lowed the whole earth as a field for his exertions.

For it is

to be understood that he must then labour without the assistance of any capital worthy of the name, without combination, and without any of the advantages which are de rived from the system of the division of labour,-that system whereby different individuals follow different employments, and exchange their productions with one another, a system from which so many advantages arise, but which, as I shall show hereafter, cannot for a moment be supported or established without capital.

That capital must necessarily be advantageous to some persons is a certainty which no argument can be required to prove. To the capitalists themselves it must evidently be so to the amount at least of the profit or interest which they derive from it. This advantage is direct and manifest, but exclusive, being confined entirely to the capitalists themselves. But that the same persons are benefited still farther, though indirectly, along with every individual member of the same community, in consequence of the effect essential to capital of diminishing the cost of production, and by that means increasing the abundance of commodities and lowering their price, is also a truth which will, it is hoped, be made fully apparent in the course of this work.

It has sometimes been thought and maintained that the shares of the capitalists, or the direct advantages enjoyed by them in the shape of profit or interest, form a deduction pro tanto from the wages of the labourers; whereas, so far from this being really the case, it will be demonstrated, that the enjoyment of those shares or advantages by the capitalists is a necessary, preliminary, and indispensable condition to the attainment of really high wages on the part of the labourers; and that the shares or wages of the latter, where capital and labour are both employed to assist each other in the work of production, (and where consequently a share in the shape of profit or interest is always paid to the former,)

are always necessarily greater than they can be where labour alone is employed, although in this case the labourer has of course the whole produce to himself. Nay the aggregate produce, where both capital and labour are jointly employed, is always so much greater than where the latter is employed singly, that it not only affords the profit or interest of the capitalist, and also a far greater share to the labourer in the shape of wages than he could acquire without the assistance of capital; but, over and above all these, it leaves a certain surplus to be shared and enjoyed by the whole community without the possibility of exclusion or exception of a single individual; which surplus diffuses itself in the form of diminished price or cheapness of commodities, over the whole expanse and surface of society.

The manner in which all this takes place I shall now endeavour very briefly to demonstrate; and for this purpose it will be necessary to revert to that early and simple state of society in which capital first begins to be acquired or employed in production.

Suppose a nation or tribe of savages to be situated in a country abounding with game, and with lakes or rivers well stored with fish, and to draw their supplies of food from those two sources in the simplest and most unartful manner, taking the fish in the shallows with their hands merely, and killing the land-animals with stones or clubs; and suppose that, in this state of things, one individual of their number more ingenious or more considerate than the rest, should construct a canoe, and invent some rude sort of nets, or other tackle, for catching the fish; and that another individual should contrive gins and the bow and arrow, and prepare a quantity of each for killing or taking the landanimals; and suppose still farther, what would naturally and necessarily follow, that, by means of these instruments and contrivances, and preliminary labours, those two indi

viduals should be enabled, the one to catch a great deal more fish, and the other to take or kill a great deal more game, than any other individual of the tribe who continued to use their hands, or the more imperfect instruments of stones or clubs ;-let us suppose what is probable enough, that with their newly-acquired instruments, or capital, they should be enabled to acquire in general each respectively · ten times as much of this sort of wealth, viz., food, in a day as the others.

If, observing the advantage which those two individuals derived from their superior artificial and (be it always remembered) laboriously-acquired means or capital, any others of the tribe should wish to borrow, and they should agree to lend, the one his canoe and tackle, and the other his gins and bows and arrows, on condition of receiving a part of all that should be taken by the borrowers by means of the instruments intrusted to them, then whatever might be agreed upon to be paid to the proprietors of those instruments would be profit of stock or interest to them (the lenders) for the use of their capital, and whatever should remain over and above that payment would be wages of labour, reward, or recompense, to the borrowers and labourers, for the toil and trouble or labour undergone by them.

Now, suppose that a fourth part, or even a half, of all that should be acquired were agreed to be paid to the lenders, still the borrowers would obtain a great and evident advantage by the bargain; for, even if they gave one-half to the lenders, the other half which would remain to themselves would be five times as much as they could have acquired by their day's labour, without the use of the borrowed capital. But this very high rate of profit or interest, if it once existed, would not certainly continue long, because the inducement to set about the formation or acquisition of similar instruments or capitals would be too great and too evident to be neglected by others. Many persons, therefore, it is

probable, would supply themselves with similar capitals, whereby the number of lenders and the competition among them would increase, whilst the number of borrowers and the competition among them would decrease, and the rate: of interest or sum paid for use would naturally and necessarily decline; and the obvious consequence would be, that a very great proportion of the wealth produced by capital would devolve indirectly to the community in general, and would accrue to every individual in the diminished cost or price of their food.

At first, indeed, it may be supposed, that the capitalists might have enhanced the value of their capitals, and might have screwed up the rate of profit or interest somewhat higher than we have supposed, and, instead of one-half, might have demanded three-fourths, or even a still higher rate, which no doubt they might have done when they had no competitors; but it is plain they never could have raised that rate the whole nine-tenths which were to be gained by the use of it, because on such terms the borrowers would have had no interest to accept of it, and would naturally have preferred to labour independently, and unencumbered with useless adjuncts, which could, upon this supposition, bring them no advantage. It is plain, therefore, that the capitalist could never, under any circumstances, have raised his profit or interest so as to draw the whole advantages to himself, and far less could he raise it so as to abstract any thing from the labourers or borrowers.

Let us suppose now still farther, that the borrowers and employers of the above-mentioned capitals, acquiring (as by the hypothesis they easily might) a great deal more game and fish than they could use, should come to offer the surplus to their neighbours in exchange for other things, it will be evident that for any article they wished to acquire, which usually cost a day's labour to those employed in producing it, they must offer at least as much or rather some

what more game or fish than those with whom they were dealing could procure to themselves by a day's labour, otherwise the latter would have no interest to accept such offer rather than go to the fields and rivers, and take their fish and game in the old manner. And thus again we arrive at the conclusion, that the borrowers or employers of capital can never use or employ it to the disadvantage of those who find it their interest to purchase its produce.

And hence we acquire an easy and distinct view of the advantages arising from capital, and of the manner in which they accrue to the different classes of society, and to the whole community, without exception or exclusion of any individual.

But though it may perhaps be allowed that what has been here stated is a correct representation of the effects of capital in the early state of society, yet still it may be thought that the same effects will not necessarily take place in the advanced state, because the lower classes have not then always the same resource or option of working independently for themselves, but must in general submit to be employed by a higher class of labourers or capitalists. But then the competition of their employers comes in the place of this option; and in point of fact it will be found that the same effects do take place, and that (as I shall have occasion to show hereafter) a constantly-increasing portion of the benefits arising from capital naturally and necessarily descend to the lower classes of labourers as society advances, wherever there is good government, or any tolerable degree of liberty and security.

From what has been advanced then it should appear that every stock or capital employed in production is advantageous to the community in a threefold manner.

1. In the first place, every capital is directly advantageous to the proprietor, whether he employs it himself, or lends it