Conclusion of the Third Book. CAPITALS consist in the accumulation of the produce of labour. This accumulation is effected by economy in consumption. In proportion as this accumulation takes place, capitals divide and follow various destinations. Some are destined to produce a revenue, and are called fixed capitals: others are destined to maintain labourers and to furnish the materials of labour; these are called circulating capitals: others, lastly, are destined to be lent out at interest in public or private loans, and constitute a part of the circulating capital.

Of all these employments of capital, the most useful, the best calculated to enrich even an agricultural country, to increase its wealth, and to raise it to the highest degree of prosperity which it can attain, is that which is applied to manufactures and commerce, which gives motion and life to the mercantile system, and seconds its efforts, its combinations, and its speculations. But the more this employment is favourable to the progress of public wealth, the less is its utility to private wealth ; and the more it is productive of private wealth, the less it is beneficial to public wealth. Governments, however, ought not to suppose

that it is in their power to put an end to this opposition of

interest. It is grounded in the nature of things : whatever governments may do, capitals always have a great value wherever national wealth declines, and they constantly lose their value in proportion to the increase of public wealth. All attempts to stem this irresistible tendency will ever prove unavailing ; and the remedy will always be worse than the evil. The best thing enlightened and prudent governments can do under such circuinstances, is to remove the accidental causes which may hasten the decline or impede the progress

of national wealth. Their power goes to further. Above all, they ought never to forget that an error on this subject is much more fatal than in taxation, to which they give such serious attention. An error in taxation produces but partial evils, private misfortunes, and local inconveniencies. But an error in matters concerning capitals affects the faculties of the community, attacks the principle of life in the body-politic, and paralyses the whole. May this important consideration enforce the utmost cau: tion, and teach governments, that it is not always cnough to wish to do good, that they ought also to know how good is to be effected, and that, in the present state of political economy with regard to capitals

, the wisest administration is that which commits the fewest mistakes.




IF man be indebted for his subsistence to labour ; if it be to the accumulation of capital as the sole means of abridging, facilitating, and improving labour, that he owes his opulence and comforts; it is only through the circulation of the produce of labour by means of commerce, that nations attain wealth, splendour, and power.

“ Trade," says D'Avenant, “is the living fountain whence we draw all our nourishment. It disperses that blood and spirits through all the members by which the body-politic subsists. The price of lands, value of rents, and our commodities and manufactures, rise and fall as it goes well or ill with our foreign trade."*

“ The greatness of a state,” says David Hume, "and the happiness of its subjects, how independent soever they may be supposed in some respects, are

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commonly allowed to be inseparable with regard to commerce; and as private men receive greater security, in the possession of their trade and riches, from the

power of the public; so the public becomes powerful in proportion to the opulence and extensive commerce of private men.

“Like sale, like production;" says Dr. Quesnay.t « That commerce is necessary,” says Galiani, “ for the support of life and the happiness of nations, is well known. Commerce owes its rise to the necessity of exchanging the surplus of our commodities for those we stand in need of, and may be defined, the interchange of the produce of general labour to provide for the wants of all. In the wretched state of nature, every one thinks only of himself: but commerce leads to social life, in which every one thinks and labours for all, not from a principle of piety and virtue, but from interest and utility.”

“The end of social economy,” says Genovesi, “is, 1st, an increased population ; 2dly, wealth ; 3dly, natural and civil happiness ; 4thly, the grandeur, glory, and welfare of the sovereign.

Of all the means capable of attaining this end, there is not one more efficient than commerce,

which avails itself of human avidity, as the most powerful promoter of all social advantages.";

* Hume's Essays, Edinb. 1804, vol. i. Essay on Commerce, page 271..

+ Physiocratie, Max. 16.
| Della Moneta.
§ Lezioni di Econom. Civile, part i. chap. 16.

“ As it is the power of exchanging,” says Adam Smith, “ that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market."*

There is, therefore, no doubt remaining concerning the extreme importance of commerce or the circulation of the produce of labour, nor respecting its intimate connexion with individual wealth and national power. All writers on political economy are unanimous in this respect; there is not any one point more firmly established.

But with regard to the principle, nature, progress, method, different modes, and numerous effects of this productive and beneficial circulation, opinions vary, systems differ, and the science fluctuates between a number of contradictory theories.

The origin of commerce is sought for by some in the avarice of mankind;t by others in their propensity to truck, barter, and exchange'one thing for another;£ and by others in their vanity.ş

Nor are authors better agreed concerning the laws which determine the respective value of the produce exchanged by commerce. Some make it depend upon a fixed and invariable standard ; others derive it

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* Wealth of Nations, London, 1805, vol. i. book i. chap. 3, page


Physiocratie, Obs. 6. 1 Wealth of Nations, by Adam Smith, 1805, vol. i. book i. chap. 2,

page 21.

$ Principes d' Economie Politique, par Canard, page 85.

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