BOOK expence which is properly laid out upon a fixed II. capital of any kind, is always repaid with great profit, and increases the annual produce by a much greater value than that of the support which fuch improvements require. This fupport, however, ftill requires a certain portion of that produce. A certain quantity of materials, and the labour of a certain number of workmen, both of which might have been immediately employed to augment the food, clothing and lodging, the fubfiftence and conveniences of the fociety, are thus diverted to another employment, highly advantageous indeed, but ftill, different from this one. It is upon this account that all fuch improvements in mechanics, as enable the fame number of workmen to perform an equal quantity of work with cheaper and fimpler machinery than had been ufual before, are always regarded as advantageous to every fociety. A certain quantity of materials, and the labour of a certain number of workmen, which had before been employed in fupporting a more complex and expenfive machinery, can afterwards be applied to augment the quantity of work which that or any other machinery is useful only for performing. The undertaker of fome great manufactory who employs a thoufand a-year in the maintenance of his machinery, if he can reduce this expence to five hundred, will naturally employ the other five hundred in purchafing an additional quantity of materials to be wrought up by an additional number of workmen. The quantity of that work, therefore, which his machinery was useful only for per- CHA P. forming, will naturally be augmented, and with it all the advantage and conveniency which the fociety can derive from that work. The expence of maintaining the fixed capital in a great country, may very properly be compared to that of repairs in a private eftate. The expence of repairs may frequently be neceffary for fupporting the produce of the estate, and confequently both the grofs and the neat rent of the landlord. When by a more proper direction, however, it can be diminished without occafioning any dimi nution of produce, the grofs rent remains at least the fame as before, and the neat rent is necef. farily augmented. But though the whole expence of maintaining the fixed capital is thus neceffarily excluded from the neat revenue of the fociety, it is not the fame cafe with that of maintaining the circulating capital. Of the four parts of which this latter capital is compofed, money, provifions, materials, and finished work, the three last, it has already been observed, are regularly withdrawn from it, and placed either in the fixed capital of the fociety, or in their stock referved for immediate confumption. Whatever portion of thofe confumable goods is not employed in maintaining the former, goes all to the latter, and makes a part of the neat revenue of the fociety. The maintenance of thofe three parts of the circulating capital, therefore, withdraws no portion of the annual produce from the neat revenue of the fociety, befides what is neceffary for maintaining the fixed capital. The II. BOOK II. The circulating capital of a fociety is in this refpect different from that of an individual. That of an individual is totally excluded from making any part of his neat revenue, which muft confift altogether in his profits. But though the circulating capital of every individual makes a part of that of the fociety to which he belongs, it is not upon that account totally excluded from making a part likewife of their neat revenue. Though the whole goods in a merchant's fhop must by no means be placed in his own stock referved for immediate confumption, they may in that of other people, who, from a revenue derived from other funds, may regularly replace their value to him, together with its profits, without occafioning any diminution either of his capital or of theirs. Money, therefore, is the only part of the circulating capital of a fociety, of which the maintenance can occafion any diminution in their neat revenue, The fixed capital, and that part of the circulating capital which confifts in money, fo far as they affect the revenue of the fociety, bear a very great refemblance to one another. Firft, as thofe machines and inftruments of trade, &c. require a certain expence, first to erect them, and afterwards to fupport them, both which expences, though they make a part of the grofs, are deductions from the neat revenue of the fociety; fo the flock of money which circulates in any country muft require a certain expence, first to collect it, and afterwards to fup port II. port it, both which expences, though they make CHA P. a part of the grofs, are, in the fame manner, deductions from the neat revenue of the fociety. A certain quantity of very valuable materials, gold and filver, and of very curious labour, inftead of augmenting the ftock referved for immediate confumption, the fubfiftence, conveniencies, and amufements of individuals, is employed in fupporting that great but expenfive inftrument of commerce, by means of which every individual in the fociety has his fubfiftence, conveniences, and amufements, regularly diftributed to him in their proper proportion. Secondly, as the machines and inftruments of trade, &c. which compofe the fixed capital either of an individual or of a fociety, make no part either of the grofs or of the neat revenue of either; fo money, by means of which the whole revenue of the fociety is regularly distributed among all its different members, makes itself no part of that revenue. The great wheel of circulation is altogether different from the goods which are circulated by means of it. The revenue of the fociety confifts altogether in those goods, and not in the wheel which circulates them. In computing either the grofs or the neat revenue of any fociety, we must always, from their whole annual circulation of money and goods, deduct the whole value of the money, of which not a fingle farthing can ever make any part of either. It is the ambiguity of language only which can make this propofition appear either doubtful BOOK or paradoxical. When properly explained and understood, it is almost felf-evident. II. When we talk of any particular fum of money, we fometimes mean nothing but the metal pieces of which it is compofed; and sometimes we include in our meaning fome obfcure reference to the goods which can be had in exchange for it, or to the power of purchafing which the poffeffion of it conveys. Thus when we fay, that the circulating money of England has been computed at eighteen millions, we mean only to exprefs the amount of the metal pieces, which fome writers have computed, or rather have fuppofed to circulate in that country. But when we fay that a man is worth fifty or a hundred pounds a-year, we mean commonly to exprefs not only the amount of the metal pieces which are annually paid to him, but the value of the goods which he can annually purchase or confume. We mean commonly to ascertain what is or ought to be his way of living, or the quantity and quality of the neceffaries and conveniences of life in which he can with propriety indulge himself. When, by any particular fum of money, we mean not only to exprefs the amount of the metal pieces of which it is compofed, but to include in its fignification fome obfcure reference to the goods which can be had in exchange for them, the wealth or revenue which it in this cafe denotes, is equal only to one of the two values which are thus intimated fomewhat ambiguoufly by the fame word, and to the latter more properly than to the former, to the money's worth more properly than to the money. Thus |