SECTION III.

THAT THE ACQUISITION OR EXISTENCE OF CAPITAL IS A CONDITION NECESSARY TO THE ESTABLISHMENT OR EXISTENCE OF THE DIVISION OF LABour.

BUT all this all that is effected by the division of labour, as explained in the foregoing section, is owing to capital; because without capital the division of labour cannot be established or attained. For the whole of the articles or items of wealth required in every department of industry, and in every employment or division of labour, as necessary to enable one and all of them to be established or carried on, are portions of capital. All the machinery required is capital, and every tool or instrument used in every sort of business, and not only these, but all the materials prepared or required to be worked up into more perfect goods, as well as the stores of food, clothing, and provisions of all sorts, necessary to maintain the whole of the labourers engaged in any kind of work, are capitals. Now it is self-evident, that without supplies of capital of the last-mentioned kind, namely, food and other necessaries, either possessed by himself or furnished him by other people, the labourer could not confine or apply himself to any single trade or employment (except that of seeking for such necessaries) but for the shortest periods; not probably for a whole day at one time, and certainly not for a whole week. Without such necessaries or capitals previously laid in store, every man's immediate efforts must be directed to the procuring of what will satisfy those natural wants which can neither be delayed nor dispensed with. But if even one individual could not confine himself to one employment without a certain capital or quantity of provisions being previously laid in store, much less

would it be possible for very large numbers to divide and betake themselves to all the variety of distinct occupations necessarily followed among a civilized people, without such stores and accumulations being provided beforehand as should be sufficient to supply their immediate wants.

Those who cultivate the ground, and look forward to its produce for their remuneration, must be provided beforehand with sufficient stores to supply their necessities till the gathering of the harvest; and the farmer must of course be prepared to afford his labourers food, clothes, and lodging, or, what comes to the same thing, money-wages with which they may purchase these necessaries, as well during the period that he is only putting the seed into the ground as when he is receiving his return, and during the whole interval likewise between the one period and the other. The manufacturer also, who undertakes the establishment of a work, must be prepared, in like manner, to supply his labourers with their necessary maintenance, or with moneywages sufficient to procure it for them, besides providing them with the proper machinery or implements required in the peculiar business. The cotton-spinner, for example, must build his mill-house, and fit it up with the proper machinery; he must erect the water-wheel or steam-engine which is to give motion to that machinery, and he must provide the material of cotton which is to be spun; and not only so, but he must provide all his work-people with their necessary subsistence, comprising food, clothes, and lodging, or with such wages as will enable them to purchase those articles; and every person in every business must be prepared to do the like for his labourers. But it is self-evident, that no wages could enable either the manufacturer or his workmen to purchase such articles, (or any articles,) if they did not already exist, or had not been previously produced and accumulated in the hands of neighbouring speculators or proprietors, with a view to supply the general demand.

Wherever, therefore, the system of the division of labour is established, such stores or capitals must necessarily be accumulated, and must have grown up simultaneously with that system, sufficient to supply the necessary wants of the whole of the labourers employed under it.

Those stores and accumulations, or capitals, belong of course to a vast variety of persons; indeed nearly to as many as there are individuals or members in the community, and in the greatest variety also, and difference of proportions. It is by no means necessary that they should be. long to the persons who actually apply them to the work of production. They are often consigned in the shape of a loan from the rich capitalist to the undertaker of a work; and the inferior labourers are supplied from those stores or accumulations which the general demand of the country gives birth to, weekly or daily as they require them, through the instrumentality of the money-wages which they receive, and with which they purchase what they have occasion for from the capitalists, who make a trade of providing such stores. And the ways are innumerable by which every different store and every different item of every different sort of capital finds its way from the possession of its temporary proprietor to its proper and destined use by exchange, by treaty and agreement, by barter, by purchase, and by loan.

Nor must we be confounded by the circumstance, that loans of capital from one person to another are commonly made in the shape of money. This is merely the temporary and transitory form which capital is made to undergo in the act of changing masters; and the transfer of the money from the one to the other is simply the transfer of a command over the general wealth or capital of the country to the extent of all that can be purchased by the amount of the loan.

"Almost all loans at interest," says Dr Smith, are made in money, either of paper, or of gold and silver. But what

the borrower really wants, and what the lender readily supplies him with, is not the money, but the money's worth, or the goods which it can purchase. If he wants it as a stock for immediate consumption, it is those goods only which he can place in that stock. If he wants it as a capital for employing industry, it is from those goods only that the industrious can be furnished with the tools, materials, and maintenance, necessary for carrying on their work. By means of the loan, the lender, as it were, assigns to the borrower his right to a certain portion of the annual produce of the land and labour of the country, to be employed as the borrower pleases."*

To return-It should appear then, from what has been advanced, that stock, or stored wealth, or capital, is absolutely necessary to the existence or establishment of the division of labour; and it consequently follows, that all the effects which we have seen to result from the division of labour in assisting and improving the powers of production, are really and properly the effects of capital.

SECTION IV.

CONCLUSION OF THE CHAPTER.

THAT ALL WEALTH IS NOT PRODUCED BY LABOUR alone, BUT BY LABOUR AND CAPITAL TOGETHER.

How absurd then must it appear to contend that labour produces all and is the only source of wealth, as if capital produced nothing, and was not a real and distinct source of wealth also! But those who maintain this most extraordinary doctrine could only do so from mistaking the most im

• Wealth of Nations, book ii. chap. 4.

portant objects of the science which they cultivate, and from overlooking the proper end which is meant to be served by distinctly ascertaining and discriminating the original sources of wealth; which end is, that we may establish thereupon the distinct original grounds of right to property; for if capital did nothing, and labour every thing, in the work of production, what right could the capitalist show to any part of the produce?

If it should be said, that capital could not do what is done by means of it without the assistance and co-operation of labour, neither, I reply, could labour do what is done by means of it without the assistance and co-operation of capital; and if an attempt were made to estimate what could be done by labour without capital, and compare it with what actually is done in any highly-improved and civilized country by its assistance, it would quickly appear which of these two sources was the most copious, and to which of them the society were indebted for the greater part of their wealth.

Without, however, attempting to make such an estimate, it may be useful, in concluding, here briefly to glance at the effects of capital in the three great departments of productive industry-agriculture, manufactures, and commerce, -in order to bring to view, in a connected manner, how much is owing to this instrument in the production of wealth. In doing this, it will only be necessary very slightly to review those different departments of industry, and to enumerate a few of the most striking and important particulars of the capitals employed in them.

I. In agriculture it is obvious to perceive how much production is increased and labour saved by the possession and employment of capital. "In a farm," says Dr Smith, "where all the necessary buildings, fences, drains, communications, &c., are in the most perfect good order, the same number of labourers and labouring cattle will raise a much