Unlessacapitalwasemployedintransportingeithertherudeormanufacturedproducefromtheplaceswhereitaboundstothosewhereitiswanted,nomoreofeithercouldbeproducedthanwasnecessaryfortheconsumptionoftheneighbourhood。Thecapitalofthemerchantexchangesthesurplusproduceofoneplaceforthatofanother,andthusencouragestheindustryandincreasestheenjoymentsofboth。
Unlessacapitalwasemployedinbreakinganddividingcertainportionseitheroftherudeormanufacturedproduceintosuchsmallparcelsassuittheoccasionaldemandsofthosewhowantthem,everymanwouldbeobligedtopurchaseagreaterquantityofthegoodshewantedthanhisimmediateoccasionsrequired。Iftherewasnosuchtradeasabutcher,forexample,everymanwouldbeobligedtopurchaseawholeoxorawholesheepatatime。Thiswouldgenerallybeinconvenienttotherich,andmuchmoresotothepoor。Ifapoorworkmanwasobligedtopurchaseamonth’sorsixmonths’provisionsatatime,agreatpartofthestockwhichheemploysasacapitalintheinstrumentsofhistrade,orinthefurnitureofhisshop,andwhichyieldshimarevenue。hewouldbeforcedtoplaceinthatpartofhisstockwhichisreservedforimmediateconsumption,andwhichyieldshimnorevenue。Nothingcanbemoreconvenientforsuchapersonthantobeabletopurchasehissubsistencefromdaytoday,orevenfromhourtohour,ashewantsit。Heistherebyenabledtoemployalmosthiswholestockasacapital。Heisthusenabledtofurnishworktoagreatervalue,andtheprofit,whichhemakesbyitinthisway,muchmorethancompensatestheadditionalpricewhichtheprofitoftheretailerimposesuponthegoods。Theprejudicesofsomepoliticalwritersagainstshopkeepersandtradesmenarealtogetherwithoutfoundation。Sofarisitfrombeingnecessaryeithertotaxthemortorestricttheirnumbersthattheycanneverbemultipliedsoastohurtthepublic,thoughtheymaysoastohurtoneanother。
Thequantityofgrocerygoods,forexample,whichcanbesoldinaparticulartownislimitedbythedemandofthattownanditsneighbourhood。Thecapital,therefore,whichcanbeemployedinthegrocerytradecannotexceedwhatissufficienttopurchasethatquantity。Ifthiscapitalisdividedbetweentwodifferentgrocers,theircompetitionwilltendtomakebothofthemsellcheaperthanifitwereinthehandsofoneonly;andifitweredividedamongtwenty,theircompetitionwouldbejustsomuchthegreater,andthechanceoftheircombiningtogether,inordertoraisetheprice,justsomuchtheless。Theircompetitionmightperhapsruinsomeofthemselves;buttotakecareofthisisthebusinessofthepartiesconcerned,anditmaysafelybetrustedtotheirdiscretion。Itcanneverhurteithertheconsumerortheproducer;onthecontrary,itmusttendtomaketheretailersbothsellcheaperandbuydearerthanifthewholetradewasmonopolizedbyoneortwopersons。Someofthem,perhaps,maysometimesdecoyaweakcustomertobuywhathehasnooccasionfor。Thisevil,however,isoftoolittleimportancetodeservethepublicattention,norwoulditnecessarilybepreventedbyrestrictingtheirnumbers。Itisnotthemultitudeofale—houses,togivethemostsuspiciousexample,thatoccasionsageneraldispositiontodrunkennessamongthecommonpeople;butthatdispositionarisingfromothercausesnecessarilygivesemploymenttoamultitudeofale—houses。
Thepersonswhosecapitalsareemployedinanyofthosefourwaysarethemselvesproductivelabourers。Theirlabour,whenproperlydirected,fixesandrealizesitselfinthesubjectorvendiblecommodityuponwhichitisbestowed,andgenerallyaddstoitspricethevalueatleastoftheirownmaintenanceandconsumption。Theprofitsofthefarmer,ofthemanufacturer,ofthemerchant,andretailer,arealldrawnfromthepriceofthegoodswhichthetwofirstproduce,andthetwolastbuyandsell。
Equalcapitals,however,employedineachofthosefourdifferentways,willimmediatelyputintomotionverydifferentquantitiesofproductivelabour,andaugment,too,inverydifferentproportionsthevalueoftheannualproduceofthelandandlabourofthesocietytowhichtheybelong。
Thecapitaloftheretailerreplaces,togetherwithitsprofits,thatofthemerchantofwhomhepurchasesgoods,andtherebyenableshimtocontinuehisbusiness。Theretailerhimselfistheonlyproductivelabourerwhomitimmediatelyemploys。Inhisprofitsconsiststhewholevaluewhichitsemploymentaddstotheannualproduceofthelandandlabourofthesociety。
