
 pendant cinq ans on y prit chaque annee quatre cent mille francs, 
 destinees a ces provisions pour soulager le peuple dans les besoins 
 pressans. On emploira d'abord cent mille francs pour reparer les 
 anciens magazines de Tay-quen, capital de la province, pour en 
 batir de nouveaux, et pour amasser du riz, afin d'assister dans le 
 temps de sterilite le territoire de cette ville, de Fuen-tchou et autres 
 lieux qui n'en sont font eloignes. Du cote du midi est la ville de 
 Pincr-vanor. de Kinff-tcheou, et autres endroits circonvoisins. La 
 grande ville de Laugan est situee vers I'occident; en y faisant la 
 meme depense, ou sera en etat de distribuer du riz a Ke-tcheau, a 
 Leao-tcheau, et autres villes subalternes de sa dependance. Enfin 
 
 * " Pourquoi les exclure ? Les constructions sont des produits de I'industrie 
 humaine consacres a la reproduction ; partant ce sont des outils. Un champ 
 lui-ni('ine est un outil qui ne differe des autres qu'en ce qu'il n'cst point un 
 produitde I'industrie, mais un don de la nature." J.-B. Say. 
 
NOTES. 393 
 
 de semblables magasins qu'on etablira dans la ville do Tai-tong, qui 
 est an nord pourront aider a la subsistence des petites villes de Lono-- 
 pin Kingvou, et autres semblables. Ce sont la les quatres princi- 
 pales villes de la province, on seront places les magasins generaux, 
 etd'ou les grains se repandront dans les lieux qui en auront besoin." 
 
 He next mentions the precautions he conceives necessary to guard 
 against malversation. "Or apres des precautions si necessairos, 
 supposons que, de la liberalite de votre majeste, il soit donne cette 
 annee a chacun de ces villes cent mille francs pour capital: si 
 I'annee est abondante, on peut, de ces cent mille francs, acheter 
 au moins trente mille grandes mesures de riz, lequelles multipliees 
 par quatre, feront, dans les quatres villes, cent vingt mille mesures. 
 Depuis la recolte jusqu'a la fin de I'annee le prix du riz est mediocre ; 
 ce n'est que dans le printemps qui le prix commence a augmenter, 
 alors on ouvrira les magasins, et on vendra ce riz. De cette vente 
 on aura deux avantagesj I'un est qu'en mettant I'abondance, on 
 empechera que le prix du riz ne croisse trop : I'autre, que le vendant 
 alors un pen plus cher qu'il n'a ete achete dans le temps de la 
 recolte, on sera en etat, au moyen de ce profit, d'acheier apres la 
 nouvelle moisson au moins dix mille mesures de riz dans chaque 
 endroit, de plus qu'on n'en avait I'annee precedente. Par-la, I'an- 
 cien riz sort des greniers, et le nouveau le remplace. II sort a un 
 prix plus cher et rentre a bon marche. N'est-ce pas un excellent 
 moyen de multiplier ce riz, en soulageant meme \e peuple ? car on 
 ne pretend pas s'enrichir aux depends du public. Ce riz tire des 
 magasins sera vendu au cours et a un prix raisonnable, quoique 
 plus cher qu'il n'etait huit mois auparavant. Rien de plus juste 
 et de plus utile dans les annees abondantes. Par cette conduite, 
 le riz chaque annee se multiplie dans la magasin; et si pendant 
 cinq annees il se fait une abondante recolte, la provision d'un en- 
 droit, qui n'etoit d'abord que de trente mille mesures, peut se trou- 
 ver a la cinquieme annee de plus de quatre cent mille mesures dc 
 riz. En cas de necessite, n'est ce pas deja un excellent moyen de 
 soulager toute une provence? * * * dans les disettes ordin- 
 eires, le rix sera vendu a un juste prix. Dans celles qui passeront 
 un peu I'ordinaire, on en pretera au peuple, et dans les grands ne- 
 cessites on le distribuera par aumone." Tirce de la Gazette Ptih- 
 lique par le R. Pere Contanrin. 
 
 The inhabitants of the island of Trong-ming often enter into 
 voluntary associations, which have for their object the relief of some 
 individual whose affairs have become deranged. They give him 
 the means of reestablishing himself in a way which they conceive 
 burdens them a little, though not very much. The association con- 
 sists of seven individuals, including the person for whose relief it is 
 formed. The principle of it will be understood from the followino- 
 table. 
 
 50 
 
394 
 
 NOTES. 
 
 First year. Second year. 
 
 The first, that is, the person for The first gives 
 whose benefit the company is formed, 
 
 receives 
 
 60 pistols 
 
 The second gives 
 
 15 
 
 third 
 
 13 
 
 fourth 
 
 11 
 
 fifth 
 
 9 
 
 sixth 
 
 7 
 
 seventh 
 
 5 
 
 Third year. 
 
 
 The first gives 
 
 15 
 
 second 
 
 13 
 
 third receives 
 
 60 
 
 fourth gives 
 
 11 
 
 fifth 
 
 9 
 
 sixth 
 
 7 
 
 seventh 
 
 5 
 
 Fifth year. 
 
 
 The first gives 
 
 15 
 
 second 
 
 13 
 
 third 
 
 11 
 
 fourth 
 
 9 
 
 fifth receives 
 
 60 
 
 sixth gives 
 
 7 
 
 seventh 
 
 5 
 
 Seventh year. 
 
 
 The first gives 
 
 15 
 
 second 
 
 13 
 
 third 
 
 11 
 
 fourth 
 
 9 
 
 [le first gives 
 
 15 
 
 second receives 
 
 60 
 
 third gives 
 
 13 
 
 fourth 
 
 11 
 
 fifth 
 
 9 
 
 sixth 
 
 7 
 
 seventh - 
 
 5 
 
 Fourth year. 
 
 
 The first gives 
 
 15 
 
 second 
 
 13 
 
 third 
 
 11 
 
 fourth receives 
 
 60 
 
 fifth gives 
 
 9 
 
 sixth 
 
 11 
 
 seventh 
 
 5 
 
 Sixth year. 
 
 
 The first gives 
 
 15 
 
 second 
 
 13 
 
 third 
 
 11 
 
 fourth 
 
 9 
 
 fifth 
 
 7 
 
 sixth receives 
 
 60 
 
 seventh gives 
 
 5 
 
 Seventh year. 
 
 
 fifth 
 
 7 
 
 sixth 
 
 5 
 
 seventh receives 60 
 
 AUhough the sum paid by each of the associates is unequal, and 
 that the ffrst disburse more each year than the last, yet the Chinese 
 think that the conditions of the contract are much more favorable 
 for the former than for the latter, because they sooner receive the 
 sum of sixty pistols, and the great profits they derive from commerce, 
 well indemnifies them for the advances they have to make. Letter 
 of Father Jacquemin. Lcttrcs Edijiantes, Tom. X. p. 127. 
 
 I subjoin a few extracts from different authors, indicative of the 
 strength of the accumulative principle in China, of the orders at 
 which instruments remain there, and of some other circumstances 
 in the condition of that empire, which I have referred to in the 
 
 text. 
 
 " The spirit of gain, by working on an extensive plan, and by 
 new methods, for supplying multitudes with particular articles, is 
 not prevalent among the Chinese, unless in large or maritime towns. 
 Some there arc, however, in almost every village, who seek to ac- 
 cumulate wealth by taking advantage of the wants of the people 
 around them. Shops for lending money on pledges are common 
 every where. Very high interest upon loans is allowed by law. 
 
NOTES. 395 
 
 The practice of such loans implies, certainly, great improvidence 
 in the multitude, or great uncertainty in the success of their pur- 
 suits. The facility of culture, and the abundance of crops, when 
 no calamity intervenes, enables them in many places to bear such 
 burdens, though often in a very impoverished condition." Staun- 
 ton, vol. 11. p. 244. 
 
