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productive, in the sense in which the term is understood by political economists. I grant that no labour really tends to the enrichment of society, which is employed in producing things for the use of unproductive consumers. The tailor who makes a coat for a man who produces nothing, is a productive labourer, but in a few weeks or months the coat is worn out, while the wearer has not produced anything to replace it, and the community is then no richer by the labour of the tailor, than if the same sum had been paid for a stall at the opera. Nevertheless, society has been richer by the labour while the coat lasted, that is, until society, through one of its unproductive members, chose to consume the produce of the labour unproductively. The case of the gold lace or the pine apple is no further different, than that they are still further removed than the coat from the character of necessaries. These things also are wealth until they have been consumed.
§ 6. We see, however, by this, that there is a distinction, more important to the wealth of a community than even that between productive and unproductive labour; the distinction, namely, between labour for the supply of productive, and for the supply of unproductive, consumption; between labour employed in keeping up or in adding to the productive resources of the country, and that which is employed otherwise. Of the produce of the country, a part only is destined to be consumed productively; the remainder supplies the unproductive consumption of producers, and the entire consumption of the unproductive classes. Suppose that the proportion of the annual produce applied to the first purpose amounts to half; then one-half the productive labourers of the country are all that are employed in the operations on which the permanent wealth of the country depends. The other half are occupied from year to year and from generation to generation in producing things which are consumed and disappear without return; and whatever this
half consume is as completely lost, as to any permanent effect on the national resources, as if it were consumed unproductively. Suppose that this second half of the labouring population ceased to work, and that the government or their parishes maintained them in idleness for a whole year: the first half would suffice to produce, as they had done before, their own necessaries and the necessaries of the second half, and to keep the stock of materials and implements undiminished: the unproductive classes, indeed, would be either starved or obliged to produce their own subsistence, and the whole community would be reduced during a year to bare necessaries; but the sources of production would be unimpaired, and the next year there would not necessarily be a smaller produce than if no such interval of inactivity had occurred; while if the case had been reversed, if the first half of the labourers had suspended their accustomed occupations, and the second half had continued theirs, the country at the end of the twelvemonth would have been entirely impoverished.
It would be a great error to regret the large proportion of the annual produce, which in an opulent country goes to supply unproductive consumption. It would be to lament that the community has so much to spare from its necessities, for its pleasures and for all higher uses. This portion of the produce is the fund from which all the wants of the community, other than that of mere living, are provided for; the measure of its means of enjoyment, and of its power of accomplishing all purposes not productive. That so great a surplus should be available for such purposes, and that it should be applied to them, is a subject only of congratulation. The things to be regretted, and to be remedied, are the prodigious inequality with which this surplus is distributed, and the large share which falls to the lot of persons who render no equivalent service in return; topics of the greatest importance, but for the discussion of which, the proper place is in another division of our inquiry.
§1. IT has been seen in the preceding chapters that, besides the primary and universal requisites of production, labour and natural agents, there is another requisite without which no productive operations, beyond the rude and scanty beginnings of primitive industry, are possible: namely, a stock, previously accumulated, of the products of former labour. This accumulated stock of the produce of labour is termed Capital. The function of Capital in production, it is of the utmost importance thoroughly to understand, since a number of the erroneous notions with which our subject is infested, originate in an imperfect and confused apprehension of this point.
Capital, by persons wholly unused to reflect on the subject, is supposed to be synonymous with money. To expose this misapprehension, would be to repeat what has been said in the introductory chapter. Money is no more synonymous with capital than it is with wealth. Money cannot in itself perform any part of the office of capital, since it can afford no assistance to production. To do this, it must be exchanged for other things; and anything, which is susceptible of being exchanged for other things, is capable of contributing to production in the same degree. What capital does for production, is to afford the shelter, protection, tools and materials which the work requires, and to feed and otherwise maintain the labourers during the process. These are the services which present labour requires from past, and from the produce of past, labour. Whatever things are destined for this use-destined to supply productive labour with these various prerequisites-are Capital.
To familiarize ourselves with the conception, let us consider what is done with the capital invested in any of the branches of business which compose the productive industry of a country. A manufacturer, for example, has one part of his capital in the form of buildings, fitted and destined for carrying on his branch of manufacture. Another part he has in the form of machinery. A third consists, if he be a spinner, of raw cotton, flax, or wool; if a weaver, of flaxen, woollen, silk, or cotton, thread; and the like, according to the nature of the manufacture. Food and clothing, for his operatives, it is not the custom of the present age that he should directly provide; and few capitalists, except the producers of food or clothing, have any portion, worth mentioning, of their capital, in that shape. Instead of this, each capitalist has money, which he pays to his workpeople, and so enables them to supply themselves: he has also finished goods in his warehouses, by the sale of which he obtains more money, to employ in the same manner, as well as to replenish his stock of materials, and to replace his buildings and machinery when worn out. His money and finished goods however are not wholly capital, for he does not wholly devote them to these purposes: he employs a part of the one, and of the proceeds of the other, in supplying his personal consumption and that of his family, or in hiring grooms and valets, or maintaining hunters and hounds, or in educating his children, or in paying taxes, or in charity. What then is his capital? Precisely that part of his possessions, whatever it be, which he designs to employ in carrying on fresh production. It is of no consequence that a part, or even the whole of it, is in a form in which it cannot directly supply the wants of labourers.
Suppose, for instance, that our capitalist is a hardware manufacturer, and that his stock in trade, over and above his machinery, consists at present wholly in iron goods. Iron goods cannot feed labourers. Nevertheless by a mere change of the destination of these iron goods, he can cause labourers
to be fed. Suppose that with a portion of the proceeds he intended to maintain a pack of hounds, or an establishment of servants; and that he changes his intention, and employs it in his business, paying it in wages to additional workpeople. These workpeople are enabled to buy and consume the food which would otherwise have been consumed by the hounds or by the servants; and thus without the employer's having seen or touched one particle of the food, his conduct has determined that so much more of the food existing in the country has been devoted to the use of productive labourers, and so much less consumed in a manner wholly unproductive. Now vary the hypothesis, and suppose, that what is thus paid in wages would otherwise have been laid out not in feeding servants or hounds but in buying plate and jewels: and in order to render the effect perceptible let us suppose that the change takes place on a considerable scale, and that a large sum is diverted from buying plate and jewels to employing productive labourers, whom we shall suppose to have been previously, like the Irish peasantry, only half employed and half fed. The labourers, on receiving their increased wages, will not lay them out in plate and jewels, but in food. There is not, however, additional food in the country; nor any unproductive labourers or animals, as in the former case, whose food is set free for productive purposes. Food will therefore be imported if possible; if not possible, the labourers will remain for a season on their short allowance: but the consequence of this change in the demand for commodities, occasioned by the change in the expenditure of capitalists from unproductive to productive, is that next year more food will be produced, and less plate and jewellery. So that again, without having had anything to do with the food of the labourers directly, the conversion by individuals of a portion of their property, no matter of what sort, from an unproductive destination to a productive, has had the effect of causing more food to be appropriated to the consumption of productive labourers. The distinction, then, between Capital and