mize the expences of cultivation, and multiply its produce; in manufactures, on the contrary, the division of labour abridges, facilitates, and improves labour. But in all kinds of labour, the slavery or bondage of the labourers, apprenticeships, and corporations, which restrain the choice of labour; and the keeping of wages below the natural rate, discourage the labourer, cause labour to languish, and oppo-e an insurmountable obstacle to the developement of its faculties, to its prosperity and power; in short, it is on the liberty of the labourer, on the freedom of selecting his labour, and on the wages of labour being fixed by competition alone, that the progress and success of general labour are depending.

When labour has produced the elements of wealth, economy superintends their consumption, saves the surplus of the non-consumed produce, accumulates it, forms it into capital stock, and seeks the most advantageous employment for this capital. It devotes one part to procure the raw materials of all labours and the advances necessary to the labourer, before the produce of their labour is put up to sale. The funds applied for these purposes form the circulating capital. Another part is employed in the amelioration and enlargement of the existing labours, and in new undertakings, and the funds thus directed to the increase of labour form the fixed capital. A third and last part is reserved for extraordinary consumptions, occasioned by the unforeseen necessities of private individuals and governments, and these funds form the reserved capital stock which is absorbed by private or public loans; so that all the produce which

economy saves from ordinary consumption, returns into circulation by extraordinary consumption, which restores the equilibrium between consumption and production.

Some philosophical inquirers are afraid of the share which economy necessarily has in the formation of wealth. The term economy, which the vulgar confounds with avarice, and constantly connects with notions of privation, makes them suppose that wealth is obtained only by privations; and hence they disdain riches as too painful and difficult to acquire: but their error arises from the wrong idea they attach to the word economy. In its proper signification, it merely means order, moderation, and the proper direction of necessary, useful, and even agreeable expences; a vigilant severity against profusion and prodigality, and a just proportion between the ordinary expenditure and the ordinary income. The difference between avarice and economy is striking: the miser, like the economist, saves the surplus of his produce above his consumption: but the miser converts that produce into precious metals, which he buries under ground, and which, from that instant, become useless to him and to all others; the economist, on the contrary, employs that surplus in more extended labour, the produce of which he shares with the labourers.

The economist is, therefore, as useful to his fellowcreatures as the miser is useless and detrimental to them; and wealth is as much indebted to the wise moderation of the former, as it suffers by the mise

rable parsimony of the latter. It is certain that, without economy, there is no capital stock; and without capital there is no improvement or increase of labour, and no resource for the unforeseen necessities of individuals and nations.

Some very enlightened philosophers think that the unforeseen necessities of individuals and nations ought to be preferably supplied out of the produce destined for ordinary consumption: but experience has shewn that it is much wiser to supply them at first from the stock accumulated by economy and reserved for extraordinary expences; and barely to levy upon the stock destined for ordinary consumption a slight tax, which, being continued for a long space of time, suffices to pay the interest due to the capitalist, and to extinguish the capital by means of a sinking fund. This way of providing for extraordinary exigencies leaves to labour all its resources, all its faculties, all its power; the produce of which the labourer is stripped by the tax, is probably recovered by greater efforts, attention, and activity; and the tax thus proves a clear gain to the state; or if the times be so hard, that the tax cannot be recovered by more labour and a greater economy, its burthen will be lighter for being laid on for a greater number of years and for absorbing a smaller quantity of the funds necessary to re-production. In short, the system

founded upon the extinction of public debts by means of a sinking fund, has generally prevailed, and promises still greater success, should governments apply it to all extraordinary expences beyond the regular

expenditure of the public service. The utility and advantages of such a plan shall be developed somewhere else.

Finally, theorists are not yet agreed concerning the most useful employment of capital. The most general doctrine is that it ought to be preferably applied in agricultural labour: but I do not think this theory well founded. The prosperity of agriculture is necessarily subordinate and dependent on the progress of manufactures and commerce; to begin by creating an abundant agricultural produce before the existence of the industrious classes, by whom it is to be consumed, is to invert the natural order of things.

The most usefully employed capitals, and the most profitable labours, are those which are devoted to manufactures and commerce.

In the very dawn of political economy, the influence of commerce upon wealth was better felt than known, more praised than studied, more admired than investigated. It was supposed that a country grows rich in proportion to the quantity of gold and silver accumulated by a favourable balance of foreign trade. This system is at present so discredited, that it must be regarded as an antiquated error, barely worthy of being mentioned in the history of the science.

The French economists, who first discovered this fallacy and successfully attacked it, had not, however, any much more correct notions of commerce. They limited its power to the conveyance of the produce of labour from the producer to the consumer, and to the fixing of its value by general competition. To

reduce,commerce to a material, and, as it were, mechanical conveyance of goods, is stating only part of its functions, undervaluing its services, confining its influence, and misunderstanding its true property. This depreciating system has met with but an ephemeral success, and can only mislead those who embraced their doctrine with too much credulity or too much levity.

Adam Smith has rendered an important service to that part of the science, not only by refuting the errors with which it was obstructed, but particularly by ascertaining the fundamental principle of commerce, its direction, its effects, and its results. In his opinion, commerce began by the exchange of the produce which the producer could not or would not consume, for another produce that was more agreeable to him, or that better suited his conveniency. This first exchange led all producers to perceive that the interchange of the produce of their private labour afforded the means of selecting, among the productions of general labour, those which they thought it most advantageous or most gratifying to consume. In proportion as this truth was generalised by experience, any labour was considered as a branch of general labour, any produce as a portion of the universal produce, and the total mass of produce as the stock of general consumption. By circulating the produce of labour from the country to the towns, from the towns to distant nations, and from every part of the globe throughout the world, individuals, hordes, tribes, communities, and nations, shared in the advantages of all climates, of all soils, of all countries, of