 "Pawn-brokers shops are as numerous in Chinese cities as in 
 London." Ellis' Embassij, p. 120. 
 
 " L'usure qui regne parmi les chinois est un autre obstacle bien 
 difficile a vaincre. Lorsqu'on leur dit qu'avant que de recevoir 
 le bapteme, ils doivent restituer des biens acquis par ces voies illi- 
 cites, et aussi ruiner en un jour toute leur famille, vous m'avouerez 
 qu'il faut un grand miracle de la grace pour les y determiner." 
 Lettrcs Edifiantcs, Tom. X. p. 379. 
 
 " La deuxieme cause de la disette n'est pas seuleraent, comme 
 on se persuade, la multitude du peuple Chinois; j'avoue qu' elle y 
 contribue beancoup; cependant je crois que la Chine fournit des 
 grains suffisamment pour la subsistence de tous ces habitans ; mais 
 c'est qu'on ne menage pas assez les grains, et qu'on en fait une 
 Consomraation etonnante pour fabriquer du riz et de I'eau-de-vie 
 ou de la raque. * * * * c'est sourtout le soir avant que de 
 se coucher qu'ils en font usage, principalement le marchands, les 
 artisans et les soldats. lis ont chactm dans la chambre ou ils cou- 
 chent un fourneau a charbon de pierre ou ils font cuire le riz, le 
 the, et chauffer cette sort de boisson ; ils la prennent en mangeant 
 des herbes salees, et s'enivrent a peu de frais. Si par megarde, 
 ou etant a moitie ivres, ils laissent tomber de cette raque dans le 
 feu, la flamme s'eleve bientot jusqu'au plancher, qui n'est fait que 
 de nattes d'osier ou de chassis de papier, et dont la hauteur n'est 
 fait que de trois ou quatre pieds au dessus de la tete d'une homme. 
 Alors dans un instant, toute la chambre est en feu ; et parcque les 
 bontiques ou couchent les marchands et la plupart des maisons du 
 peuple, ne sont pas separees de leur voisons par des maitresses 
 murailles, et que souvent les charpentes sont lies ensemble, le feu 
 s'etend avec rapidite et fait des grands ravages avant qu'on ait pu 
 I'eteindre. 
 
 " Ajoutez a cela que I'usage trop frequent de cette boisson fait 
 mourir quantite de menu peuple d'une maladie qu'on nomme ye- 
 che a la quelle on n'a pu trouver aucun remede. 
 
 " Si la dissette n'eclaircissoit pas de temps en temps ce grande 
 nombre d'habitants qui contient la Chine il seroit difficile qu'elle 
 put subsister en paix. II n'y a point de guerre comme en Europe, 
 ni de pertes ni de malidies populaires ; a peine en voit-on dans un 
 siecle." Lettres Edifimites, vol. XII. p. 200. 
 
 Many circumstances might be adduced, to show that it is not so 
 much the want of power to accumulate, as the want of a desire to 
 accumulate sufficiently strong to prompt to effective action, which 
 prevents individuals in the lower classes in China, from rising to 
 opulence. Of these I might mention the number of eating-houses, 
 and the goodness of their fare, and the occasional richness of the 
 attire of the common people, as described by recent travellers. I 
 
39G NOTES. 
 
 prefer, l)oue\ er, citing an anecdote from the " Lettres Edifiantes," 
 as these are piobably less known to the reader. 
 
 " Uu vieillard vient le trouver" (ie missionaire) "pour lui repre- 
 sentor I'extreme desir qu'il avoit que Ton construisit une eglise dans 
 son village. Votre zele est louable, lui dit le missionnaire, mais je 
 n'ai pas maintenant de quoi fournir a une pareille depense. Je 
 pretends bien la faire moi-meme repartit le villageois. Le mission- 
 naire, accouturae a le voir depuis plusieurs annees mener une vie 
 tres-pauvre, le crut hors d'etat d'accomplir ce qu'il promettoit; 
 il loua de nouveau ses bonnes intentions, en lui representant que 
 son village etant tres-considerable, il y falloit batir une eglise aussi 
 grande que celle qui etait dans la ville voisine ; que dans la suite il 
 pourrit y contribuer selon ses forces ; mais que seul il ne pourrit 
 suffire a de si grands frais. Excusez moi, reprit le paysan, je me 
 crois en situation de faire ce que je propose. Mais savez vous, 
 repliqua le pere, que pour une pareille entreprise, il faut au moins 
 deux mille ecus? Je les ai tout prets, repondii, le vieillard, et si 
 je ne les avait pas, je n'aurois garde de vous importuner par une 
 semblable demande. Le pere fut charme d'apprendre que ce bon 
 homme, qu'il avoit cru fort pauvre, se trouvat neanmoins avoir 
 taut d'argent comptant, et qu'il voulut I'employer si utilement. 
 Mais il fut bien plus surpris, lorsqu' ayant eu la curiosite de de- 
 mander a ce villageois comment il avoit pu se procurer cette som- 
 me, il repondit ingenument que depuis quarante ans qu'il avait 
 concu ce dessein, il retranchait de sa nourriture et de son vete- 
 ment tout ce qui n'etoit pas absolument necessaire, afin d'avoir, la 
 consolation avant de mourir de laisser dans son village une eglise 
 elevee a I'honneur du vrai Dien. Vol. XII. p. 363. 
 
 To these extracts I am induced to add the two following, as 
 strikingly illustrative' of the strange contrasts which the morality of 
 the Chinese exhibits. 
 
 " This dominion is tempered," (that of husbands over their wives) 
 " indeed, by the maxims of mild conduct in the different relations 
 of life, inculcated from early childhood, amongst the lowest as well 
 as the highest classes of societv. The old persons of a family live 
 generally with the young. The former serve to moderate any 
 occasional impetuosity, violence, or passion of the latter. The 
 influence of age over youth is supported by the sentiments of nature, 
 by the habit of obedience, by the precepts of morality engrafted in 
 the law of the land, and by the unremitted policy and honest arts 
 of parents to that effect. They who are past labor, deal out the 
 rules which they had learned, and the wisdom which experience 
 taught them, to those who are rising to manhood, or to those lately 
 arrived at it. Plain sentences of morals are written up in the com- 
 mon hall, where the male branches of the family assemble. Some 
 one, at least, is capable of reading them to the rest. In almost 
 every house is hung up a tablet of the ancestors of the persons then 
 residing in it. References are often made, in conversation, to 
 their actions. Their cxan)ple, as far as it was good, serves as an 
 incitement to travel in the same path. The decendants from a 
 coinmon stock, visit the tombs of their forefathers together, at stated 
 
NOTES. 397 
 
 times. Tliis joint care, and indeed other occasions, collect and 
 unite the most remote relations. They cannot lose sight of each 
 other; and seldom become indifferent to their respective concerns. 
 The child is bound to labor and to provide for his parents mainte- 
 nance and comfort, and the brother for the brother and sister that 
 are in extreme want, the failure of which dutj' would be followed 
 by such detestation that it is not necessary to enforce it by positive 
 law. Even the most distant kinsman, reduced to misery by accident 
 or ill health, has a claim on his kindred for relief Manners, 
 stronger far than laws, and, indeed, inclination, produced and nur- 
 tured by intercourse and intimacy, secure asistance for him." 
 Staunton's China, vol 11. p. 21. 
 
 " The frail females in the boats had not embraced this double 
 occupation, after having quitted their parents, or on being abandon- 
 ed by them on account of their misconduct ; but the parents them- 
 selves, taking no other interest in the chastity of their daughters, 
 than as it might contribute to an advantageous disposal of them to 
 wealthy husbands, feel little reluctance, when no such prospect 
 offers, to devote them to one employment," (that of conveying pas- 
 sengers in boats) " with a view to the profits of another." (of prosti- 
 tution.) Ihid. p. 338. 
 