Thecapitalofthewholesalemerchantreplaces,togetherwiththeirprofits,thecapitalsofthefarmersandmanufacturersofwhomhepurchasestherudeandmanufacturedproducewhichhedealsin,andtherebyenablesthemtocontinuetheirrespectivetrades。Itisbythisservicechieflythathecontributesindirectlytosupporttheproductivelabourofthesociety,andtoincreasethevalueofitsannualproduce。Hiscapitalemploys,too,thesailorsandcarrierswhotransporthisgoodsfromoneplacetoanother,anditaugmentsthepriceofthosegoodsbythevalue,notonlyofhisprofits,butoftheirwages。Thisisalltheproductivelabourwhichitimmediatelyputsintomotion,andallthevaluewhichitimmediatelyaddstotheannualproduce。
Itsoperationinboththeserespectsisagooddealsuperiortothatofthecapitaloftheretailer。
Partofthecapitalofthemastermanufacturerisemployedasafixedcapitalintheinstrumentsofhistrade,andreplaces,togetherwithitsprofits,thatofsomeotherartificerofwhomhepurchasesthem。Partofhiscirculatingcapitalisemployedinpurchasingmaterials,andreplaces,withtheirprofits,thecapitalsofthefarmersandminersofwhomhepurchasesthem。Butagreatpartofitisalways,eitherannually,orinamuchshorterperiod,distributedamongthedifferentworkmenwhomheemploys。Itaugmentsthevalueofthosematerialsbytheirwages,andbytheirmatters’profitsuponthewholestockofwages,materials,andinstrumentsoftradeemployedinthebusiness。Itputsimmediatelyintomotion,therefore,amuchgreaterquantityofproductivelabour,andaddsamuchgreatervaluetotheannualproduceofthelandandlabourofthesocietythananequalcapitalinthehandsofanywholesalemerchant。
Noequalcapitalputsintomotionagreaterquantityofproductivelabourthanthatofthefarmer。Notonlyhislabouringservants,buthislabouringcattle,areproductivelabourers。Inagriculture,too,naturelaboursalongwithman;andthoughherlabourcostsnoexpense,itsproducehasitsvalue,aswellasthatofthemostexpensiveworkmen。Themostimportantoperationsofagricultureseemintendednotsomuchtoincrease,thoughtheydothattoo,astodirectthefertilityofnaturetowardstheproductionoftheplantsmostprofitabletoman。Afieldovergrownwithbriarsandbramblesmayfrequentlyproduceasgreataquantityofvegetablesasthebestcultivatedvineyardorcornfield。Plantingandtillagefrequentlyregulatemorethantheyanimatetheactivefertilityofnature;andafteralltheirlabour,agreatpartoftheworkalwaysremainstobedonebyher。Thelabourersandlabouringcattle,therefore,employedinagriculture,notonlyoccasion,liketheworkmeninmanufactures,thereproductionofavalueequaltotheirownconsumption,ortothecapitalwhichemploysthem,togetherwithitsowners’
profits;butofamuchgreatervalue。Overandabovethecapitalofthefarmerandallitsprofits,theyregularlyoccasionthereproductionoftherentofthelandlord。Thisrentmaybeconsideredastheproduceofthosepowersofnature,theuseofwhichthelandlordlendstothefarmer。Itisgreaterorsmalleraccordingtothesupposedextentofthosepowers,orinotherwords,accordingtothesupposednaturalorimprovedfertilityoftheland。Itistheworkofnaturewhichremainsafterdeductingorcompensatingeverythingwhichcanberegardedastheworkofman。Itisseldomlessthanafourth,andfrequentlymorethanathirdofthewholeproduce。Noequalquantityofproductivelabouremployedinmanufacturescaneveroccasionsogreatareproduction。Inthemnaturedoesnothing;mandoesall;andthereproductionmustalwaysbeinproportiontothestrengthoftheagentsthatoccasionit。Thecapitalemployedinagriculture,therefore,notonlyputsintomotionagreaterquantityofproductivelabourthananyequalcapitalemployedinmanufactures,butinproportion,too,tothequantityofproductivelabourwhichitemploys,itaddsamuchgreatervaluetotheannualproduceofthelandandlabourofthecountry,totherealwealthandrevenueofitsinhabitants。Ofallthewaysinwhichacapitalcanbeemployed,itisbyfarthemostadvantageoustothesociety。
Thecapitalsemployedintheagricultureandintheretailtradeofanysocietymustalwaysresidewithinthatsociety。
Theiremploymentisconfinedalmosttoaprecisespot,tothefarmandtotheshopoftheretailer。Theymustgenerally,too,thoughtherearesomeexceptionstothis,belongtoresidentmembersofthesociety。
Thecapitalofawholesalemerchant,onthecontrary,seemstohavenofixedornecessaryresidenceanywhere,butmaywanderaboutfromplacetoplace,accordingasitcaneitherbuycheaporselldear。
