as when it is employed in the cultivation of the land: he has traced the various means by which labour may be rendered most effective; and has given a most admirable analysis and exposition of the prodigious addition made to its powers by its division among different individuals, and by the employment of accumulated wealth, or capital, in industrious undertakings. Dr. Smith has also shown, in opposition to the commonly received opinions of the merchants, politicians, and statesmen of his time, that wealth does not consist in the abundance of gold and silver, but in the abundance of the various necessaries, conveniences, and enjoyments of human life: he has shown that it is in every case sound policy, to leave individuals to pursue their own interest in their own way that, in prosecuting branches of industry advantageous to themselves, they necessarily prosecute such as are, at the same time, advantageous to the public; and that every regulation intended to force industry into particular channels, or to determine the species of commercial intercourse to be carried on between different parts of the same country, or between distant and independent countries, is impolitic and pernicious-injurious to the rights of individuals-and adverse to the progress of real opulence and lasting prosperity.

The fact that the distinct statement of several of the most important of these principles, and that traces of them all, may be found in the works of previous writers, does not in the least detract from the real merits of Dr. Smith. In adopting the discoveries of others, he has made them his own; he has demonstrated the truth of principles on which his predecessors had, in most cases, stumbled by chance; has separated them from the errors by which they were previously incumbered; has traced their remote consequences, and pointed out their limitations; has shown their practical importance and real value— their mutual dependence and relation; and has reduced them into a consistent, harmonious, and beautiful system.

But, however excellent in many respects, still it cannot be denied that there are errors, and those too of no slight importance, in the 'Wealth of Nations.' Dr. Smith does not say that in prosecuting such branches of industry as are most advantageous to themselves, individuals necessarily prosecute such as are at the same time MOST advantageous to the public. His leaning to the system of the Economists—a leaning perceptible in every part of his work-made him so far swerve from the principles of his own system, as to admit that individual advantage is not always a true test of the public advantageousness of different employments. He considered agriculture, though not the only productive employment, as the most productive of any; and he considered the home trade as more productive than a direct foreign trade, and the latter than the carrying trade. It is clear, however, that all these distinctions are fundamentally erroneous. A state being nothing more than an aggregate collection of individuals,

it necessarily follows, that whatever is most advantageous to them must be most advantageous to the state; and it is obvious, that the self-interest of those concerned will always prevent them from engaging in manufacturing and commercial undertakings, unless when they yield as large profits, and are, consequently, as publicly beneficial as agriculture. His opinion with respect to the unproductiveness of all labour, not realized in a fixed and vendible commodity, appears, at first sight, to rest on no better foundation than the opinion of the Economists with respect to the unproductiveness of commerce and manufactures; and its fallacy has been fully established by several late writers. These, however, are blemishes of inferior importance. The radical defect of the 'Wealth of Nations' consists in the erroneous doctrines Dr. Smith has advanced with respect to the invariableness of the value of corn, and the effect of fluctuations in the rate of wages on prices: these have prevented him from acquiring any clear and accurate notions respecting the nature and causes of rent, and the laws which govern the rate of profit; and have, in consequence, vitiated all that part of his work which treats of the distribution of wealth, and the principles of taxation.

But after every allowance has been made for these defects, enough still remains to justify us in considering Dr. Smith as the real founder of the modern system of Political Economy. If he has not left us a perfect work, he has, at all events, left us one which contains a greater number of useful truths than have ever been given to the world by any other individual; and he has pointed out and smoothed the route, by following which, subsequent philosophers have been enabled to perfect much that he had left incomplete, to rectify the mistakes into which he had fallen, and to make many new and important discoveries. Whether, indeed, we refer to the soundness of its leading doctrines, to the liberality and universal applicability of its practical conclusions, or to the powerful and beneficial influence it has had on the progress and perfection of economical science, and still more on the policy and conduct of nations, Dr. Smith's work must be placed in the foremost rank or those that have helped to liberalize, enlighten, and enrich mankind.*