 G. Page 193, 251. 
 
 According to the view of banking given in the text, it is an art 
 which time, and what we call chance, have wrought out of the cir- 
 cumstances of European society, and the use of which is to quicken 
 the exhaustion of instruments, by facilitating exchanges. But, 
 according to this view of the subject, the consideration of two cir- 
 cumstances generally combined with banking transactions, is omit- 
 ted. The business of banking has been very often combined with 
 the payment and receipt of the revenue of the state. Whatever 
 the government receives, in lieu of the precious metals, or other 
 commodities, in payment of the imposts it levies, will have the 
 value of that for which it is taken in exchange. Government may 
 so give the value of the precious metals to paper, or any other mate- 
 rial, and, for its own convenience, may circulate the money which 
 it in this manner issues through the medium of a bank. Thus the 
 Bank of England may be said to be founded on the transactions of 
 this sort, of the British government. This is, liowever, a circum- 
 stance by no means necessarily connected with banking. Indeed, 
 I think there is reason to believe, that, from the great fluctuations 
 thus introduced into what is called the money market, by the mag- 
 nitude of the transactions of the state, the union of the two, when 
 it takes place, operates injuriously on the general system of ex- 
 change of the country. 
 
 The other circumstance to which I allude, is the exchange of 
 the precious metals between different countries. Banks, as the 
 
398 NOTES. 
 
 great dealers in these metals, are necessarily exposed to the incon- 
 venience of having to provide a supply for the demands occasioned 
 by fluctuations in the business of difl^erent countries. Although, 
 however, this circumstance is always more or less intimately con- 
 nected with the business of banking, it is not necessary for our 
 purpose to examine the effects resulting from it. 
 
 We may confine our attention, therefore, altogether to the con- 
 sideration of the art, as a means of facilitating exchanges within 
 any society. A brief statement of its condition in Scotland, a 
 country in which, to judge from the circumstances attending its 
 introduction, and the practical benefits arising from its operation, 
 it has probably arrived as near perfection as any where, may suffi- 
 ciently serve the purpose of showing the manner in which the mode 
 of its operation may be explained by the principles I have endea- 
 vored to develope, and how it seems to attain the power of commu- 
 nicating the advantages it is capable of bestowing, and of avoiding 
 the evils to which it is sometimes liable. The Scotch banking 
 system is also better fitted for an example, both as it was the one 
 directly presented to the observation of Adam Smith, and from 
 which, accordingly, his ideas on the subject seem to be chiefly 
 taken, and because it is not directly connected with the issue of 
 government paper, or with the passage of coin or bullion from 
 country to country. 
 
 Banks in Scotland are both what are termed banks of deposit, 
 and of circulation. They are the receivers and transferrers of the 
 money, or what is equivalent of the capital of others, and they are 
 issuers of paper money of their own. Their business is confined 
 to what is the proper occupation of bankers, transactions springing 
 from the exchanges effected through the medium of credit. They 
 avoid, therefore, to grant loans, unless for the purpose of facilitating 
 exchanges. Previously, however, to examining the operation of 
 the system, it may be well to direct our attention to the circum- 
 stances of the parties with whom bankers have to deal. 
 
 When, in consequence of the business of banking being estab- 
 lished on a sure basis, in any community, the system of credit 
 comes extensively to prevail, the owners of the whole stock of the 
 society are divided into two classes, the one consisting of those 
 having in their possession a greater stock of -instruments than what 
 actually belongs to them, the other having a less stock than what 
 belongs to them. The larger proportion of the owners of stock, 
 belong sometimes to the one, sometimes to the other class, but the 
 circumstances of many place them permanently in the one or the 
 other. 
 
 Individuals engaged in the forming, transporting, and exchanging 
 of instruments, the farmers, manufacturers, and merchants of the 
 community, have occasion to employ in their difTerent businesses, 
 sometimes a larger, sometimes a smaller stock of instruments or 
 capital. At one time, for example, the state of the land the 
 farmer cultivates, requires a great outlay for seed-corn, for tilling, 
 and manuring it, and for wages paid to laborers. At another time 
 the returns from it in the shape of grain, fat cattle, and other instru- 
 
NOTES. 399 
 
 ments and commodities are proportionally great. At the former 
 period the farmer may not have a suflicient stock of his own, and 
 may wish to borrow certain instruments, at the latter he is in a 
 condition to lend. In a similar manner, the fluctuations of busi- 
 ness render a merchant sometimes a borrower, sometimes a lender. 
 For example, two merchants in Great Britain are engaged in the 
 timber trade, the one in that carried on with Prussia, the other in 
 that with Canada. A change takes place in the business, from the 
 duty on Prussian timber being lessened. The Canadian timber 
 trade being thus no longer profitable, the merchant whose capital 
 was embarked in it, withdraws it from it. He employs a portion 
 of it in an experimental adventure to Prussia, but the larger part 
 he has no immediate use for, and is, therefore, in a condition to 
 lend to others. On the other hand, the merchant who had been 
 accustomed to trade to Prussia, knowing the details of that business, 
 and having a correspondence established there, is able to employ 
 with advantage a much larger capital than he possesses. He wishes 
 to borrow instruments, that is, commodities to export to Prussia, 
 and to have the use of ships for the double transport. Fluctuations, 
 such as these, and innumerable others, occasion continual variations 
 in the stock which every merchant, or other individual engaged in 
 any sort of business, is capable of employing with advantage. 
 Sometimes, therefore, the business of every one is expanded much 
 farther than his own stock would permit, at other tim.es it is con- 
 tracted into so narrow limits, as not to give employment to the 
 whole of it. 
 
 Again, in every society there are many individuals who cannot 
 themselves employ the instruments they own. A merchant, for 
 example, dies, leaving a large stock of instruments of one sort or 
 other to his widow, and young children. These they cannot em- 
 ploy. They must either convert them into cash, which, placing in 
 security, they may gradually expend as their occasions require, or 
 they must lend them to others who will pay for their use. On the 
 other hand, young men of ability, who have been bred to any busi- 
 ness, although, perhaps, they may have very little or no capital, may 
 yet be able to put instruments with which they may be entrusted, to 
 so active use, that they may yield more than the ordinary returns, 
 and so, after paying for the usual profits, may leave a considerable 
 surplus as the reward of their exertions. 
 
 The Scotch system of banking seems well calculated for admit- 
 ting the easy passage of indiviuals from the one to the other class. 
 Its distinguishing characteristic is that the banker allows interest 
 on all sums deposited, from the moment of deposit, and that, on 
 sufficient security, he is always ready to grant the loan of as small, 
 or as large an amount, as may be required. When he lends to 
 individuals, by discounting bills, or by what are termed bank 
 credits, he becomes the real owner of a proportional amount of the 
 stock of instruments they hold, and in this way may be said to be 
 the owner of a part of the general stock of instruments of those 
 dealing with him, equal to the amount of what he has lent. In 
 reality, however, it is not altogether he who owns them, but rather 
 
400 NOTES. 
 
 they who have given him the larger part of his funds in the shape 
 of deposits. These have all come to him with money in the form 
 of coin, of paper money of other banks, or of his own money, or of 
 an order for his own money, and in place of it have been content 
 with a pledge that it shall be returned on demand, and that in the 
 interim interest will be allowed on it. By this arrangement the 
 banker, in effect, transfers to them a portion of his claims on the 
 instruments held by those who are debtors to liim, and part of his 
 right to a portion of the returns made by tliem. Thus, while the 
 merchant formerly trading to Canada, instead of employing the 
 money he receives for sales of his existing stock of timber in pur- 
 chasing other goods, and in freighting other ships for that market, 
 pays it into the bank, the merchant trading to Prussia is drawing 
 money out of the bank, for the purpose of extending his trade with 
 Prussia. The effect produced is, in so far, similar to that which 
 would have resulted from the Canadian trader lending part of his 
 capital to the trader to the Baltic. It differs from such a transac- 
 tion, Iiowever, in three respects : 1st. These two individuals might 
 be unknown to each other, and might have no means of ascertain- 
 ing their respective plans; 2d. The merchant trading to Canada 
 would probably have either less or more spare funds, than the mer- 
 chant trading to Prussia required; 3d. He might, also, probably, 
 have occasion to call for them, for his own purposes, at a time when 
 it might be inconvenient, or impossible, for the other to replace 
 them. The banker, on the contrary, is always ready to receive or 
 to lend. 
 