Thecapitalofthemanufacturermustnodoubtresidewherethemanufactureiscarriedon;butwherethisshallbeisnotalwaysnecessarilydetermined。Itmayfrequentlybeatagreatdistancebothfromtheplacewherethematerialsgrow,andfromthatwherethecompletemanufactureisconsumed。Lyonsisverydistantbothfromtheplaceswhichaffordthematerialsofitsmanufactures,andfromthosewhichconsumethem。ThepeopleoffashioninSicilyareclothedinsilksmadeinothercountries,fromthematerialswhichtheirownproduces。PartofthewoolofSpainismanufacturedinGreatBritain,andsomepartofthatclothisafterwardssentbacktoSpain。
Whetherthemerchantwhosecapitalexportsthesurplusproduceofanysocietybeanativeoraforeignerisofverylittleimportance。Ifheisaforeigner,thenumberoftheirproductivelabourersisnecessarilylessthanifhehadbeenanativebyonemanonly,andthevalueoftheirannualproducebytheprofitsofthatoneman。Thesailorsorcarrierswhomheemploysmaystillbelongindifferentlyeithertohiscountryortotheircountry,ortosomethirdcountry,inthesamemannerasifhehadbeenanative。Thecapitalofaforeignergivesavaluetotheirsurplusproduceequallywiththatofanativebyexchangingitforsomethingforwhichthereisademandathome。
Itaseffectuallyreplacesthecapitalofthepersonwhoproducesthatsurplus,andaseffectuallyenableshimtocontinuehisbusiness;theservicebywhichthecapitalofawholesalemerchantchieflycontributestosupporttheproductivelabour,andtoaugmentthevalueoftheannualproduceofthesocietytowhichhebelongs。
Itisofmoreconsequencethatthecapitalofthemanufacturershouldresidewithinthecountry。Itnecessarilyputsintomotionagreaterquantityofproductivelabour,andaddsagreatervaluetotheannualproduceofthelandandlabourofthesociety。Itmay,however,beveryusefultothecountry,thoughitshouldnotresidewithinit。ThecapitalsoftheBritishmanufacturerswhoworkuptheflaxandhempannuallyimportedfromthecoastsoftheBalticaresurelyveryusefultothecountrieswhichproducethem。Thosematerialsareapartofthesurplusproduceofthosecountrieswhich,unlessitwasannuallyexchangedforsomethingwhichisindemandthere,wouldbeofnovalue,andwouldsoonceasetobeproduced。Themerchantswhoexportitreplacethecapitalsofthepeoplewhoproduceit,andtherebyencouragethemtocontinuetheproduction;andtheBritishmanufacturersreplacethecapitalsofthosemerchants。
Aparticularcountry,inthesamemannerasaparticularperson,mayfrequentlynothavecapitalsufficientbothtoimproveandcultivateallitslands,tomanufactureandpreparetheirwholerudeproduceforimmediateuseandconsumption,andtotransportthesurplusparteitheroftherudeormanufacturedproducetothosedistantmarketswhereitcanbeexchangedforsomethingforwhichthereisademandathome。TheinhabitantsofmanydifferentpartsofGreatBritainhavenotcapitalsufficienttoimproveandcultivatealltheirlands。ThewoolofthesoutherncountiesofScotlandis,agreatpartofit,afteralonglandcarriagethroughverybadroads,manufacturedinYorkshire,forwantofcapitaltomanufactureitathome。TherearemanylittlemanufacturingtownsinGreatBritain,ofwhichtheinhabitantshavenotcapitalsufficienttotransporttheproduceoftheirownindustrytothosedistantmarketswherethereisdemandandconsumptionforit。Ifthereareanymerchantsamongthem,theyareproperlyonlytheagentsofwealthiermerchantswhoresideinsomeofthegreatercommercialcities。
Whenthecapitalofanycountryisnotsufficientforallthosethreepurposes,inproportionasagreatershareofitisemployedinagriculture,thegreaterwillbethequantityofproductivelabourwhichitputsintomotionwithinthecountry;
aswilllikewisebethevaluewhichitsemploymentaddstotheannualproduceofthelandandlabourofthesociety。Afteragriculture,thecapitalemployedinmanufacturesputsintomotionthegreatestquantityofproductivelabour,andaddsthegreatestvaluetotheannualproduce。Thatwhichisemployedinthetradeofexportationhastheleasteffectofanyofthethree。
