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Of Money confidered as a particular Branch of the general Stock of the Society, or of the Expence of maintaining the National Capital.



T has been fhewn in the firft Book, that the CHA P. price of the greater part of commodities refolves itself into three parts, of which one pays the wages of the labour, another the profits of the stock, and a third the rent of the land which had been employed in producing and bringing them to market: that there are, indeed, fome commodities of which the price is made up of two of those parts only, the wages of labour, and the profits of stock: and a very few in which it confifts altogether in one, the wages of labour: but that the price of every commodity neceffarily refolves itself into fome one, or other, or all of these three parts; every part of it which goes neither to rent nor to wages, being neceffarily profit to fomebody.

Since this is the cafe, it has been obferved, with regard to every particular commodity, taken feparately; it must be fo with regard to all the commodities which compofe the whole annual produce of the land and labour of every country, taken complexly. The whole price or exchangeable value of that annual produce, must refolve itself into the fame three parts, and be parcelled out among the different inhabitants of

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BOOK the country, either as the wages of their labour, the profits of their stock, or the rent of their land.

But though the whole value of the annual produce of the land and labour of every country is thus divided among and conftitutes a revenue to its different inhabitants; yet as in the rent of a private eftate we diftinguish between the grofs rent and the neat rent, fo may we likewise in the revenue of all the inhabitants of a great country.

The grofs rent of a private estate comprehends whatever is paid by the farmer; the neat rent, what remains free to the landlord, after deducting the expence of management, of repairs, and all other neceffary charges; or what, without hurting his eftate, he can afford to place in his stock referved for immediate confumption, or to spend upon his table, equipage, the ornaments of his house and furniture, his private enjoyments and amufements. His real wealth is in proportion, not to his grofs, but to his neat


The grofs revenue of all the inhabitants of a great country, comprehends the whole annual produce of their land and labour; the neat revenue, what remains free to them after deducting the expence of maintaining; first, their fixed; and, fecondly, their circulating capital; or what, without encroaching upon their capital, they can place in their stock referved for immediate confumption, or spend upon their fubfiftence, conveniencies, and amufements. Their real wealth


too is in proportion, not to their grofs, but to CHA P. their neat revenue.

excluded from the

The whole expence of maintaining the fixed capital, muft evidently be neat revenue of the fociety.

Neither the mate

rials neceffary for fupporting their ufeful machines and inftruments of trade, their profitable buildings, &c. nor the produce of the labour neceffary for fashioning thofe materials into the proper form, can ever make any part of it. The price of that labour may indeed make a part of it; as the workmen fo employed may place the whole value of their wages in their ftock referved for immediate confumption. But in other forts of labour, both the price and the produce go to this stock, the price to that of the workmen, the produce to that of other people, whofe fubfif tence, conveniencies, and amusements are aug. mented by the labour of those workmen.

The intention of the fixed capital is to increase the productive powers of labour, or to enable the fame number of labourers to perform a much greater quantity of work. In a farm where all the neceffary buildings, fences, drains, communications, &c. are in the most perfect good order, the fame number of labourers and labouring cattle will raife a much greater produce, than in one of equal extent and equally good ground, but not furnished with equal conveniencies. In manufactures the fame number of hands, affifted with the best machinery, will work up a much greater quantity of goods than with more imperfect inftruments of trade. The expence


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 fupport which fuch improvements require. This fupport, however, still 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 supporting a more complex and expenfive machinery, can afterwards be applied to augment the quantity of work which that or any other machinery is ufeful 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 eftate, 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 diminution 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 obferved, are regularly withdrawn from it, and placed either in the fixed capital of the fociety, or in their stock referved for immediate consumption. 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 those 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.


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