 Throughout all the occupations carried on by the different 
 members of the community, similar circumstances occur. One 
 tradesman, or mechanic, is laying by funtls for building a dwelling 
 house, another is expending all the funds he has laid by, and, per- 
 haps, borrowing a little more, -for the purpose of finishing a dwell- 
 ing house. While the farmer is depositing in the bank some part 
 of the proceeds of his sales of grain and cattle, the corn merchant- 
 and the butcher are drawing funds from the bank, for the purpose 
 of assisting them to purchase these commodities. 
 
 It will thus be found, that the person making the deposit, is one 
 who has just transferred to others, who can employ them at the 
 moment to more advantage than he, some instruments which he 
 held, and that in return he receives a claim to that amount, on the 
 funds of the bank, and of interest on it till paid. Those funds, 
 however, consist chiefly of debts, owing to the bank by the commu- 
 nity at large, and that interest is drawn from the profits arising from 
 the stock of instruments effectively owned by the bank, and lent by 
 it to the individuals with whom it deals. Hence the person making 
 the deposit is one having transferred a part of his stock of instru- 
 ments to an individual, and receiving in lieu of it a share of the 
 claim of the bank, on the general stock of instruments owned by 
 those indebted to it. In this way the bank may be considered as a 
 1)roker neirociatino- between those, the condition of whose business 
 requires them to borrow, and those, the condition of whose business 
 disposes them to lend, and generalizing the transactions of both. 
 
NOTES. 401 
 
 It is not by any means, however, merely a broker. Besides the 
 fluctuating deposits, it has a large capital of its own embarked in 
 the business. This is chiefly owned by individuals whose circum- 
 stances place them permanently in the class of lenders, persons 
 retired, or retiring from active business, or widows, &:,c., who, 
 selling off their stock, employ their funds in this manner. 
 
 This system probably yields as many advantages as any hitherto 
 discovered, and avoids, as well as may be, the chief evils to which 
 the business of banking is subject. 
 
 1. By means of it all possible exchanges are made at the least ex- 
 pense; and with the greatest facility. Every person is prompted to 
 sell because the money he receives yields an immediate return. 
 Every person having it in his power to turn any commodity to good 
 account, has the means afforded him of obtaining possession of it. 
 
 2. The capital which bankers own, or hold, is liable to be embarked 
 and lost by them in imprudent speculations; or, through partiality, 
 to be lent to a few individuals who may squander it in the same 
 manner. This seems to be best guarded against by there being 
 many stock holders, and a large capital. In the banks to which 
 we refer, this is generally, though not always the case. 
 
 The knowledge which the banker acquires, by means of the sys- 
 tem of bank credits, of the state of the aflfairs of those dealing with 
 him, is probably somewhat greater than can be obtained by the 
 mere discount of bills. It gives him the sort of information, which 
 one would acquire of the affairs of another, by having the care of 
 his purse. I believe, also, that persons dealing with the Scotch 
 bankers, are somewhat more strongly excited than those dealing 
 with other bankers, to vigilence in providing funds to meet positive 
 engagements with them, as the slightest failure of any individual 
 in any such transaction, occasions his sureties being called on to 
 pay up his cash account, ruins his credit, and renders it impossible 
 for him to continue his business. It is probable, therefore, that 
 this system has considerable efficiency in checking rash and impru- 
 dent speculations, by withholding funds from those most likely to 
 run into them. 
 
 3. The large amount of stock subscribed, and the subscribers 
 being severally responsible to the amount of all the property they 
 possess, give so great confidence in the stability of the banks, that 
 nothing but some very great revolution in the affairs of the society, 
 or some great convulsion in the money market, would be sufficient 
 to shake it. Owing to the system pursued, the possibility of any 
 great disturbance of the money market is prevented. This forms 
 the fourth circumstance to be noted. 
 
 4. I have observed in the text, that, when any reverse happens to 
 the trade of a community, the diminution of sales which is the con- 
 sequence of it, while it renders it necessary for those, whose busi- 
 ness, as compared with their capital, is much expanded, to borrow 
 money to meet the engagements which they have entered into, 
 gives a redundancy of money to those whose business, as compared 
 with their capital, is small, and who have contracted to receive a 
 great amount of money, and to pay only a small amount. 
 
 51 
 
402 NOTES. 
 
 According to the system of banking which prevails in England, 
 and in most countries, all individuals in the latter class will have a 
 greater or less amount of cash lying by them useless. They are 
 afraid to lend it, owing to the prevailing embrrassments, and, where 
 the banker allows no interest on money deposited with him, they 
 have no particular motive to induce them to lodge it in any bank. 
 But, when a person intends to keep money lying by him, he will 
 be apt to prefer coin, to paper, the former is the securest of any 
 sort of property, the latter may possibly be insecure. He will more 
 especially be inclined to prefer the former, if he have the least sus- 
 picion of the stability of the bank issuing the paper. It is thus 
 that, at such seasons, what are called runs upon particular banks, 
 are very apt to arise, and both to bring ruin on the bank, and in- 
 crease the general embarrassment. But wherever, as in Scotland, 
 the banker allows interest on all sums deposited, no one thinks of 
 keeping money by him. The very classes, too, it may be remarked, 
 who are most apt to commence these runs, petty shop-keepers and 
 tradesmen, have in Scotland, in general, bank credits, and are con- 
 tinually striving to put as much money into the bank with which 
 they deal, as the necessity of their business will permit. In Scot- 
 land, therefore, the banks, owning greatly, no doubt, to the guar- 
 antee of a very large capital prudently managed, but, also, as I 
 conceive, in no inconsiderable degree, to the tendency of the sys- 
 tem to bring into them all the spare funds of the society in the shape 
 of deposits, have not for fifty years been exposed to any dangers 
 or inconveniences of the sort, and in the midst of the severest com- 
 mercial distress, and the ruin of the banking establishments of the 
 sister kingdom, have always maintained their course steadily, and 
 been able to apply the resources of the community to carry those 
 through the crisis, whose embarrassments had arisen, not from the 
 bankrupt state of their affairs, but from the pressure of the times.* 
 
 5. Banks have very often issued an overabundant supply of their 
 particular money, and it has been depreciated. An effectual reme- 
 dy for this, one would be inclined to conceive, would be their being 
 obliged to convert it, on demand, into gold or silver. Many per- 
 sons, however, do not think that this is sufficient, and believe, that, 
 notwithstanding, an over issue may take place. If so, the Scotch 
 system, by its tendency to return on the bank all money not in im- 
 mediate use, would seem to be a pretty effective check on the 
 occurrence of such an evil. 
 
 Banking may be fitly described, as a generalization of individual 
 credit transactions. Every system of banking generalizes them to 
 a greater or less extent. The more complete the generalization, 
 the more completely does the system perform its functions, and the 
 nearer it comes to the perfection of art. The Scotch system, 
 viewed as an art of this sort, seems to discharge its function well. 
 Whatever spare capital the turns of business may there throw into 
 any individuals hand, he finds it for his advantage to place in the 
 
 * See the correspondence between Lord Liverpool and the Cliancellor of 
 the Excliequer and the Bank of England, in ltt26, in Hansards Debates. 
 
NOTES. 403 
 
 bank, whatever additional capital they may require of him, he 
 easily procures from the bank. The facility with which it operates 
 may be best seen, by contrasting it with the English system. 
 
