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BOOK cannot be made till fuch time as the produce of II. his own labour has not only been completed, but fold. A flock of goods of different kinds, therefore, must be stored up fomewhere fufficient to maintain him, and to fupply him with the materials and tools of his work, till fuch time, at leaft, as both these events can be brought about. A weaver cannot apply himself entirely to his peculiar business, unless there is beforehand stored up fomewhere, either in his own poffeffion or in that of fome other person, a ftock sufficient to maintain him, and to fupply him with the materials and tools of his work, till he has not only completed, but fold his web. This accumulation muft, evidently, be previous to his applying his industry for fo long a time to fuch a peculiar bufinefs.

As the accumulation of stock muft, in the nature of things, be previous to the divifion of la bour, fo labour can be more and more fubdivided in proportion only as ftock is previously more and more accumulated. The quantity of ma. terials which the fame number of people can work up, increases in a great proportion as labour comes to be more and more fubdivided; and as the operations of each workman are gradually reduced to a greater degree of fimplicity, a variety of new machines come to be invented for facilitating and abridging those operations. As the divifion of labour advances, therefore, in order to give conftant employment to an equal number of workmen, an equal ftock of provi fions, and a greater stock of materials and tools than

than what would have been neceffary in a ruder Introduct. ftate of things, muft be accumulated beforehand. But the number of workmen in every branch of business generally increases with the di vifion of labour in that branch, or rather it is the increase of their number which enables them to clafs and fubdivide themselves in this manner.

As the accumulation of stock is previously neceffary for carrying on this great improvement in the productive powers of labour, fo that accumulation naturally leads to this improvement. The person who employs his flock in maintaining labour, neceffarily wishes to employ it in fuch a manner as to produce as great a quantity of work as poffible. He endeavours, therefore, both to make among his workmen the most proper diftribution of employment, and to furnish them with the beft machines which he can either invent or afford to purchase. His abilities in both these refpects are generally in proportion to the extent of his ftock, or to the number of people whom it can employ. The quantity of industry, therefore, not only increases in every country with the increafe of the ftock which employs it, but, in confequence of that increase, the fame quantity of industry produces a much greater quantity of work.

Such are in general the effects of the increase of stock upon industry and its productive powers.

In the following book I have endeavoured to explain the nature of stock, the effects of its accumulation into capitals of different kinds, and the effects of the different employments of thofe


BOOK thofe capitals. This book is divided into five chapters. In the firft chapter, I have endeavoured to fhow what are the different parts or branches into which the ftock, either of an individual, or of a great fociety, naturally divides itself. In the fecond, I have endeavoured to explain the nature and operation of money confidered as a particular branch of the general ftock of the fociety. The ftock which is accumulated into a capital, may either be employed by the perfon to whom it belongs, or it may be lent to fome other perfon. In the third and fourth chapters, I have endeavoured to examine the manner in which it operates in both these fituations. The fifth and laft chapter treats of the different effects which the different employments of capital immediately produce upon the quantity both of national industry, and of the annual produce of land and labour.



Of the Divifion of Stock.

HEN the ftock which a man poffeffes is no more than fufficient to maintain him for a few days or a few weeks, he feldom thinks of deriving any revenue from it. He confumes it as fparingly as he can, and endeavours by his labour to acquire fomething which may supply its place before it be confumed altogether. His




revenue is, in this cafe, derived from his labour C HA P. only. This is the state of the greater part of the labouring poor in all countries.

But when he poffeffes ftock fufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it; referving only fo much for his immediate confumption as may maintain him till this revenue begins to come in. His whole ftock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital. The other is that which fupplies his immediate confumption; and which confifts either, firft, in that portion of his whole ftock which was originally reserved for this purpofe; or, fecondly, in his revenue, from whatever fource derived, as it gradually comes in; or, thirdly, in fuch things as had been purchafed by either of these in former years, and which are not yet entirely confumed; fuch as a stock of clothes, household furniture, and the like. In one, or other, or all of these three articles, confifts the stock which men commonly referve for their own immediate confumption.

There are two different ways in which a capital may be employed fo as to yield a revenue or profit to its employer.

First, it may be employed in raifing, manufacturing, or purchafing goods, and felling them again with a profit. The capital employed in this manner yields no revenue or profit to its employer, while it either remains in his poffeffion, er continues in the fame shape. The goods of the merchant


BOOK merchant yield him no revenue or profit till he fells them for money, and the money yields him as little till it is again exchanged for goods. His capital is continually going from him in one fhape, and returning to him in another, and it is only by means of fuch circulation, or fucceffive exchanges, that it can yield him any profit. Such capitals, therefore may very properly be called circulating capitals.

Secondly, it may be employed in the improvement of land, in the purchase of useful machines and inftruments of trade, or in fuchlike things as yield a revenue or profit without changing masters, or circulating any further. Such capitals, therefore, may very properly be called fixed capitals.

Different occupations require very different proportions between the fixed and circulating capitals employed in them.

The capital of a merchant, for example, is altogether a circulating capital. He has occa fion for no machines or inftruments of trade, unlefs his fhop, or warehouse, be confidered as fuch. Some part of the capital of every mafter artificer or manufacturer must be fixed in the inftruments of his trade. This part, however, is very small in fome, and very great in others. A mafter taylor requires no other inftruments of trade but a parcel of needles. Thofe of the mafter shoemaker are a little, though but a very little, more expenfive. Thofe of the weaver rife a good deal above thofe of the fhoemaker. The far greater part of the capital of all fuch mafter artificers,

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