possible to compare, and even to prefer, the employ ment of capital in agriculture to its employment in manufactures and commerce?

Adam Smith again furnishes us with an argument conclusive against his system, and all in favour of manufactures and commerce.

He acknowledges, that "the first improvements of art and industry must have been made on the seacoast and along the banks of navigable rivers, where the conveniency of water carriage opens the whole world for a market to the produce of every sort of labour."*

How has it happened, that a truth so pregnant with consequences did not wean him from the system he adopted? How was it that he did not perceive, that if industry and commerce owed their first progress to causes unconnected with agriculture, if they prosper by themselves and independently of agricultural wealth, nothing can hinder capitals, thus employed, from enriching the people to whom they belong, as well as capitals employed in agriculture? The fact cannot be denied. Although Adam Smith laid the foundations of the mercantile system, he yet could not detach himself from the impression which agricultural ideas had made on his mind. Though he attached great importance to manufactures and commerce, he yet considered them simply as the instruments, agents, and distributors of agricultural wealth. He constantly kept very close to the system

* Adam Smith's Wealth of Nations, London, 1805, vol. i. book i. chap. 3, page 31.

of the French economists which he had combated, and in the end gave it the preference over the system he had created.

But he has himself provided us with the means of avoiding the error into which he fell, by the very lights which he disseminated and neglected.

Why should capitals employed in agriculture be more advantageous to a nation than capitals employed in manufactures and commerce? It is, says he, because in this kind of labour nature does a third or a fourth of the work, and, consequently, economizes a third or a fourth of the capitals.

But the produce of labour, according to his own principles, is not valued by what it has cost, nor by its use, but by its value in exchange of course it matters little, whether the agricultural produce costs more or less to be raised, if it has not a greater value or even less value in exchange. A quarter of wheat, though it cost less to produce than a large lookingglass, and though its value in use be far superior to that of a mirror, may, however, have no value at all, if no one wants it; while a mirror may have a very great value, if desired by many individuals. It is, therefore, neither this nor that particular produce which constitutes wealth; it is the exchangeable value of all produce, and the capitals which confer the greatest exchangeable value upon the produce of a country are the most useful and most favourable to the wealth of that country. Capitals employed in manufactures and commerce are eminently possessed of that faculty, because they afford the produce most in request, and find consumers and commodities in

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exchange for it in every part of the globe. The nation which employs its capitals in manufactures and commerce is therefore evidently nearer the source of wealth, than the nation which employs them in agriculture, and which, under the most favourable supposition, can, after all, derive no wealth but from the prosperity of manufactures and commerce.

And what ought particularly to recommend this system to every friend of humanity and social happiness, is this: while the agricultural system, according to Adam Smith himself, always tends ultimately to discourage manufactures and commerce, through which alone it can prosper; it is in the very nature of the mercantile system to encourage agriculture, to develope its powers, and to carry it to the highest degree of improvement of which it is susceptible. The characteristic of the mercantile system is every where to stimulate labour, to accumulate its produce, and to increase wealth. The greater the wealth of the country, the more it prospers; it increases by the very increase which it affords to public wealth. The capitals which commerce employs must therefore be the most beneficial, not only to the wealth of one nation, but even to universal wealth. The mercantile. system is as preferable to the agricultural system with regard to the employment of capital, as with regard to the nature and effects of labour. If it be advantageous for mankind to prefer the labours of industry and commerce to those of agriculture, it is equally advantageous for them to employ their savings and capitals in the same way. The greater their progress in manufactures and commerce, the

nearer will they be to wealth, and their wealth will be so much the larger, the more capitals they have employed in manufactures and commerce.

This result of facts and reason is also that of the

human instinct, of the propensity of man to exchange commodities, and of his fondness for all those enjoyments which can be had only by means of such exchanges.

Adam Smith is of opinion, that, "had not social institutions deranged the order of things, the wealth and aggrandizement of towns would in every civilized society have advanced with equal steps with the improvements of the agriculture of the country."

I think, on the contrary, that if social institutions had seconded, or, at least, not thrown any obstacle in the way of, the developement of human faculties, thesc faculties would have been turned to those labours, the produce of which is most sought for, and which afford most objects of exchange: and as manufactures and commerce are eminently possessed of this privilege, the mercantile would, every where, have been preferred to the agricultural system. The least industrious and skilful would alone have continued attached to the rude and less productive labours of agriculture.

And in spite of those social institutions which oppose the developement of industry and commerce, is it not still to manufactures, commerce, and the arts, that the most industrious, the most ingenious individuals, those whom nature and education have endowed with most talents and faculties, devote themselves? And is not agriculture the lot of men the

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least endowed by nature, and the least disposed to occupations which require dexterity and talents?

This general tendency of men to industry and commerce renders it impossible to be blind to their advantages; and it is without any foundation, that Adam Smith asserted that capitals employed in agriculture are more favourable to national wealth, than those employed in manufactures and commerce. The most profitable capitals are not those which put most labour, but the most useful labour, into motion; not those which employ most, but the most skilful individuals; not those which yield the largest, but the most valuable produce. The most profitable capitals are, consequently, those employed in manufactures and commerce.

CHAP. V.

Of the Profit of Stock.

ADAM Smith is the first and only writer on political economy, who discovered the laws which regulate the rent of capitals or profit of stock; and his theory has not met with any criticism, nor does it appear susceptible of being criticized.

He observes, first, that the profit of capital stock employed in any private business, is so very fluctuating, that the person who carries on a particular trade, cannot always tell himself what is the averagė