 In England, an individual dealing with a banker, is expected 
 to leave in his hands an amount of capital as a deposit, for which 
 he receives no interest. It is from this that the profit of the banker 
 is derived. When, therefore, a person in the course of business 
 has a greater portion than usual of unemployed capital, he finds 
 there no immediate advantage in placing it in the bankers hands. 
 He, therefore, probably, will not place it there so promptly, as he 
 would in Scotland. The effect of this tardiness is more especially 
 felt at those critical periods to which I have referred in the text, 
 when, in consequence of a general decrease of the amount of sales, 
 persons whose means have been most expanded, are under the 
 necessity of borrowing to a larger extent than they had anticipated. 
 If, on such occasions, they whose business has been contracted 
 within narrower limits than their capitals would have admitted, 
 and who, in consequence of avoiding to purchase, have a larger sur- 
 plus capital than usual in their hands in the shape of money, retain 
 it there, instead of placing it in the bank, the banker is restrained 
 from making the advances he otherwise would, and a violent check 
 is given to the operation of the credit system, sufficient to give a 
 beginning to convulsions more extensively deranging it. 
 
 This system, also, as compared with the English, adjusts itself 
 with greater precision to the actual circumstances of the two great 
 classes of the community, the lenders and borrowers, to whose 
 transactions it serves as the instrument. When, in consequence 
 either of the progress of accumulation, or of misfortunes befalling 
 the industry of the country, instuments are placed in more slowly 
 returning orders, and profits fall, borrowers should pay less, and 
 lenders receive less, for the use of capital. And reversely, when 
 profits rise, more should be paid by the one class, and more received 
 by the other. This is naturally brought about where a certain rate 
 is paid for funds deposited, as well as for those drawn. Under 
 such a system the banker -cannot afford to have any capital lying 
 dormant. He must, therefore, preserve the proper proportion be- 
 tween the funds deposited in his hands, and those drawn out of his 
 hands. When the former become too great, which will be the case 
 when trade is dull, he lowers the rate of interest which he charges 
 his customers, and, also, that which he gives them, and thus dimin- 
 ishes the amount deposited, and increases that drawn. He does 
 just the reverse and produces directly opposite effects, when trade 
 becomes more lively, and profits rise. In England, on the contrary, 
 the state of trade has no direct effect on the interest which bankers 
 charge, and the due proportion between borrowers and lenders is 
 not so maintained.* 
 
 The advantages derived from any system become apparent, by 
 considering the con.sequences that would result from its being abol- 
 ished, or from its actions being impeded. On this account I shall 
 
 * Joplin on Currency, p. 103. 
 
404 NOTES. 
 
 state three hypothetical cases, with regard to the system which we 
 are now considering, as an example of the effects of banking in 
 general. 
 
 In the year 1826 it was proposed in the British Parliament, to 
 enact a law putting a stop to the circulation of one pound bank 
 notes, the chief money of Scotland. The bankers maintained that 
 in this case they would no longer carry on business. Let us sup- 
 pose, that the proposal had been adopted, and that the effect had 
 really been utterly to abolish the business of banking in that coun- 
 try, and unless in barter, to make all buying and selling to be trans- 
 acted in coin, either in ready cash, or in cash paid when the period, 
 to which credit had been limited, expired. 
 
 In considering the effects of such a change, we may divide all 
 transactions now taking place in Scotland, and concerned in the 
 question, into those effected by bank bills, or as they are termed, 
 bank notes, and those effected by checks on some bank. 
 
 1 . Of those now effected by bank bills, of which the majority are 
 what are called one pound notes. Every purchaser, that is, every 
 person in business, would be obliged to have continually lying by 
 him, to answer occasional demands, a certain sum proportional to 
 the extent of his business, and when preparing for some extraor- 
 dinary occasion, for a length of time previous he would be collect- 
 ing and hoarding up funds sufficient for the purchase or purchases 
 he intended making. A large part of the money of the country, 
 would, therefore, be constantly lying idle, doing nothing, but wait- 
 ing for something to do. Let us suppose that we are in Scotland 
 at the present moment, and that bank notes being able to hear and 
 answer questions, we take at random a parcel of one pound notes, 
 and interrogate them as to what their employment is, and how they 
 discharge it. They would doubtless answer: "the service we 
 render is to pass from hand to hand, for the purpose of making ex- 
 changes." " Do you ever lie idle for anytime?" "No. Every 
 one that gets hold of us immediately passes us to some other person, 
 either to pay some debt, or to make some purchase, or if not, car- 
 ries us to the banker, who sets us out again on the same round. 
 Some times, indeed, we get a few days, or a few weeks rest, in the 
 desk of a small country dealer, or some such person, who has to 
 wait that time, perhaps, before he can collect a dozen of us to send 
 to the bank, but this is seldom, and as it were by chance." Let 
 now the banks be done away with, and, instead of bank notes, let 
 us have to ask the same questions of sovereigns. Their answer 
 would be, "we are employed in the service of people who collect 
 us for the purpose of buying some thing, or things, with us, when 
 the chance presents itself We are lying continually idle, there- 
 fore, for longer or shorter intervals, waiting till this chance cast up. 
 Sometimes Vv'e are collected in money bags for weeks, sometimes 
 for months, and unless when we get into the hands of very neces- 
 sitous persons, we each of us expect to be put by in some place 
 of security, along with others of our brethren, and with them to 
 wait the chance of being called out to effect some exchange, after 
 which we again return for a time to inactivity." 
 
NOTES. 405 
 
 What in the supposed cases must be true of a particular set of 
 bank notes, or a particular set of sovereigns, would be true of all 
 bank notes, and of all sovereigns, and hence the amount of ex- 
 changes effected in any particular year, by means of three and a 
 half millions of bank notes, about the present circulation of Scot- 
 land, must be far greater than would be effected in the same time, 
 under the suppositions we have made, by three and a half millions 
 of sovereigns. The latter could not both be effecting exchanges, 
 and lying idle. 
 
 2. But, besides the exchanges made by means of bank notes, a 
 great amount of exchanges are effected by orders or checks on the 
 banker. Were there no banking system there in existence, these, 
 also, would have to be effected by the medium of money, either 
 ready money, or money paid after a certain time, but certainly, in 
 some way or other, through the instrumentality of money. There 
 would require, then, to be a farther provision of sovereigns, to effect 
 the large amount of exchanges now managed by a few strokes of 
 the pen of a bankers clerk. 
 
 What would be the addition which these two circumstances 
 would render it necessary to make to the circulating medium, in 
 order to bring sovereigns to approximate in efficiency to the bank 
 notes, the place of which they occupied, might be difficult to de- 
 termine. The proportion of the one to the other, might be as 3 to 
 2, as 4 to 2, as 6 to 2, or as 8 to 2, or perhaps still higher ; it is 
 very certain, however, that the one would be much greater than 
 the other. After all, it would only be an approximation. As what 
 will happen can only be conjectured, not known, every person 
 engaged in business would occasionally err in his calculations, and 
 would sometimes have commodities offered him which he would 
 wish to purchase, but for want of cash would be unable to purchase. 
 The two circumstances referred to, the additional expense of ex- 
 changes, consequent to the additional money necessary to effect 
 them, and the diminution of exchanges consequent to the want of 
 the money necessary to effect them, united, would mark the direct 
 loss the community sustained by the abolition of the banking sys- 
 tem. The indirect loss would arise from the check given to the 
 accumulative principle, by the diminished quickness of return ot 
 instruments — by what would be termed the dulness of trade — and 
 the diminished accumulation of stock consequent to it. 
 
 But such a supposition as that we have made, could not possibly 
 come to be a reality. When the art of banking has once been 
 introduced into a country, the advantages resulting from it, are too 
 great to admit of its being altogether abolished. There will always 
 be some generalization of credit transactions, some recognized mode 
 of transferring from hand to hand, promises to pay, made by one 
 individual to another. The enactments of the legislator may act 
 on the art so as to make it more or less effective, but they cannot 
 prevent the practice of it. I shall, therefore, make another suppo- 
 sition, and assume that the measure proposed having been adopted, 
 sovereigns took the place of bank notes, and that, notwithstanding, 
 the banks continued their operations as before. 
 