Thecountry,indeed,whichhasnotcapitalsufficientforallthosethreepurposeshasnotarrivedatthatdegreeofopulenceforwhichitseemsnaturallydestined。Toattempt,however,prematurelyandwithaninsufficientcapitaltodoallthethreeiscertainlynottheshortestwayforasociety,nomorethanitwouldbeforanindividual,toacquireasufficientone。Thecapitalofalltheindividualsofanationhasitslimitsinthesamemannerasthatofasingleindividual,andiscapableofexecutingonlycertainpurposes。Thecapitalofalltheindividualsofanationisincreasedinthesamemannerasthatofasingleindividualbytheircontinuallyaccumulatingandaddingtoitwhatevertheysaveoutoftheirrevenue。Itislikelytoincreasethefastest,therefore,whenitisemployedinthewaythataffordsthegreatestrevenuetoalltheinhabitantsofthecountry,astheywillthusbeenabledtomakethegreatestsavings。Buttherevenueofalltheinhabitantsofthecountryisnecessarilyinproportiontothevalueoftheannualproduceoftheirlandandlabour。
IthasbeentheprincipalcauseoftherapidprogressofourAmericancoloniestowardswealthandgreatnessthatalmosttheirwholecapitalshavehithertobeenemployedinagriculture。Theyhavenomanufactures,thosehouseholdandcoursermanufacturesexceptedwhichnecessarilyaccompanytheprogressofagriculture,andwhicharetheworkofthewomenandchildrenineveryprivatefamily。ThegreaterpartbothoftheexportationandcoastingtradeofAmericaiscarriedonbythecapitalsofmerchantswhoresideinGreatBritain。Eventhestoresandwarehousesfromwhichgoodsareretailedinsomeprovinces,particularlyinVirginiaandMaryland,belongmanyofthemtomerchantswhoresideinthemothercountry,andaffordoneofthefewinstancesoftheretailtradeofasocietybeingcarriedonbythecapitalsofthosewhoarenotresidentmembersofit。WeretheAmericans,eitherbycombinationorbyanyothersortofviolence,tostoptheimportationofEuropeanmanufactures,and,bythusgivingamonopolytosuchoftheirowncountrymenascouldmanufacturethelikegoods,divertanyconsiderablepartoftheircapitalintothisemployment,theywouldretardinsteadofacceleratingthefurtherincreaseinthevalueoftheirannualproduce,andwouldobstructinsteadofpromotingtheprogressoftheircountrytowardsrealwealthandgreatness。Thiswouldbestillmorethecaseweretheytoattempt,inthesamemanner,tomonopolizetothemselvestheirwholeexportationtrade。
Thecourseofhumanprosperity,indeed,seemsscarceevertohavebeenofsolongcontinuanceastoenableanygreatcountrytoacquirecapitalsufficientforallthosethreepurposes;
unlessperhaps,wegivecredittothewonderfulaccountsofthewealthandcultivationofChina,ofthoseofancientEgypt,andoftheancientstateofIndostan。Eventhosethreecountries,thewealthiest,accordingtoallaccounts,thateverwereintheworld,arechieflyrenownedfortheirsuperiorityinagricultureandmanufactures。Theydonotappeartohavebeeneminentforforeigntrade。TheancientEgyptianshadasuperstitiousantipathytothesea;asuperstitionnearlyofthesamekindprevailsamongtheIndians;andtheChinesehaveneverexcelledinforeigncommerce。Thegreaterpartofthesurplusproduceofallthosethreecountriesseemstohavebeenalwaysexportedbyforeigners,whogaveinexchangeforitsomethingelseforwhichtheyfoundademandthere,frequentlygoldandsilver。
Itisthusthatthesamecapitalwillinanycountryputintomotionagreaterorsmallerquantityofproductivelabour,andaddagreaterorsmallervaluetotheannualproduceofitslandandlabour,accordingtothedifferentproportionsinwhichitisemployedinagriculture,manufactures,andwholesaletrade。
Thedifference,too,isverygreat,accordingtothedifferentsortsofwholesaletradeinwhichanypartofitisemployed。
Allwholesaletrade,allbuyinginordertosellagainbywholesale,maybereducedtothreedifferentsorts。Thehometrade,theforeigntradeofconsumption,andthecarryingtrade。
Thehometradeisemployedinpurchasinginonepartofthesamecountry,andsellinginanother,theproduceoftheindustryofthatcountry。Itcomprehendsboththeinlandandthecoastingtrade。Theforeigntradeofconsumptionisemployedinpurchasingforeigngoodsforhomeconsumption。Thecarryingtradeisemployedintransactingthecommerceofforeigncountries,orincarryingthesurplusproduceofonetoanother。
Thecapitalwhichisemployedinpurchasinginonepartofthecountryinordertosellinanothertheproduceoftheindustryofthatcountry,generallyreplacesbyeverysuchoperationtwodistinctcapitalsthathadbothbeenemployedintheagricultureormanufacturesofthatcountry,andtherebyenablesthemtocontinuethatemployment。Whenitsendsoutfromtheresidenceofthemerchantacertainvalueofcommodities,itgenerallybringsbackinreturnatleastanequalvalueofothercommodities。Whenbotharetheproduceofdomesticindustry,itnecessarilyreplacesbyeverysuchoperationtwodistinctcapitalswhichhadbothbeenemployedinsupportingproductivelabour,andtherebyenablesthemtocontinuethatsupport。ThecapitalwhichsendsScotchmanufacturestoLondon,andbringsbackEnglishcornandmanufacturestoEdinburgh,necessarilyreplacesbyeverysuchoperation,twoBritishcapitalswhichhadbothbeenemployedintheagricultureormanufacturesofGreatBritain。
