to another at the ordinary rate of profit or interest. This advantage needs no illustration or argument to prove it.

2. Secondly, every capital is directly advantageous to the person who has it in loan; because, if he did not expect to derive advantage, he would not have borrowed, or having borrowed, he would not retain the loan if he did not find his advantage in doing so.

3. Thirdly, every capital is indirectly advantageous to the whole community; because every capital either actually assists in the work of production, or fills a vacuity which would draw other capitals from that work; consequently every capital assists either directly or indirectly in augmenting the quantity and diminishing the cost and price of commodities; and as all men are consumers and purchasers of commodities, they are necessarily participators in the benefits of that abundance and cheapness which capital creates.*

As a farther illustration of the subject discussed in the text, the following extract from a pamphlet, published (by the author of this Inquiry) several years ago, may be added :

"Capital," it is there said, "extenuates labour to the full amount of the revenues drawn from it; nay, it always does so in a considerably greater degree, and the poor and unendowed man's lot, as well as the inheritor of those revenues, is improved by it, and always made better by every extension and investment of capital, excepting when that investment is in public funds or securities, the interest of which must be paid from taxation.

Capital extenuates labour in a greater degree than the amount of the revenues drawn directly from it by the proprietors of that capital, because, if the works or properties in which it must always be invested, (if not in public funds,) did not operate such an advantage to the public, those revenues could not be paid. Thus the collections drawn from canals, roads, harbours, docks, ships, &c. and which go to keep up those properties, and to pay the proprietors their shares of revenue, do not exhaust the whole of their benefits. Every one who pays or contributes any part, however small, of those revenues, does previously

SECTION III.

CONCLUSION OF THE CHAPTER.

INDEPENDENTLY therefore of any labour they may themselves choose to perform, the capitalists are in reality the greatest of all benefactors to the community; for not only are their properties necessarily beneficial in a greater or less degree to all the other classes as well as to themselves, as has been shown in the previous section; but, as will be

derive a positive advantage and benefit to himself, either by the immediate use and occupation of that canal, road, harbour, dock, ship, &c. or from the cheaper purchase of the goods he has occasion for, and which are, by means of those and other investments of capital, brought to market at an easier rate, and in greater abundance, and placed more within the reach and ability of every one to procure. And this advantage is independent of and over and above that which is derived, in the shape of revenue, by the proprietors of those capitals.

"If the merchant could have got any cheaper, more convenient, and easier mode of transport, he would not have employed that canal, road, harbour, dock, ship, &c.; and if the smallest purchaser of goods could have got them cheaper borne by any other conveyance, he would not have preferred those, or contributed any part to support and keep up those capitals, and to pay the revenues of their owners. And thus it is that the poorest man shares naturally in every accumulation of wealth and investment of capital. His command over the luxuries, conveniences, or necessaries of life, is increased. And so it is with all capitals, they extenuate labour in a greater degree than the amount of the revenues drawn from them, to which no one is compelled to contribute, but does it voluntarily, and solely for his own advantage; and thus it is that the owners of those capitals live and enjoy their revenues, not only without being burdensome to the rest of the community, but conferring, at the same time, a boon and a benefit upon it.”—General Statement of an Argument on the Subject of Population in Answer to Mr Malthus's Theory.. Edinburgh, 1821.

shown more fully in the sequel, it is by means of the assistance of those properties, that is, of the capitals preserved, saved, and accumulated by them and their predecessors, that any wealth is produced or enjoyed by any individual beyond the most scanty and most miserable subsistence.

The distinct nature and condition of this class, or the real effects produced by the establishment of those rights of which the condition and privileges of this class is a necessary consequence, has never yet been fully explained or elucidated; and hence it is that it has been thought a sufficient answer to objectors and cavillers, to say that the law of the land is the foundation of their rights, as if just grounds in reason could not be shown why the institutions which establish these rights should be the law of the land.

It is owing probably to the neglect of this point also, that any obscurity has ever appeared to rest on the question of productive and unproductive labour, after the very clear and accurate manner in which Dr Smith has explained that obvious distinction. For it is not to be imagined that in laying down that distinction this very perspicacious author intended to include in those two classes, whom he calls labourers, the whole population or members of the community. Some, he confesses, "do not labour at all." Those of course he could not intend to include. All that Dr Smith meant therefore, in drawing the distinction which he has done between productive and unproductive labour, evidently was simply to divide and distinguish the persons who really and necessarily must and do labour into those two classes, so very plainly marked and distinct in themselves. That this was indeed his only intention is not left to be made out by any uncertain process of reasoning, or conjecture, but follows closely and unequivocally from the propositions he expressly admits and the terms which he uses,-as when he "Both says,ductive and unproductive labourers, and those who do not la

pro

bour at all,"* &c.,-" Unproductive labourers, and those who do not labour at all,"* &c.,-expressions which conclusively show that he acknowledged this third class of persons in society, and consequently did not intend to include the whole' people under his classification of the labourers, productive and unproductive.

There is then, it must be acknowledged, a class in the community who do not labour at all or need to labour; and it has been now shown, and will appear more fully in the sequel, that this privilege or exemption from labour on the part of particular persons, when it is derived from the possession or proprietorship of land or capital, not only does not entail any burden or hardship upon the labouring classes, but is, on the contrary, most closely and inseparably connected with their advantage and interest; the establishment of those rights on which this privilege is founded being a condition necessary to the acquisition and employment of capital, without which neither the labouring classes, nor any classes or class whatsoever, even the lowest that exists, could possess or enjoy that degree of wealth or affluence which naturally and necessarily falls to them wherever there is any capital accumulated under good government.

This being considered, it will not, I hope, surprise the reader when I observe here, that it is the grand object and effect of all real improvement to increase this class and diminish every other, to increase the number of the non-labourers, and diminish the number of the labourers, productive and unproductive,—at the same time, be it well observ. ed, that either the quantity of labour to be performed by those who remain labourers is diminished, or their enjoyments or wages increased, or both; in a word, that the pro

Wealth of Nations, book ii. chap. 3.

per object and effect of all real improvement is to increase enjoyment and to lighten labour. And to this end it is that the whole exertions and endeavours of mankind, in the accumulation or acquisition of wealth, are constantly directed, and uniformly tend, wherever there is any tolerable degree of security and liberty, or good government.

This object is chiefly to be attained by the accumulation and application of wealth to the work of production,—that is, by capital; in other words, by all those various properties whereby the productive powers of labour are assisted and augmented, and a given quantity of wealth produced by fewer hands;-as by roads, canals, harbours, docks, ships, steam-engines, water-wheels, and all other articles or items of productive wealth, as well as by such accumulations or stores of consumable goods as are necessary to the establishment of the division of labour; all which properties are the fruit of saving, and as soon as they are accumulated or completed, present at once,—first, the means of production with diminished labour; and, secondly, a certain fund for the maintenance of non-labourers; which fund is, as we have shown, additional to and over and above the other advantages which necessarily accrue from those properties or capitals to all other persons; and it is always to be borne in mind, that the existence of this fund-namely, the interest due to the capitalists-is a condition necessary to the existence of the capitals themselves, and consequently to any other species of advantage derivable from them. And thus it is that the object we have endeavoured to describe is accomplished, and that non-labourers are provided for and their number increased with advantage to the community; being the only way in which the increase of this class can be either just and useful, or desirable.

There is indeed another mode quite different from this of increasing this class; but then its effects in regard to the community at large, and to the labouring classes in particu