406 NOTES. 
 
 In this case the banks, by the supposition, giving sovereigns out, 
 and receiving them again, in tbe same manner as they had tlieir 
 ovv^n notes, the community in general would have been sensible of 
 no other alteration but that of handling gold instead of paper, and 
 they would have had the advantage of some additional security 
 against the danger of the failure of the banks, and against disorders 
 consequent on drains of gold from abroad. But this supposition, 
 also, is inadmissible. The diminution of the paper money issued 
 by the bankers, would have proportionably diminished their profits. 
 The amount of one pound bank notes there circulating, being some- 
 thing over two millions, their circulation would probably have been 
 curtailed by the measure by nearly two millions. This at five per 
 cent, is not much short of half of what they make by the whole 
 funds deposited in their hands, which have been estimated at about 
 twenty millions, and on which they gain one per cent., the differ- 
 ence between what they chaige those who borrow from them, and 
 which they give those who lend to them. Their profits must, 
 therefore, have been greatly diminished by the measure, and unless 
 we suppose that bankers in Scotland have more than the ordinary 
 profits of stock, which, where there is so active a competition, can- 
 not well be, capital would have been withdrawn from the business,* 
 or the business would have undergone a change. It is probable 
 that the latter circumstance would have happened. The banks 
 would either have made more than one per cent, difference between 
 what they allowed and what they charged for money, or, as is more 
 likely, they would have changed the system of bank credits. The 
 business of the small dealers, tradesmen and farmers, who have 
 credit with the banks, is transacted mostly by one pound notes. 
 Bank bills exceeding five pounds rarely pass into their hands. 
 Under the supposition, therefore, this class would have circulated 
 but very little of the bankers paper; he, consequently, would have 
 declined granting them credit, in this way, and confined his credits 
 of this sort to merchants and others, whose transactions being large, 
 made them the circulators of the paper to the issue of which he was 
 confined, and whose business, consequently would have been more 
 profitable to him. The facility of exchange among the small dealers 
 would have been greatly abridged, and through it, that among the 
 whole community would have been somewhat lessened. The real 
 amount of loss that would have been in consequence sustained, it 
 is not necessary to our purpose to attempt to fix. Almost all per- 
 sons practically acquainted with the business of the country, be- 
 lieved that it would have been very considerable, and, in conse- 
 quence of their urgent representation, the measure in contemplation 
 was abandoned. 
 
 * It may be observed, that there is a great difference between Great Britain 
 and the United States in this respect, because in Great Britain the govern- 
 ment funds afford an advantageous investment for the capitals of individuals, 
 widows, iSic, who in tliis continent are under a sort of necessity of placing it 
 in banks. In this, and in many other respects, as in the distance from other 
 nations, and the increased difficulty in replenishing the stock of bullion when 
 exhausted, the situation of the two countries is very different. 
 
NOTES. 407 
 
 If I have succeeded in placing clearly before the reader my ideas 
 concerning this somewhat intricate subject, he will, I think, per- 
 ceive, that there exists an essential difference between the nature 
 and operation of the money of the banker, and those of other 
 money. 
 
 In communities where the art of banking has no existence, money 
 may be defined to be" a commodity, of which every person in the 
 habit of making exchanges, keeps a supply by him, for the purpose 
 of effecting them. 
 
 In a community, again, where the art of banking has been estab- 
 lished, as in the instance of Scotland, if we confine our attention 
 to those who have dealings with the banker, the money he issues 
 may be fitly described as counters which he gives them for the 
 purpose of arranging their transactions with one another, and 
 which they return to him immediately they are arranged, that they 
 may be rated on his books according to the place they occupy as 
 borrowers of part, or as owners of part, of the general funds which 
 he holds. An individual who has a deposit in a bank draws from 
 it, we shall say, the sum of <£1,000, and lessens by that amount 
 the deposits in the bank, and for which it has to pay interest. But, 
 of course, he intends to put it to some use, that is, to make some 
 purchase or purchases with it, or pay for some before made. The 
 person or persons to whom, for this purpose, he transfers it, by the 
 supposition dealers with the bank, if they have no immediate use 
 for it, w'ill directly carry it to the bank, and then the general de- 
 posits and loans of the bank will be the same as before, but the 
 bank accounts of the particular depositors and borrowers engaged in 
 the transaction will have suffered an alteration. If, on the other 
 hand, any of those individuals, among whom the ,il,000 is distri- 
 buted, or all of them, have use for the sums they receive, that can 
 only be to make some immediate purchases, or to pay for some 
 before made. In this way, after passing through a less or greater 
 number of hands, the =£1,000 the banker had issued, finds its way 
 back to him, and, as far as his business is concerned, he is exactly 
 in the same situation as before he issued it. The situation of the 
 person who took out the money, and that of them who return it, is 
 altered. One holds a greater stock of instruments, and the debtor 
 side of his bank account is proportionally greater, the others hold 
 a less stock, and the credit side of their bank accounts are propor- 
 tionably greater. The former has transferred a part of his claim 
 on the general stock of instruments, and has in lieu of it the pos- 
 session of some particular instrument or instruments, and the latter 
 have done the reverse. The bank money, therefore, has merely 
 served the place of counters, by aid of which the customers of the 
 bank settle their tiansactions, and finally determine their relations 
 to its stock. During the time these transactions were in progress, 
 there was a proportional diminution in the amount of interest which 
 the bank had to pay its customers, and, if the counters it gave them 
 were merely pieces of paper costing it little pr nothing, this would 
 be so much clear gain to it ; if they were gold, the expense of pro- 
 curing them would exactly balance the gain. 
 
408 NOTES. 
 
 If there be a plurality of banks, as the bankers in this case, ex- 
 change their notes with one another, the series of transactions pro- 
 duced are substantially the same, unless in so far as the business of 
 one bank may be extending, that of another contracting, a circum- 
 stance which is generally of little moment to the community. 
 
 It is only when the banker's money passes out of the range of 
 those having transactions with him, that it comes to hold the place 
 of other money. While it is in their hands, it performs the office 
 that other money would, and in this respect, if it be paper money, 
 he gains an advantage not directly springing from the exchanges 
 managed by his funds. Individuals, however, who do not deal with 
 any bank, where banking is properly managed, are persons whose 
 affairs do not require them to keep money by them, and by the 
 agency of both classes, it is, therefore, preserved in continual motion 
 and employment. 
 
 I have entered into a longer detail on this subject than I had 
 intended, from my desire to make apparent the distmction stated m 
 the text, in regard to the superior efficiency of the money which 
 the banker puts into circulation, whether paper or gold, as com- 
 pared with that which exists where the art of banking is unknown, 
 and where there is either no generalization, or an imperfect gener- 
 alization of transactions performed through the medium of credit. 
 
 It will be seen, that the view I have attempted to give of the 
 whole subject of exchange, is quite opposed to that exhibited in the 
 Wealth of Nations. Adam Smith sets out from exchange, and 
 makes it, and the division of labor consequent on it, the source of 
 stock, whereas I have endeavored to show that exchange is the 
 result of the increase of stock, and subsequent division of employ- 
 ments, that the necessity for its existence is a circumstance retard- 
 ing the increase of stock, and that the benefits of the art of bank- 
 ing spring from the facility which that art gives to the process. 
 