Thecapitalemployedinpurchasingforeigngoodsforhomeconsumption,whenthispurchaseismadewiththeproduceofdomesticindustry,replacestoo,byeverysuchoperation,twodistinctcapitals;butoneofthemonlyisemployedinsupportingdomesticindustry。ThecapitalwhichsendsBritishgoodstoPortugal,andbringsbackPortuguesegoodstoGreatBritain,replacesbyeverysuchoperationonlyoneBritishcapital。TheotherisaPortugueseone。Thoughthereturns,therefore,oftheforeigntradeofconsumptionshouldbeasquickasthoseofthehometrade,thecapitalemployedinitwillgivebutonehalftheencouragementtotheindustryorproductivelabourofthecountry。
Butthereturnsoftheforeigntradeofconsumptionareveryseldomsoquickasthoseofthehometrade。Thereturnsofthehometradegenerallycomeinbeforetheendoftheyear,andsometimesthreeorfourtimesintheyear。Thereturnsoftheforeigntradeofconsumptionseldomcomeinbeforetheendoftheyear,andsometimesnottillaftertwoorthreeyears。Acapital,therefore,employedinthehometradewillsometimesmaketwelveoperations,orbesentoutandreturnedtwelvetimes,beforeacapitalemployedintheforeigntradeofconsumptionhasmadeone。Ifthecapitalsareequal,therefore,theonewillgivefour—and—twentytimesmoreencouragementandsupporttotheindustryofthecountrythantheother。
Theforeigngoodsforhomeconsumptionmaysometimesbepurchased,notwiththeproduceofdomesticindustry,butwithsomeotherforeigngoods。Theselast,however,musthavebeenpurchasedeitherimmediatelywiththeproduceofdomesticindustry,orwithsomethingelsethathadbeenpurchasedwithit;
for,thecaseofwarandconquestexcepted,foreigngoodscaneverbeacquiredbutinexchangeforsomethingthathadbeenproducedathome,eitherimmediately,oraftertwoormoredifferentexchanges。Theeffects,therefore,ofacapitalemployedinsucharoundaboutforeigntradeofconsumption,are,ineveryrespect,thesameasthoseofoneemployedinthemostdirecttradeofthesamekind,exceptthatthefinalreturnsarelikelytobestillmoredistant,astheymustdependuponthereturnsoftwoorthreedistinctforeigntrades。IftheflaxandhempofRigaarepurchasedwiththetobaccoofVirginia,whichhadbeenpurchasedwithBritishmanufactures,themerchantmustwaitforthereturnsoftwodistinctforeigntradesbeforehecanemploythesamecapitalinre—purchasingalikequantityofBritishmanufactures。IfthetobaccoofVirginiahadbeenpurchased,notwithBritishmanufactures,butwiththesugarandrumofJamaicawhichhadbeenpurchasedwiththosemanufactures,hemustwaitforthereturnsofthree。Ifthosetwoorthreedistinctforeigntradesshouldhappentobecarriedonbytwoorthreedistinctmerchants,ofwhomthesecondbuysthegoodsimportedbythefirst,andthethirdbuysthoseimportedbythesecond,inordertoexportthemagain,eachmerchantindeedwillinthiscasereceivethereturnsofhisowncapitalmorequickly;
butthefinalreturnsofthewholecapitalemployedinthetradewillbejustasslowasever。Whetherthewholecapitalemployedinsucharound—abouttradebelongtoonemerchantortothreecanmakenodifferencewithregardtothecountry,thoughitmaywithregardtotheparticularmerchants。ThreetimesagreatercapitalmustinbothcasesbeemployedinordertoexchangeacertainvalueofBritishmanufacturesforacertainquantityofflaxandhempthanwouldhavebeennecessaryhadthemanufacturesandtheflaxandhempbeendirectlyexchangedforoneanother。
Thewholecapitalemployed,therefore,insucharound—aboutforeigntradeofconsumptionwillgenerallygivelessencouragementandsupporttotheproductivelabourofthecountrythananequalcapitalemployedinamoredirecttradeofthesamekind。