The science of Political Economy was long confounded with that of Politics; and it is undoubtedly true that they are very intimately connected, and that it is frequently impossible to treat those questions which strictly belong to the one without referring more or less to the principles and conclusions of the other. But, in their leading features, they are sufficiently distinct. The laws which regulate the production and distribution of wealth are the same in every country and stage of society. Those circumstances which are favourable or unfavourable

*The subsequent steps in the progress of the science will be pointed out in the course of this work. I have given a sketch of its history, up to the present time, in my Discourse on the Rise, Progress, Peculiar Objects, and Importance of Political Economy.

A

to the increase of riches and population in a republic may equally exist, and will have exactly the same effects, in a monarchy. That security of property, without which there can be no steady and continued exertion—that freedom of engaging in every different branch of industry, so necessary to call the various powers and resources of human talent and ingenuity into action-and that economy in the public expenditure, so conducive to the accumulation of national wealth-are not the exclu

sive attributes of any particular species of government. If free states generally made the most rapid advances in wealth and population, it is an indirect rather than a direct consequence of their political constitution. It results more from the greater probability that the right of property will be held sacred-that the freedom of industry will be less fettered and restricted, and that the public income will be more judiciously levied and expended under a popular government, than from the mere circumstance of a greater proportion of the people being permitted to exercise political rights and privileges. Give the same securities to the subjects of an absolute monarch, and they will make the same advances. Industry does not require to be stimulated by extrinsic advantages. The additional comforts and enjoyments which it procures have always been found sufficient to ensure the most persevering and successful exertions. And whatever may have been the form of government, those countries have always advanced in the career of improvement, in which the public burdens have been moderate, the freedom of industry permitted, and every individual enabled peaceably to enjoy the fruits of his labour. It is not, therefore, so much on its political organization, as on the talents and spirit of its rulers, that the wealth of a country is principally dependent. Economy, moderation, and intelligence on the part of those in power, have frequently elevated absolute monarchies to a very high degree of opulence and of prosperity; while, on the other hand, all the advantages derived from a more liberal system of government have not been able to preserve free states from being impoverished and exhausted by the extravagance, intolerance, and short-sighted policy of their rulers.

The sciences of Politics and of Political Economy are, therefore, sufficiently distinct. The politician examines the principles on which government is founded: he endeavours to determine in whose hands the supreme authority may be most advantageously placed; and unfolds the reciprocal duties and obligations of the governing and governed portions of society. The political economist does not take so high a flight. It is not of the constitution of the government, but of its ACTS only, that he is called upon to judge. Whatever measures affect the production or distribution of wealth, necessarily come within the scope of his observation, and are freely canvassed by him. He examines whether they are in unison with the just principles of economical science. If they are, he pronounces them to be advantageous, and

shows the nature and extent of the benefits of which they will be productive; if they are not, he shows in what respect they are defective, and to what extent their operation will be injurious. But he does this without inquiring into the constitution of the government by which these measures have been adopted. The circumstance of their having emanated from the privy council of an arbitrary monarch, or the representative assembly of a free state, though in other respects of supreme importance, cannot affect the immutable principles by which the economist is to form his opinion upon them.

Besides being confounded with Politics, Political Economy has sometimes being confounded with Statistics; but they are still more easily separated and distinguished. The object of the statistician is to describe the condition of a particular country at a particular period; while the object of the political economist is to discover the causes which have brought it into that condition, and the means by which its wealth and riches may be indefinitely increased. He is to the statistician what the physical astronomer is to the mere observer. He takes the facts furnished by the researches of the statistician, and after comparing them with those furnished by historians and travellers, he applies himself to discover their relation. By a patient induction—by carefully observing the circumstances attending the operation of particular principles, he discovers the effects of which they are really productive, and how far they are liable to be modified by the operation of other principles. It is thus that the relation between rent and profitbetween profit and wages, and the various general laws which regulate and connect the apparently conflicting, but really harmonious interests of every different order in society, have been discovered, and established with all the certainty of demonstrative evidence.

