"The public must therefore suffer by this love of "accumulation if pushed beyond its due bounds; “first, by the creation of a quantity of capital more "than is requisite: and, secondly, by abstracting a portion of encouragement to future reproduction.'

Is this criticism of the doctrine of the best writers on the formation of capital sufficiently luminous and well founded? Are not the noble Earl's notious of wealth, capital, and economy, incorrect? and is not the doctrine which he wishes to preach the offspring of his misconceptions on these subjects?

If, as cannot reasonably be disputed, and as has been, I hope, sufficiently shewn, wealth results from the accumulation of the surplus of the produce of labour over consumption; it is evident that wealth may be increased by other means than those by which it has actually been produced.

Suppose, for instance, that a nation accumulates every year ten millions of produce, it is perfectly indifferent whether these ten millions are derived from the usual produce or from the savings in the consumption of that produce: in both cases, there are ten millions of commodities accumulated and kept in store for unforeseen accidents, for the improvement of the soil, for the extension of labour and increase of population; consequently public and private wealth is ten millions larger than it was before.

But will not these ten millions saved be detrimental to reproduction? Whenever consumption can do

The Earl of Lauderdale's Inquiry into the Nature and Origin of Public Wealth. Edinb. 1804. c. iv. p. 207, and following.

with ten millions less of annual produce, will not pro duction be annually ten millions less? And does not the nation in that case lose in production what it has gained by economy in consumption?

Were this argument founded, it would as well apply to an increased annual produce of ten millions as to a saving of ten millions. There would be in both cases a surplus of ten millions, which, as it exceeds the real wants of consumption, would diminish reproduction by as much.

Yet no person ever thought of regarding an augmentation of produce as a sign of poverty and decline, or as a diminution of wealth; on the contrary, it is justly regarded as an infallible symptom of prosperity, wealth, and grandeur: why then should an increase of ten millions saved have a different effect?

The ten millions arising from an increased produce, or from saving, are capable of the same application, produce the same effect, and accomplish the same end.

They either are distributed to individuals whose situation is rendered more comfortable, and who pay for them with more or better labour; in this case they act as an encouragement to labour and industry, and multiply the means of public and private wealth.

́Or they are given to individuals taken from the labouring and industrious classes, to be employed in the service of the idle and rich in that case they increase population by all the individuals they maintain.

Such is the natural effect of economy and of an increased produce; both contribute equally and in the

same proportion to the progress of population and wealth. There are no limits to this progress but in the utmost extension and improvement of agriculture, manufactures, commerce, population, and civilization all over the world. As long as civilized countries have not reached the highest possible perfection of civil society; as long as barbarous nations have not attained the highest degree of civilization; as long as there is in any part of the globe a spot of land to be cleared, cultivated, and improved; as long as mankind have not arrived at the developement and improvement of which they are susceptible, economy in consumption and an increased produce will both be means equally proper to accomplish that desirable end. Mankind therefore, ought never to be tired of increasing their produce and being economical in their consumption.

The maxim of political economy, that consumption is the measure of production, is an incontestable truth it is certain that a produce which finds no consumer, is not long reproduced. But the real meaning of this principle must not be mistaken, nor must it be inferred that an abundant and even overrabundant produce is not consumed. The abundance of productions is always an incitement to a greater consumption; and as abundance is wealth, wealth in its turn affords the greatest possible means of consumption.

When then does it happen that production is limited by consumption? It is when the consumer does not like the commodities produced, or when he is unable to pay their price. The producer is everywhere obliged to consult the taste and faculties of the con

sumers, and it is only when he is mistaken in these two respects, that non-consumption is detrimental to reproduction. He may produce as much as he pleases, his produce will be consumed, provided it suits the consumers and they have the means of paying for it. Abundance and cheapness, these are the two springs of consumption and reproduction;, and as economy necessarily produces both, it follows that ecomy is not prejudicial either to consumption or to reproduction: on the contrary, it is beneficial to both.

Is the same noble author correct, when he states capital to consist only in machines and instruments proper to shorten or facilitate labour, and an economy which tends to multiply capital beyond real wants, to be injurious, because it diverts capital from an useful path to make it flow into an useless channel 7

Did the capital of a country consist in nothing but machines and instruments proper to shorten or facilitate labour, it is certain that an economy which should unnecessarily increase their quantity, would be unprofitable and even detrimental to public prosperity. But this kind of accumulation is not commonly that which parsimony has in view, nor is it that which its partizans recommend; and if a few individuals are saving to obtain a larger number of machines, tools, and instruments than they have occasion for ; such cases are rare; they are eccentricities and whims undeserving of either the attention of the satesman, or the meditation of the philosophical inquirer.

The capital, of which the best writers recommend the increase by parsimony, consists as has been

observed before, in the advances and raw materials necessary to all kinds of labour, in the improvements of the soil, in the instruments and machines proper to abridge or facilitate labour, and in the produce kept in store for present, future and distant consumptions. This theory seems indeed proof against any criticism.

If economy increase the totality of advances and raw materials wanted in all kinds of labour, the means of labour are increased, and consequently there is more raw and manufactured produce in existence.

If it increase the improvements of the soil, the soil is rendered more productive.

If it multiply the machines and instruments which abridge or facilitate labour, the productions of industry are more abundant, of a better quality, at a lower price, and within the reach of a greater number of individuals.

Finally, if economy augments the totality of commodities, their abundance is a premium to augment population, and a means of private and public wealth.

Thus economy, by extending and improving every branch of capital, has the same effect as the productiveness of the soil, the progress of industry, and the speculations of commerce. It augments public and private wealth; and, as has been very justly observed by Adam Smith, it is economy and not industry which increases the capital of a nation.