Whateverbetheforeigncommoditywithwhichtheforeigngoodsforhomeconsumptionarepurchased,itcanoccasionnoessentialdifferenceeitherinthenatureofthetrade,orintheencouragementandsupportwhichitcangivetotheproductivelabourofthecountryfromwhichitiscarriedon。IftheyarepurchasedwiththegoldofBrazil,forexample,orwiththesilverofPeru,thisgoldandsilver,likethetobaccoofVirginia,musthavebeenpurchasedwithsomethingthateitherwastheproduceoftheindustryofthecountry,orthathadbeenpurchasedwithsomethingelsethatwasso。Sofar,therefore,astheproductivelabourofthecountryisconcerned,theforeigntradeofconsumptionwhichiscarriedonbymeansofgoldandsilverhasalltheadvantagesandalltheinconveniencesofanyotherequallyround—aboutforeigntradeofconsumption,andwillreplacejustasfastorjustasslowthecapitalwhichisimmediatelyemployedinsupportingthatproductivelabour。Itseemseventohaveoneadvantageoveranyotherequallyroundaboutforeigntrade。Thetransportationofthosemetalsfromoneplacetoanother,onaccountoftheirsmallbulkandgreatvalue,islessexpensivethanthatofalmostanyotherforeigngoodsofequalvalue。Theirfreightismuchless,andtheirinsurancenotgreater;andnogoods,besides,arelessliabletosufferbythecarriage。Anequalquantityofforeigngoods,therefore,mayfrequentlybepurchasedwithasmallerquantityoftheproduceofdomesticindustry,bytheinterventionofgoldandsilver,thanbythatofanyotherforeigngoods。Thedemandofthecountrymayfrequently,inthismanner,besuppliedmorecompletelyandatasmallerexpensethaninanyother。Whether,bythecontinualexportationofthosemetals,atradeofthiskindislikelytoimpoverishthecountryfromwhichitiscarriedon,inanyotherway,Ishallhaveoccasiontoexamineatgreatlengthhereafter。
Thatpartofthecapitalofanycountrywhichisemployedinthecarryingtradeisaltogetherwithdrawnfromsupportingtheproductivelabourofthatparticularcountry,tosupportthatofsomeforeigncountries。Thoughitmayreplacebyeveryoperationtwodistinctcapitals,yetneitherofthembelongstothatparticularcountry。ThecapitaloftheDutchmerchant,whichcarriesthecornofPolandtoPortugal,andbringsbackthefruitsandwinesofPortugaltoPoland,replacesbyeverysuchoperationtwocapitals,neitherofwhichhadbeenemployedinsupportingtheproductivelabourofHolland;butoneoftheminsupportingthatofPoland,andtheotherthatofPortugal。TheprofitsonlyreturnregularlytoHolland,andconstitutethewholeadditionwhichthistradenecessarilymakestotheannualproduceofthelandandlabourofthatcountry。When,indeed,thecarryingtradeofanyparticularcountryiscarriedonwiththeshipsandsailorsofthatcountry,thatpartofthecapitalemployedinitwhichpaysthefreightisdistributedamong,andputsintomotion,acertainnumberofproductivelabourersofthatcountry。Almostallnationsthathavehadanyconsiderableshareofthecarryingtradehave,infact,carrieditoninthismanner。Thetradeitselfhasprobablyderiveditsnamefromit,thepeopleofsuchcountriesbeingthecarrierstoothercountries。Itdoesnot,however,seemessentialtothenatureofthetradethatitshouldbeso。ADutchmerchantmay,forexample,employhiscapitalintransactingthecommerceofPolandandPortugal,bycarryingpartofthesurplusproduceoftheonetotheother,notinDutch,butinBritishbottoms。Itmaybepresumedthatheactuallydoessouponsomeparticularoccasions。
Itisuponthisaccount,however,thatthecarryingtradehasbeensupposedpeculiarlyadvantageoustosuchacountryasGreatBritain,ofwhichthedefenceandsecuritydependuponthenumberofitssailorsandshipping。Butthesamecapitalmayemployasmanysailorsandshipping,eitherintheforeigntradeofconsumption,oreveninthehometrade,whencarriedonbycoastingvessels,asitcouldinthecarryingtrade。Thenumberofsailorsandshippingwhichanyparticularcapitalcanemploydoesnotdependuponthenatureofthetrade,butpartlyuponthebulkofthegoodsinproportiontotheirvalue,andpartlyuponthedistanceoftheportsbetweenwhichtheyaretobecarried;
chieflyupontheformerofthosetwocircumstances。ThecoaltradefromNewcastletoLondon,forexample,employsmoreshippingthanallthecarryingtradeofEngland,thoughtheportsareatnogreatdistance。Toforce,therefore,byextraordinaryencouragements,alargershareofthecapitalofanycountryintothecarryingtradethanwhatwouldnaturallygotoitwillnotalwaysnecessarilyincreasetheshippingofthatcountry。
