different produce of labour a value constantly relative to the demand of the consumers and to the abundance or scarcity of the commodity. This value is always proportioned to the extent of the commerce, to the number of consumers, and to the variety of productions: but in fixing this value, which is sometimes uncertain and frequently arbitrary, cominerce generally gives to every producer the equivalent of what his production has cost him. Were this indispensable condition not fulfilled, re-production would be at a stand, and circulation would lose its activity, and perhaps entirely cease. This condition once performed, commerce observes no other law in the distribution of equivalents, but the demand for and the abundance or scarcity of the commodity: and this law is always fluctuating, always uncertain, and consequently always unequal. But this inequality obstructs neither the activity nor the range of the circulation; it only affects the rate of profits; and a small profit is always preferable to none.

Notwithstanding these advantages and the general interest which it must inspire, the circulation of the produce of labour would have met with but an indifferent success, had it not been for the assistance of a preferred produce, which every producer willingly takes at all times in exchange for its produce,because he is certain that the partiality or predilection which he entertains for that produce is common to the producers of all countries.

When money has that indispensable and necessary character; when it consists in a produce universally preferred, and for which all other productions are

willingly exchanged; when public authority contents itself with guaranteeing, as it were, this preferred commodity against the frauds, adulterations, and deteriorations to which it may be liable, money be comes the most active agent, the most powerful spring, and the most useful instrument of circulation. But it is especially by giving rise to credit that metallic money renders the greatest service to circulation. As soon as it has established credit metallic money appears in circulation merely to regulate the march and to insure the results of credit. Even the liquidation of credit is frequently effected without the aid of metallic money. Banks, when confined to the liquidation of commercial credit, supply the place of coin most successfully, or at least derive but a feeble and trifling assistance from the metallic currency of the country.

The different methods of circulating the produce of labour, such as corporations and privileged companies, the monopoly of colonial commerce, exclusive commercial treaties, and every combination that has been contrived to give another direction to the course of commerce, when it is supposed unfavourable or less beneficial, or to enlarge it when supposed to be favourable, are as many obstacles, which restrict and shackle the progress of commerce, and are equally fatal to public and private wealth.

In short, nations ought never to forget that the circulation of the produce of labour is always beneficial, and that the only way to reap all its benefits is to render commerce safe, free, easy, and general.

BOOK V.

ON THE VARIOUS SYSTEMS CONCERNING THE
NATIONAL INCOME AND CONSUMPTION.

CHAP. I.

Of the National Income.

ALL systems of political economy agree in making the national income consist in the produce of annual labour. The spontaneous productions of the soil, of mines, and of the waters, are not very considerable, and require besides a certain portion of labour to be gathered and brought to market; they must, of course, be ranked among the produce of labour.

Income is either private or public. But these two denominations are merely two different manners of viewing income; they neither alter its nature nor its quantity. All authors on subjects connected with political economy, unanimously teach, that the national income is composed of the private income of the members of the nation.*

* Sir William Petty-George King-Mr. Hooke-Sir William Pulteney-Adam Smith-Dr. Beeke--Physiocratie, page 113.Philosophie Rurale, page 150.

One noble author alone thinks that this opinion, "though universally prevalent, must be deemed false and unfounded by every man who considers the subject, after having formed and familiarized himself to an accurate and distinct opinion of the nature of value."

"It must appear," says the Earl of Lauderdale, "that a commodity being useful or delightful to man, cannot alone give it value; that to obtain value, or to be qualified to constitute a portion of private riches, it must combine with that quality the circumstance of existing in a certain degree of scarcity. Yet the

common sense of mankind would revolt at a proposal for augmenting the wealth of a nation by creating a scarcity of any commodity generally useful and necessary to man.

"Let us for a moment suppose it possible to create as great an abundance of any species of food as there exists of water; what would be thought of the advice of a man who should cautiously recommend, even at the moment of the pressure of scarcity, to beware of creating this boasted abundance? For, however flattering it might appear as a remedy for the immediate evil, it would, inevitably diminish the wealth of the nation. Yet, ridiculous as this opinion might appear, as every thing which partakes of the abundance of water or air must at once cease to possess value; it follows that, by occasioning such an abundance, the sum total of individual riches would most certainly be diminished to an extent equal to the total value of that species of food, the value of which would by this means be destroyed.

"At present, the capital of the national debt of Great Britain amounts nearly to five hundred millions sterling. We have seen, and know, that war, even in the course of the first year, may sink the value of this capital twenty per cent. ; that is, that it may diminish the mass of individual fortunes one hundred millions; and thus impose upon any man, who made up the account of public wealth on the principle that an accurate statement of it was to be derived from adding together the fortunes of individuals, the necessity of saying that one hundred millions of our wealth had vanished.

"But this is not all. sinks at the same time.

The value of many things In the value of land in particular, we have seen a considerable diminution, which would create the necessity of a further reduction in this statement of public wealth. Yet the surface of the national territory remains unaltered; the landlord receives the same rent; the stock-holder is paid the same interest; and there is no one thing on which a man can lay his hand as an article of national wealth, which does not appear to retain the same qualities that rendered it either useful or desirable.

"If we could further suppose nature to bestow on any community, or art to procure for them, such an abundance, that every individual should find himself in possession of whatever his appetites could want, or his imagination wish or desire, they would possess the greatest degree of national wealth; though under such circumstances it is impossible that any commodity could obtain the attribute of value: for, like water and air, all commodities that partake of their abun