 As exchange may be said to be the commencement of Adam 
 Smith's system, and as money is the instrument of exchange, he 
 assumes it as a first principle, that while the exchanges remain the 
 same, the same amount of money is necessary to transact them. 
 Bank paper, he, therefore, concludes, will exactly equal in nominal 
 value the specie circulated before its issue. If it exceed this amount, 
 it will return upon the bank, if it fall short of it, the vacancy will be 
 filled by specie. This principle, which Adam Smith, as is observed 
 by Mr. Say, has introduced into speculations on this subject, is 
 thus epitomized by the latter author: 
 
 "Taking it for granted, then, that the specie, remaining in cir- 
 culation within the community, is limited by the national demand 
 for circulating medium ; if any expedient can be devised, for sub- 
 stituting bank notes in place of half the specie, or the commodity, 
 money, there wUl evidently be a superabundance of metal money, 
 and that superabundance must be followed by a diminution of its 
 relative value. But as such diminution in one place by no means 
 implies a cotemporaneous diminution in other places, where the 
 expedient of bank notes is not resorted to, and where, consequently, 
 no such superabundance of the commodity, money, exists, money 
 
NOTES. 409 
 
 naturally resorts thither, and is attracted to the spot where it bears 
 the highest relative value, or is exchangeable for the largest quantity 
 of other goods; in other words, it flows to the markets where com- 
 modities are cheapest, and is replaced by goods, of value equal to 
 the money exported." Say, B. I. c. xxii. Am. edit. vol. I. p. 246. 
 
 He goes on to prove that the national capital must be augmented 
 by the specie exported, and fixes the utmost quantity by which it 
 can so be increased, at one tenth of the annual product or revenue 
 of the nation. 
 
 Now I maintain, that to effect the same transactions, it requires 
 far less bankers money, wliether that money be paper or specie, 
 than was required of the money in existence before the establish- 
 ment of banks, the celerity of motion making up for the deficiencies 
 of quantity, and tliat what Adam Smith asserts concerning the 
 comparative efficiency of the two kinds of money circulated by 
 consumers and dealers, holds true of that money of which the bank 
 forms the centre of circulation, as compared with that, which, 
 where there are no banks, circulates slowly and after intervals of 
 inactivity between dealer and dealer, and that the one by " a more 
 rapid circulation, serves as the instrument of many more purchases 
 than the other," and, consequently, that if the same number of 
 transactions only takes place after the establishment of banks, as 
 before their introduction, then much less money will be necessary, 
 and if the same money be circulated, the fact indicates, that a great 
 addition has been made to the business transacted, and still more 
 if the money circulated exceeds that formerly circulated. It is 
 this last event, that, I conceive, generally takes place. In this, as 
 in other instances of real improvements, the effect is contrary to 
 what might have been anticipated, the greater facility in performing 
 the operation bringing so much greater a compass of materials 
 within its reach, that the occupation given to the art, instead of 
 diminishing, increases, and by the subdivision of employments, 
 and abandonment of barter, money comes to be so much more used 
 as an instrument of exchange, that, on the whole, the quantity of it 
 employed is augmented, in the same way, as when a road is much 
 improved, though one horse may be sufficient to transport what 
 three did before, yet the commodities transported so increase, that 
 there are, notwithstanding, thrice the number of horses employed. 
 This is especially the case in new countries, where, from causes 
 specified in the text, money before the existence of banks is exces- 
 sively scarce. 
 
 If the reader have still any doubts on the sv' ject, lie may, I con- 
 ceive, satisfy himself of the accuracy of this view, by reference to 
 the pages of the "Wealth of Nations" itself. Adam Smith, by no 
 means, limits the advantages of banking as practised in Scotland, 
 to the substitution of paper for specie, and the direct fictitious capital 
 thus created. On the contrary, he thinks that every person dealing 
 with the banker, that is, every person engaged in business, derives 
 individually very great advantages from the system. These advan- 
 tages are resolvable into the circumstance, that every such person 
 is free from the necessity of keeping any money by him. What- 
 
 52 
 
410 NOTES. 
 
 ever demands are made on him he answers by means of his cash 
 credit, or by discounting a bill, or bills. In this way " partly by the 
 conveniency of discounting bills, and partly by that of cash accounts, 
 the creditable traders of the country are dispensed from the neces- 
 sity of keeping any part of their stock by them unemployed, and in 
 ready money, for answering occasional demands." * Now it is 
 certainly very remarkable, that it did not strike Adam Smith, that 
 if all the creditable dealers in the community, that is, the great ma- 
 jority of those who before the establishment of banks would have 
 kept money by them, will by the facilities given by the art, be dis- 
 pensed with the necessity of doing so, and can still carry on equally 
 extensive transactions, the money requisite to transact the general 
 business of the country must be diminished by that amount. If, 
 for example, according to the estimate he makes, the specie in cir- 
 culation in Scotland before the introduction of banking, was about 
 one million sterling, after the establishment of that art, had the ex- 
 changes effected remained the same, a much less sum than one 
 million would have been sufficient to perform them, for all that 
 money would have been useless which it had before been necessary 
 to keep in the coffers of the different dealers, and which formed the 
 great mass of the then circulating medium, or rather of the medium 
 through the intervention of which exchanges were transacted. If, 
 then, a million had been still employed, — if a million of the bankers 
 paper had superseded a million of coin, — it would have indicated, 
 as I have stated in the text, a great increase in the transfers effected, 
 and would have shown, either "that a larger compass of materials 
 had been brought within reach of the accumulative principle, or 
 that employments had been more subdivided, or that both circum- 
 stances had occurred." f 
 
 According to Adam Smith, the bank saves each dealer from 
 keeping by him in ready money, all that amount which it advances 
 him by means of the cash account it opens with him, or by dis- 
 counting the bills he presents. What in this way, then, all the 
 banks advance to all the dealers, deducting from it the amount of 
 paper circulated, must be so much which they save them from being 
 obliged to keep by them. But this is the employment to which, 
 where banking is properly conducted, bankers devote their whole 
 funds, and by this mode of reckoning the saving effected by them 
 in Scotland might be made to appear equal to thirty millions of specie. 
 Were banking, however, as a distinct business, totally abolished 
 in that country, the event certainly would not bring into it thirty 
 millions of specie. The effects produced by such an event would 
 consist in a diminution of the number of exchanges, and, con- 
 sequently, of the division and subdivison of employments, and of 
 the capacity given to materials, the transaction of many exchanges 
 by barter, and the generalization of a large amount of them by 
 transfers from hand to hand. Specie would only come in, in suffi- 
 cient abundance to make up the balance. 
 
 * Book II. c. ii. 
 t Page 188. 
 
NOTES. 411 
 
 To conclude ; in my opinion the notion from which Adam Smith 
 sets out, and which, since his time, has kept possession of all specu- 
 lations on this subject, and been the foundation of many important 
 practical measures,* is essentially erroneous. According to him, 
 there is always a certain sum of money necessary to carry on the 
 transactions of every society, the amount of which is proportioned 
 to the transactions carried on. This is termed the circulating 
 medium, and, whether it be bank paper, or specie circulated by the 
 banker, or coin used for the purposes of exchange where there is 
 no bank, it is reckoned always in quantity proportioned to the 
 transactions carried on. On the contrary, it seems to me, that 
 when once a bank is established in any community, the money 
 circulated among those who are its customers, serves merely the 
 purpose of counters for arranging their transactions, performing the 
 same part as a multiplicity of checks, operating upon their several 
 accounts, might accomplish. It is not a fund kept for making ex- 
 changes, but an instrument applied for, at the time exchanges are 
 to be made, and operating upon the real fund kept for that purpose, 
 the claim, viz., which the bank has on the general stock of the 
 community, the specie deposited in its vaults, and the other items 
 making up its capitol, which, like the coin in the old deposit banks 
 of Italy and Holland, constitute that part of the general stock, 
 really performing the function of exchange. 
 
 If this be the case, it follows that the more perfect as an art bank- 
 ing becomes, the less, other circumstances being equal, is the amount 
 of the circulating medium required, and the greater the saving to 
 the community. It also follows, that a system of banking considered 
 merely as a means of transacting exchanges taking place in the 
 ordinary course of affairs, within the community, approaches nearest 
 to the excellence of art, when it most effectually secures its funds 
 from being squandered, and when the counters employed by it in 
 its operations, issue from it, pass through the hands of its customers, 
 and find their way back to it most easily and quickly. The former 
 citcumsiance diminishes the risk of loss from the mode of effecting 
 exchange, the latter diminishes the expense of it. 
 