Thecapital,therefore,employedinthehometradeofanycountrywillgenerallygiveencouragementandsupporttoagreaterquantityofproductivelabourinthatcountry,andincreasethevalueofitsannualproducemorethananequalcapitalemployedintheforeigntradeofconsumption:andthecapitalemployedinthislattertradehasinboththeserespectsastillgreateradvantageoveranequalcapitalemployedinthecarryingtrade。Theriches,andsofaraspowerdependsuponriches,thepowerofeverycountrymustalwaysbeinproportiontothevalueofitsannualproduce,thefundfromwhichalltaxesmustultimatelybepaid。Butthegreatobjectofthepoliticaleconomyofeverycountryistoincreasetherichesandpowerofthatcountry。Itought,therefore,togivenopreferencenorsuperiorencouragementtotheforeigntradeofconsumptionabovethehometrade,nortothecarryingtradeaboveeitheroftheothertwo。Itoughtneithertoforcenortoallureintoeitherofthosetwochannelsagreatershareofthecapitalofthecountrythanwhatwouldnaturallyflowintothemofitsownaccord。
Whentheproduceofanyparticularbranchofindustryexceedswhatthedemandofthecountryrequires,thesurplusmustbesentabroadandexchangedforsomethingforwhichthereisademandathome。Withoutsuchexportationapartoftheproductivelabourofthecountrymustcease,andthevalueofitsannualproducediminish。ThelandandlabourofGreatBritainproducegenerallymorecorn,woollens,andhardwarethanthedemandofthehomemarketrequires。Thesurpluspartofthem,therefore,mustbesentabroad,andexchangedforsomethingforwhichthereisademandathome。Itisonlybymeansofsuchexportationthatthissurpluscanacquireavaluesufficienttocompensatethelabourandexpenseofproducingit。Theneighbourhoodofthesea—coast,andthebanksofallnavigablerivers,areadvantageoussituationsforindustry,onlybecausetheyfacilitatetheexportationandexchangeofsuchsurplusproduceforsomethingelsewhichismoreindemandthere。
Whentheforeigngoodswhicharethuspurchasedwiththesurplusproduceofdomesticindustryexceedthedemandofthehomemarket,thesurpluspartofthemmustbesentabroadagainandexchangedforsomethingmoreindemandathome。Aboutninety—sixthousandhogsheadsoftobaccoareannuallypurchasedinVirginiaandMarylandwithapartofthesurplusproduceofBritishindustry。ButthedemandofGreatBritaindoesnotrequire,perhaps,morethanfourteenthousand。Iftheremainingeighty—twothousand,therefore,couldnotbesentabroadandexchangedforsomethingmoreindemandathome,theimportationofthemmustceaseimmediately,andwithittheproductivelabourofallthoseinhabitantsofGreatBritain,whoareatpresentemployedinpreparingthegoodswithwhichtheseeighty—twothousandhogsheadsareannuallypurchased。Thosegoods,whicharepartoftheproduceofthelandandlabourofGreatBritain,havingnomarketathome,andbeingdeprivedofthatwhichtheyhadabroad,mustceasetobeproduced。Themostround—aboutforeigntradeofconsumption,thereforemay,uponsomeoccasions,beasnecessaryforsupportingtheproductivelabourofthecountry,andthevalueofitsannualproduce,asthemostdirect。
Whenthecapitalstockofanycountryisincreasedtosuchadegreethatitcannotbeallemployedinsupplyingtheconsumptionandsupportingtheproductivelabourofthatparticularcountry,thesurpluspartofitnaturallydisgorgesitselfintothecarryingtrade,andisemployedinperformingthesameofficestoothercountries。Thecarryingtradeisthenaturaleffectandsymptomofgreatnationalwealth;butitdoesnotseemtobethenaturalcauseofit。Thosestatesmenwhohavebeendisposedtofavouritwithparticularencouragementsseemtohavemistakentheeffectandsymptomforthecause。Holland,inproportiontotheextentofthelandandthenumberofitsinhabitants,byfartherichestcountryinEurope,has,accordingly,thegreatestshareofthecarryingtradeofEurope。
England,perhapsthesecondrichestcountryofEurope,islikewisesupposedtohaveaconsiderableshareofit;thoughwhatcommonlypassesforthecarryingtradeofEnglandwillfrequently,perhaps,befoundtobenomorethanaround—aboutforeigntradeofconsumption。Suchare,inagreatmeasure,thetradeswhichcarrythegoodsoftheEastandWestIndies,andofAmerica,todifferentEuropeanmarkets。ThosegoodsaregenerallypurchasedeitherimmediatelywiththeproduceofBritishindustry,orwithsomethingelsewhichhadbeenpurchasedwiththatproduce,andthefinalreturnsofthosetradesaregenerallyusedorconsumedinGreatBritain。ThetradewhichiscarriedoninBritishbottomsbetweenthedifferentportsoftheMediterranean,andsometradeofthesamekindcarriedonbyBritishmerchantsbetweenthedifferentportsofIndia,make,perhaps,theprincipalbranchesofwhatisproperlythecarryingtradeofGreatBritain。
