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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 muft by no means be placed in his own ftock 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, firft 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 fupport
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 stock 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 amusements, 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 diftributed 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 thofe 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 almoft felf-evident.
When we talk of any particular fum of money, we fometimes mean nothing but the metal pieces of which it is compofed; and fometimes 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 afcertain 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 composed, 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 ambiguously 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 if a guinea be the weekly penfion of a c HA P. particular perfon, he can in the courfe of the week purchase with it a certain quantity of fubfiftence, conveniences, and amufements. In proportion as this quantity is great or small, fo are his real riches, his real weekly revenue. His weekly revenue is certainly not equal both to the guinea, and to what can be purchased with it, but only to one or other of those two equal values; and to the latter more properly than to the former, to the guinea's worth rather than to the guinea.
If the penfion of fuch a perfon was paid to him, not in gold, but in a weekly bill for a guinea, his revenue furely would not fo properly confist in the piece of paper, as in what he could get for it. A guinea may be confidered as a bill for a certain quantity of neceffaries and conveniencies upon all the tradesmen in the neighbourhood. The revenue of the perfon to whom it is paid, does not fo properly confist in the piece of gold, as in what he can get for it, or in what he can exchange it for. If it could be exchanged for nothing, it would, like a bill upon a bankrupt, be of no more value than the most useless piece of paper.
Though the weekly or yearly revenue of all the different inhabitants of any country, in the fame manner, may be, and in reality frequently is paid to them in money, their real riches, however, the real weekly or yearly revenue of all of them taken together, must always be great or fmall in proportion to the quantity of confumable
BOOK fumable goods which they can all of them purchafe with this money. The whole revenue of all of them taken together is evidently not equal to both the money and the consumable goods; but only to one or other of those two values, and to the latter more properly than to the former.
Though we frequently, therefore, exprefs a perfon's revenue by the metal pieces which are annually paid to him, it is because the amount of thofe pieces regulates the extent of his power of purchafing, or the value of the goods which he can annually afford to confume. We ftill confider his revenue as confifting in this power of purchafing or confuming, and not in the pieces which convey it.
But if this is fufficiently evident even with regard to an individual, it is still more fo with regard to a fociety. The amount of the metal pieces which are annually paid to an individual, is often precifely equal to his revenue, and is upon that account the shortest and best expreffion of its value. But the amount of the metal pieces which circulate in a fociety, can never be equal to the revenue of all its members. As the fame guinea which pays the weekly penfion of one man to-day, may pay that of another tomorrow, and that of a third the day thereafter, the amount of the metal pieces which annually circulate in any country, muft always be of much less value than the whole money penfions annually paid with them. But the power of purchafing, or the goods which can fucceffively be bought with the whole of those money penfions as they are fucceffively paid, muft always be