 It may farther be observed that the popular notion, that the ad- 
 vantages of banking are limited to the substitution of paper for 
 specie, and the creation to that amount of a fictitious capital, 
 is altogether erroneous. The advantages derived from this 
 source are rather contingent, than essential. They fall chiefly to 
 the banker, and, as he may be considered as a broker having the 
 care of the funds of certain of the lenders of the community, for 
 the purpose of distributing them among the borrowers, and having 
 to be paid for the trouble, the expense, and the risk of loss attending 
 his business, this mode of paying him may be the most convenient 
 that can be devised. The real advantage however of the art, arises 
 from its application of the floating loans of the society to the pur- 
 
 * As for instance, the contraction of issues by the bank of England in 1826, 
 (the immediate cause of the disasters of that year,) and the legislative enact- 
 ments on British currency for the last twenty years. 
 
412 NOTES. 
 
 poses of exchange ; and, instead of the paper money issued being 
 the cause and the measure of the good derived from it, the less the 
 quantity of such money, in proportion to the business transacted 
 with it, the smaller the expense of the business of exchange to the 
 trading community, and the greater tlie benefits the banker bestows 
 on it. And, again ; in cases where bank paper makes the general 
 currency, instead of the partial or total abolition of banking, only 
 requiring the substitution of a quantity of specie, equal to the paper 
 withdrawn from circulation, it would, in proportion as it were partial 
 or total, compel the substitution of a much larger quantity of specie, 
 or a proportional diminution of the exchanges before transacted, 
 and, in either case, would place the instruments belonging to the 
 society in more slowly returning orders, lessen the amount of mate- 
 rials within reach of the accunmlative principle, and eventually 
 occasion a proportional diminution of the national stock. 
 
 H. Page 249. 
 
 Since the passage in the text was written, the art of the applica- 
 tion of .steam, as an agent in transport by water, has made a farther 
 step. It consists in a passage of the engine used in land carriage, 
 to that used in water carriage. Besides this, however, the germ of 
 some other principles has appeared, which, it seems probable, will 
 ultimately produce a great and important revolution in the art. It 
 is remarkable, that the site of this event is also the Hudson. 
 
 I. Page 276. 
 
 I have seen many of the Indians in Canada, when in high dress, 
 clothed in the finest English cloth, of which they are, I am told, 
 excellent judges ; certainly, however, in the way they wear it, the 
 Indian blanket, one made thick for the purpose, with a broad blue 
 border, makes a more convenient and more becoming robe. The 
 almost irresistable passion which these people have, for whatever 
 they perceive esteemed precious by others, must have struck every 
 one having had any intercourse with them ; perhaps the following 
 anecdote may be worth relating, as in some degree illustrative of it. 
 I was once voyaging with a friend in a small canoe, when we 
 chanced to keep company for two or three days with some Indians 
 in another, one of whom a severe intermittant had reduced to a 
 mere skeleton. One forenoon when we stopped for a little, they 
 requested us to come close to thein, and open a case we had, to 
 let the sick man examine it. Having done as they desired, the 
 invalid seemed sadly disappointed. " I thought," he said, " when 
 I saw it at a distance yesterday, that the inside was silver, and it 
 
NOTES. 413 
 
 seemed to me it would do me good to look at it, but it is only tin." 
 The expression of his countenance and voice showed that he fan- 
 cied the sight of so much silver, would have acted like a cordial, 
 and so I dare say it would. It is to be observed that it is noi the 
 custom of Indians to make requests having an air of impertinence 
 of strangers, or to express disappointment. 
 
 J. Page 285. 
 
 A gentleman of my acquaintance, who had been long among the 
 Indians, and ranked among them as a brother warrior, once travel- 
 led a great distance in the far interior to visit a chief His friend 
 received him in the spirit of hospitality natural to the red man. In 
 proof of it, he declared he would feast him, as he had seen white 
 men feasting their friends, — for he too had been a traveller. Ac- 
 cordingly, his "womankind" not being adequate to the task, he 
 set about cooking and serving dinner himself, and, considering all 
 things, succeeded wonderfully. As imitators, however, will often 
 copy rather defects than merits, so the relish of the repast would 
 have been somewhat improved, by his memory having been a little 
 less tenacious of a few, of what doubtless seemed to him the strange 
 ceremonies of the white men. For example ; he had seen at the 
 houses of some of his white friends, their young men employed 
 rubbing the dishes, off of which the guests ate, with a small square 
 piece of cloth. Now, the only piece of cloth, like this, which he 
 happened to have, formed an article of dress in use among the In- 
 dians, but unknown, and undescribable by modern Europeans. It 
 seems, notwithstanding, to have been in use among their ancestors, 
 being, if I mistake not, that very garment, of which Ulysses threat- 
 ened to strip the unhappy Thersytes, the day he made him feel that 
 he did not bear the sceptre in vain. 
 
 To divest himself of it, was no doubt an inconvenience, but this 
 was not to be reckoned in the service of a guest. Accordingly, hang- 
 ing it over his arm, he rubbed his visitor's platter with it very care- 
 fully, at every change. My friend had nothing for it but to honor 
 the care of his host by eating gravely and abundantly. Had he 
 done otherwise, the chief, who was himself the most polite of men, 
 would have regarded it as an unpardonable grossierete. 
 
 K. Page 345. 
 
 Perhaps it may be said, that the strictness of the inductive method 
 can only apply to the sciences treating of mere matter and its affec- 
 tions. This were to declare the same thing to be, and not to be, a 
 
414 NOTES. 
 
 science of experiment, and is besides in opposition to the authority 
 of the founder of the inductive philosophy. 
 
 " Etiam dubitabit quispiam potius quam objiciet; utrum nos de 
 natural! tantum philosophia, an etiam de scientiis reliquis, logicis, 
 ethicis, politicis, secundum viam nostram perficiendis loquamur. 
 At nos certe de universis hsec, qua3 dicta sunt, intelligimus : Atque 
 quemadmodum vulgaris logica, qufe regit res per sylloaismum, non 
 tantum ad Naturales, sed ad omnes scientias pertinet ; ita et nostra, 
 quae proceditper inductioncm, omnia complectitur. Tarn enim his- 
 toriam et tabulas inveniendi conficimus de ira, metu, et verccundia, 
 et similibus : ac etiam de exemplis rerum civilium ; nee minus de 
 motibus mentalibus memorio', compnsitionis et divisionis, judkii, et 
 reliquorum ; quam de calido et frif^ido, aut luce, aut vcgetationc, 
 aut similibus." Nov. Org. Lib. I. c. cxxvii. 
 
 KRRATA. 
 Page 30, line 2G from top, for " members " read numbers. 
 " 32, " 9 " for " «i ore " read from. 
 
 " 111, " 28 « for" C" read c. 
 
 " li34, " 8 " for "(iirirfcfP' read directed. 
 
 " 2(>9, " U " for " confent " read constant. 
 
 '' 354," 2 " for "■' rapidity '^ read security. 
 
 In pages 349, 350, only part of Mr. Storch's opinions on the subject of Ireland are quoted. 
 There ought to be asterisks to mark the omissions. 
 
loanperiodT'' 
 HOME USE 
 
 ALL BOOKS 'MY BE RECMU^^ ^ ^^^^ p^^^p ,^ ^, 
 
 rArPHRIO^^'f "HS^^^^ AND t-VEAR. 
 
 RtNEWALS^^U. (-ilS) 642-3405 
 
 «c.c». 
 
 ®s 
 
 i 
 
 FOR^ANO.DD6, 60m, 1/83 
 
M5083G1 
 
 1,^ / u / uu 
 
 Sii:, 
 
 1: 
 
 RZ 
 1^3 + 
 
 CASE 
 B 
 
 GENERAL LIBRARY - U.C. BERKELEY 
 
 BDD0fl37M'=lb