PART II. PRODUCTION OF WEALTH,

SECTION I. Definition of Production-Labour the only Source of Wealth,

ALL the operations of nature and of art are reducible to, and really consist of transmutations,—of changes of form and of place. By production, in the science of Political Economy, we are not to understand the production of matter, for that is the exclusive attribute of Omnipotence, but the production of utility, and consequently of exchangeable value, by appropriating and modifying matter already in existence, so as to fit it to satisfy our wants, and to contribute to our enjoyments. The labour which is thus employed is the only source of wealth.*

* This point has been strongly and ably stated by M. Destutt Tracy Non-seulement,' says he, nous ne créons jamais rien, mais il nous est même impossible de concevoir ce que c'est que créer ou anneantir, si nous entendons rigoureusement par ces mots, faire quelque chose de rien, ou reduire quelque chose à rien; car nous n'avons jamais vu un être quelcon

Nature spontaneously furnishes the matter of which all commodities are made; but, until labour has been expended in appropriating matter, or in adapting it to our use, it is wholly destitute of value, and is not, nor ever has been, considered as forming wealth.* Place us on the banks of a river, or in an orchard, and we shall infallibly perish, either of thirst or hunger, if we do not, by an effort of industry, raise the water to our lips, or pluck the fruit from its parent tree. It is seldom, however, that the mere appropriation of matter is sufficient. In the vast majority of cases, labour is required not only to appropriate it, but also to convey it from place to place; and to give it that peculiar figure and shape, without which it may be totally useless, and incapable of either ministering to our necessities or our comforts. The coal used in our fires is buried deep in the bowels of the earth, and is absolutely worthless until the labour of the miner has extracted it from the mine, and brought it into a situation where it can be made use of. The stones and mortar of which our houses are built, and the rugged and shapeless materials from which the various articles of convenience and ornament with which they are furnished have been prepared, were, in their original state, alike destitute of value and utility. And of the innumerable variety of animal, vegetable, and mineral products which forms the materials of our food and clothes, none were originally serviceable, while many were extremely noxious to man. It is his labour that has given them utility, that has subdued their bad qualities, and made them satisfy his wants, and minister to his comforts and enjoyments. 'Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased.' (Wealth of Nations, Murray's Reprints, p. 1.)

If we observe the progress, and trace the history of the human race in different countries and states of society, we shall find that their comfort and happiness have been always very nearly proportioned to the power which they possessed of rendering their labour effective in appropriating the raw products of nature, and in fitting and adapting them to their use. The savage, whose labour is confined to the gathering of wild fruits, or to the picking up of shellfish on the sea coast, is placed at the very bottom of the scale of civilization, and is, in point que sortir du néant ni y rentrer. De là cet axiome admis par toute l'antiquité: rien ne vient de rien, et ne peut redevenir rien. Que faisons-nous donc par notre travail, par notre action sur tous les etres qui nous entourent? Jamais rien, qu'opérer dans ces etres des changements de forme ou de lieu qui les approprient à notre usage, qui les rendent utiles à la satisfaction de nos besoins. Voila ce que nous devons entendre par produire; c'est donner aux choses une utilité qu'elles n'avoient pas. Quel que soit notre travail, s'il n'en resulte point d'utilité, il est infructeux; s'il en resulte, il est productif. (Elemens d'Ideologie, v. iii. p. 162.)

*The writer of an article in Quar. Rev., (No. 60, Art. 1.) contends that the earth is a source of wealth, because it supplies us with the matter of commodities. But this, it is obvious, is just the old error of the Economists reproduced in a somewhat modified shape. It would, in truth, be just as correct to say, that the earth is a source of pictures and statues, because it supplies the materials made use of by painters and statuaries, as to say, that it is a source of wealth, because it supplies the matter of commoditics.