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Thus the savings consumed by the labouring classes evidently increase both wealth and population.

When the savings are consumed by the idle classes, they serve to employ a greater number of individuals in labours of luxury. Suppose the annual savings amount to one hundred quarters of wheat, and that the idle classes employ them in taking twenty individuals more in their service, what will be the consequence of the consumption of these savings?

These twenty individuals quit useful labour, to pass over to labours of luxury. The classes which they hare quitted, repair their absence by more labour, and obtain higher wages. This increase of wages in a short time produces the same number of individuals of which these classes were composed ; and the twenty individuals who left them, occasion an actual increase of population.

Being become necessary to the opulent class, these twenty individuals consume the one hundred quarters of wheat economized annually, and re-produce by their labour the capital with which they are fed. It matters little whether the savings be made by the idle classes, or whether they be borrowed by the latter from the labouring class. In the first case, the savings serve only to augment the population; in the second, the savings of the labouring class are exchanged for the capitals of the idle classes: and it ought to be particularly remembered, that this exchange of the savings of the labouring class for the capitals of the idle classes is no-wise injurious to the national capital; it simply effects a change of capitalists per

fectly indifferent to the formation of capitals and wealth, and no-wise prejudicial to population.

It is, therefore, evident, that Dr. Quesnay and even Adam Smith were both mistaken, when they sup. posed that savings cannot contribute to the formation of capitals, except they are, in the opinion of the former, applied to agricultural, and according to the latter, to productive labour.

They still contribute to the formation of capital, though they be employed in labours of luxury.

This kind of labour, the least beneficial to wealth, constantly and infallibly replaces the savings by which it is paid, and consequently produces the population which is maintained by these savings.

Capitals, then, are always derived from economy, and can neither be formed nor increased otherwise than by economy.

This system has been strenuously opposed by the Earl of Lauderdale; and as the noble Lord is the only author who has raised a controversy on this subject, I hope I shall be pardoned for having rather extracted than analysed that part of his work in which he has endeavoured to subvert the doctrine established on this important point of political economy.

“ As animals," says the noble Earl, are only

multiplied by the ineans by which they are pro“ duced; as vegetable substances also can only be “ increased by the means by which they are produced ; “ as a greater quantity of metals and other productions “ from the bowels of the earth, can only be acquired

by an increase of that labour which procures thein ; " and as a greater quantity of raw materials can only

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“ acquire the form that adapts them for consump“ tion, by a more frequent repetition or skilful “ exertion of the labour that gives them form ; so

wealth, it might be reasonably inferred, could only “ be increased through the means by which it is

produced.

“ But popular prejudice, which has ever regarded " the sum total of individual riches to be synonymous "s with public wealth, and which has conceived

every means of increasing the riches of individuals to be a means of increasing public wealth, has

nted out parsimony or accumulation by a man's depriving himself of the objects of desire to which « his fortune entitles him, (the usual means of in

creasing private fortune,) as the most active means " of increasing public wealth.

" When we reflect, that this abstinence from " expenditure, and consequent accumulation, neither “ tends to increase the produce of land, to augment to the exertions of labour, nor to perform a portion of “ labour that must otherwise be executed by the hand “ of man, it seems that we might be warranted at

once to pronounce that accumulation may be a “ method of transferring wealth from A, B, and C, to “ D; but that it cannot be a method of increasing

public wealth, because wealth can only be increased by the same means by which it is produced. “ But when the public prejudice is confirmed by

men most admired for talents; when we are told by " the most esteemed authority, that every prodigal " is a public enemy, and every frugal man a public “ benefactor ; that parsimony, and not industry, in

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creases capital (meaning wealth); and that, as frugality increases, and prodigality diminishes, the public capital; so the conduct of "those whose expence just equals their revenue, neither increases

nor diminishes it; it becomes necessary to enter « into a more minute examination of this opinion, “s and the more so, as it has given birth to an erro“ neous system of legislation which, if persisted in, “ must infallibly ruin the country that adopts or per

severes in it. “ If capital, in all its varieties, is neither inore nor less than a part of the produce of the earth, or

a part of the earth itself, to which either nature or " art has given a form that adapts it for supplanting

or performing a portion of labour ; let us consider “ whether there are not bounds to the quantity of “ its revenue, which a country can, consistently with “ its welfare, bestow in this sort of expenditure, that " is appropriate to the execution of this duty.

“ For the sake of perspicuity, we shall begin by considering the effects of accumulation in a simple

state of society, where capital has not yet assumed " all that variety of form, which man, in the progress “ of society, gives it, for the purpose of performing “ labour; though the same observations will after“ wards be found applicable to societies such as “ modern Europe presents to our view, where capital “ floats in all the variety of channels to which ex“ tended commerce destines it, and where even the “ natural channels, in which all property would “ fluctuate, are deranged by overgrown financial “ When society exists in that state where man is chiefly occupied in agriculture, his property can

arrangements.

only consist in the land he possesses, in the grain "he produces annually, in the breeding stock “ whose produce is reared for consumption, and,

lastly, in the animals and utensils lie employs to " enable him to produce and consume his wealth with *s less labour ; that is, in a more satisfactory and com“ fortable manuer to himself. In such a state, there“ fore, his property divides itself into three different “ branches.

* 1. The land he cultivates, “ 2. The stock he reserves forimmediate and remote consumption.

3. His capital, consisting of the animals or " machines he employs to save labour in the cultiva~ tion of his farm, or in the convenient consumption “ of its produce.

“ That this last part of his wealth is highly bene“ ficial to himself, as well as to the society in which " he lives, is undoubted; it saves a portion of labour “ which must otherwise be executed by the hand of * man, and may even execute a portion of labour

beyond the reach of the personal exertions of man " to accomplish. If, therefore, he is not possessed of " a sufficiency of those animals, instruments, and “ machines, which form his capital, it will most “ clearly be commendable and in the highest degree “ advantageous to society, that he should augment “ the exertions of his industry, for the purpose of “ procuring them; and if he cannot otherwise effect " this augmentation, it may even be prudent and

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