Theextentofthehometradeandofthecapitalwhichcanbeemployedinit,isnecessarilylimitedbythevalueofthesurplusproduceofallthosedistantplaceswithinthecountrywhichhaveoccasiontoexchangetheirrespectiveproductionswithanother:thatoftheforeigntradeofconsumption,bythevalueofthesurplusproduceofthewholecountryandofwhatcanbepurchasedwithit:thatofthecarryingtradebythevalueofthesurplusproduceofallthedifferentcountriesintheworld。Itspossibleextent,therefore,isinamannerinfiniteincomparisonofthatoftheothertwo,andiscapableofabsorbingthegreatestcapitals。
Theconsiderationofhisownprivateprofitisthesolemotivewhichdeterminestheownerofanycapitaltoemployiteitherinagriculture,inmanufactures,orinsomeparticularbranchofthewholesaleorretailtrade。Thedifferentquantitiesofproductivelabourwhichitmayputintomotion,andthedifferentvalueswhichitmayaddtotheannual,produceofthelandandlabourofthesociety,accordingasitisemployedinoneorotherofthosedifferentways,neverenterintohisthoughts。Incountries,therefore,whereagricultureisthemostprofitableofallemployments,andfarmingandimprovingthemostdirectroadstoasplendidfortune,thecapitalsofindividualswillnaturallybeemployedinthemannermostadvantageoustothewholesociety。Theprofitsofagriculture,however,seemtohavenosuperiorityoverthoseofotheremploymentsinanypartofEurope。Projectors,indeed,ineverycornerofit,havewithinthesefewyearsamusedthepublicwithmostmagnificentaccountsoftheprofitstobemadebythecultivationandimprovementofland。Withoutenteringintoanyparticulardiscussionoftheircalculations,averysimpleobservationmaysatisfyusthattheresultofthemmustbefalse。Weseeeverydaythemostsplendidfortunesthathavebeenacquiredinthecourseofasinglelifebytradeandmanufacturers,frequentlyfromaverysmallcapital,sometimesfromnocapital。Asingleinstanceofsuchafortuneacquiredbyagricultureinthesametime,andfromsuchacapital,hasnot,perhaps,occurredinEuropeduringthecourseofthepresentcentury。InallthegreatcountriesofEurope,however,muchgoodlandstillremainsuncultivated,andthegreaterpartofwhatiscultivatedisfarfrombeingimprovedtothedegreeofwhichitiscapable。Agriculture,therefore,isalmosteverywherecapableofabsorbingamuchgreatercapitalthanhaseveryetbeenemployedinit。WhatcircumstancesinthepolicyofEuropehavegiventhetradeswhicharecarriedonintownssogreatanadvantageoverthatwhichiscarriedoninthecountrythatprivatepersonsfrequentlyfinditmorefortheiradvantagetoemploytheircapitalsinthemostdistantcarryingtradesofAsiaandAmericathanintheimprovementandcultivationofthemostfertilefieldsintheirownneighbourhood,Ishallendeavourtoexplainatfulllengthinthetwofollowingbooks。
ANINQUIRYINTOTHENATUREANDCAUSESOFTHEWEALTHOFNATIONS
byAdamSmith1776
BOOKTHREE
OFTHEDIFFERENTPROGRESSOFOPULENCEINDIFFERENTNATIONS
OftheNaturalProgressofOpulenceTHEgreatcommerceofeverycivilisedsocietyisthatcarriedonbetweentheinhabitantsofthetownandthoseofthecountry。Itconsistsintheexchangeofrudeformanufacturedproduce,eitherimmediately,orbytheinterventionofmoney,orofsomesortofpaperwhichrepresentsmoney。Thecountrysuppliesthetownwiththemeansofsubsistenceandthematerialsofmanufacture。Thetownrepaysthissupplybysendingbackapartofthemanufacturedproducetotheinhabitantsofthecountry。Thetown,inwhichthereneitherisnorcanbeanyreproductionofsubstances,mayveryproperlybesaidtogainitswholewealthandsubsistencefromthecountry。Wemustnot,however,uponthisaccount,imaginethatthegainofthetownisthelossofthecountry。Thegainsofbotharemutualandreciprocal,andthedivisionoflabourisinthis,asinallothercases,advantageoustoallthedifferentpersonsemployedinthevariousoccupationsintowhichitissubdivided。Theinhabitantsofthecountrypurchaseofthetownagreaterquantityofmanufacturedgoods,withtheproduceofamuchsmallerquantityoftheirownlabour,thantheymusthaveemployedhadtheyattemptedtopreparethemthemselves。Thetownaffordsamarketforthesurplusproduceofthecountry,orwhatisoverandabovethemaintenanceofthecultivators,anditistherethattheinhabitantsofthecountryexchangeitforsomethingelsewhichisindemandamongthem。Thegreaterthenumberandrevenueoftheinhabitantsofthetown,themoreextensiveisthemarketwhichitaffordstothoseofthecountry;